In Memoriam: Richard L. Stroup (1943-2021).

• Author: Munger, Michael C.

Rick Stroup was one of the founders of the environmental economics movement; he was a conservationist of the first rank. Conserving resources requires accounting for the opportunity costs of using those resources. But in the 1970s the focus of environmentalism was command and control; it fell to economists such as Rick Stroup, John Baden, Terry Anderson, and others to point out that prices embody and enforce a concern for opportunity cost better than any alternative system.

The essence of the environmental economics approach is the need to clarify and protect property rights. If the transaction costs of using tort law and negotiations are low enough, many of the problems of pollution and resource misuse are mitigated. In his book Cutting Green Tape (Independent Institute, 2000, co-edited with Roger Meiners), Stroup makes a powerful and incisive argument for claims that many traditional environmental activists found abhorrent: For one thing, you can be too careful, and that uses a lot of resources. Second, focusing liability on actors with deep pockets fails to reduce pollution but wastes enormous resources on compliance and distorted incentives. Finally, far and away the greatest violators of environmental prudence and principles of conservation are state and, especially, federal government agencies. But the government immunizes itself from even the most basic accountability while placing at risk the assets of companies and individuals who create value in the economy.

Rick was a native of Washington State and was an environmentalist out of love for the outdoors and the natural world. But in studying economics (his B.A., M.A., and Ph.D. were all taken from the University of Washington's outstanding economics department, which then included my own dissertation adviser and future Nobel Prize winner, Douglass C. North), Rick came to see that the way to conserve resources is to give someone an incentive to make sure those resources are preserved and cared for into future generations. Government programs either were misdirected or they unintentionally converted valuable resources into a "commons," with disastrous results. The key factor in policy, then, was not the stated intent but the actual consequence. And market-based approaches consistently yield far better consequences than command and control structures driven by "experts."

Stroup was one of the founders of the Property and Environment Research Center (PERC, 1980) and is recognized as one...