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The Commons
Mining the Parks
Posted by Jonathan H. Adler  ·  10 August 2004  ·  Federal Lands and Parks

In reference to Randal O'Toole's comment below, I have two thoughts:

1. It is certainly true that giving more money to the National Parks without changing the incentive structure faced by park managers will not improve the park' condition, and could make things worse. Yet it has been my impression that the fee demonstration program (discussed on The Commons here and here) has helped change those incentives for the better. Admittedly fee demo is no panacea, but I believe it's a significant step in the right direction. Does Randal disagree?

2. I would also question Kerry's assumption that altering the 1872 Mining Act will produce a substantial increase in federal revenue. Increasing royalty payments will reduce the amount of mining activity on federal land (which is one reason many environmental activists support this policy change). Thus it is possible that an increase in mining revenue could be more than offset by a decrease in federal tax revenues.

[Speaking of the Mining Act, my colleague Andrew Morriss co-authored a provocative defense of the Act which can be found here.]

Comments
  1. Has the recreation fee demo project changed Park Service incentives for the better? Not really, mainly because the Park Service showed an amazing lack of imagination in implemented fees. Basically, all it did was double the existing entry fees in many national parks and then kept the additional fee.

    In contrast, the Forest Service has developed quite an array of fees, such as fees for climbing Mt. Shasta and fees for participating in archeological digs.

    What kind of incentives are created by entry fees? Imagine a grocery store that was funded exclusively by entry fees. The store would soon realize that selling hamburger and steak made no sense because everyone would take the steaks and leave the hamburgers. So the store would just sell hamburger. In the same way, parks funded exclusively by entry fees provide more-or-less the lowest common denominator of recreation experiences.

    The fee demo project has changed Park Service incentives in one significant way. Before fee demo, when parks weren't allowed to keep the entry fees they charged, you often could enter and leave a park and not pay a fee because the agency didn't bother to staff the entry booths. Now that it gets to keep the money, it keeps the booths staffed. That can't be called much of an improvement for park management, especially when we don't really know how much of the entry fee is siphoned off into the Park Service's bottomless pit of overhead.

    Posted by: Randal O'Toole at August 11, 2004 12:13 PM
  2. Regarding mining, I am not convinced by Andrew Morriss' defense of the 1872 act. It might make sense if minerals existed by themselves. But in fact they are part of a complicated mixture of resources that include timber, forage, recreation, watershed, and wildlife (the classic "multiple uses").

    How do we allocate land among these resources? One way is by central planning, but we all know how that works. (If you don't, may I modestly suggest that you read my book, Reforming the Forest Service, which includes a detailed critique of national forest planning.)

    Another way is through the price mechanism. If people are charged user fees for timber, recreation, minerals, and other resources, and managers are funded out of identical shares of those fees, managers will have incentives to manage the land in a way that maximizes the value of all the resources.

    Morriss' argument presupposes that privatization of resources is a good thing. But even if it is, why is it good to privatize hard-rock minerals and not any of the other federal land resources? The conflicts created by such a situation actually give privatization a bad name since the "evil miners" are seen as destroying the values of all the other resources that can't be privatized.

    Free-market advocates must come up with a more comprehensive solution to public land issues than support of an ancient law that ineffectively privatizes one resource and leaves the rest to be managed by central planners.

    Posted by: Randal O'Toole at August 11, 2004 12:24 PM
  3. Randal O'Toole is right - we should privatize all federal land. But in the meantime, the Mining Law of 1872 does a good job of privatizing some federal land (something to cheer) and it privatizes the land that has particularly important opportunity costs associated with it because of the value of the potential resources.

    Posted by: Andrew Morriss at August 11, 2004 12:51 PM
  4. I didn't say we should privatize all federal lands. I said if you wanted to privatize them, the 1872 mining law is a bad way to do it. I am interested in results: What will produce better land management.

    If you consider privatization to be the goal, then you have to ask: How many acres have been privatized a year under the 1872 mining law? The answer is very few. As Morriss' paper notes, only 3.3 million acres were privatized by mining laws in 133 years -- less than 25,000 acres a year. I suspect the rate in the last 30 years is far lower.

    If your real goal is better land management, then you have to ask: Does the 1872 mining law result in better management on any land? If so, are those improvements compensated for by lower-quality management on other lands? I would argue that Morriss could find few if any acres that are managed better today because of the law and that I could find far more acres that are managed more poorly because of the law.

    Posted by: Randal O'Toole at August 11, 2004 07:59 PM