by: F.R. Duplantier

"Markets are a form of voluntary cooperation," observes Richard Stroup of the Political Economy Research Center. "Competitors cannot use force to increase their power, but must cooperate with others for mutual gain. Their cooperation leads to mutually productive activities," Stroup asserts, "even in the case of environmental activities."

In an essay included in A Blueprint for Environmental Education, recently published by the Political Economy Research Center (www.perc.org), Stroup examines "how privately held property rights and market exchange accomplish cooperation, even in the environmental sphere [and] how problems arise when important elements are missing." He notes, for example, that "environmental regulations have made the definition of land ownership in some cases unclear," thereby discouraging good stewardship.

Stroup argues that property rights "hold people accountable. When people treat property negligently or carelessly," he explains, "its value declines. When they treat it with care, its value goes up. The property's owner has both the incentive and the legal means to protect and increase its value."

Stroup insists that property rights also foster environmental cooperation. "Conflict over environmental resources, when it drags on and on, is almost always a political conflict," he asserts. "Decisions are to be made by the government, and the side with the most political power wins, at least for the moment." On the other hand, when private property rights are the basis for negotiation, "the solutions that people agree on are ones that both parties want."

Stroup shows how free market principles such as pricing can be applied to conservation. "Market prices provide market participants with information from all corners of the market," he observes. "When resources are not privately owned and traded in open markets, this vital flow of information is missing." Stroup cites America's national parks as examples of "what happens when such information is missing. Because visitors to our national parks do not pay the full cost of the services they receive, park managers have little information about how much the various services are worth to visitors," he points out. "In fact, with most of the funding coming from Congress, the Park Service ends up paying more attention to politicians than to visitors or taxpayers."

The remarkable innovation so characteristic of a free-market economy is also conducive to conservation. "Over the past century, new technology has led to less pollution and to the use of fewer raw materials per unit of output," Stroup reports. "Innovation is largely beneficial to the environment, primarily because innovators are driven to reduce total costs, including the cost of materials, energy, and waste handling, and to switch to processes that use fewer resources," he explains. "When property rights are defined, defendable, and divestible," Stroup argues, "markets turn the conflict that is caused by scarcity into a cooperative search for mutual benefits by buyers and sellers." When owners "are free to act and are accountable for their actions," he concludes, "markets can protect the environment."