Mises Wire

How The Feds Got All That Western Land (and Why It’s a Problem)

Government owned and subsidized lands in the American West have been a source of conflict among competing interest groups since the 19th century. Since the very beginning of white settlement, lands have been used by the federal government as part of a political scheme to subsidize and reward certain groups while punishing others. 

The current standoff between ranchers and federal officials in Oregon is simply the latest chapter in a long contentious and sometimes bloody history of groups competing for control over government-owned lands in the West, and by ensuring that lands continue to be allocated by political means rather than through the market, government ownership of lands simply perpetuates conflict in the region. 

The Origins of Government Ownership in the West 

Why is it that so much land is controlled by the federal government in Western states in contrast to the rest of the county? 

The troubles initially began with the Louisiana Purchase which established the federal government as the direct administrator of immense amounts of non-state land. However, the ideological justification for permanent federal ownership really began to gain influence by the late 19th century as many Americans, including influential economists of the time, began to adopt ideologies that saw centralized government as necessary for regulating the economy. We see these ideological leanings in the creation of the Interstate Commerce Commission in 1887 which was initially created to regulate the railroads. Over time, the ICC became the inspiration for a host of other federal regulatory agencies that began to appear by the early 20th century. 

As with the railroads, land in the west began to be seen as a “public resource” that required federal regulation as well. 

But ideology was just one factor. The widespread nature of federal lands can also be attributed to mere administrative, historical, and geographic accidents that led to an expansion of federal land ownership well beyond what anyone had expected. 

First of all was the fact of Indian settlement on Western lands. It may strike many as hard to believe, but the treatment of the Indian tribes west of the Mississippi was actually more restrained than it had been in Eastern states. 

In earlier generations, for example, Indian settlements were completely destroyed with all the inhabitants killed or forcibly removed to locations west of the Mississippi. In other words, the tribes of the east were more completely decimated than were many tribes further West. 

Much of this is due to the fact that whites populated the West more slowly and in smaller numbers than in, say, the Great Lakes area, but some of it is also due to the fact that the tribes often received better treatment from federal troops than they did from the ad hoc local militias they encountered in the Eastern states. 

This is why Kit Carson saw his U.S. Army work in forcing Indians onto reservations as a “humanitarian” mission. Based on experiences in the east (and in early West Coast settlements), Carson surmised that the Indian tribes of the west would be completely destroyed if left to the “mercy” of locally based militias.   

Over time — and contrary to past efforts of this sort — the removal of the tribes to reservations came to be dominated by the federal government. With this came what were effectively federally owned reservations. Legally, the reservations were sovereign lands guaranteed by the law of treaties. But the reality of US military domination meant the lands were really federal lands. 

The Overrated Homestead Act 

At the same time the federal government was moving the tribes onto reservations, it was attempting to encourage settlement by whites on those same lands. This was important to the federal government for  military reasons. It was important to the federal government that whites with an allegiance to the US settle the lands instead of, say, Canadians or Mexicans, and it was important toward making sure that the Indians did not attempt to re-settle the land. 

The Homestead program was also a clever welfare scheme that provided nearly-free land to new settlers who were paying nowhere near what the cost of acquiring the land had actually been. The taxpayers back East had already covered much of the immense cost of Indian removal and infrastructure construction. The new homesteaders paid but a small fraction of this cost. But from the federal government’s perspective, it was worth it since the cheap land meant pro-American settlers were keeping others out. 

The homestead act is often romanticized and praised by free-market types, but it should not be. The Homestead program was, ultimately, a federal land redistribution scheme, and it worked about as well as anyone skeptical of federal competence might expect. It also further expanded the role of the federal government.

Homesteading, as defined by federal law, worked relatively well in places like eastern Kansas or in the eastern Dakotas where it still rained enough to allow for crops without irrigation. 

Further west — west of the 100th meridian — things were much drier, and the small acreage plots dictated by the Homestead Act made very little sense. Not surprisingly, Congress had written laws without bothering to check to see if they made any sense in light of geographic realities. 

With so little water out west, and with fragile ecosystems that could not support anywhere near the agricultural population density that the Homestead Act envisioned, conflicts quickly arose over resources. Devastating boom-bust cycles like the Great Dakota Boom took shape in which new settlers flooded new lands only to find that they could not make a living on such small plots and with so little water. The lands were later abandoned. 

In the wake of these new realities came rampant fraud in which large wealthy interests bent or broke the law to acquire large swaths of land that had been intended for small-scale settlement. Water rights became frequent bones of contention, and all the while, federal intervention became the tool of competing special interests who used federal power to gain lands and water rights for themselves. 

The Spread of “Public” Lands 

As it became clear that it was impossible to impose the eastern settlement model on the west, politicians and activists continued to cling to the idea that land ownership should still consist of only small parcels, even when such a plan made no sense at all in arid lands with sparse grass. 

As a Plan B, the feds began to encourage the use of “open range” and the idea of public lands in which large numbers of small landowners would share water and grazing resources. 

Eventually, neither the government nor the settlers wanted these lands to be privatized. Each interest group — homesteaders, ranchers, and water owners — wanted the lands to continue to be public since each group assumed it would be able to use its own political power to gain de facto use and control of the lands.

Thus, today, we are living with the results of this system throughout the west. Federally-owned lands continue because interest groups would rather battle for control of the lands through political means than allow the lands to be privatized and pass outside the control of special interests. Meanwhile, the public in general tolerates this state of affairs because so many view markets as damaging to both the environment and ordinary citizens. For all its faults, they reason, federal ownership of the land must be less bad that private or even local-government ownership. 

Eastern Oregon as Microcosm 

In the current controversy over public lands in eastern Oregon, we’re witnessing just another conflict between interest groups over how federal lands should be used, and the history of land politics in eastern Oregon tends to mirror the West overall. 

In eastern Oregon as elsewhere, an important step in giving the Federal government a larger role in the local economy was in turning reservation lands into “public” lands for use by whites. 

William N. Grigg has recently explored how conflicts between ranchers and Piute Indians in eastern Oregon led to demands by the ranchers for a larger federal role in the area. And, when the Piute Indians were finally forced out of Oregon, this paved the way for more federal control over lands in the region as what were once Indian lands became federally managed “public lands.”

But the drive among interest groups to control federal lands extends well beyond conflicts with Indians. Throughout the West  in the late 19th century, cattle ranchers were engaged in regular feuds with sheep herders and farmers over who could use and control federal lands. Oregon was no different. 

In her book Forest Dreams, Forest Nightmares, Nancy Langston looks at how conflict among competing groups vying for control of the land in eastern Oregon led to ranchers calling for more federal involvement. Following the expulsion of the Piutes, the public lands quickly began to be overgrazed both on old Indian lands and in other public lands as well. 

According to Langston, “law and custom specified that the range was supposed to be open to all, and not the exclusive property of the wealthy. Grass in the mountains was free and belonged to those who got their first: the Enclosures Act of 1873 stated to t no one could legally fence public domain.”

As is typical with any “commons,” the resources in public lands were immediately strained to the point of making the land unusable. This then led to violence as each group attempted to exclude all other groups from the land. Langston explains: 

Tensions finally spilled over into cattle and sheep wars throughout eastern oregon. In Union county, cattle owners formed a group called the Sheep Shooters Association. They ran advertisements in the La Grande Gazette identifying certain cattle ranges where sheepherders were advised not to cross recognizable boundaries ... they also announced they would be placing lethal saltpeter mixed with stock salt in certain hotly contested range areas. Jon Skovline wrote that “Andy Sullivan, who ran horses on the flats below the Campbell Brothers, homestead burned out several night corrals built by itinerant sheep owners along what is now called Burnt Corral Creek. It is very likely that Sullivan also burned the accompanying tented camps of the herders. Lew McCarty was shot by unknown assailants.” Thousands of sheep were also killed in grant county where feelings were strongest because summer range was in shortest supply.

Meanwhile, homesteaders attempted to drive away cattle ranchers when they “fenced the creek bottoms to cut off the water supply from the large stockmen...Bitter feuds resulted.” 

Violent fueds between sheep herders and cattle ranchers continued for years until, by 1903, Langston writes, “ local sheepmen as well as cattlemen were ready for regulation, even though [the sheepmen] feared the government would rule in favor of cattle over sheep ... Ranchers were ready for an end to the disputes and  increasingly welcomed government intervention.” 

The “Sheep Wars,” as they are known today, were hardly unique to eastern Oregon, nor were the range wars between homesteading farmers and cattle ranchers.

For the most part, the cattle ranchers, through more effective use of fear and intimidation, won these political conflicts, and throughout the first half of the 20th century, the “Cattlemen’s Associations” dominated state legislatures and the land use bureaucracies that regulated land use throughout the West. They’ve even passed laws making it illegal to criticize cattle ranchers. 

In a familiar story of regulatory capture in which the regulated interest group actually controls the regulators, the cattle industry has long shaped debate over the use of public lands for grazing purposes. 

Since the 1960s, however, the cattlemen have been increasingly eclipsed by other interests including environmentalists and urban residents looking for expanded access to water. The EPA has assumed an expanding role in managing federal lands and neighboring areas, and with it comes greater regulation on ranchers and on land use in general. Environmentalists are relishing their relatively newfound power, and ranchers don’t like it when they’re unable to exercise the same amount of influence to which they have been historically accustomed.

It is this new ideological and political conflict that is fueling today’s battles between federal land agencies and ranchers. 

However, it should be remembered that, generally speaking, ranchers who use federal lands have never been opposed to the existence of federal lands. After all, federal subsidization of water projects and federal control of watersheds has furnished ranchers with cheap water for years, at the expense of taxpayers and urban dwellers. In dry and high-altitude areas especially, cattle are reliant on alfalfa crops and on other non-forage feed, which means their need for water is immense. 

Why We Need Decentralization Now 

If we wish to defuse national conflicts over land use, the only answer is to decentralize the land itself. It should be no concern of people in Washington, DC — 3,000 miles away  — as to how a handful of ranchers want to use a tiny corner of land in rural Oregon. Similarly, taxpayers in, say, Ohio (a net taxpayer state) should not be paying to mitigate the effects of overgrazing by ranchers in Oregon, or to build their water projects. 

There are, of course, many legal and constitutional obstacles to decentralizing land ownership, but the political obstacles are numerous as well. For example, many ranchers oppose ending federal ownership of grazing lands because it would likely mean an increase in grazing fees. 

Moreover, federal rules mean ranchers can often maintain their federal leases indefinitely without having to worry about prices ever being driven up by competitors. 

Were grazing lands to be taken over by states or localities — or privatized — ranchers would have to compete with other ranchers, outdoor-recreation proprietors, and conservationist billionaires on the open market. Ranchers may quickly find that their formerly cozy grazing arrangements are now unaffordable. For many ranchers, a federal bird in hand is still better than two private-sector birds in the bush. 

At the same time, environmentalists want perpetual federal control because they are convinced that any decentralization or privatization would mean that lands will be taken over by rapacious ranchers and miners. 

But would they?  

It is not at all clear that markets or local governments would prefer that land be used for agricultural purposes as opposed to other purposes. For example, were Rocky Mountain National Park to become a locally-controlled park or state park, there is, realistically speaking, zero chance that it would be handed over to ranchers or miners. The park is far too valuable to the local economy as part of the recreation and tourism industries. To turn the park into  range land would devastate the economies of the local communities, many of which contain wealthy and influential voters. 

But, say that the park were broken up into parcels and sold to a  number of private owners. (We’re in the realm of pure fantasy at this point.) It would make little sense to use the land for mining or ranching even in this case. Given the infrastructure in place and the relative closeness to a major metropolitan area, the lands in and around the Park are likely far more lucrative for recreational purposes than for mining or ranching. 

So, when we ask the question of “if it’s privatized/decentralized, won’t those people take over the land?”  The answer is: “It depends.” 

Yes, some remote or otherwise unattractive areas will lend themselves to ranching and strip mining, and some areas (especially those less remote from where people live) will lend themselves to being preserved as parks and recreational facilities. The lands in the American west are incredibly diverse and different areas will be ideal for different purposes. 

And, in an age of growing eco-tourism and outdoor recreation, there’s a lot more to the west than ranching and mining. 

But let us never forget that were it not for federal infrastructure such as dams, military bases, and federal highways, the West would have far fewer people and much less development than it does today. As has been demonstrated by numerous scholars of the West — especially Gerald Nash in his economic history of the West, The Federal Landscape — the development of the West has been largely dependent on federal spending — and we’re talking about spending far above and beyond the initial federal efforts that cleared out the original inhabitants and laid down the first intercontinental railroad. The modern West as we know it today is a result of immense federal spending done during the Depression and the Cold War. 

Likewise, it has been the federal government that has created the billion-dollar mega-dams, dumped plutonium into the ground, and failed miserably at fire suppression. The footprint of the federal government is everywhere in the west, and it could very well be that in a world with a smaller federal government, the West would look very different indeed. 

The Democracy of the Marketplace 

Ultimately, however, its the democracy of the marketplace that is best suited to determine how lands should be used in the west. 

The perennial conflicts in the West over land seizures by environmentalists, regulatory battles, micromanagement, and overgrazing all illustrate how much of a failure the federal land ownership scheme has been. 

With control over such immense resources, the far away federal government does not respond to local needs or local demand, but to national interest groups. 

If we truly wish to democratize the use of land in the west, we would privatize it, or at the very least make it responsive to local populations instead of national interests. It is the marketplace, and not politics, that truly reflects the desires and needs of the people who wish to use lands and reward or punish those who own it. 

In his book Bureaucracy, Ludwig von Mises long ago explained how it is the consumers who decide how economic inputs (such as land) are to be used:

The real bosses, in the capitalist system of market economy, are the consumers. They, by their buying and by their abstention from buying, decide who should own the capital and run the plants. They determine what should be produced and in what quantity and quality. Their attitudes result either in profit or in loss for the enterpriser. They make poor men rich and rich men poor. They are no easy bosses. They are full of whims and fancies, changeable and unpredictable. They do not care a whit for past merit. As soon as something is offered to them that they like better or that is cheaper, they desert their old purveyors. With them nothing counts more than their own satisfaction. They bother neither about the vested interests of capitalists nor about the fate of the workers who lose their jobs if as consumers they no longer buy what they used to buy. 

In the absence of bailouts, subsidies, and government protections, only those who use the land in a way that benefits others will be rewarded accordingly, at the expense of their competitors. 

What will land use in the West look like for the next 100 years? Will it be just another century of unaccountable federal bureaucrats picking winners and losers? Or will the democracy of the marketplace be permitted and thus allow the people who use the land and depend upon it to have a say? 

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