Bozeman is clearly the epicenter of the people who have long studied how institutional arrangements affect the quality of natural resource and environmental management. In these arenas, as in all others where chance does not determine the outcome, decisions depend on two things, information and incentives. There are many types of incentives including cultural, financial, religious, reputational, and status.

Management that produces good outcomes, however they are measured, is dependent on the quality of information readily available and the incentives to act responsibly upon it. To deny this reality and assume that somehow bureaucrats armed or imbued with an ideology based on good intentions and pious pronouncements is worse than naïve, it’s morally, economically, and environmentally irresponsible.

This is one lesson from the great forest fires of 1910 whose centennial we observed last weekend. The Big Burn hit 10 national forests in Idaho, Montana, and Western Washington. It covered three million acres, one and a half times the area of Yellowstone Park, and killed 78 firefighters. After the devastation of the Big Blowup, the U.S. Forest Service decided to battle against every wildfire. And, of course, now firefighting drives its budget. The lesson is clear, incentives matter.

The U.S. Forest Service in the Twentieth Century

There is no better illustration of the ecological problems associated with bureaucratic land management than the century-long saga of the United States Forest Service, an agency that was once revered as the world’s premiere conservation agency. It was the U.S. Forest Service, more than any other governmental entity, which provided the experimental foundations for its founder Gifford Pinchot’s Progressive Era vision of federal land management. When the agency was young—during the years 1905 to end of World War II—it enjoyed broad popular support and had earned a decent record for watershed protection and resource management across its nearly 200 million acre domain.

In the early years, the key to Forest Service management was decentralization: the forest ranger reigned, and the field district office managed. But after the Great War, as the agency became more and more centrally controlled from the offices in Washington, fault-lines built into the Forest Service from its beginning widened into massive cracks.

Pinchot’s political mastery built the national forest system and gave the agency nearly godlike control over the lands within its domain, but the ever-shrewd Pinchot, in order to gain political acceptance across the West for his land management dreams, cut deals from the very beginning. An agency that was supposed to be managing for healthy trees and watersheds soon allowed livestock grazing to become a dominant use of many national forests. An old neighboring rancher told me that when he was a boy, 20 bands of sheep, some 20,000, grazed on the Gallatin National Forest south of Gateway.

While Pinchot personally detested the idea of mining within the forests, mining claims soon dotted agency’s lands. The original conservative approach to timber sales soon resembled a timber free-for-all, with massive subsidies going to huge logging companies. As agency decisions became more centralized, the management of the lands became more politicized. Pinchot’s experiment in European-style forest conservation devolved into perhaps the fattest pork barrel within the federal lands domain.

As Paul Hirt’s masterful A Conspiracy of Optimism chronicles, the reputation of the Forest Service turned swiftly from “world’s premiere conservation organization” to “timber beast;” from scientific land manager to the world’s largest road-building operation. Along the way, amid the agency’s meteoric decline, an inconvenient truth came to light: the very agency charged with the careful stewardship of the nation’s public forests had turned millions of acres of them into tinderboxes.

One hundred years of fire suppression had been the wrong thing to do, from an ecological perspective. By the beginning of the twenty-first century, by far the largest expenditures on the national forests were going to wildfire control. Not bad people but rather poor institutional design is the culprit.