Question for libertarians: why are rangers less evil (and more stupid) than teachers?

Libertarians often say that public lands should be handed over to the private sector, which has an incentive to conserve them. But doesn’t the same logic that leads them to hate teachers’ unions also imply that forest rangers will do anything to preserve the forests that provide their cushy jobs?

A student currently enrolled in an Institute for Humane Studies seminar writes me to ask about a libertarian argument I’ve heard before: that “privately owned lands will be better cared for since their owners have incentives to do so; public servants have no incentive to do so since their salary is independent of their success at preserving these lands.”

This has always struck me as a complete non sequitur. The conclusion seems to rely on an incentives argument but is stated with much greater confidence than the argument seems to justify.  If I own a forest and clear-cut it for the lumber, I can make millions.*   On the other hand,  a forest service employee who lets the land be clear-cut will clearly be out of a job, will never get another one in the government, and will probably go to jail.  Why are public sector workers whose job depends on protecting the environment supposed to be so lousy at protecting their interests while private entrepreneurs are perfect at protecting theirs?  In other contexts, i.e. those in which public employees’ determination to protect their turf,  budgets, and employee pensions are at issue, libertarians typically assume the contrary: public-sector employees will do anything to keep their jobs and to increase, not decrease, their power to regulate.

All this isn’t even to mention externalities: cutting down a tree causes costs to others that a forest owner doesn’t personally bear. Including externalities would make the libertarian argument even weaker.  But I’m saying that even without them, the argument fails on its own terms.

Obviously, I’ve cited an extreme case. Most kinds of malfeasance would be harder to catch than allowing a treyf clear-cut. But the larger point is that incentive arguments can cut both ways.  The public sector can provide adequate incentives for doing one’s job well. (It had better be able to, or else cops are no better than organized criminals.) And the private sector can contain incentives for doing extreme things that in a world of perfect information and infinite liquidity wouldn’t happen.

I’m sure that commenters will say that I’m taking libertarian dogma too seriously by even considering the question.  But I’d like to prove that assumption wrong if I can.  I’ve only heard the “private stewardship is best” argument in a very crude form. Is there a more sophisticated form that makes it less laughable than it seems?

*True, I might make more over time by husbanding the resource, but what if I’m hard up and need the cash now—or want the capital to start a business that makes more profit than growing trees?  The answer might be that in that case I could sell it to someone who would in turn have an interest in husbanding it. But buyers aren’t always available when I need them and might be suspicious of my desire to sell within a week.

Author: Andrew Sabl

I'm a political theorist and Visiting Professor (through 2017) in the Program on Ethics, Politics and Economics at Yale. My interests include the history of political thought, toleration, democratic theory, political ethics, problems of coordination and convention, the realist movement in political theory, and the thought of David Hume. My first book, Ruling Passions: Political Offices and Democratic Ethics (Princeton, 2002) covered many of these topics, with a special focus on the varieties of democratic politics and the disparate qualities of mind and character appropriate to those who practice each of them. My second book Hume's Politics: Coordination and Crisis in the History of England was published in 2012; I am currently finishing a book on toleration, with the working title The Virtues of Hypocrisy, under contract with Harvard University Press. A Los Angeles native, I got my B.A. and Ph.D. from Harvard. Before coming to Yale I taught at Vanderbilt and at UCLA, where I was an Assistant, Associate, and Full Professor; and held visiting positions at Williams, Harvard, and Princeton. I am married to Miriam Laugesen, who teaches health policy and the politics of health care at the Mailman School of public health at Columbia, and we have a twelve-year-old son.

25 thoughts on “Question for libertarians: why are rangers less evil (and more stupid) than teachers?”

  1. Mandy Rice-Davies, when the prosecuting counsel pointed out that Lord Astor denied an affair or having even met her, famously observed, “Well, he would, wouldn’t he?”

    If you regard libertarian theology as, at best, an apology for whatever capitalism does, and, more commonly, a denial against evidence, I don’t suppose you worry too much about unearthing “a more sophisticated form”.

    But, certainly, there’s some relation between libertarian ideas and the “proofs” of economists, who have considered, variously, the profit-maximizing entrepreneur, the problems of the commons and, in more recent years, the problems of public choice and “rent-seeking”. I always assume that the enthusiasms of libertarians for the “free market” begin, intellectually, with the logical theorems and vague, uncritical generalities of Econ 101. The logical force of such abstract arguments have been rotting brains since the Physiocrats rationalized the ruin of acien regime France.

    It seems to me, from your post, that you are already familiar with the basic outlines of those economic arguments. Do you just want to see “first-best” arguments from logical deduction duke it out with “second-best” arguments from experience and evidence?

  2. This libertarian argument always seems to rely on a very long-term view. “Sure, you might make money TODAY by clearcutting”, the argument goes, “but then you’d be reducing the value of the land asset that your grandchildren inherit.” Real human beings don’t think like this; that’s obvious to the most casual observer.

    Long-term irrational economic behavior is obvious in the stock market, but there it doesn’t have long-term effects. Suppose that 10% of big stockholders have the attitude “I’ll buy this company, strip it bare, and find a greater fool to buy the worthless remains.” (Hi there, Mitt Romney!) Under this regime companies have a finite lifetime; every 10th buyout, you expect the whole thing to go under. That hurts, but it doesn’t deplete a resource. New companies rise up and are on average just as good as the old ones.

    Apply the same regime to a natural resource, like endangered-species habitat. Even if *some* or *most* of the owners are long-term-rational in the libertarian dream way … well, if a species goes through one bad-land-raider’s portfolio, just once, it’s gone. (A species, or a habitat, or an intangible principle like “Half Dome is an inappropriate place for luxury condos”. Once it’s gone it’s probably gone for good.)

  3. “Including externalities would make the libertarian argument even weaker.”

    Are there any libertarian arguments this doesn’t apply to?

  4. hilker: depends on what you count. I contend there’s a libertarian argument in favor of carbon taxes. Sadly, I think I’m in the minority among self-professed libertarians here.

    Andrew: I’ll take a crack, although this isn’t an argument I tend to go around making in a strong form. I think the sophisticated form also makes weaker claims, but claims that are enough weaker that they aren’t silly.

    Basically, the argument is that the private sector is more likely to have a better incentive alignment (as opposed to the crude “guaranteed to have a perfect one”). Essentially, you take the Hayekian claim that markets embed a whole bunch of information that no one explicitly has in one place, and automatically gives people incentives to respond to that information, to argue the private sector will usually have relatively good incentives. Note that this doesn’t rely on “everyone always responds to incentives perfectly”; if you ignore incentives, you go out of business, a new business shows up, and it probably doesn’t ignore incentives (and when it starts to ignore them too badly, it fails too).

    The government, on the other hand, doesn’t have this sort of pressure. It still has incentives, but if it starts doing stupid things it doesn’t go out of business–sometimes it gets a budget cut. And sometimes it gets a budget hike. Because it’s genuinely kind of hard to tell whether your problem is getting worse because your screwing it up, or because it’s getting really bad and you need more resources to fight it.

    And we all basically accept this in general; BM specifically points out that in the stock market this all happens, sometimes people are stupid, then new companies pop up and it’s not a problem. The environment is a weird case for a number of reasons. And I guess the real libertarian argument is that the park ranger loses his job if he lets someone clearcut the forest. But how do you know that clearcutting the forest isn’t the best thing to do?

  5. Are Libertarians blind to history? Private enterprise has ravaged natural resources for centuries, while only governments have (occasionally) protected them.

  6. I concur as to your conclusions, Mr Sabl, but your argument could be better grounded in the actual practices of the USDA Forest Service. While clearcutting has been significantly reduced on USFS lands during the last couple of decades, it’s far from unheard-of even today. More to the point, it has long been a central concern of forest-protection advocates in the US that USFS District Rangers, like Forest Supervisors, still have their performance measured against a numeric timber production target (once the “allowable sale quantity” or ASQ, lately the “probable sale quantity” or PSQ, and changed under the Bush II administration from “offered” to “sold”), along with a very few other key indices.

    The idea that private capital would better ‘manage’ our forests is readily refuted by the example of essentially every corporate timber operation in the country – except to those already firmly committed to the ideology that forests are but timber waiting conversion to dollars on the stump.

  7. This applies to health insurance as well. Why would I as a rational consumer trust a private insurance company over the government. The private incentive is to collect as much as they can from me while paying for the least amount of services they can get away with. The public incentive is to give me all the service budget allows so I reelect them.

    My representative needs me to like them. My insurance company will drop me if I miss a payment.

  8. Even a high-ranking official in public land management rarely has anything close to the authority or discretion of a private owner. Public lands are managed by networks of employees under clear directives, including preservation, from the ultimate owners, the public. Any supposed comparison of “public managers” and “private owners” that fails to take full account of that is pointless.

  9. This post contains quite a few questionable premises. For instance, why is it assumed that the public employee’s job “depends on protecting the environment”? In the case of the Forest Service, that has not been true for the bulk of hte agency’s history. It was created as a resource agency, in the Agriculture Department, not as part of Interior. For most of its history, the agency has been structured in such a way that budgets and power are maximized through excessive road-building and below-cost timber sales, not conserving environmental values. The nature of political management is also such that multiple use is more difficult to maintain. Whereas International Paper can turn a profit by catering to recreational and conservation interests in the way it manages its lands in the decades between cuts, public entities tend to lack the flexibility and autonomy to operate equivalently. When we step back and look at the empirical evidence, we also see that net forest growth over the 20th century was significantly greater on pirvate than on government lands. We also see that state agencies that manage their lands more like private owners (e.g. state trust lands for which schools are residual claimants) tend to outperform equivalent federal land units on both economic and environmental grounds. Again, this is explained not by making assumptions about the people in the various jobs, but on the institutional context in which they find themselves.

    More broadly, the empirical evidence that property-based systems out-perform political management is quite strong. Across a wide range of resources, those that are managed through property rights or their equivalent tend to outperform their politically managed (or open-access) equivalents. There’s lots of available data making this point. One place to look is the recent empirical work on fisheries, showing the clear superiority of property systems over political management. Again, the claim is not that fishermen are any more or less evil than fishery regulators, but that the institutional structure in one case creates better incentives than in the other. The problem, of course, is that not all resources are equally amenable to property-based management regimes. Even allowing for various forms of collective or “corporate” (as in through some sort of share-based entity) ownership, in some cases property systems remain impractical. In other cases there may be other concerns, such as potential distributional effects. But this does not alter the basic finding about the sorts of institutional arrangements that best maximize stewardship.

    If I may be excused a bit of self-promotion, I’ve summarized some of the relevant literature in various articles, including these two:

    JHA

  10. @ Tyler

    This applies to health insurance as well. Why would I as a rational consumer trust a private insurance company over the government. The private incentive is to collect as much as they can from me while paying for the least amount of services they can get away with. The public incentive is to give me all the service budget allows so I reelect them.
    My representative needs me to like them. My insurance company will drop me if I miss a payment.

    Actually, they’ll drop you if you make a claim. At least, if you’ve obtained your insurance through the individual market. Some health insurance executive bragged before Congress that “rescission” affected only about 0.5% of the insured every year – but that number is in fact extraordinarily high. Only about 5% of people spend significant money on health care every year, and 1% account for a quarter of all spending. It’s a safe bet that the insurer doesn’t bother with “rescission” if they’re making more in premiums than the policy is costing their firm. “Rescission” is a technique that mostly can only be used on people who’ve purchased their care on the individual market, rather than receiving insurance through their employer (or, of course, from the government, say through Medicare). About half of the insured obtain their insurance on the individual market – suggesting that the 2.5% of patients accruing significant medical bills who obtained insurance individually face a minimum 20% chance of having their policy “rescinded”, with that possibility presumable climbing as the bills mount.

  11. Finally, a minister of propaganda has arrived to make false claims!

    “When we step back and look at the empirical evidence, we also see that net forest growth over the 20th century was significantly greater on pirvate than on government lands”

    Fallacy #1: Forest growth does not equal environmental stewardship.

    “One place to look is the recent empirical work on fisheries, showing the clear superiority of property systems over political management.”

    Fallacy #2: ignore the obvious negative externalities. See here: http://www.greenpeace.org/international/seafood/understanding-the-problem/overfishing-history/sea-cow-steller-extinction

    Good times!

  12. Andrew Sabl,
    Although I am neither a libertarian nor a Libertarian I’ll take a stab at this. I expect you will see the outlines of an answer to your question in the AER articles “The Use of Knowlegde in Society” by Friedrich Hayek and “The Market for Yes-men” by Canice Prendergast and the JPE article “Anarchy and its Breakdown” by Jack Hirschliefer.
    Hayek discusses the problem facing political decision makers who lack detailed information. “What works?” is an empirical question which only an experiment (a competitive market in goods and servises, or a federal system of government) can answer. Prendergast discusses the incentives that subordinates face in political (and other corporate) hierarchies. Remote authorities use information which the organizations that they direct supply. Hirschliefer discusses the issue that Jonathan Adler mentions: “The problem, of course, is that not all resources are equally amenable to property-based management regimes.” How do you put a fence around pelagic tuna?
    In general, individuals respond to incentives and institutions shape incentives. There’s no point in arguing over types of legal regimes with anyone who disputes this. Laws shape incentives with threats of punishment. Bureaucracies shape incentives with promises of promotion (and the opportunity for self-dealing that ascent of the hierarchy offers). Markets (the legal regime of title and contract law) shape incentives with the promise to title holders to protect exchanges of material resources.
    Oh, and read the Science article “The Tragedy of the Commons” by Garrett Hardin.

  13. Benny Lava —

    Your post actually helps make my point. The Greenpeace link isn’t about externalities, but the overfishing of open access commons, which was the historical norm in fisheries. Political management has not improved on the situation, which is why fisheries remain under stress the world over. Indeed there are few sustainable fisheries anywhere in the world not under property management regimes.

    As for your other point, of course forest growth is not the only relevant variable. It is a salient point when talking about the Forest Service, however, as the USFS was expressly created to prevent a “timber famine” due to overharvesting on private lands — a timber famine that never materialized as private timber growth outpaced that on federal lands. In any event, when other ecological characteristics are considered, private lands continue to fare well against their politically managed counterparts.

    JHA

  14. This argument about more growth on private lands reminds me of the huge bonuses so many bankers got in 2010 because profits were way higher than 2009. Unless you have comparable starting points, comparing growth numbers is inconclusive at best. It’s easy to show growth from zero.

  15. When we step back and look at the empirical evidence, we also see that net forest growth over the 20th century was significantly greater on pirvate than on government lands.

    This is commonly used by those seeking to mislead. I am willing to believe here it is mindlessly parroted.

    The reason for this is the abandonment of farms in New England and the forest moving back in. This is not due to Galtian/Herculean private property owners’ God-like stewardship.

    This is not to say I do not like family forests. I merely point out the tactics. Or parroting of tactics. Which leads me to this:

    the USFS was expressly created to prevent a “timber famine” due to overharvesting on private lands

    I’m not generally a FS fan at the high levels, altho I have colleagues on the ground. But I have never heard this before, despite studying forest management history and forest ecosystems.

    These tactics concern me.

  16. The reason for this is the abandonment of farms in New England and the forest moving back in.

    Yes, but that should read ‘farms across the East’. I could dig up some actual paper from the early nineties if anyone actually cared what they said.

    But there’s also a false comparison embedded in the misleading metric of ‘net forest growth.’ On the whole, private timberlands are on the higher-site-potential acres, with better soil, more water, and less extreme temperatures than even the ‘suitable timberland’ portions of the national forests.

    the USFS was expressly created to prevent a “timber famine” due to overharvesting on private lands

    Sort of. The Upper Midwest had just been laid waste, after all, so the idea that the timber barons if left to their own devices might just whack everything and move on had some traction. The timber famine idea was one advanced by Gifford Pinchot among others in promoting their vision of public forests as the testbed for a progressive, scientific forestry. But if you look at the actual Organic Act, it talks about the protection of water supplies as well. And what was in Pinchot mind when he drew the lines that became the midnight reserves, or in Roosevelt’s when he signed ’em into being?

    But Pinchot also said ‘forestry begins with the axe,’ and for generations FS rangers’ efforts to bring the national forests ‘into management’ meant meeting those ASQs by logging the holy crap out of the biggest stands on the best and most accessible sites, to get the decadent old-growth out of the way and those fast-growing plantations planted and growing. As we have now discovered to our collective chagrin, ‘net forest growth’ is an essentially agricultural idea that fails as a useful metric for the many things we need from forests, including, yes, carbon storage.

    And the whole plantation thing didn’t actually work out nearly as well as the models suggested, and hardly provided for wildlife, natural fire regimes, or the persistent inability of the Forest Service to actually keep ’em planted and growning and thinned on schedule. Sometimes there was funding; sometimes there wasn’t. Which gets to another point: the FS gets to keep some of the money when it sells timber. To do everything else, it has to get money from Congress.

  17. “Your post actually helps make my point.”

    No it doesn’t. Think harder, you aren’t trying.

    “Political management has not improved on the situation, which is why fisheries remain under stress the world over.”

    Do you have evidence that political management has not prevented extinction of species that otherwise would have in an unregulated market? Again, another fallacy.

    “It is a salient point when talking about the Forest Service, however, as the USFS was expressly created to prevent a “timber famine” due to overharvesting on private lands — a timber famine that never materialized as private timber growth outpaced that on federal lands.”

    The mission of the Forest Service is “to provide the greatest amount of good for the greatest amount of people in the long run”. This service encompasses millions of acres of grassland, which is why referencing timber growth is a fallacy that you choose to ignore because it contradicts your argument. Again, try HARDER.

  18. Benny Lava —

    I cite to some of the relevant fisheries literature in the third link I posted above, and there are more recent papers that document the superiority of property-based management systems over the available alternatives. (See, e.g., Costello, et al., Science, vol. 321 (2008): 1678-81) Pointing to species extinctions in the ocean commons is a nonsequitur, as there is no private ownership. It’s undisputed that open access fisheries have been depleted. It’s also undisputed that fisheries subject to political management have been depleted — so much so that few fisheries experts defend traditional regulation any more (though some interest groups do). The empirical literature also makes clear that fisheries subject to property-based management, on the other hand, are rarely if ever depleted. Indeed, in some systems fishery rights holders have tended to seek lower catch limits than the regulators.

    On the USFS, when the Forest Service was created, the concern was a timber famine. TR, Pinchot, et al., thought private timber practices were unsustainable, so the federal government had to acquire and manage timberlands to ensure sustainable timber production. The USFS has failed at this goal, even if it has been used to help achieve some others. The National Grasslands were not created until 1960, so it’s not relevant to the purpose for which the service was founded. At around that time, other environmental goals (such as wilderness preservation) were also grafted on to the Forest Service’s mandate, but they were not part of the initial aim either. In any event, the timber growth rate on USFS timberlands has lagged behind private equivalents — a point that is relevant if (returning to the original question) we are interested in comparing private and political management regimes. As for other measures of forest management, there have been comparative studies of Forest Service units with equivalent state trust units, for which there are residual claimants, finding superior economic and ecological management in the latter case, largely due to the different institutional structure — a structure that more closely replicates the incentives facing private owners. The National Park Service experiments with fee demonstration projects has produced similar results.

    The bottom line is that institutions matter, and politically managed institutions tend to have a hard time maximizing environmental values when compared to their property-based equivalents. It’s not an invariable rule, but it is a clear, well-documented tendency.

    JHA

  19. the USFS was expressly created to prevent a “timber famine” due to overharvesting on private lands

    No. That was only part of it. I agree, however, that resource-exploiting politicians (the last great one being wide-stanced Larry Craig) shot down that idea.

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