This week’s FREE Insight is a summary of the talk that I gave yesterday (11/5/13) at Harvard and will also present at NYU Law tomorrow (11/7/13). The full paper can be found by clicking here.

 

I find fiduciary trusts attractive arrangements for managing parks and wild lands, especially after October 1.  National parks are one of America's best innovations and federal management of them was probably optimal for their first century.  

 

Yellowstone, designated in 1872, is Bozeman's back yard.  The world has learned a great deal from it.  Yellowstone is a model with many dimensions, geological, ecological, and economic.  

 

By today's standards America in 1900 was a poor Third World nation.  Poor nations prefer the exploitation of natural resources to appreciation of nature and ecology. Reformers of the Progressive Era created institutions to protect parks, forests, and wild areas from the excesses of the pre WWI era.

 

There is an inherent problem in this approach; federal management strongly implies political management.  For example, beginning Oct 1st, America’s national parks and monuments were closed to the public.  Park Service police even closed the WWII memorial to veterans of that war and they harassed elderly visitors to Yellowstone. 

 

This pettiness has a benefit for those who care about America’s national parks, forests and wild-lands. We are warned how an impending budget crisis might adversely affect all American national parks, forests, and wilderness areas.  Political economists have considered such political pathology for 40 years and suggested alternative arrangements for dealing with them.  

 

My participation began with a debate with Milton Friedman.  He proposed selling the National Forests and I objected.  The debate produced a Journal of Law and Economics article, "Externalities, Property Rights, and the Management of Our National Forests" by my colleague Richard Stroup and me in October of 1973.  Ronald Coase accepted it without revision.  We argued that both political and profit seeking management produced predictable problems. Fiduciary trusts are a promising alternative.  

 

The October 1 shutdown is a harbinger of far more severe problems.  Federal budgets will hit serious constraints within a generation, probably sooner.   When this occurs Congress will slight national parks and wilderness areas as luxuries and emphasize revenue.  There is a rekindling of interest in selling Yellowstone, increasing commodity production on federal lands, and transferring these lands to the states.  The Sagebrush Rebellion reignites.  

 

 The beneficial consequence of the recent shutdown is renewed attention to fiduciary trusts for managing and protecting parks and wild lands.  If the sylvan socialists, forest fascists, and well meaning but naive others relinquish their affection for central controls over natural areas, the values of wild lands may be conserved, even when governments are broke and broken.  

 

Read John's entire paper by clicking the link below: