Around the world, as the ills of common ownership are increasingly recognized, a surge of "privatization" is taking place. People are beginning to understand that private ownership encourages efficiency and spurs national prosperity. Until recently, however, nearly everyone drew a line when it came to environmental matters.
Conventional wisdom assumes that when it comes to protecting wildlands, reducing pollution, and providing for natural amenities, the government must always be in charge.
Today that blanket assumption, is being questioned. In his environmental message to Congress earlier this year, President Reagan stated that efficient use of the nation's resources, "guided whenever possible by free markets rather than centralized controls, will work to promote environmental health, economic productivity, and fiscal responsibility." He urged the expansion of efforts "to create markets and to consider market-like management practices" in government regulations.
The latest annual report of the President's Council on Environmental Quality offers abundant evidence that the private sector provides more natural protection than most people realize.
This emerging recognition that the private sector can protect the environment sometimes better than the government should not be surprising. It reflects Aristotle's observation that commonly owned property is often neglected, while privately owned property is well taken care of. But only recently have economists systematically applied this understanding to the natural environment.
Environmental protection depends on accountability. The environment--like any resource or property--will be well protected if someone is accountable for it. Yet often, no one is.
In most facets of our lives, accountability is not a serious problem because someone owns--and therefore protects--most things. People who own cars, houses, clothing, and other things of value, for example, have a strong incentive to take good care of them. If they don't, the value of their possessions declines. Moreover, if someone else damages their property, owners can use the law to insist on repair, because the law recognizes people's right to their property.
But much of our external environment--such as the air, water, and open land--is not owned by individuals but instead held in common. When everyone "owns" a resource and is "accountable," often no one is.
Water becomes polluted because the water belongs to "the people"--and, in effect, no one owns it. Because it is available to all, then everyone--private industry, farmers, municipalities, homeowners--can use it for a wastestream. Early in our history, such casual use may not have seriously contaminated streams, because there was plenty of water. But as the population increased, especially in urban areas, water in many places became severely polluted.
Air's Free, Isn't It?
A similar situation exists with regard to the air. Although theoretically a person can sue a
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