Tribes that can resist the temptation to extract wealth at the expense of future growth have the best hope of overcoming poverty and becoming truly sovereign.
James M. Buchanan, the Nobel laureate in economics and father of public choice theory, has passed away at the age of 93. Buchanan's work formed the foundation for PERC's early research on environmental issues.
PERC begins a colloquium this week on property rights and liberty in Native American societies. The program focuses on the historical emergence of property rights and how these rights have impacted Native Americans.
PERC's workshop, "Tackling the Global Fisheries Challenge," took place last week. Fisheries specialist for the World Bank, Michael Arbuckle, discusses rights-based fisheries reform in developing countries.
Denis and Barbara Prager fear the day that hydraulic fracturing takes place on their land in the Shields Valley of Montana.
The physical world lost a great scholar last week with the passing of Elinor Ostrom, a 2009 Nobel Laureate
For the past ten days PERC's Jonathan Adler been one of the guest bloggers on Megan McArdle’s blog on The Atlantic‘s website.
Today the House of Representatives is expected to vote on the REINS Act, a bill to enhance political accountability over regulatory decisions. The bill has two essential features.
There has been plenty of confusion surrounding
The link between natural resources, institutions, and economic prosperity is nowhere more apparent than on American Indian reservations.
Global population is believed to top 7 billion. Is this a problem? Does 7 billion people constitute “overpopulation”? Nicholas Eberstadt doesn’t think so.
Though known for millennium that nature provides multiple benefits, the idea of ecosystem services and payments for these services has become more prominent in the last two decades.
by Andrew Balthrop, a PhD student in economics at Georgia State University and 2011 PERC Graduate Fellow.
Common law legal actions can easily handle the simple case in which one property owner causes obvious harm to another, what about the not-so-simple case?.
Is seven billion too many people on earth or not enough?
When children play games they often make up the rules as they go. This can work with patient participants but often leads to an argument that overtakes the game. A parent or teacher may need to come in and act as referee to calm the situation.
Don't miss PERC senior fellow Bruce Yandle’s article in the latest issue of Regulation magazine.
PERC's Terry Anderson made an appearance on Stossel Friday night to discuss the causes of American Indian poverty. The video is here:
PERC's Terry Anderson will be on Stossel on the Fox Business Channel tonight to discuss property rights on Indian reservations.
Cross-posted at Grist.A recent post on Grist attempted to dismantle the intellectual foundations of free market environmentalism—the application of markets and property rights to solve environmental problems. But far from toppling a burgeoning movement within modern environmentalism, it succeeded only in misrepresenting the subject.To recap: Clark Williams-Derry claimed that while free market environmentalism may be effective in some areas of the environment (e.g., fisheries management), its reliance upon unrealistic assumptions about the real world largely relegates it to useless intellectual theorizing. In particular, the Coase theorem—an important component of market-based environmentalism named for Nobel Prize-winning economist Ronald Coase—amounts to “a quirky but not particularly relevant bit of theoretical math.”While there is certainly much more to free market environmentalism than the work of Coase (see Terry Anderson and Donald Leal’s book Free Market Environmentalism for more details), I focus here mostly on the misinformed critique of Coase that has been used to discredit free market environmentalism.So, who is Coase, what is his theorem, and what does it have to do with free market environmentalism?
Paul Ehrlich has had quite a career.
by Pete GeddesI have several hockey-playing friends who simply cannot understand my opposition to government subsidies for “green” energy. They question my belief that the market process is likely to generate environmentally and ethically superior results and default to describing me as a “market fundamentalist.” If you find yourself in a similar situation, I’d like to offer the following for your consideration.In addition to several empirical arguments against government intervention, I think it's important to explain the philosophical underpinnings for my preference for markets over mandates. I start with these insights from 1974 Nobel Laureate F.A.Hayek:The knowledge problem In modern societies, knowledge of time- and place-specific conditions is dispersed among millions of individuals. Consumers and producers communicate their desires through prices. Markets then allocate resources -- labor, capital, and human ingenuity -- in a manner that can’t be anticipated or mimicked by a central plan (or planner.)This fundamental insight is found in Hayek’s essay “The Use of Knowledge in Society." What is the problem we wish to solve when we try to construct a rational economic order? On certain familiar assumptions the answer is simple enough. If we possess all the relevant information, if we can start out from a given system of preferences, and if we command complete knowledge of available means, the problem which remains is purely one of logic. This piece explains why large scale economic planning fails. It is because the social world does not consist of physical objects governed by simple laws of causality, but is a ‘kaleidic’ world inhabited by individuals with minds, whose inner recesses are inaccessible to the external observer, where knowledge is not ‘fixed’ and available to a single person or institution. (Another essential critique is found in the work of János Kornai.)Here's an example from the American West: Between 1933 and 1938 the Columbia Basin Project (CBP) impounded water behind the Grand Coulee Dam. It was to provide irrigation and power to 100,000 family farms, and turn the desert of eastern Washington into lush farmland. Two generations later, only a few thousand farmers and corporations work the irrigated land--at great cost to taxpayers and the environment. What was the problem? Planners designed policies for an unknown future, the only kind we have. The CBP plans did not anticipate changes in technology such as the replacement of horses by tractors. The tractors, tillers, and harvesters all became much, much larger and faster. This led to huge consolidation rather than 40-acre farms. Social preferences are even more difficult to predict (e.g., for healthy runs of wild salmon instead of more dams for irrigation).“Product of human action but not human design…”My progressive friends are firm believers in the theory of evolution and are highly dismissive of alternative explains, except when considering social policy. I find this intriguing, but not surprising.The idea that things exist in the world that are the product of human action but not human design is highly unintuitive. In Hayek’s 1967 essay, “The Principles of a Liberal Social Order,” he explores this:
by Shawn Regan Over at Forbes.com, Art Carden pens this gem of a poem that retells Dr. Suess's classic "How the Grinch Stole Christmas" using property rights, Pigouvian taxes, and the Coase theorem--important concepts in environmental economics: How Economics Saved Christmas by Art Carden Every Who down in Whoville liked Christmas a lot.But the Grinch, who lived just north of Whoville, DID NOT.He stood and he hated the Whos and their noiseHe hated the shrieks of the Who girls and boysFor fifty-three years he’d put up with it now—He had to stop Christmas from coming, somehow.He asked and he questioned the whole thing’s legalityThen his eyes brightened: he screamed “externality!”He reached for his textbooks; he knew what to doHe’d fight them with ideas from A.C. PigouThis idea has merit, he thought in the frostA tax that was equal to external costAt the margin, would give all the Who girls and boysAn incentive to stop all their screaming and noiseFailing that, an injunction to make them all ceaseAnd they’d have to pay him to have their Roast Beast.
by Pete Geddes
Some economic histories are valuable because they provide insights into events and places previously not fully explored, while others contribute through a well-formulated test of economic propositions. In Commerce by a Frozen Sea, Ann M. Carlos and Frank D. Lewis have given us a marvelous melding of the two. The authors have written a carefully researched and well-organized discussion of the early fur trade in the very northern reaches of North America as well as a fascinating use of basic economic theory. The book extends our understanding of the overall extent of the trade and the interaction between the European traders -- primarily the French and British -- and indigenous tribes. Europe wanted furs, primarily beaver, and the resident tribal groups valued the commodities available from the more economically-developed countries.When Adam Smith published his Wealth of Nations in 1776, he devoted a bit more than a page to the Hudson Bay Company, which was over a hundred years old at that point, having been created by royal charter in 1670. Smith places his discussion of the Company in his section discussing the costs and benefits of joint stock companies, and thinks the Hudson Bay Company probably had a reasonable level of profits, despite some of the principal-agent problems inherent in such organization.Smith could have made the Company and its relations with the Native Americans in the region around Hudson Bay a prime example of one of his basic assumptions about human nature, “the propensity to truck, barter, and exchange one thing for another.” He also argued that the division of labor is limited by the extent of the market and he would have found in the activities of the Hudson Bay company a surprisingly robust case study of entrepreneurial efforts to further extend the market and hence the division of labor.Commerce by a Frozen Sea is, at its core, an account of the gains from trade when two very different cultures with very different resources and productive abilities come into contact. And that contact itself was not exogenous, but driven by farsighted individuals who were able to organize trade across thousands of miles in the most difficult of circumstances. The Hudson Bay was frozen for most of the year, so the outposts or “factories” along the edges of the Bay depended upon the yearly vessel that would bring rations for the Europeans stationed at the factory as well as trade goods. These goods were often ordered specifically by the Indians the year before. The ship would then load the furs that had accumulated at the trading post for the return trip to Europe.
Last week, PERC was featured on the Fox Business Channel's Stossel program for a Thanksgiving special giving thanks to property righ
by Shawn Regan