Skip to content

About PERC

All Areas of Focus

All Research

Free market environmentalism: Private sector better at preservation

By Craig Green

Free market environmentalists are everywhere these days, but you rarely hear about them in the mainstream press. Conventional wisdom for our entire lifetimes has been that only government protection can minimize or prevent environmental damage.

The idea that markets are better at managing natural resources than governments may come as a shock to some, but the simple reason is that private property owners have more incentive and control to take care of property they own.

Terry Anderson, executive director of the Property and Environment Research Center in Bozeman, Mont., made this case in his groundbreaking book, “Free Market Environmentalism,” co-authored with Donald Leal in 1991. It’s well past time these ideas get more attention.

In his June 25 Wall Street Journal article, “Why it’s Safer to Drill in the Backyard,” Anderson explains an aspect of the current Gulf oil spill disaster you won’t find in most media outlets.

He refers to the Audubon Society’s successful relationship with oil companies who have operated wells on its lands, but only when birds weren’t nesting. Period. None of the ifs, ands or buts that are always present when politicians and special interests try to manipulate public land use.

Why would Audubon allow well drilling on its environmentally-sensitive lands? To generate royalties for the purchase of more privately-owned land that can then be protected.

Private organizations like Audubon are much better stewards of the environment than government. For an outrageous example of government failure, look no further than the ongoing Gulf oil spill, where available options for a speedy cleanup were set aside and President Barack Obama’s political agenda rose to the top, like his never-ending refrains about alternative energy, cap and trade taxes and punishing the deep-water wells that did not blow out. None of these have anything to do with the current disaster, a masterful example of bait-and-switch by an expert politician.

The Merchant Marine Act of 1920, aka the “Jones Act,” which prohibits using ships and equipment not owned by Americans to protect labor unions from competition, could have been waived immediately after the spill.

North Atlantic countries with extensive ocean drilling experience immediately offered their sophisticated oil-skimming equipment, but the offer was declined by the U.S. government. After several weeks, National Incident Commander Admiral Thad Allen said, “No one has asked me to waive the Jones Act.”

Finally, after two months, procedures for waiving the Jones Act were developed. This is how government responds to media pressure, a completely different skill than actually solving problems, or at least getting out of the way.

Under the 1990 Oil Pollution Act, liability for future oil spills was limited to $75 million in most situations. The combination of public ownership (ensuring political instead of economic resource allocation), government-limited liability and government restrictions reducing drilling locations all but assured BP’s shoddy workmanship in the current disaster.

Anyone who thinks the free market is to blame for such problems hasn’t been paying attention to the last century of increasing government interference in every aspect of the economy, including business and other subsidies that discourage accountability.

As a collapsing worldwide economy unfolds from a century of unsustainable public debt, counterproductive and idealistic promises of government stewardship are finally being revealed for what they are: A flawed comparison between market realities with government fantasies that never seem to work in the long run.

More information about free market environmentalism may be found at

J. Craig Green is an engineer and senior fellow at the Independence Institute in Denver.

Related Content