Preservation and Private Property
Haiti and the Dominican Republic share a Caribbean island. Haiti occupies the western portion, the Dominican Republic the eastern. An aerial photograph of the border between the two countries reveals a stark contrast (our favorite appeared in the November 1987 National Geographic). To wit, the Dominican Republic is heavily forested; Haiti, once heavily forested, is now virtually barren.
Does Haitian-like resource depletion await tomorrow's Americans? Yes, if you listen to many of our professional counterparts (and their students) at colleges and universities across the country. For these capped-and-gowned doomsters, the problem is that American capitalism's bottom-line focus shortchanges tomorrow's Americans. Capitalist decision-makers, say these critics, ride roughshod over natural resources in the same way that Buffalo Bill slaughtered buffalo and Paul Bunyan decimated forests.
"Sustainability" is the doomsters' rallying cry. The slogan is clever. It sparks apocalyptic urgency, since today's consumption of many natural resources (like petroleum) necessarily reduces future availability. The slogan also appropriates an aura of self-sacrificing piety for its proponents, while simultaneously hampering opponents by making it appear they favor "unsustainability."
Clever slogans and vivid imagery are no substitute for clear thinking. For example, the border between Haiti and the Dominican Republic convincingly demonstrates the essential role private property, which is the defining characteristic of capitalism, has in the preservation of natural resources. Haitian land ownership rights have always been tenuous, to say the least. Not so for the Dominican Republic. The stark contrast along the border of the two countries mirrors a stark contrast in land ownership rights. The pervasiveness of intergenerational myopia in Haiti traces to attenuated property rights.
The same applies to use of Buffalo Bill/Paul Bunyan-like examples to support an apocalyptic vision for natural resources under American capitalism. The fact is that Bill killed buffalo that were not owned by anyone. Ditto for the land where Paul Bunyan cut trees. Nobody owned the trees. Nobody owned the land. No wonder Paul didn't replant. A lack of private property biases attentions away from future generations. To blame capitalist institutions for something that happens when the defining characteristic of capitalism is lacking is disingenuous at best, ignorant at worst.
Our colleagues frequently respond with high-sounding nonsense to the effect that ". . . all humanity, by virtue of being inhabitants of spaceship earth, has an ownership stake in the earth's resources." Rhetoric aside, the fact is that no one effectively owns resources that "everyone owns." This explains why whales, for example, face extinction, while KFC serves up millions of chickens each week without people fretting over tomorrow's Americans facing life without fried chicken.
Private property in natural resources gives yet-to-be-born Americans a powerful voice in current resource use. These Americans "communicate" their resource desires via the prices that are expected to rule when the future arrives. The higher future prices are, the more profitable it will be for owners to delay current consumption of resources. Attempting to enhance the present value of long-lived resources in no way shortchanges tomorrow's Americans.
Of course, no one knows future prices with certainty (and that includes "sustainability" gurus). However, private owners of natural resources have an important reason to be among the most well-informed. Their personal wealth is at stake!
For hundreds of years, economists have shown that, despite the pervasiveness of self-interested behavior in the world, nations can achieve economic success as a by-product of their citizens' self-interested actions. The secret, they have said, is in getting incentives right. The evidence of world economic events over the years has demonstrated the veracity of this insight over and over again.
"Sustainability" gurus simply ignore this evidence. Instead, by attenuating private property rights, they muffle the voice that capitalism grants tomorrow's Americans. This distorts intergenerational economic incentives. That many of these gurus are well-intentioned is irrelevant. The road to hell is paved with good intentions. In economic affairs, it's important to get incentives right. If you still don't believe it, look again at a picture of Haiti's border with the Dominican Republic.
The authors are economics professors at Ball State University, Muncie, IN. firstname.lastname@example.org