The Free Market 17, no. 11 (November 1999)
Garet Garrett wrote in 1932, “Mass delusions are not rare. They salt the human story.” Indeed, mass delusions are no more apparent than in the realm of public policy and especially in the faith people have in their government to carry out functions designed to promote the public good. How else to describe the persistent belief that government is a good steward of resources of any kind?
Let’s focus on this delusion, specifically in regard to government ownership of land and the notion that somehow government is a beneficent protector of “environmentally sensitive” land. It was one of the basic tenets of the Communist Manifesto that private ownership of land be abolished. A truly disinterested observer might wonder whether the Manifesto is the preferred manual for politicians these days.
In the 1950s, government ownership of land totaled nearly one-quarter of all U.S. lands. This was a source of sorrow for many libertarians. Admiral Ben Moreell lamented, “that practice is followed no longer.” Our government today has no problem holding land indefinitely and intentionally keeping it out of private hands. Currently, the federal government alone owns one-third of all land in the United States.
The states also have been purchasing land at record levels with the explicit intention of keeping it from being developed or used for private ends. One example: the state of Maryland, in what will be the largest land deal in state history, will purchase 29,000 forested acres of land from the Chesapeake Forest Products Company for $16.5 million. In addition, the Richard King Mellon Foundation, a private organization, will also purchase 29,000 acres that it will eventually turn over to the state.
Now, Americans should have no problem with a private organization purchasing land with the intent of preserving its natural state. However, we should have a great deal of difficulty with a state’s use of millions of dollars of taxpayer money to support an ideological land purchase.
The purpose of this purchase is to protect these lands from development. The land contains waterways that feed the Chesapeake Bay and much of the land fronts five rivers and stretches across five counties. The editors at the Washington Post gushed, “Whatever other legacies Parris Glendening may leave Maryland, the preservation of unspoiled lands for public use will be the most treasured.” They conclude with “Governments shouldn’t be gobbling up land all over the place merely to stop growth or to stockpile ordinary terrain. But when reasonable prices can be negotiated to preserve public access, to save valuable wetlands and to protect wildlife, the benefits of future generations can be priceless.”
The siren song of government intervention can be difficult to overcome. After all, how can one be against preserving the environment for future generations? However, let us cast a critical eye at some of the implicit assumptions made by supporters of this government land grab.
The first of these is the assumption that governments are better able to preserve natural resources than private interests are. Professor Holcombe’s book Public Policy and the Quality of Life contains an excellent discussion of the critical issues.
Holcombe points out the different incentives that drive the machinery of government versus the natural flow of markets as manifest in the behavior of private-property owners. Private-property owners, contrary to popular belief, take the long view. Ownership provides incentives to maintain and increase value because it can be sold later. The incentive is for property owners to preserve the value of their asset.
In the present day, we have examples of this phenomenon everywhere. In the stock market, the market caps of many Internet stocks of companies that are years from turning a profit reflect the fact that investors are taking the long view. This difference in incentives is also reflected in behavior of renters versus owners. Anyone who has bought or sold real estate knows that owners take better care of their property and have every incentive to do so.
Government property owners have incentives that work in an opposite way. There is no ownership interest. Instead, the political process determines access and usage of the property. As Holcombe notes, “What politics gives, politics can take away.. Political victories are never permanent.”
Currently, the state of Maryland is very much an ally of the environmental movement and is acting on its behalf with these land purchases. That situation can easily change. Special interests can gain favors with those currently in power and force the issue their way. There is practical evidence everywhere that government fails in its promise to deliver for the public good.
In Maryland, we have water shortages, the cost of education is spiraling out of control and demand for these services seems insatiable. We have horrible traffic congestion and the list goes on and on. And yet, what do these things have in common? They are government services or are heavily regulated. These things don’t happen in the private sector. Can you imagine Intel making a public announcement pleading with the people to buy fewer computers and conserve computing power? Can you imagine Wal-Mart pleading with the public to buy fewer goods to help it through its shortage? Absurd! But in government, this is everyday reality.
What does all this have to do with land ownership? It serves to show that government incentives make it very improbable that it will be able to perform its assigned role adequately or with any efficiency, especially when compared to the private sector. As Herbert Spencer noted over a century ago, “It is one thing to secure each man the unhindered power to pursue his own good; it is a widely different thing to pursue the good for him.”
Private landowners, like the owners of any other resource, perform a valuable service in the allocation of that resource in the market economy. Government owners are unable to do this, as Murray Rothbard succinctly observed, “due to the inherent defects of government operation; the absence of a profit and loss test, the conscription of initial capital, the coercion of revenue-the calculational chaos that government ownership and invasion of the free market create.” To break the link between the market and property owner is to destroy the ability to calculate and to best allocate the resource.
As Julian Simon once noted, there is a difference between physical conservation and economic conservation. Physical conservation is relatively straightforward. Like blocking off acres of land or making it illegal to use water for certain purposes. Economic conservation is taking into consideration the costs of using versus not using the resource. Economic conservation is preferred. You would rather have people reduce their use of water because the price of water is high, than conserve water simply to preserve the physical quantity of water. Man must live on this earth and in the process man will consume. It should seem obvious that mere physical conservation is not often desirable.
Those who support the government’s purchase of land promote an ethical system that places their values above others and that condones the use of force to coerce others to submit to their will. It is one that promotes the violation of individual rights and property.
Christopher Mayer is an MBA student at the University of Maryland. Further Reading: Garet Garrett, A Bubble That Broke the World (Boston: Little Brown & Company, 1932); Ben Moreell, The Admiral’s Log (Philadelphia: The Intercollegiate Society of Individualists, 1958); Randall G. Holcombe, Public Policy and the Quality of Life (Westport: Greenwood Press, 1995).
