“Compared to what?” the late Rick Stroup often asked. “Markets are imperfect, but are government solutions better?” Rick’s passing in November 2021 is a loss felt by the entire PERC family and a reminder to analyze that question more often.
As a co-author of Economics: Private and Public Choice, now in its 17th edition, and author of many other books and articles, Stroup was much more than an economist; he was an educator. His writings help decode economics from its mathematical rigor into applicable ideas.
Rick’s teachings forced students to look beyond accepted norms and explore the intricate dealings of human behavior, whether as a voter, consumer, bureaucrat, or politician. Each of these roles are motivated by different incentives, thus driving different behaviors. Incentives matter. This is such a basic idea but one that few people pause to explore. It is a concept that changed how I think.
Rick took his wealth of knowledge and produced a set of fundamentals that help explain why choices made within the public sector may seem misdirected and identify when private markets may perform poorly. Understanding the workings of both public and private choices is what Rick believed would help create a more prosperous and fair society.
One of those basic fundamentals described by Stroup was private ownership. Clear property rights provide the incentive for stewardship and encourage cooperative exchange. Rick’s “three Ds” of property rights—Definable, Defendable, and Divestible—are simple attributes that nevertheless brought great clarity to me nearly 40 years ago. These key characteristics of property rights provide the foundation for well-functioning markets.
What many would call market failure Stroup called insecure property rights. To be fair, these ideas were not created by Stroup alone. As a co-founder of PERC with Terry Anderson and John Baden, and, soon thereafter, P.J. Hill, Stroup and his colleagues held multiple workshops exploring institutional structures and their underpinnings.
PERC began as the Political Economy Research Center—a think tank started to examine failing environmental outcomes that resulted from public choices and government actions. Over time PERC evolved into the Property and Environment Research Center, focusing on private solutions to environmental problems and illuminating the role of secure property rights as the key to sustainable stewardship and conservation.
Through these fundamentals, Rick encouraged students and peers to look beyond idealized notions of government solutions, yet with no pretense that markets are perfect. He encouraged an evaluation of public and private choices without romance. He looked to the incentives driven by different institutional structures as the key to understanding the motivation behind productivity, efficiency, stewardship, and mutual gains.
Rick was a great economist, a professor, an originator of New Resource Economics, and he directed the Office of Policy Analysis at the Department of the Interior during the Reagan administration. To me, he was a mentor extraordinaire. To look back at what I learned from Rick tells a great deal about who I am today.
Rick was a friend, teacher, associate, and mentor. He profoundly influenced my thinking and how I approach life by presenting ideas foundational for liberty and freedom. By simplifying the economic way of thinking into basic fundamentals, Rick helped me understand the underpinnings of private and public choices. When discussing markets and government policy I echo, “Compared to what?” Markets may not be perfect but tend to produce better outcomes than government-defined solutions. Ignoring these lessons will send us down the road to serfdom.