Book Review: Natural Resources: Bureaucratic Myths and Environmental Management by Richard L. Stroup and John A. Baden

(Pacific Institute for Public Policy Research, 635 Mason Street, San Francisco, CA 94108) 1983
148 pages • $25.00 cloth, $9.95 paperback

The battle lines over environmental issues seem to be clearly drawn. On one side stand private landowners and businessmen, supposedly bent on plundering natural resources. Opposing them are government bureaucrats, who seem to form the environment’s last line of defense. Almost all environmentalists side with the bureaucrats.

But according to Richard Stroup and John Baden, the environmentalists are on the wrong side. Private owners face economic incentives which are fundamentally different from the political incentives facing government bureaucrats. After carefully examining these incentives, the authors conclude that private ownership of natural resources offers the best hope for enlightened resource management.

Consider, for example, the 107 million acres of public forestland managed by the federal government. The bureaucrats in control, no matter how well intentioned, have no economic incentive to promote efficient timber production. Instead of logging where marginal returns are the greatest, the U.S. Forest Service responds to political pressures. Bureaucratic mismanagement squanders scarce resources, deprives the nation of needed lumber, raises housing costs, and increases the number of acres that have to be cut to produce a given amount of lumber.

But wouldn’t private forest companies do even worse? Wouldn’t they strip forests bare and then move on? Not if they owned the forests. As private forest companies such as Boise Cascade and Weyerhaeuser have shown, it is in their economic self-interest to maintain their forests and plant seedlings—if for no other reason than to sell the forest to the next private owner.

In addition to forestland management, Stroup and Baden analyze air and water pollution, toxic waste disposal, the development of fossil fuels, nuclear and alternative energy sources, wildlife sanctuaries, rangeland management, and water resources. Through the use of basic economics and concrete examples, they make a compelling case for private ownership in a market economy as the best possible solution to environmental problems.