We are more likely to protect the environment when we own a piece of it and profit by nurturing it.

 In earlier chapters, we learned how First Layer aggression of licensing laws allowed the FDA and AMA to dictate our health care options and increase their cost. The previous chapter showed us how Second Layer aggression, exclusive licensing, creates monopolies that overcharge us and promote our depend-ence on fossil fuels. With the addition of the Third Layer, however, we are forced- at gunpoint if necessary- to subsidize the monopoly service- even if we choose not to use it! Most often, the subsidized monopoly service is provided by a government agency or department. This transfer to the public sector has its own hidden costs- including large-scale environmental destruction.

Increasing Costs

Public services on the average cost twice as much as the same service provided by the private sector. (1) Bureaucrats have little incentive for efficiency when consumers must pay for the service, whether they use it or not. The proof of this inefficiency is the enormous savings enjoyed when public services are contracted out to private firms instead of being performed by government employees. California cities save between 37% and 96% by contracting out their street cleaning, janitorial services, trash collection, traffic signal repairs, grass cutting, and street maintenance/overlay construction. (2 )Private municipal transit service saves taxpayers30 to50%. (3) Savings have also been realized in various locales by contracting out fire protection, (4) emergency ambulance service, (5) building or operation of water and sewage treatment plants, (6) and solid waste recycling. (7) The monopoly services are still subsidized, but to a lesser extent.

Encouraging Waste

Whenever people do not pay the full costs for something they use, they have much less incentive to conserve. For example, when people pay the same amount of taxes for solid waste disposal whether they recycle or not, fewer people are inclined to conserve. As a consequence, more waste is generated and disposal problems increase.

Conversely, when subsidies decrease, conservation automatically follows. In Seattle, during the first year that customers were charged by the volume of trash they generated, 67% chose to become involved in the local recycling program. (8) Since about 18% of our yearly trash consists of leaves, grass, and other yard products, (9) composting coupled with recycling can dramatically lower a person's disposal bill. As less waste is generated, fewer resources are needed to dispose of it. What could be more natural?

Discouraging Conservation

Ownership and distribution of water is most often a government monopoly subsidized by our tax dollars. In California's San Joaquin Valley, 4.5 million acres of once-desert farmland is irrigated by subsidized water. Our tax dollars, taken- at gunpoint, if necessary- were used to construct dams for irrigators, pay many of their delivery costs, and support zero-interest loans so that farmers pay only about 10% of the water's market value! (10) These subsidies encourage wasteful over-irrigation, resulting in soil erosion, salt build-up, and toxic levels of selenium in the run-off. Kesterson Wildlife Reservoir has been virtually destroyed by irrigation-induced selenium build-up, which now threatens San Francisco Bay as well. (11)

As long as our tax dollars subsidize the irrigators, however, they have little financial incentive to instill drip sprinkler systems or other conservation devices. As a result, less water is available for other uses, so prices increase for everyone else. Without subsidies, irrigators would be motivated to conserve water, which is desperately needed in California's coastal cities for domestic use.

Destroying the Environment

The above examples of Third Layer aggression deal with exclusive monopolies where service is provided by a public works department, subsidized in whole or in part by taxes. Strictly speaking, the grazing rights, timber sales, and park operations by governmental units are not exclusive monopolies. No one is stopped at gunpoint from creating wealth by providing these same services to willing customers. Rather than exclusive licensing, another form of aggression- forcible prevention of homesteading- made the U.S. government the largest single provider of such services. In addition, these services are subsidized by tax dollars, making them similar to the other examples in this chapter.

Homesteading is a time-honored way of creating wealth. An individual or group improves previously unused land by clearing it for agriculture, fencing it for grazing, making paths for hikers, building a home, etc. To own the wealth they have created, the creators lay claim to the property on which it resides.

Much of our country was settled this way. On 42% of U.S. territory, however, the government prevented the creation of wealth through homesteading- at gunpoint, if necessary. (12) Such widespread aggression has an impact similar to the exclusive licensing characteristic of the Second Layer of the Pyramid of Power. Adding subsidies through the aggression of taxation gives governmental administration of range land, forests, and parks many of the characteristics of Third Layer aggression.

If the guns of government were used only to prevent homesteading (Second Layer), the lands would simply be left in their natural state. Some wealth would be consumed protecting the lands from squatters, just as would happen with individual homesteaders. However, the land could not be used constructively or sustainably to create new wealth. No trees would be harvested for wood. No cattle would be raised for food.

Sometimes we equate wealth creation on rangelands and in forests with their ultimate destruction. These natural ecosystems, however, are renewable and sustainable if they are properly cared for. Individual homesteaders or owners have incentive to do just that, because they will profit most if the creation of wealth is able to continue year after year. An individual who wishes to leave wealth to children and grandchildren is more likely to care whether the property continues to be fruitful.

Overgrazing the Range

The incentives are very different for the congressional representatives who oversee the Bureau of Land Management. To appreciate their perspective, we should listen in on an imaginary conversation between a congressman and some of his constituents.

"Mr. Congressman, we represent the ranchers in your district. Things are pretty tough for us right now, but you can help us. Let us graze cattle on all that vacant rangeland the government has in this area. We'll be properly grateful when it comes time to contribute to your campaign. As a token of our good will, we'd like to hire your out-of-work daughter as the assistant manager of our association."

The congressman has twinges of conscience. He knows that the ranchers will overstock the government lands, even though they carefully control the number of cattle on their own. Since they can't be sure of having the same public range every year, however, they cannot profit by taking care of it. They cannot pass it on to their children. They profit most by letting their cattle eat every last blade of grass. When he shares his concern with the ranchers, they reply:

"Mr. Congressman, we will pay a small fee for 'renting' the land. Renters don't take as good care of property as owners do, it's true, but the land is just sitting there helping no one. All those people who want to save the land for the next generation must not have the problems we do just keeping food on the table so there will be a next generation. Your next generation benefits most if you allow us to give her a job and you keep yours. If you don't help us, sir, neither of you will have a job. We'll find someone to run against you who knows how to take care of the people he or she represents. We'll make sure that you're defeated."

The congressman sighs and gives in. After all, the ranchers gain immensely if allowed to graze cattle on the land he controls. They have every incentive to make good their threats and their promises. The people who might prefer to let the land simply remain au naturale do not benefit financially from doing so. While the ranchers will share the money they make from the rangeland with the congressman, no profit is generated by maintaining the status quo. If anyone objects, the congressman and the ranchers can use the money generated from the range to finance its own destruction.

The congressman tries to get a coalition of his colleagues together to encourage changes in the way the Bureau of Land Management (BLM) operates. He finds that some of their constituents have similar desires for the construction of a dam, access to timberland, etc. He agrees to help them change the policies that control resources in their area in return for their agreement to help him with the Bureau of Land Management, which controls an area almost twice the size of Texas, including nearly all of Alaska and Nevada. (13) Naturally, these changes set precedents for all the resources controlled by the BLM, not just the ones in this congressman's district.

Because of these skewed incentives, almost half of these lands are rented out to ranchers for grazing cattle at one-fifth to one-tenth the rate of private grazing land. (14) By 1964, three million additional acres had been cleared by "chaining" (15) to create more rentable rangeland. Because the ranchers and their representatives cannot profit by protecting the land, they have little incentive to do so. As early as 1925, studies demonstrated the inevitable result: on overgrazed public ranges, cattle were twice as likely to die and had half as many calves as animals raised on private lands. (16)

Are the ranchers and their representatives selfish others whom we should condemn? Not at all! Had ranchers been permitted to homestead these lands in the first place, the rangeland would now be receiving the better care characteristic of private grazing. Our consent to aggression has taken the profit out of caring for the environment. When this aggression is even partially removed, the situation improves.

For example, in 1934, Congress passed the Taylor Grazing Act to encourage ranchers to care for the public grazing land by allowing them ten-year transferable leases. (17) Essentially, ranchers were allowed to homestead or own the land for ten years. Ranchers who cared for the land were given the positive feedback of good grazing or a good price when selling their lease. As a result, almost half of the rangeland classified as poor was upgraded. (17) However, in 1966, leases were reduced to only one year, giving ranchers less incentive to make improvements. As a result, private investment in wells and fences in the early 1970s dropped to less than a third of their 1960s level. (18)

Logging the Forests

As subsidies increase, so does the environmental destruction. Most of the trees in our national forests wouldn't be logged without subsidies, because the cost of building the roads necessary to transport the timber exceeds the value of the lumber. Once again, however, the special interests found a way to use the aggression of subsidy to their own advantage. Let's listen to an imaginary conversation between the timber companies and their congresswoman.

"Ms. Congresswoman, the U.S. Forest Service has money in its budget for hiking trails. Now we're all for hiking; we just think we should get our fair share of the forest and our fair share of the subsidy. Some of that money for trails should be used to build logging roads. Consumers will benefit by increases in the supply of timber. We'd profit too and see that you got your 'fair share' for your campaign chest. We'd pay some money for replanting too, so the environmentalists will be happy."

The Congresswoman considers their offer. She knows that the loggers, like the ranchers, have little incentive to log sustainably on public lands. She also knows that if the hikers complain, she can ask for a larger subsidy for the U.S. Forest Service. Some of that subsidy can be channeled to more logging roads and more campaign contributions. If anyone objects, the profit from the forests can be used to lobby for their own destruction.

Special interests reap high profits with subsidies, so it is worth their while to spend large sums of money to protect them. If the congresswoman doesn't agree to the timber companies' demands, they'll put their considerable money and influence behind her opponent. The timber companies will be able to log the forests. The only question is which congressional representative will reap a share of the profits. The congresswoman sighs and agrees to fight for more logging subsides.

As a result, the U.S. Forest Service, which has custody of forest and rangeland covering an area larger than Texas, uses our tax dollars to log the national forests. By 1985, almost 350,000 miles of logging roads had been constructed in the national forests- eight times more than the total mileage of the U.S. Interstate Highway System! (19) Construction of roads requires stripping the mountainous terrain of its vegetation, causing massive erosion. In the northern Rockies, trout and salmon streams are threatened by the resulting silt. Wildlife and fragile ecosystems are disturbed. (20)

The Forest Service typically receives 20 cents for every dollar spent on roads, logging, and timber management. (21) Even though the timber companies are charged for the cost of reforestation, 50% of these funds go for "overhead". (22)

While logging vehicles are encouraged, hikers are discouraged. Even though the number of backpackers increased more than ten times between the 1940s and the 1980s, trails in the national forests dropped from 144,000 miles to under 100,000. (23)

Should we blame the timber companies and their congressional representatives for this travesty? Hardly! After all, if we sanction aggression to prevent homesteading, we take the profit out of protecting the forest. The nation's largest private landowner, Inter-national Paper, carefully balances backpacking and other forest recreation with logging. In the Southeast, 25% of its profit is from recreational use. (24) When we honor the choices of others, they profit from honoring ours.

Slaughtering Wildlife

Our tax subsidies have also been responsible for the extermination of wildlife, sometimes to the point of near extinction. While state governments were encouraging the shooting of hawks (Pennsylvania paid hunters a bounty), Mrs. Rosalie Edge began a sanctuary for them with voluntary contributions. She bought what is now known as Hawk Mountain, an eastern Pennsylvania area of the Appalachians that was ideally suited to bird watching. Before she established the Hawk Mountain Sanctuary in 1934, sportsmen had used it to shoot the magnificent birds. (25)

In 1927, the owner of Sea Lion Caves, Inc., the only known mainland breeding and wintering area of the Stellar sea lion, (26) opened it to visitors as a naturalist attraction. Meanwhile, Oregon's tax dollars went to bounty hunters who were paid to shoot sea lions. The owners of Sea Lion Caves spent much of their time chasing the hunters off their property. While the owners of Sea Lion Caves and Hawk Mountain Sanctuary were protecting the wildlife that inhabited their land, they were also forced- at gunpoint, if necessary- to pay the taxes that rewarded hunters who en-dangered it!

Not everyone in a group wants resources treated in the same way. When all people treat their property as they think best, one owner's careless decision is unlikely to threaten the entire ecosystem. When bureaucrats control vast areas, however, one mistake can mean ecological disaster. In addition, special interest groups struggle for control.

For example, Yellowstone, the crown jewel of the national park system, has been torn apart by conflicts of interest. In 1915, the Park Service decided to eradicate the Yellowstone wolves, which were deemed to be a menace to the elk, deer, antelope, and mountain sheep that visitors liked to see. (27) Park employees were permitted to keep or sell hides from wolves they had trapped as an inducement to hunt them. Eventually, the fox, lynx, marten, and fisher were added to the list. (28) Without predators, the hoofed mammals flourished and began to compete with each other for food. The larger elk eventually drove out the white-tailed deer, the mule deer, the bighorn sheep, and the pronghorn. As their numbers increased, the elk ate the willow and aspen around the river banks and trampled the area so that seedlings could not regenerate. Without the willow and aspen, the beaver population dwindled. Without the beavers and the ponds they created, water fowl, mink, and otter were threatened. The clear water needed by the trout disappeared along with the beaver dams. Without the ponds, the water table was lowered, decreasing the vegetation growth required to sustain many other species. When they realized their mistake, the Park officials began removing the elk (58,000 between 1935 and 1961). (29)

Meanwhile, the elk overgrazed, greatly reducing the shrubs and berries that fed the bear population. In addition, the destruction of willow and aspen destroyed the grizzly habitat, while road construction and beaver loss reduced the trout population on which the grizzlies fed. When the garbage dumps were closed in the 1960s to encourage the bears to feed naturally, there was little left for them to eat. They began seeking out park visitors who brought food with them. Yellowstone management began a program to remove the problem bears as well. In the early 1970s, more than 100 bears were removed. Almost twice as many grizzlies were killed. (30)

Subsidies create tension between special interests with different views. Yellowstone visitors wanted to see deer and elk. Some naturalists would have preferred not to disturb the ecosystem, even if it meant limiting visitors and disappointing some of them. Since everyone is forced at gunpoint, if necessary to subsidize the park, each person tries to impose his or her view as to how it should be run. The resulting compromise pleases no one.

Contributors to private conservation organizations, in contrast, choose to donate to a group that shares their common purpose. For example, at Pine Butte Preserve, the Nature Conservancy replanted overgrazed areas with chokecherry shrubs for the grizzlies and fenced off sensitive areas from cattle, deer, and elk, animals that thrive in the absence of predators.31 The Nature Conservancy has preserved more than 2.4 million acres of land since 1951. (32)

The Audubon Society also uses ownership to protect the environment. The Rainey Wildlife Sanctuary is home to marshland deer, armadillo, muskrat, otter, mink and snow geese. Carefully managed natural gas wells and cattle herds create wealth without interfering with the native species. (33) Other private organizations investing in wilderness areas for their voluntary membership include Ducks Unlimited, National Wild Turkey Federation, Inc., National Wildlife Federation, Trout Unlimited, and Wings Over Wisconsin.

The story of Ravena Park illustrates how aggression compromises the care given to the environment. In 1887, a couple bought up the land on which the giant Douglas firs grew, added a pavilion for nature lectures, and made walking paths with benches and totems de-picting Indian culture. Visitors were charged admission to support Ravena Park; up to 10,000 people came on the busiest days.

Some Seattle citizens weren't satisfied with this non-aggressive arrangement. They lobbied for the city to buy and operate the park with tax dollars taken at gunpoint. In 1911, the city took over the park, and one by one the giant fir trees began to disappear. Concerned citizens complained when they found that the trees were being cut into cordwood and sold. The superintendent, later charged with abuse of public funds, equipment, and personnel, told the citizens that the large "Roosevelt Tree" had posed a "threat to public safety." By 1925, all the giant fir trees were gone. (34) The superintendent could personally profit from the beautiful trees by selling them.

Power Corrupts

The above example illustrates why layering aggression upon aggression forms a Pyramid of Power. Licensing laws (Layer 1) give a group of professionals the power to limit our choices. Exclusive licensing (Layer 2) gives a single firm the monopoly power. Subsidizing (Layer 3) allows a tiny handful of bureaucrats the power to trade public assets for personal gain. Unlike the personal power that comes from wisdom, inner growth, and hard work, this power comes from the point of a gun. This power of aggression corrupts those who use it, impoverishes those who have little, and destroys the earth that supports us. We ask for these results when we vote for subsidies.

The Easy Way Out

In earlier chapters, we saw that the aggression of exclusive licensing inhibited innovation, increased costs, and lowered the quality of service. Subsidies encourage inefficiency and waste as well.

Ironically, we often sanction the aggression of subsidized, exclusive, government-run monopolies because of the erroneous belief that they promote improved efficiency and prudent use of resources. Subsidies are sometimes tolerated in the equally mistaken belief that they allow the poor access to ser-vices they otherwise couldn't afford. The cost of aggression, however, is so great that the poor are harmed instead of helped.

For example, those too poor to own property pay no property taxes directly. Instead, they rent from property owners, who raise rents to compensate for tax increases. The municipal services that these taxes fund will cost considerably more than they would in the absence of aggression. The tax increases, therefore, are higher than the cost of the services would be. The poor end up paying higher rents to subsidize inefficiency and waste even for services they do not use!

Socialist countries abound with exclusive, subsidized government-run monopolies. Not surprisingly, many are reacting to this new knowledge by privatizing subsidized government-run monopolies, including railways and highways, by selling them to individuals or corporations. (35) In New Zealand, the post office has been privatized. Without increasing rates, the private postal service was still able to maintain service to all addresses, increase on-time delivery of first-class mail from 84% to 99%, and transform an annual loss of $37 million to a profit of $76 million! (36) Since this yearly $37 million loss was usually made up by the taxpayer, real postal rates actually went down as quality went up!

How can privatizing decrease costs so quickly? When provision of services is not restricted to a subsidized government agency, the profit motive spurs businesses to adopt the latest, most efficient technology possible. For example, instead of dumping refuse into landfills, waste disposal companies find ways of turning trash into cash. Recomp, Inc. (St. Cloud, Minnesota), and Agripost, Inc. (Miami, Florida), use composting whenever possible and sell the resulting loam to landscapers, Christmas-tree farms, and reclamation projects. Other projected uses for the nutrient-rich compost include topsoil replacement for the farms, rangelands, and forests (9) that have been devastated by Third Layer aggression.

Better quality at lower cost is only the beginning of the natural beauty of the marketplace ecosystem, however. Private companies can offer ownership to employees through stock options. Government employees sometimes become owners of newly privatized firms. Surly employees whose jobs were guaranteed by subsidies are transformed overnight into dedicated workers whose profits depend on serving their customers efficiently and well. Saying "No!" to the aggression of subsidies reduces waste and encourages employees to take pride in their work, while benefiting the poor and the consumer.

Doing away with subsidies means doing away with the aggression of taxation that generates them. As aggression decreases, prosperity increases. Studies of the U.S. economy show that a measure of wealth creation, our Gross National Product (GNP), plunges when taxes increase. (37) The economic growth of individual states is also highly dependent on how heavy a burden of taxation they place on their populace.38 We can hardly expect to prosper if we subsidize inefficiency and waste!

Privatization of public lands and waterways holds a special bonus for the American populace. Although its value is difficult to estimate, a substantial percentage of the national debt could likely be retired with the proceeds!

In 1989, 15% of our federal expenditures went to pay the interest on the national debt. (39) If the debt were repaid and the taxes lowered, tremendous economic growth would result.

Some people don't worry much about the national debt because they believe we simply "owe it to ourselves." In a way, that is true. The government I.O.U.s are held by individuals, corporations, and pension plans (including Social Security) throughout the land. For our pension plan to pay us, taxes will have to go up to pay off the I.O.U. We will have to pay more taxes so that our pension plan can pay us. The net result is that we may have no pension at all!

To understand how we came to such an impasse, we should look at the apex of the Pyramid of Power the money monopoly.







 If we can prevent the Government from wasting the labors of the people under the pretense of caring for them, they will be happy.

- Thomas Jefferson, author of the Declaration of Independence




Forces which impede innovation in a public service institution are inherent in it, integral to it, and inseparable from it.



























































The most entrepreneurial, the most innovative people behave like the worst time serving bureaucrats or power hungry politicians 6 months after they have taken over the management of a public service institution, particularly if it is a government agency. Forces which impede innovation in a public service institution are inherent in it, integral to it, and inseparable from it.














What is common to many is least taken care of, for all men have greater regard for what is their own that what they possess in common with others

- Aristotle


































































...government ownership has another kind of impact on society: it necessarily substitutes conflict for the harmony of the free market.

- Murray Rothbard, POWER AND THE MARKET