The Land of Many Opportunity Costs: Constituent-group politics continue to dampen the public benefit from the federal estate.

Author:Libecap, Gary D.

Eighty-five percent of Americans have visited at least one national park. Others have seen the U.S. Forest Service's (USFS) "The Land of Many Uses" signs for national forests or notices of entry into Bureau of Land Management (BLM) lands. These areas are advertised by the agencies as being "public lands," implying that they are owned and managed in the best interest of U.S. citizens. Yet that is unlikely to be the case.

This would be of little importance except for the vast amount of land involved. In the lower 48 states, public lands encompass nearly 475 million acres, 21% of the land mass and more than the combined areas of France, Spain, Sweden, and Norway. (See Figure 1.) Adding the public lands in Alaska and Hawaii brings the total to about 640 million acres, 28% of the U.S. land area. Most citizens are unaware of just how large is the federal estate.


There are several reasons why government ownership of this huge resource is detrimental to economic welfare and individual liberty. First off, it is in sharp contrast to the plans of the nation's founders and philosophical forebears. The importance of private ownership of land for advancing individual potential and autonomy, as well as land value, was emphasized by early political economists and philosophers, including Adam Smith, John Locke, Jeremy Bentham, Jean-Jacques Rousseau, John Stuart Mill, David Ricardo, Edward Wakefield, and Robert Torrens. The advantages of widespread private land ownership were championed by Thomas Jefferson, who claimed that "the earth is given as a common stock for man to labor and live on.... The small landholders are the most precious part of a state." As he toured the new country in 1835, Alexis de Tocqueville observed that being freeholders changed the way in which Americans thought of themselves and the country* s political structure. The noted historian of the frontier Frederick Jackson Turner asserted in 1893 that America ultimately was shaped by private ownership and small-farm frontier settlement as the underpinnings for democracy, an independent citizenry, and generalized economic wellbeing.

In contrast, in the more modern period, the threats of private ownership for an authoritarian government were clearly understood by Karl Marx, Vladimir Lenin, Joseph Stalin, and Mao Zedong. They banned private property in land and placed it in state possession, jailing or executing previous owners. Even today in China, where private rights to intangible property such as stocks and bonds are tolerated, long-term, fee-simple title to land is prohibited. The state remains dominant in holding the most critical resources as its own.

From the colonial period through the late 19th century, the overriding aim of government land policies was to transfer land ownership as quickly as possible from the state to private citizens. The attraction of America for immigrants was land. And they could get it in comparatively small parcels that supported individual farms. The Homestead Act of 1862 distributed federal land in 160-acre plots for free to claimants, and between 1863 and 1920 some nearly three million homestead claims were filed for more than 435 million acres, smaller than the government's holdings today but larger than Alaska.

A land demarcation system was created to facilitate the measurement, location, trade, and productive use of land. The frontier societies that emerged were among the most egalitarian in the world. Capital gains from land ownership and sale were the primary sources of wealth creation, and the use of land as collateral encouraged widespread participation in and growth of capital markets. Agricultural production expanded and prosperous communities emerged. Private citizens with a stake in society invested in local public goods provision, particularly education, so that the United States became a world leader in general access to a practical education. Such a society was politically stable.

The long-standing emphasis on the private acquisition of government lands, however, ended in the late 19th century. In its place came the creation of the National Forests, now comprising more than 225 million acres, and the National Rangelands, covering almost 250 million acres, along with a permanent bureaucracy for administration and short-term distribution. As of Fiscal Year 2018, the USFS has some 37,000 career, tenured civil service employees and a budget of $1.75 billion, and the BLM has over 8,000 career employees and a budget of $1.1 billion.

Lost economic value / A second reason why so much land ownership by the state is detrimental is that much of it is misallocated and dramatically under-produces, diminishing general welfare. Much poorer developing countries seek to have their natural resources provide employment and output for their citizens, but the United States locks more and more federal land away, ostensibly for preservation for future generations. There is no clear metric for assessing how those generations will benefit nor are the tradeoffs easily available for general citizens to assess. Decisions are determined by politicians and the bureaucracy in response to lobby pressures, and no party in...

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