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• Editorial Staff
• Associate Editors
• Editorial
• Bibliographical Essay: Richard Stroup and John Baden, Property Rights and Natural Resource Management
• I: Natural Resources and Property Rights
• Indian Water Rights
• Resources and Bureaucrats As Predators
• Government Energy Conservation
• Timber, Property Rights, and Government
• The Reclamation Service's Tahoe Fiasco
• Mineral Rights and Government
• Market Protection of Property Rights
• Government Water Planning
• Indians, Property, and Conservation
• Political Or Voluntary Ecology?
• II: War, Peace, and Empire
• American Foreign Policy
• Oil and Government Policy
• War, State, and Nation
• Early U.s. Indian Policy
• U.s. Foreign Policy and Latin America
• Reform, Progressives, and Empire
• Harry Elmer Barnes and Revisionism
• Imperialism and War Technology
• Pietistic Vs. Pragmatic Foreign Policy
• Atomic Warfare and Human Suffering
• Vietnam: Cost-benefit Warfare
• III: Political and Social Philosophy
• Plato and Constitutions
• The Uses of a Political Myth
• Florentine Guilds and Republicanism
• Machiavelli, Corruption, and America
• Hume and Contract Theory
• Corporations: a Contractual Paradigm
• Smith, America, and Utilitarianism
• People, Freedom, and State In Hegel
• Freedom and Virtue
• Nineteenth Century Spanish Liberalism
• Victorian England and Laissez-faire
• O'connell, Anti-slavery, and Freedom
• Carnegie and Spencer
• Republicanism Vs. Liberal Individualism
• Rousseau's Social Contract and Freedom
• Artistic and Cosmic Harmony
• Pound and Politics
• Ideology and Classes

Timber, Property Rights, and Government

Gary D. Libecap and Ronald N. Johnson

• University of New Mexico

“Property Rights, Nineteenth-Century Federal Timber Policy, and the Conservation Movement.” Journal of Economic History 39(March 1979):129–142.

Economics teaches that, “given fully-defined property rights, resources will be guided by market allocation to their highest-value user.” Legal restrictions hindering the transferability of resources impose costs termed the “dissipation of rents.” The authors argue that federal timber policy of the late nineteenth century created significant rent dissipation. Congress restricted the transfer to private ownership of public timberland in the Pacific Northwest to 160 acres per claimant. Thus, private lumber companies could not directly buy from the government the large acreage of forested land needed for economies of scale in logging operations.

Before the late nineteenth century and the rise of the conservation movement, most officials considered private property rights as a means of conserving the nation's timber. But conservationists such as Gifford Pinchot argued that a timber famine would results from selfish private interests unless a national forest reserve system was established. Beginning in President Harrison's administration, this government intervention led to eventually over 184 million acres of land being reserved. Yet the real culprit of forestry misuse was not private industry but rather the costly federal land transfer policy. This government policy was restrictive and increased transaction costs in assigning private property rights to the forests of the Pacific Northwest. Paradoxically, federal laws “delayed the transfer of property rights and as a result actually encouraged the rapid cutting observed by the General Land Office in the 1870s and 1880s.

The lumber companies circumvented federal restrictions on the amount of land ownership by having their agents buy separate land parcels only to transfer them to the lumber companies. However, the estimated costs for evading the restrictive law were excessive since federal policy had significantly driven up the transaction costs of land sales.