Peter J. Hill

Privatizing the Commons: An Improvement?

Recent years have seen political economists turning to an institutional paradigm wherein the extent to which property rights are defined and enforced is an important determinant of human action. (Furubotn, 1972) The institutional or property rights approach has become an important component of explanations of both economic growth and economic inefficiency. The institutional environment now holds a prominent place in explanations of differential growth rates among political units and over time.1 The property rights approach has also become commonplace in the analysis of the environmental crisis where the lack of well-defined property rights is seen as the cause of environmental problems and movement toward a more complete specification of those rights as the solution. Even bureaucratic inefficiencies have been analyzed in the context of property rights. (McKean, 1965).

Cowboys and Contracts

This article expands Harold Demsetz’s seminal work on property rights by arguing that property rights entrepreneurs discover previously unowned or unpriced attributes of a resource and capture rents by defining and enforcing rights to those attributes. To keep the rents from these new uses from being dissipated in the tragedy of the commons, the entrepreneur must contract to exclude others from the value of his perception. We describe specific and general contracting and use the frontier of the American West to illustrate the two. A central theme is that smaller, homogeneous groups are more likely to prevent rent dissipation and that more centralized political processes are more likely to encourage it.

Economic Growth in a Transfer Society: The United States Experience

Economic growth occurs when individuals of a society engage in productive, positive-sum games. Conventional measures of growth, however, include measures of positive- and negative-sum games. This paper establishes a framework for distinguishing between productive (positive-sum) and transfer (negative-sum) activity. The role of the Constitution in promoting productive activity is discussed.

PROPERTY RIGHTS IN THE AMERICAN WEST: THE TRAGEDY OF THE COMMONS OR THE TRAGEDY OF TRANSACTIONS COSTS?

The winter of 1886–87 was extremely harsh in the cattle country of the Northern Plains. The winter began with storms and frigid temperatures in November of 1886 and continued through the late spring of 1887 with a loss of thousands of cattle. But some historians believe the winter would not have taken such a toll had the range not been overgrazed in the years immediately preceding the hard winter. Granville Stuart (1967, 188), for example, in his biography, Forty Years on the Frontier, reports that “It would be impossible to make persons not present on the Montana cattle ranges realize the rapid change that took place on those ranges in two years. In 1880, the country was practically uninhabited … but in the fall of 1883, there were 600,000 cattle on the range.” Likewise, Osgood (1929, 105) notes that With a rapidity that can almost be measured in months rather than years, every available bit of range in north and central Wyoming was occupied; the country in eastern Montana, north of the Yellowstone to the southern boundary of the Indian reservation was filled up, and herds began to look for favorable locations beyond the international boundary along the Saskatchewan River.