Category Archives: Politics

We’re All Environmentalists Now

Regulations took care of the most serious issues. Now it’s time for markets to handle the rest, says Terry Anderson.

By Valentin Schmid, Epoch Times

Elephant in Zimbabwe
An elephant in Hwange National Park in Zimbabwe in this file photo. Since 1989, a Zimbabwean program that allows local communities to market hunting quotas has increased incomes by up to 25 percent and encouraged locals to protect the animals, leading to an increase in the population.(MARTIN BUREAU/AFP/Getty Images)

The days when political lines could be drawn in terms of where one stood on the environment are over. Everybody wants cleaner air, open spaces, vibrant wildlife, and lusher vegetation. The question is, how do we get there: through more regulation, or through free-market solutions? To seek answers, The Epoch Times spoke to Terry Anderson*, a senior fellow at the Hoover Institution and one of the country’s foremost experts on free-market environmentalism, at the Gottfried von Haberler Conference in Liechtenstein on May 19, 2017.

The Epoch Times: People equate environmental protection with regulation. You say the market can also find solutions. How?

Terry Anderson: The original regulations came from some pretty serious problems. The Clean Water Act in the United States was passed when rivers were burning. The Clean Air Act was passed when children couldn’t go outside because of the smog in Los Angeles. The Endangered Species Act was passed when the bald eagle was nearly extinct. These were low hanging fruit; we picked the worst sources of pollution, where people were dumping poison into the rivers and air. We also said, “Don’t shoot bald eagles,” and this was relatively easy to do.

Now we are looking at higher fruits that are harder to get through the political process. I see free-market environmentalism as having two prongs: one is a healthy economy that allows you to achieve the higher hanging fruit, and the second is getting the incentives right.

The Epoch Times: Why is having a good economy important? Doesn’t more business harm the environment?

Mr. Anderson: Wealth is created by productivity, by humans generating capital. The more productive you are, the fewer resources you need. The more capital you have, the more you can use it on the environment.

If you ask people in the developing world to save wildlife, it’s very low on their priority list. They may care about the air quality in their home if they are burning dung and maybe they would prefer to have natural gas. They care about the water quality in the river where they get their drinking water. They want to have those basic needs met first.

The Epoch Times: What about the incentives?

Mr. Anderson: Political solutions and regulations don’t depend on incentives other than the threat of punishment. If we find positive incentives through markets, we can solve the more difficult problems, even for the developing world. One example is wildlife in Africa. If you tell local people, “Save elephants because they are magnificent animals,” and the elephant just trampled over their crop, they won’t be very enamored with this argument.

But one successful program implemented in Zimbabwe is called CAMPFIRE (Communal Areas Management Programme for Indigenous Resources). It gives communities control over their wildlife without central planning. They can market hunting; they can market ecotourism. Then they see elephants as a source of revenue, and they start to treat them differently.

They distribute the profits from hunting, as well as the meat of the hunted elephants, among the people. And there are jobs for the people along the way. Because the elephant has value to the community, poaching went to zero in those places. The live elephants are worth enough that the last thing the village wants is another person coming to kill the elephant just to sell the ivory on the black market.

A game warden told me: “We don’t kill poachers the first time, we just beat them up and send them back. But the second time they come, we will kill them.” The elephant becomes so valuable that the local people have an incentive to have more elephants around. Fewer of them are killed, and the ones alive are treated better.

Also, it’s not just hunting, it’s eco-safaris too. That’s a solution that’s hard to get through regulation. We have regulations about poaching, and they mostly don’t work.

The Epoch Times: What about the United States?

Mr. Anderson: Leaving water in the streams and rivers, for example, is good for the fish and the birds and other wildlife. But there is a trade-off between leaving the water in the rivers and using some of it for farming. In Montana, people say the state should tell people how much water they use for farming. But if one party wants to keep water in the stream for fishing, instead of forcing the farmer not to use water for irrigation, they can make a deal with the farmer and buy the water from him.

This is putting your money where your mouth is. If you have to pay for the water you want to preserve, you are going to be much more careful with the quantities and places you choose. There is a group in Oregon called The Freshwater Trust, and they purchase water from farmers to create habitats for salmon to spawn.

They purchase the water, leave it in the stream, and count the fish, and if it doesn’t work, they don’t buy the water anymore and they move to another stream.

The people out there who care about the salmon have better information about the salmon, [which allows them] to make the right decision. The farmer who sells the water has some idea how much it would be worth if it was still used for crops. Bureaucrats who pass laws mandating this or that have none of that information and no skin in the game.

Markets encourage cooperation. Unlike a lawsuit, you can’t strike a deal if you don’t cooperate. So the environmentalists operate as “enviropreneurs” and search for these win-win solutions. Some people say, “We should not have to pay for this; the elephants should just be saved.” Yes, that should be, but you have to be more realistic and say, “This is our starting point. The regulation doesn’t work, so let’s look for a better solution.”

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We’re All Environmentalists Now

*Terry L. Anderson has been a senior fellow at the Hoover Institution since 1998 and is currently the John and Jean DeNault Senior Fellow. He is the past president of the Property and Environment Research Center in Bozeman, MT, and a Professor Emeritus at Montana State University where he won many teaching awards during his 25 year career. Anderson is one of the founders of “free market environmentalism,” the idea of using markets and property rights to solve environmental problems, and in 2015 published the third edition of his co-authored book by that title. He is author or editor of 39 books, including most recently, Unlocking the Wealth of Indian Nations (2016), exploring the institutional underpinnings of American Indian reservation economies.

Automation, innovation and the arrogance of the elite

GIS opinion, by Prince Michael of Liechtenstein

In June 2016, Switzerland held a referendum on whether to introduce a guaranteed basic income (GBI) for all. Under such a system, governments regularly pay out a sum that would cover subsistence to each individual over the course of their entire lives. It was argued that since work was increasingly automated, fewer jobs were available. The measure was rejected by more than 75 percent of voters, despite a strong turnout from the proposal’s supporters.
Billionaire and Microsoft founder Bill Gates made a similar argument to that of the Swiss proposal’s supporters when he suggested the introduction of an income tax on robots, like that on employee wages. Proceeds of this tax would be used to provide a basic income for all to compensate for job losses and to ease inequality.

GIS opinion, by Prince Michael of Liechtenstein

In January 2017, the European Parliament’s legal affairs committee adopted a report on the consequences of the rise of robots and artificial intelligence. The report recommends that the member states adopt a guaranteed basic income for all, to compensate for the loss of jobs due to new technologies.

Sending the wrong message

It is no wonder that liberal Switzerland rejected GBI, since the values of self-responsibility and personal freedom are very strong in its civil society. Government is kept small and is considered a service provider. It is surprising, however, that Bill Gates, who with Microsoft spearheaded innovation and increased productivity in processes, is advocating measures such as GBI.

GBI will not only discourage innovation, but also send the wrong message concerning the work ethic. Certain parts of society might use this benefit to avoid education and work. It could create a new class of long-term government parasites. Living off public subsidies instead of on personal achievements deprives people of a good part of their dignity and sense of responsibility.

GBI will need financing, and it would result in increased taxes on the new means of production. Taxing robots, as proposed, will mean curbing innovation and, in consequence, reducing prosperity, especially for people with lower incomes.
In a post on LinkedIn, entrepreneur and author Anurag Harsh made a convincing case that we need not fear innovation; that robots will still need human guidance and that new jobs will be created. He quoted Henry Ford as saying, “If I had asked people what they wanted, they would have said faster horses.”

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GIS opinion: Automation, innovation and the arrogance of the elite

The U.S. and China’s ‘free trade’ agendas

GiS Expert View by Henrique Schneider

“Pursuing protectionism is like locking oneself in a dark room,” said China’s President Xi Jinping. “Wind and rain may be kept outside, but so is light and air.” Mr. Xi’s words of warning were directed at the new president of the United States. Meanwhile in Washington, Donald Trump erected new barriers to free trade. Why does Communist China seem to embrace free trade while the capitalist U.S. resorts to protectionism? The answer is simple. In both countries trade, or its absence, is just an instrument of politics. China’s approach to trade is best described as mercantilism. Its government allows for some economic freedom within its borders.
However, it pushes and regulates exports and curbs imports. The more the country exports, the more money it accumulates and the more power it has.
China does allow for some internal trade. But it has a set of “strategic industries” that are ring-fenced by regulation. This regulation makes it almost impossible for foreigners to supply, invest or acquire any stake in them. Also, a large network of state-owned enterprises operates independently from China’s free-trading commitments …

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The U.S. and China’s ‘free trade’ agendas

Trumps verhängnisvoller Nationalismus

LI-Paper von Richard Ebeling

Die von der US-Regierung eingeschlagene Richtung verspricht dunkle Zeiten für freiheitliche Werte wie Privateigentum und den begrenzten Staat.
Kaum hatte Donald Trump seine Hände von der Bibel genommen, auf welche er den präsidialen Eid geleistet hatte, die Verfassung der Vereinigten Staaten von Amerika zu erhalten, zu schützen und zu verteidigen, begann er auch schon damit, die Stossrichtung der US-Regierung radikal und schnell zu transformieren. Bereits hat er eine Reihe von präsidialen Verfügungen unterschrieben. Einige von ihnen, obwohl sie offensichtlich unterschiedliche intrinsische Qualitäten innehaben, sind kennzeichnend für die Prämissen und Prinzipien, die Donald Trump in einer Vielzahl seiner Entscheidungen leiten werden. Die eingeschlagene Richtung lautet: politischer und ökonomischer Nationalismus.
Viele Konservative und einige Liberale preisen die an sich gute Entscheidung Trumps, die Keystone-Pipeline voranzutreiben oder sein Versprechen, die steuerlichen und regulatorischen Belastungen für amerikanische Unternehmen zu reduzieren. Aber die Frage lautet doch: Warum wird er diese wirtschaftspolitischen Änderungen vorschlagen oder umsetzen? Ist der Grund tatsächlich, dass er glaubt, dass die Regierung die Individuen grundsätzlich frei leben lassen sollte und diese ihr persönliches Leben eigenverantwortlich gestalten sollen dürfen?
Dies ist offensichtlich nicht der Fall. Trumps Vision ist nicht jene der individuellen und wirtschaftlichen Freiheit. Es ist vielmehr das kollektivistische Ideal einer politisch bestimmten «nationalen Grösse», zu welchem alle Amerikaner beitragen sollen — wenn nicht freiwillig, dann eben durch die fiskalische und regulatorische Hand des Staates …

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Trumps verhängnisvoller Nationalismus (PDF)

Unlocking the Wealth of Indian Nations

By Terry L. Anderson*

Many Europeans still view Native Americans as the “noble savage” depicted in the paintings of Karl Bodmer. Traveling with the German explorer Prince Maximillan zu Wied-Neuwied from 1832 through 1834, Bodmer saw and painted American Indians with the dignity and cultural wealth they deserved. Unfortunately, that dignity and wealth have been stripped from most Native Americans by the federal government.

The dignity painted by Bodmer derived from the fact that Native Americans had well established institutions—property rights, limited government, and trade—that sustained indigenous economies. Before the arrival of Europeans, the more sedentary Indians of the East had well defined tribal and individual property rights to land, and invested in making land more productive. Pacific Northwest tribes invested in weirs to catch salmon on their upstream migration and sustainably harvested salmon to increase populations. Pueblo bands in the southwest developed sophisticated irrigation systems to cope with aridity. Even the more nomadic Plains Indians invested in “surrounds” into which buffalo were driven and in stone walls miles long to drive buffalo over cliffs. Thanks to the ingenuity of their members, many tribes were able to build up a surplus of goods—to, in other words, accumulate wealth—and trade with other tribes.

A story from the Lewis and Clark expedition shows the propensity of Native Americans to trade. While the Corps of Discovery, as the expedition was called, spent the first winter of 1803 in a Mandan village (now North Dakota), the blacksmith among them made trade axes and used them to barter with Indians for food, horses, and artifacts. Months later, when the expedition reached the Pacific Coast, they were surprised that one of the axes had beaten them there, having been traded between Indians many times across the plains and mountains. In the words of Adam Smith, Indians had the “propensity to truck, barter, and exchange.”

If Bodmer ventured into Indian Country today, however, he would be struck by the poverty and lack of economic development. Housing is typically substandard, businesses are small if they exist at all, and infrastructure is poor. In 2015, average household income on reservations was 68 percent below the U.S. average of $53,657; twenty percent of the households made less than $5,000 annually compared to 6 percent for the overall U.S. population; and 25 percent of the Indian population was below the poverty level compared to 15 percent for the nation as a whole. The suicide rate among Native American males aged 15 to 34 is 1.5 times than for the general population, the rate at which Native American females are raped is 2.5 times the national average, and the rate of child abuse on reservations is twice the national average.

In essence, Indian reservations are islands of poverty in a sea of wealth. Even though the Native American population of 2.9 million is roughly the population of Kansas, it is mainly ignored except by Washington bureaucrats. Bureaucracies, housed mostly in the Department of Interior, employed 9,000 people and spent approximately $2.9 billion in 2012. That amounts to one bureaucrat for every 322 Indians and $1,000 for every Indian.

The subjugation of Native Americans by the federal government began at the same time that Bodmer was traveling with Maximillan, when in 1832, Supreme Court Justice John Marshall concluded that the relationship between the federal government and Indians is that of “a ward to his guardian.” Since then through laws such as the Allotment Act (1877) and the Indian Reorganization Act (1934), Congress has locked Indian lands into perpetual trusteeship with the Department of Interior (DOI) as the trustee. As trustee, the DOI regulates land use, oversees leasing of Indian lands, collects revenue from Indian land leases, and distributes revenues back to the tribes and individual Indians. The resulting bureaucratic red tape makes development virtually impossible.

Consider what this means for the abundant energy resources in Indian Country. Reservations contain almost 30 percent of the coal reserves west of the Mississippi, 50 percent of potential uranium reserves, and 20 percent of known oil and gas reserves. The Council of Energy Resource Tribes recently estimated the total value of these resources at nearly $1.5 trillion.

Energy development on reservations could lead to jobs for people with the highest unemployment rates in the country, in some cases over 50 percent. For instance, on the Blackfeet reservation in Montana, drilling a single oil well resulted in 49 new jobs for the tribe, and each of its members received a $200 royalty payment in 2013. From its oil and gas reserves, the Blackfeet tribe has collected around $30 million in leases and bonus payments. Not surprisingly, Ron Crossguns, from the tribe’s oil and gas department, doesn’t think outsiders should tell the tribe how to manage its energy resources: “It’s our right. We say yes or no. I don’t think the outside world should come out here and dictate to us what we should do with our properties.”

The Bureau of Indian Affairs (BIA) is involved in nearly every aspect of energy development on Indians lands, including reviewing and approving pipeline agreements and rights-of-way approvals, and the process is notoriously inefficient. A 2015 Government Accountability Office (GAO) report observed that “the added complexity of the federal process stops many developers from pursuing Indian oil and gas resources for development” and that the process “can involve significantly more steps than the development of private or state resources, increase development costs, and add to the timeline for development.” The GAO report noted further that in 2014, the Southern Ute tribe reported that the BIA’s review of several of its pipeline rights-of-way agreements took as long as eight years. A simple review of a wind-energy lease on the Rosebud Sioux Reservation in South Dakota took a year and a half for the BIA to review. According to the developer, the delay made the project lose its agreement with the local utility, resulting in a loss of revenue for the company and the tribe.

Beyond energy resources, tribes also have water, timber, fisheries, grazing lands, and recreational amenities that could help pull them out of poverty. And, of course, for some tribes, especially those in more urban areas, gaming has brought jobs and income.

The enormous resource potential on reservations begs the question: Why can’t tribes unlock their wealth potential? Is it because their culture is inimical to economic growth? Is it that their members lack entrepreneurial and technical skills?

As described above, the historical record suggests that these are not the reasons for poverty in Indian Country. As tribe member and law professor Robert Miller notes, “Contrary to what most Americans believe, individual and family entrepreneurship is not a new concept to Indian cultures.”

If culture and entrepreneurship are not the impediments, what is the key to reservation growth? The key to Unlocking the Wealth of Indian Nations (Lexington Press, 2016),, is for Indian Nations to establish clear and stable property rights to their land, to create a rule of law that will attract the capital investment necessary to stimulate reservation economies, and to create fiscally responsible tribal governments that can provide the local infrastructure to support investment.

The lack of a rule of law on reservations thwarts capital investment in Indian Nations. Because tribes are considered sovereign nations, many have their own judicial systems separate and apart from the states in which they reside. Because tribal courts often do not follow jurisprudential rules taken for granted outside reservations, they discourage capital investment and credit markets on reservations. Writing for Forbes, Joseph Koppisch quoted an officer of a local lending institution near the Crow Reservation in Montana: “We take on such a huge extra risk with someone from the reservation. If I knew contracts would be enforced, then I could do a lot more business there.” As a result, when reservations with independent courts are compared to those whose civil disputes are adjudicated in state courts, per capita income for Indians on the latter reservations was 35 percentage points higher than the former. Hence, a stronger rule of law on reservations could contribute significantly to helping Indian Nations rise out of poverty.

The Trump administration may change much of this status quo. Trump has formed the Native American Affairs Coalition to free Indians from “a suffocating federal bureaucracy.” As Markwayne Mullin, a U.S. representative from Oklahoma and a Cherokee tribe member who is co-chairing Trump’s coalition, put it: “It is time to end the overreaching paternalism that has held American Indians back from being the drivers of their own destiny.”

If Native Americans are to determine their own destiny, rise out of poverty, and unlock their wealth trapped by trusteeship, they must achieve what the great Nez Perce Chief Joseph sought in 1879: “Let me be a free man, free to travel, free to stop, free to work, free to trade where I choose, free to follow the religion of my fathers, free to talk, think and act for myself.” It is past time to give Native American the freedom they deserve to make their own decisions about the future of their culture and economies.

* Terry L. Anderson is a fellow with the Lichtenstein Academy, PERC (Bozeman, MT), and the Hoover Institution, Stanford University. This essay is based on research published in Unlocking the Wealth of Indian Nations (Lexington Books) edited by Dr. Anderson.