Wish upon a star: Sell Disney the Grand Canyon

February 26, 2006 • Commentary
This article appeared in the Houston Chronicle on February 26, 2006.

Earlier this month, the Bush administration proposed to sell 200,000 acres of federal land in order to raise money for rural schools in 41 states. Despite the fact that the proposed sale represents only tiny fraction of the total federal estate and despite the fact that the parcels in question range from only a quarter of an acre to 200 acres in size many environmentalists are apoplectic.

Admittedly, many Americans believe that the federal government needs to own land in order to keep it out of the hands of developers. That is why so many recoil from privatization.

But why should those who oppose development be able to impose their preferences regarding land use on everyone else? If there is more money to be made by turning the Grand Canyon over to the Walt Disney Co. rather than to an eco‐​sensitive tourism cooperative, it simply means that the public demand for Disney’s services at the Grand Canyon is greater than the public’s demand for Deep Green Trail Services Inc.

Corporations are simply the economic agents of consumers (us).

Complaints about corporations are really veiled complaints about the preferences of some people.

In this case, environmentalist complaints are really complaints about the preferences of the rabble. If the preferences of the rich were to dominate the market, the environment would likely benefit because the rich (as a group) care a lot more about the environment than anyone else.

The demographic profile of the membership of major environmental organizations certainly bears that out. So do public opinion surveys and the behavior of the rich themselves. For instance, Roxanne Quimby, founder of Burt’s Bees cosmetics, is buying up vast tracts of land from timber companies in Maine in order to turn a large chunk of that state into the nation’s largest wilderness area east of the Mississippi River.

American apparel magnate Douglas Tompkins recently bought 2 million square miles of Patagonia wilderness with the intent of keeping that land wild forever. Cattle ranches across the American West are being bought‐​up by West Coast millionaires who are retiring the cows and turning the land into their own private parks. Given that ecologically attractive land is relatively cheap, it only takes a few environmentally minded rich people to change the world.

Market trends also suggest that privatizing public land would move land away from resource extraction and toward preservation and conservation.

Trade associations for cattle ranchers and farmers, for instance, fight tooth‐​and‐​nail to prohibit the sale of federal grazing permits and water allocation rights to those outside their industries. Those trade groups rightly fear that if environmentalists were allowed to buy grazing or water rights from ranchers and farmers, there would be few ranchers or farmers left for those trade groups to represent.

Timber companies likewise fight to keep conservationists out of the bidding for federal timber rights. When environmentalists have been allowed in to such auctions, they have often outbid the timber companies for exploitation rights. Those facts speak volumes about how the market might allocate public resources if politicians were to get out of the way.

Some object to privatization because they believe that our national “crown jewels” (however defined) are sacred natural treasures and that no price tag can or should be attached to them. Well, one is welcome to one’s beliefs, but value is subjective. Land is worth only what people will pay for it. And while you might well believe that old growth forests are “sacred,” you can’t expect a government that strives to keep church separated from state to provide you with a taxpayer‐​financed cathedral.

A more sophisticated objection to privatization is related to the fact that land owners cannot force others to pay for the psychic benefits that they receive from their conservation efforts.

Economists refer to this as “existence value” and believe that a large number of people free ride off the conservation expenditures of others. That in turn means that the market will produce less money for conservation than would be socially optimal.

While that may well be true, it’s unclear to what extent free‐​riders reduce the market power of conservationists. The success of the Nature Conservancy, the Audubon Society, Ducks Unlimited, and other private nonprofit land holders suggests that conservationists have little trouble attracting donations. If free riding were found to be a serious problem, then subsidizing contributions to conservation programs (say, via tax deductions) is an easier and cleaner solution to the problem than public ownership.

Private property will end up in the hands of those who value that property most. Public property, on the other hand, will end up in the control of the best organized and the most politically powerful. If environmentalists are right that an overwhelming majority of Americans want to keep our public lands wild and free, then they would have everything to gain and little to lose from privatization. If their suspicions about the preferences of “the rabble” are correct, then we might see more commercial uses of public lands. Either way, the public will get what it wants, and what’s so bad about that?

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