Sunday, June 12, 2011

Property rights for animals

This is based on some comments I made here on a proposal to give animals property rights in order to protect habitats.

Presuming that the point of the exercise is not simply a green power grab (which is what it looks like) but to change people’s behaviour, then adding to people’s future possibilities rather than threatening their present ones seems a better way to go.

In his Economic Analysis of Property Rights Yoram Barzel notes differences between UK and US habitat law, which I summarized as:
Another striking Barzel example is property rights in wildlife (Pp145-7). In the UK, farms tend to be larger than habitats, so property rights to wildlife are largely held privately as habitats are largely encompassed within private holdings. In Canada and the US, farms tend to be smaller than habitats, so the state assumes much more control over wildlife, as habitats generally extend across several, or even many, holdings.
A famous example of giving people a stake in preserving wildlife is giving local people ownership rights over their local elephants rather than just banning poaching. The former means that live elephants are a continuing source of income, the latter means the only profitable elephant is a dead elephant.

If live possums or whatever a boon for the farmer, then there will be more live whatevers. There is no such thing as an endangered profits-from-owning species.

Property rights evolved as a way of creating productive boundaries. Harold Demsetz, in his classic 1967 article Towards a Theory of Property Rights uses the example of beavers in North America. As the fur trade developed, Amerindians developed property rights in beaver dams. An example of productive interactions, considered by Steven Cheung, is bee-keepers and apple farmers. (Coase’s classic The Problem of Social Cost (pdf) considers these sorts of interactions.)

The proposal to give animals property rights, does not create productive boundaries, it creates anti-productive boundaries; it does not increase human possiblities, it lessens them. Not a clever idea.

Property-rights environmentalism has a lot to be said for it, but precisely because it increases human possibilities, not because it undermines them.

As for the comment in the above-linked thread from an advocate of the proposal
Why do so many land holders react with hostility to the idea of having to talk to others about their land use decisions? I might be an optimist but considering all the other supposed regulatory burdens upon land holders, is what I’m suggesting all that more demanding?
Because there are only so many ours in the day? Because it is their livelihood one is talking about? Because their experience of other examples is not a happy one?

Discretionary controls by officials inevitably become dominated by the politically well-connected. The notion that this would be a reliably benign process is belied by an enormous amount of experience.

As for “talking to others”, once one shares control of some attribute, one raises transaction costs, lowering the number and return on such transactions. To quote Michael Kirby, then High Court Justice, certainty is the central demand of land law. Clear boundaries allow productive trades. Unclear boundaries undermine such: sometimes profoundly. If a way exists to eliminate the problem (such as eliminating the problematic animals), it is likely to be taken.

Here is a question: would landholders be compensated for their loss of rights, or a we talking about simple theft here? A property right is a right of control up to a boundary. If you create “property rights” for animals, then any previously existing right of control in that boundary is eliminated. Someone else — the landowner in this case — loses rights. So, will there be payment for such loss or is it going to be simple theft?

As for appealing for “good intentions” by landlords, incentives matter. They matter a great deal. Given the potential power over land use this proposal gives, one must expect that people will politically organise to gain control over that power.

This is one of those basic analytical differences. Libertarians and others presume that private interests are endogenous to the political process and will game it according to the incentives generated. Progressives of various stripes presume that political processes can somehow be made exogenous to private interests and “control them” from outside. This is nonsense on stilts, and pernicious nonsense at that.

The more proponents argue for this proposal, the more alarming I find it. The issue is not the intention, but the means suggested.

Markets with clear rules have shown excellent ability to trade attributes to their most efficient holders. For example, we pay to have the attribute ‘liable to catch fire’ allocated to insurance companies according to rules which work fairly well. The trick is being able to define boundaries to the attributes and to trade them to mutual benefit.

If one does not have such defined boundaries, one just has a mess. And the experience of officials (actual or quasi) having joint control over attributes with private property owners is not a happy one. (Such as aiding and abetting NIMBY and BANANA — build absolutely nothing anywhere near anyone.)

It is not a lack of imagination that leads to the scepticism about this proposal, it is the application of experience against comforting theories about good intentions.

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