Montreal, July 15, 2005 • No 156




Heidi Lange is currently a junior at Hillsdale College (Michigan), majoring in Economics and minoring in Biology.





by Heidi Lange


          Conservation is most often explained by the argument that we, as humans, have a responsibility to maintain the earth's ecosystems in whatever their "natural" state would be. Indeed, "NPS policy statements provide the basis for natural process management as implemented in Yellowstone National Park and many other units of the national park system… Natural processes are generally considered to be all those ecological and environmental forces acting on an ecosystem that are not induced by, or are not significantly affected by, the actions of modern humans" (Huff et al 1999, p. 17-18).


          This argument serves both as a basis for justifying conservation activities and as the alleged goal of those activities, so it is worth giving some consideration to. The first question to ask is: why is it that we ourselves are the only mammalian species on the planet which we do not consider part of the "natural" environment? The obvious answer to this objection is that humans are one of the few species who are physically able to disregard the limitations of an ecosystem and achieve their own goals in spite of natural limitations which serve to restrain most animals' activities to those which are obviously available to them as a result of their natures. It is necessary to keep in mind that in a biological sense, man is as much a part of the natural environment as is the wolf – the difference is that man can often overcome his environment, rather than remaining subject to it.

          It is also important to note that the definition of "natural" is hardly clear, especially when discussing the ecosystem of a national park:

"[I]t is prudent to ponder whether or not these park ecosystems are in fact natural. I don't believe there is any one answer to that question. On the one hand, parks are certainly more 'natural' than the managed landscapes common throughout the rest of the country. However, scientists are also continually gaining new appreciation for the degree to which these landscapes have been utilized by native peoples over the past 10 000 yr and are more and more accepting the fact that they were never pristine wildernesses" (Wright 1999, p. 32).

          However, the fact that the wilderness is not strictly in a "natural" state gives us hope: if man has discovered a way to coexist with his environment for millennia, then it seems possible that he can avoid the present difficulties and once more find a way to coexist with the rest of his environment, which now encompasses the entire world. It is my opinion that the answer to this dilemma lies in applying an understanding of human action, in an economic sense, to the problem.

The economic side of the issue

          The key to achieving conservation on a nation-wide or even a world-wide level is to ensure that human interaction with wildlife is (or becomes) a market activity. The market, left to its own devices, will guide human activity towards a "socially optimal" allocation of all resources, including untarnished wilderness. Private incentives for preservation of the wolf must be set up or, on an individual level, there will be little interest in conservation.

          Economics cannot give us goals, or tell us if conservation is a good thing, but it certainly can tell us that if we want conservation on a nation-wide scale, the best way to obtain it is to give the people in charge of managing the resources in question – in this case, the gray wolf – incentives to conserve those resources, and access to price signals as a guide for their actions. Government attempts at conservation have failed or been sub-par because government officials have no personal incentives to manage the resources well. They neither benefit from the preservation of nor suffer from the loss of the natural resources which they are responsible for. To quote Austrian economist Murray Rothbard, "Government ownership is not true ownership, because the government officials, while able to control the resource, cannot themselves reap their capital value on the market" (Rothbard 1973 p. 255). Hence, it comes as no surprise that the management of the natural parks and the species contained therein has been mediocre for well over a century.

          Not only has government management of the parks been disastrous, but allowing the general public to use these natural resources with no personal interest in their conservation has had even worse consequences, predictably so. Users of a public good have every reason to obtain as much immediate benefit as possible from the resource in question with little or no thought for the future (since future benefits will be reaped by others). "When the government owns the land and permits private individuals to use it freely, the result is indeed a wasteful overexploitation of the resource… Free use of a governmentally owned resource truly inaugurates a 'war of all against all,' as more and more users, eager for a free bargain, attempt to exploit the scarce resource. To have a scarce resource and to make everyone believe (because of the free gift of use) that its supply is unlimited, causes overuse of the resource, favoritism, figurative queuing up, etc." (Rothbard 2004, p. 1127). Overuse of a good is the natural response to something which should be a scarce resource, but has no disincentives associated with its use. (For instance, if an actor uses up a portion of the good he does not have any less wealth than he had before, since the good was not his.) This leads each actor in the market to use more than she would if she suffered the direct consequences of her actions.

"As crowding, rationing, and queuing become more and more severe in such nonpriced or underpriced activities, it becomes a major issue to determine whether rationing by price or by quantity restriction is the better method. One alternative is to eliminate the common-property aspects of such resources" (North & Miller 1976, p. 98).

          In a simple sense, the national parks are not public goods and should not be treated as such. A public good is first of all non-excludable (in other words, you cannot keep anyone from using it – a good example is air), and secondly is a case of non-rivaling consumption (that is, when you use more of the good it doesn't stop others from using it – again, air is one such good). Wilderness, even when used for preservation as in the case of the national parks, fulfills neither of these qualifications. Land and animals both fall under the jurisdiction of the market; they are scarce goods which are subjectively valued by actors in the market. Hence, the control of wilderness belongs in private hands under the market system, not in the hands of a monopolistic government which has no price signals to drive the correct management of the resource.

"No one debates whether horses or dogs should be private property, since there is no question of either species becoming extinct. In the case of an endangered species such as the gray wolf, how much more could the market system do for its preservation?"

          An objection that one might make to letting the market drive conservation efforts is that people are simply too selfish to have any reason to conserve nature. But the exact opposite is true: actors in a market system would conserve wildlife and land precisely because they are selfish. The solution to the problem of conservation is to ensure that those in charge of managing the resources are those who feel the consequences of their actions. The simplest and most efficient way to set up such a system is to allow private ownership of natural resources, including, and especially, endangered species. Ludwig von Mises tells us that

"carried through consistently, the right of property would entitle the proprietor to claim all the advantages which the good's employment may generate on the one hand and would burden him with all the disadvantages resulting from its employment on the other hand. Then the proprietor alone would be fully responsible for the outcome" (Mises 1963, p. 655).

          No one debates whether horses or dogs should be private property, since there is no question of either species becoming extinct. In the case of an endangered species such as the gray wolf, how much more could the market system do for its preservation? An endangered species is a scarce good; the more scarce a good, the higher its price. The higher the price of a good, the more incentive actors in the market have to create or discover more of that good. In other words, if wolves were allowed to be bought and sold on the market system, we would see an increase in their number simply because they would be a scarce good in high demand.

          Twentieth century Austrian economist Friedrich Hayek felt that any kind of conservation was simply another form of investment; that a natural resource such as wilderness land or a wolf pack should be treated with the same regard as a man-made resource such as a barn full of steel girders.

"Perhaps the best way of concisely stating the chief point is to say that all resource conservation constitutes investment and should be judged by precisely the same criteria as all other investment. There is nothing in the preservation of natural resources as such which makes it a more desirable object of investment than man-made equipment or human capacities; and, so long as society anticipates the exhaustion of particular resources and channels its investment in such a manner that its aggregate income is made as great as the funds available for investment can make it, there is no further economic case for preserving any one kind of resource" (Hayek 1960, p. 374).

          In other words, both conservation and the objects of conservation (i.e. wilderness land and wild animals) fit the qualifications of an economic good, and should be treated as such if the most optimal allocation of the resource in question is to be obtained.

          One obvious objection which the conservationist could make is simply to say, "Who cares about maximizing profit? The purpose of conservation is to conserve wilderness. If we allow conservation to be determined by the free market and it turns out that consumers are willing to pay more for a shopping mall than for a virgin forest, what then?" The answer lies in the subtleties of the definition of economic profit. Profit is merely one way of measuring public opinion – like voting, but more precise, giving more attention to the individual's or the minority's opinion. The profit and loss system is what signals the owner of a resource as to his success or failure managing that resource, in the opinion of the actors in the market. We can leave conservation to the unwieldy bureaucracies of government control, where the fate of a virgin forest or a wolf pack depends on the number of voters who bother to turn up at the polls, or on whether a particular politician finds nature conservation to be the thing that will advance his career. Or we can let conservation be controlled by the market system, where individuals are rewarded for specializing in the ins and outs of conservation biology (unlike the politician who votes yay or nay for a particular bill and then moves on to other issues).

Does it destroy the wolf to domesticate it?

          An obvious objection to the case of the domesticated animal as an argument for private property's positive effect on a species' survival is that most domesticated animals are incapable of surviving in the wild. The objection, here, is that although man has ensured its survival, he has "destroyed" the species by taking away its natural survival skills. Certainly in the case of the wolf, one might argue that it would not be a good thing for the wolf to become a domesticated animal. However, I am not arguing that it is necessary for an animal to become domesticated to ensure its survival. It would be perfectly possible for a wild animal, such as the wolf, to benefit from private ownership while continuing to run free and behave much as it would in the wild, with the simple exception that he wears a tracking tag and runs free on acreage which is privately owned.

          There are many possible ways for private conservation to be undertaken, but I believe the most likely one is for private (probably non-profit) organizations to arise whose focus is conservation, but the likelihood of private ownership of natural resources is also important. In his 1995 paper "Conserving Biodiversity," Stephen R. Edwards discusses conservation through sustainable use as the best method of achieving real effects in conservation. He writes that

"sustainable conservation of biodiversity will be achieved only when the people who live with it recognize the importance of conserving… Incentive systems to promote sustainable use of wild resources require that people be allowed to use them free from excessive government interference… Rights to use wild resources can be conveyed through property ownership… To enhance the probability of sustaining the wild harvest or use, the people living with the resources must have sufficient incentives to conserve the resources" (Edwards 1995, p. 255 and 248).

          In other words, individuals or firms must be allowed to own natural resources if those individuals or organizations are to be expected to conserve the resources in question. If a particular resource has a single owner (whether that is an individual or a group of individuals), that owner has incentive not only to curtail his own use of the resource but to protect it from others' use. More importantly, if he holds private property rights to the resource, he has the legal recourse against any other individual who attempts to overuse the resource.


          The free market and private property rights are the best – if not the only – way to determine the appropriate amount of endangered species demanded by the American public and the world at large, and to protect those species which are truly at risk of extinction.

          Perhaps in ecology, as in economics, the scientific observer must come to accept that disequilibrium is reality; that we can merely observe the fluctuations of a system which will never perfectly fit our models; and most of all, that human interference in the system which naturally occurs (whether ecological or market based) will only drive the natural world further from the equilibrium towards which it will always strive and never achieve.

          Man's place in the natural world is neither above it, nor separate from it. Man is not the master of nature, to do and destroy as he pleases, but neither is he an "unnatural" and negative force which must at all costs be kept from affecting the world around him. He is part of nature; he must learn to interact with it in a manner which is productive, while maintaining a certain amount of respect for the other denizens of the world which he inhabits. How can a society encourage this type of optimal behavior? There exists a naturally occurring system which will drive man to both preserve nature and use it for his own ends, in appropriate proportions; a system which, like natural selection, drives the beings acting within it towards what is optimal for their species' welfare. This system is the market economy. The free market is the best, and indeed the only, system which can drive man to act optimally in an ecological sense, yet at his own volition.

          Stephen Kellert and his colleagues, in their 1996 article in Conservation Biology, argue that the wolf is important because,

"throughout North America's history of intense persecution of wolves, the animal has been a powerful barometer of changing attitudes toward the natural world. Many North Americans now view wilderness as the expression of a delicate and even divine handiwork, and wilderness species, especially large carnivores, as vital components of a complex, quasi-living structure. For others the wolf remains a powerful reminder of the human need to fight and repress nature in a never-ending struggle to render the land safe and productive. Thus the wolf will probably remain a powerful indicator of the shifting attitudes of North Americans toward the natural world." (Kellert et al. 1996, p. 980-981).

          They are correct; how man reacts to the wolf situation is indeed an indicator of his attitudes toward the natural world and his relation to it. This is an invaluable opportunity for humanity to see the importance of understanding the economic aspects of conservation activity, and the fact that the only way we can achieve any goals in this area is to remember that human behavior follows simple economic laws. In order to achieve the appropriate balance in the conservation of wildlife, especially wolves whose existence ties in with that of mankind so closely and in such a complex manner, we must use these economic laws as our guide; the free market must be allowed to guide human interaction with wildlife.



• Coughenour, Michael B. (1996) "Elk Population in Yellowstone National Park Under the Policy of Natural Regualtion," in Ecological Applications, Vol. 6, No. 2.
• Edwards, Stephen R. (1995) "Conserving Biodiversity: Resources for Our Future," in The True State of the Planet (ed Ronald Bailey), New York: The Free Press.
• Gwartney, James D., Stroup, Richard L., et al. (2003) Economics: Private and Public Choice, 10th Edition, USA: Thomson South-Western.
• Hayek, Friedrich A. (1960) The Constitution of Liberty, Chicago: University of Chicago Press.
• Huff, Dan E. and Varley, John D. (1999) "Natural Regulation in Yellowstone Park's Northern Range," in Ecological Applications, Vol. 9, No. 1.
• Kellert, Stephen R; Black, Matthew; Rush, Colleen Reid; Bath, Alistair J. (1996) "Human Culture and Large Carnivore Conservation in North America," in Conservation Biology, Vol. 10, No. 4.
• Lopez, Barry Holstun. (1978) Of Wolves and Men, New York: Charles Scribner's Sons.
• Mises, Ludwig von. (1963) Human Action, San Francisco: Fox & Wilkes.
• Mowat, Farley. (1983) Never Cry Wolf, Boston, MA: Little, Brown and Co.
• North, Douglas C., and Miller, Roger LeRoy. (1976) The Economics of Public Issues, New York: Harper and Row.
• Peterson, Rolf O. (1999) "Wolf-Moose Interaction on Isle Royale: The End of Natural Regulation?" In Ecological Applications, Vol. 9, No. 1.
• Rothbard, Murray. (1973) For A New Liberty, New York: Libertarian Review Foundation.
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•  Wright, R. Gerald. (1999) "Wildlife Management in the National Parks: Questions in Search of Answers" in Ecological Applications, Vol. 9, No. 1.