Private
ownership is one of the least understood institutions of the
free society -a fact that can be of enormous value to debaters
and extempers looking for a fresh, unexpected angle on an
issue. Many people assume that since ownership entails the
right to use property as one sees fit and to exclude others
from using it that private property is anti-social and dangerous.
A resource that is owned by a private individual (rather than
commonly owned, or government-owned) is subject to whatever
capricious idea that person might have about its use. The
public has no recourse to prevent irresponsible or even dangerous
uses of resources when property rights are consistently defended,
the argument goes. From there the argument continues that
government control is the answer, either through outright
public ownership or through regulations that take away some
of the property owners' rights. Economic reasoning shows that
this argument gives too little credit to private owners and
too much to government's wisdom and beneficence.
Private
property does give owners a degree of freedom but it also
makes them accountable for their actions. The owner of a dog
is legally responsible for the damage his dog does to his
neighbor's rose garden. The owner of a building is responsible
for making repairs if the roof leaks on his tenants. This
accountability ensures that property is not used in a way
that harms other peoples' rights.
Consider
furthermore that one of a private owner's rights is the right
to sell his resource to someone who values it more than he.
This opportunity forces people (both owners and potential
buyers) to take into account the value that others place on
the property. When natural gas was discovered under the Rainey
Wildlife Preserve in Southern Louisiana, the environmentalist
group that owned the land considered the commercial value
of the gas and sold the right to extract it under tightly
controlled conditions.
The environmentalists
didn't care so much about heating homes as they did about
the additional wilderness areas that the gas revenue would
permit them to buy. Likewise, the gas company that won the
bid for the right to drill didn't develop special extraction
technologies with low environmental impact because they loved
the wildlife but because they knew that this would increase
their chances of winning the drilling rights. Each party had
the incentive to cooperate with the other and to take their
values into account.
When property
rights are not clearly established or property is held in
common, the incentives are reversed. This typically results
in irresponsible resource use. The water crisis is a good
example5 .
Farmers who share the water in underground aquifers throughout
the Western United States know that the aquifers are being
exhausted faster than they can be replenished. Without plentiful
ground water, millions of acres of valuable cropland will
some day be useless, yet no farmer has much incentive to conserve
this dwindling resource. Each knows that his own conservation
efforts will be to no avail unless others do the same. Each
pays little or no cost for wasteful uses of water. He may
as well use the water while it lasts and hope that his children
don't go into farming.
By contrast,
if each farmer had a share of the water that was his own,
his conservation efforts would be rewarded since he could
sell the rights to any unused water to other water users.
If water became more scarce the price would increase and the
reward for conservation would become even greater. Responsible
water use would prevail.
The reckless
waste and abuse of commonly owned (or unowned) resources has
been dubbed the "Tragedy of the Commons" by economists and
is a problem that is evident in some form in almost every
area of public policy. Here are just a few examples. Learn
to watch for the signs of the "Tragedy" and to trace its cause:
Many of these examples also illustrate the conflict that results when political forces are inevitably brought to bear to control common-pool resources. Political control of resources does not eliminate competition; it only changes it from market competition to competition among political interest groups. Whereas competitors for privately owned resources have strong incentives to accommodate each other (as in the Rainey Wildlife Preserve example), political competition is usually a winner-take-all affair. Political struggles over health care, the environment, and now the legal protection of private, personal information have been heated and sometimes even violent because competing groups have nothing to gain from accommodating each other and everything to lose.
|
A Foundation for Economic Education Website 30 South Broadway, Irvington-on-Hudson, New York, 10533 Questions, Comments, Suggestions? Email: Debate@fee.org Main Website: www.fee.org |