The New Economy

Hi There Folks!

It's bound to happen sooner or later.   Sooner or later we'll be going through the way we view money, transact with it and manage our lives around it.   It may happen in ten years or may happen in 50 but IT will happen.  The Bit-coin is a manifestation of the need for economic democracy...something that is NOT currently present in the U.S.  We are an oligarchy.  Wether the Bit-coin will hold up or not may not be the relevant point.  What is the point is that the huge disparity of wealth between those who have and those who don't is working its way to the tipping point of radical change.   The new economics will reflect the limits of growth and must reflect democracy in the workplace and with material accumulation.   What does our new economy looks like?  Is it a combination of barter, time swapping, and other elements?    We'll be exploring this issue some more.

Thanks!
Forest

Free Market Environmentalism: Giving away our future to the Greedy?

A Defense of Free Market Environmentalism

Posted on August 22, 2011 by Todd Wynn

By Nick Sibilla

On July 30, the Washington Post published my letter to the editor where I argued for theprivatization of America’s national parks. In response to an earlier op-ed (which claimed the National Park Service was a “prime example of government failure”), I wrote that the best way to solve government failure is through privatization. The national parks would be better managed if they were in the hands of private, environmental nonprofits. In short, I was arguing for free market environmentalism.

As one can imagine, privatization did not go down well with the Washington Post’sliberal readers. Online, my letter was swarmed with angry comments. My proposal was blasted as a “horribly misguided…propaganda piece.” I was called a “moron” and accused of “trying to destroy this country for a quick buck.”  One commenter even said I should go kill myself. In fact, another said I would “sell [my] grandma if it made a profit.”

Since a letter to the editor is too short to fully promote free market environmentalism, I will now rebut some of the more misinformed claims about privatizing the parks.

Private parks would not lead to price gouging

One common concern was that if the parks were privatized, the owners would gouge the visitors and charge incredibly high entrance fees.  The simplest response is that if a greedy park owner did charge something outrageously high (say, $200 per ticket) who would attend?  To attract more visitors, private parks would have incentives to charge a reasonable price, in order to increase profit. In addition, since the government would no longer have a monopoly, parks would compete with each other to attract visitors, thereby driving entrance fees down.

Now, some might counter that this proposal cannot work with all parks.  Whoever owns all of the Grand Canyon has a monopoly, and so, they can price gouge to their heart’s content.  But why should all of the Grand Canyon go to just one buyer?  To further increase competition, parks that have truly unique features could be divided into smaller pieces and purchased by different organizations.  After all, places like Yosemite, Yellowstone, and the Grand Canyon are immense.

In addition, what many people don’t realize is that there ain’t no such thing as a free lunch.  While the parks do have nominal fees, most of their cost is hidden to visitors.  Visitors already pay for the parks through concessions, lodging, parking permits, and taxes.

The parks are safer in private hands than in the government’s

In the Washington Post, I specifically mentioned that the parks should be “managed by environmentalists in the private sector.” Putting aside their politics, nonprofits like theSierra Club and the Nature Conservancy have great records in conservation. In addition, one liberty-minded commenter commended the Land Trust Alliance for its “successful history of land management.” But despite this clear and explicit praise, I was still called a “right-wing anti-environment hack.”

However, there are other options to ensure private conservation. Environmental nonprofits need not be the only option. The Department of the Interior (which oversees the National Park Service) could also sell the parks as conservation easements. These agreements allow land to be managed privately, but with legally binding agreements to limit development. This would assure Americans that the parks would still be preserved, regardless of their owner.

In addition, what these anti-privatization advocates fail to realize is that the government does not always promote an environmentalist agenda. Since the parks would no longer depend on federal funding, there would be no need to aggressively lobby Congress or worry about election cycles. Indeed, none of these commenters rebutted my concerns about regulatory capture (when a regulatory agency becomes dominated by special interests) or political patronage. For example, under President Reagan, Secretary of the Interior James Watt quintupled leasing federal land to coalmining and regularly mocked environmentalists. Indeed, he once quipped there are two groups living in the United States: “liberals and Americans.” Remember, Watt was once the ultimate overseer of the National Park Service.

Furthermore, the Sea Lion Caves on the Oregon coast exemplify how private conservation can rectify a government failure. In 1920, the Oregon Legislature established a bounty to exterminate populations of seals and sea lions on the Oregon Coast.  Each sea lion slaughtered earned a $5 reward, up to an annual limit of $10,000 a year.  By comparison, these bounty hunters would have earned over $120,000 a year in 2010 dollars, thanks to these perverse government incentives.

Fortunately for the sea lions, the market stepped in to correct this egregious government failure.  In 1927, R.E. Clanton purchased America’s largest sea cave and drove away bounty hunters from his property.  Five years later, Clanton opened a for-profit business to attract visitors.  Since then, the Sea Lion Caves have been both profitable and protective of the environment. Each year, over 200,000 people visit, while the sea lion population on the Oregon coast has quadrupled since 1964. Indeed, profit and stewardship are interdependent.  At the Sea Lion Caves:

…their profitability depends on the presence of the animals. The owners take every precaution against disrupting the natural habitat. Thus, tourists are fenced out at a distance close enough for viewing, while the animals are free to come and go, unlike in an aquarium or zoo. Further, maintenance and improvements are undertaken only when the wildlife will not be disturbed….The Sea Lion Caves demonstrate that making a living and preserving wildlife can be compatible.

Disney has a great model

On that note, free market environmentalism is regularly accused of turning the parks into Disneyworld (or worse, Chuck E Cheese). My response: We should be so lucky.

Disney actually has an animal conservation park: Disney’s Animal Kingdom in Florida. Although it’s the seventh most visited theme park in the world, Animal Kingdom is anaccredited zoo, according to the Association of Zoos and Aquariums. But thanks to its high profits, Disney has been able to fund a plethora of conservation projects, like planting trees and preserving coral reefs with the Nature Conservancy, rescuing endangered gorillas in the Congo, and protecting 12,000 acres of Florida wetlands, to name but a few.

Some might argue that this is not a fair comparison to privatizing the parks, since Disney’s Animal Kingdom is not conserving land. In fact, it’s even better than conservation. Before this park was developed, the land in Lake Buena Vista, Florida was vacant and not a source of anything valuable to environmentalists. But because of Disney’s efforts, that land is now home to over 200 different species and 1,000 animalsfrom around the world, including a replicated African savannah. In other words, Disney has generated both economic and environmental value. Not bad for a multibillion dollar media conglomerate.

Privatization is a continuum

While full privatization may be ideal, there are other options to inject market forces into public lands.  In Oregon, Timberline Lodge is a phenomenal example of this partial privatization.

Nestled on the slopes of Mount Hood, Timberline Lodge was built as a public works project during the Great Depression. In fact, President Franklin D. Roosevelt personally dedicated the lodge in 1937. However, due to repeated mismanagement by the government, the lodge was forced to close in 1955—barely 18 years of operation. But soon after it closed, Richard Kohnstamm made a bid to operate the lodge.  Starting in 1955, Timberline Lodge was run as a public-private partnership: the U.S. Forest Service would administrate and own the property, but contract out the day-to-day operations to the Kohnstamm family.

This market infused partnership became immensely successful.  The lodge now receivesalmost 2 million visitors each year and became the first ski resort to be honored as a National Historic Landmark.  But without the efforts of Richard Kohnstamm, Timberline Lodge would have remained derelict.

Privatization would not lead to advertisements everywhere

Whoever runs the parks has a strong incentive not to turn Yosemite or Crater Lake into Times Square. One major reason why people visit natural parks is to “escape” from modern life and reconnect with nature. Visitors greatly value nature and would eagerly pay a premium for that experience. Thus, accepting advertisements would “devalue” the experience of being in nature (permit the economic language). In addition, the ad revenue hardly would compensate for the loss of experiencing nature. Private owners have a formidable incentive not to plaster ads over their land.

Even if an evil, nasty transnational corporation did plaster ads all over one of its parks, no one is forced to enter. In a free market system, there would be other, ad-free parks to visit. In addition, people could boycott that park and force that corporation to change its ways and respond to consumer demand.

We don’t have money

Many have argued that instead of privatizing the parks, we should increase spending on the national parks. However, this solution is not as simple as it sounds. The U.S. national debt is over $14,000,000,000,000. In the debt ceiling agreement just reached between President Obama and Congress, roughly $2.4 trillion in federal spending is supposed to be cut in just the next decade. It is unlikely that national parks will compete successfully with much more powerful political interests defending expensive programs such as entitlements and national defense.

All in all, privatizing the parks is not ivory tower speculation. Disney’s Animal Kingdom, the Sea Lion Caves, and the Timberline Lodge are all living proof that free markets can promote and protect the environment.

Nick Sibilla is a research associate at Cascade. He received his bachelor’s degree in Political Science and Religious Studies from the University of Pittsburgh.

This entry was posted in Cascade Website, Environment, Todd Wynn and tagged advertisements, conservation,conserve, debt, Department of Interior, disney, Environment, free market, free market environmentalism, free markets,national debt, national park, national park service, national parks, park, privatize, washington post. Bookmark thepermalink.

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