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Bureaucrats and Indians

The New York Times
June 28, 2005

By John Tierney

Crow Agency, MT — The Crow Indians rode with Custer at Little Bighorn, but they have since reconsidered. On the anniversary of the battle Saturday, they cheered during a re-enactment when Indians drove a stake through his fringed jacket and carved out the heart of the soldier going by the name of Yellow-Hair in Blue Coat Who Kills Babies, Old Men and Old Women.

Their revised opinion is understandable considering what has happened to them since that battle to get their valley back from rival tribes. Today it’s a Crow reservation with enough land and mineral resources to make each tribe member a millionaire, yet nearly a third live below the poverty level, and the unemployment rate has reached 85 percent.

What went wrong? Before Custer, the Crows had prospered by trading with whites, but he represented a new kind of white: the one who tells you he’s from Washington and he’s here to help you. As the economists Terry Anderson and Fred McChesney have documented, the downfall of the American Indians correlates neatly with the rise of two federal bureaucracies.

The first was the standing army established during the Mexican War of the 1840’s. Before then, settlers who wanted Indian land usually had to fight for it themselves or rely on local militias, so they were inclined to look for peaceful solutions. From 1790 to 1840, the number of treaties signed with Indians each decade far exceeded the number of battles with them.

But during the next three decades there were more battles than treaties, and after the Army’s expansion during the Civil War the number of battles soared while treaties ceased. Settlers became an adept special interest lobbying for Washington to seize Indian land for them. For military leaders, the "Indian problem" became a postwar rationale for maintaining a large force; for officers like Custer, battles were essential for promotions and glory.

Indians no longer had any bargaining power, and they were powerless to resist the troops that avenged Custer’s death. They were consigned to reservations and ostensibly given land, but it was administered by another bureaucracy, the agency that would grow into what’s now the Bureau of Indian Affairs.

The agency, in addition to giving some of the best land away to whites, allotted parcels to individual Indians with the goal of gradually transferring all the land and ending federal supervision. But what self-respecting bureaucrats work themselves out of a job?

As the land under their control dwindled, they presumed that Indians were not "competent" to own land outright. It had to be placed under the agency’s own enlightened trusteeship. They kept allotting parcels of this "trust land" to individual Indians, but an Indian couldn’t sell or lease his parcel without permission from the Bureau of Indian Affairs.

The rules discouraged sales and encouraged parcels of land to be passed on to multiple heirs. Today it’s common to find a tract with dozens or hundreds of owners. Instead of inheriting the family ranch, which they could work themselves or use as collateral to start another business, these Indians inherit the right to collect checks from the federal bureaucrats who lease their land to others, usually non-Indians.

The system leaves Indians with little incentive to work their land or extract the maximum value by improving it. Not surprisingly. Dr. Anderson finds that trust lands are only half as productive as the other parcels of private land on the reservation that were given outright to Indians under the old system.

Some Indians are trying to go back to the old system, but it’s not easy, as Gus Gardner has discovered. For five years he has been hoping to exchange his trust lands – tiny portions of more 100 different tracts on the Crow reservation – for one big piece of land for his own cattle ranch. But he figures the paperwork involved will take at least another three years.

"Just give me a regular deed to land that I own and let me go on my own," he said. That sounds like a reasonable enough request in a capitalist country, but changing the current system seems politically unrealistic. It has too many defenders at the local and state level whose living depends on it.

Cutting paperwork means cutting bureaucrats’ jobs, a feat that makes killing Yellow-Hair in Blue Coat look easy. No one has yet figured out how to drive a stake through the heart of White-Collar With Red Tape.

Further Reading:

The Wealth of Indian Nations: Economic Performance and Institutions on Reservations by Terry L. Anderson and Dominic P. Parker, June 2004, 42 pp., working paper.

The Not So Wild. Wild West: Property Rights on the Frontier by Terry L. Anderson and Peter J. Hill Stanford University Press, 256 pp., May 2004

Property Rights: Cooperation, Conflict, and Law edited by Terry L. Anderson and Fred S. McChesney, Princeton University Press, 448 pp., 2002.

Copyright 2005 The New York Times Company

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