Private Investment Protects Environment Where Government Fails

The Institute for Humane Studies, an essential educational foundation in Arlington, Va., just launched a new Web site entitled A Better Earth. The site aims to educate college students, graduate students and others on alternative methods of environmental preservation — methods less hostile to free markets and free enterprise.

The new Web site is important, because the environment seems to be the one area where even avowed free marketeers can't quite bring themselves to trust private enterprise over government intervention.

Profit-seekers and corporations are too greedy and self-interested, the thinking goes, to give much thought to preserving wildlife, forests and wilderness.

But is that really so? Are governments really better at preserving the environment than private enterprise?

The biggest polluters on the planet are governments, not corporations. The U.S. government immunizes itself from most all of the environmental laws it demands of private corporations. And it is by far the bigger polluter.

Overseas, the countries most hostile to market forces tend to be the countries with the worst pollution habit. We found after the fall of communism, for example, that the dirtiest governments of the 20th century weren't the capitalist corporate giants of the West, but the Soviet Union and the countries of the Eastern Block — governments where the notion of private property and free enterprise were nonexistent.

A little reflection should reveal why that would be the case. Think for a moment about things that are "private" versus things that are "public."

Given the choice, would you rather use a private bathroom or a public one? If forced to bed down on a given night, would you rather sleep in a private home or in public housing? If a loved one were ill, would you rather he be taken to a private hospital or a public one?

Economists call this phenomenon "the tragedy of the commons." We take better care of things we own, things that are ours. We're far less careful and cautious with things someone else owns. And we're least respectful of those things owned by the "public."

Consider forests. Every summer we watch the news as thousands of acres of publicly owned lands go up in flames. Ever wonder why privately owned forests don't burn as often? Why do these fires always seem to start in national or state parks?

The answer is that land owned by the government is generally unkempt. Regulations and pressure from environmental groups keep much of our parks system untouched.

Private forests, on the other hand, are owned by people and businesses with a vested interest in keeping them intact. So private forests are thinned and pruned of underbrush, and proprietors set control fires to keep detritus from feeding larger fires later. Likewise, timber and paper companies know that if they don't plant a tree for every tree they fell, they won't be in business for long.

The best example of the tragedy of commons occurs in the oceans. Why is it that we regularly hear about how we're running out of various species of fish, but we're always well stocked with beef, pork and poultry?

The difference is that the latter are raised on dry land, where there are clear, discernible property rights. A rancher would be foolish to send all of his cattle to slaughter. Sure, he'd make more money in the short run, but with no cattle left to breed, he'd be out of business in a year.

It's a little different with the oceans. No one owns them, nor the fish that live in them.

Consequently, if I'm a fisherman, I have no incentive to leave any fish behind to ensure that fish stocks stay healthy. If I do, the fisherman who goes out just after me will snatch them up. And he's wise to, because if he doesn't, the fisherman after him will.

Laws and treaties won't change any of this. Until the oceans are divided up and claimed (yes, it would be difficult — but it could be done), we'll continue to overfish. And we'll soon deplete our fish supply.

The African ivory trade provides another example. Well-meaning Western countries like the United States have banned the trade of ivory out of concern for African elephant populations. But devaluing ivory on the open market also devalues elephants. This has two effects, and neither of them is good for elephants.

First, with no legitimate international ivory trade, landowners in Africa have no reason to preserve elephant habitats. That land could be far better used to make way for farms or factories.

Second, devaluing ivory on the open market increases the demand for ivory on the black market. That makes elephants lucrative targets for poachers who, after all, don't have much reverence for the law.

Countries that have allowed the ivory trade, and have given local landowners more autonomy, have replenished their elephant populations. Landowners see value in the animals, and so take precautions to protect them.

Back in America, private organizations have had lots of success in preserving species through positive incentives. Several kinds of duck, the American bison, breeds of hawks and raptors, the oryx and many other species have been saved from extinction by private individuals and organizations who have either bought up land for preservation or offered existing landowners incentives to allow fledgling species room to nest or migrate.

Contrast that to the federal Endangered Species Act, which in 30 years has saved only eight of the 1,400-plus species it has attempted to protect.

Organizations like Ducks Unlimited request or even pay landowners to allow certain species of duck to nest, rest or fly on or over their property. Most of us wouldn't have much problem there.

But if an ESA-protected animal is found on your property? Not only aren't you paid or kindly asked to protect the animal, you're prohibited from using your land in any way that might harm it. In some cases, you assume responsibility for the animal's survival, including spending your own money to ward off threats and predators.

One approach offers incentives to landowners to allow some animals access to their property. The other devalues their land and renders it useless. It isn't hard to see why one method is successful and the other isn't.

So counterintuitive as it may seem, markets are perfectly compatible with respect for the environment. Treat land well, and it increases in value. Treat it poorly, and watch your investment slip away.

The mere fact that so many of us desire campgrounds, hunting grounds, and wildlife preserves means there's a market for them. Better to entrust them to the stewardship of those with a vested interest in their preservation than to a government subject to the political whims of whoever happens to be running it.

Radley Balko is a freelance writer and publishes a Weblog at

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