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I wonder why I remain startled when I have conversations like the following:

Student: Professor Rizzo, can you show me an example of how the “economic way of thinking” is different, and will help me be a better citizen

Professor: Sure. Take the Endgangered Species Act. This was an act of Congress intended to do what?

Student: Protect cute fuzzy animals from the perils of living in modern society.

(Professor thinks to himself … why isn’t Swine Flu virus protected, or various forms of bacteria that are virtually eradicated)

Professor: Generally, yes. It was intended to protect species that for whatever reason appear to be threatened. Now, is this a good way to protect such species?

Student: Of course, how could it not be, after all, that was the intention of the program.

Professor: Yes, but the economic way of thinking will force you to look beyond intentions and seek to understand the incentives various policies put in place, and to look at what the effects of a policy are, not just its intention.

Student: I see.

Professor: Did you ever hear of the Red Cockaded woodpecker?

Student: No, but I am sure it is important.

Professor: Well, without going into a long song and dance – the Endangered Species Act was passed to help birds like this, in particular to protect the habitats they require to survive and thrive. However, the implementation of the act has actually led to the bird becoming even more threated.

Student: More threatened?

Professor: Indeed. The ESA gets incentives all messed up. You see, if a Red Cockaded woodpecker is heard near your land, or is known to be on your land, you lose virtually all development rights to that land. You know that this bird loves the tall pine trees on your property – but if someone sees the bird there, under the ESA your land becomes virtually worthless to you. What do you do? Sit idly by as your dream piece of land is rendered useless? Of course not, you might take steps to prevent the bird from showing up on your land. Even if you are not a nasty person who would shoot the bird, maybe you play loud music all the time to scare it away, or perhaps you cut your trees down.

Student: I see.

Professor: And this is exactly what has happened in North Carolina. Despite the high minded intentions of the Endangered Species Act, it is not actually helping to protect species. The major reason is that individual landholders are expected to bear the full costs of species, and not the “population” at large who commanded this act be passed. However, they only enjoy a small portion of the benefits. It is not only not in their economic interests to bear these costs, but it is far from clear that they should be morally responsible for bearing these costs that the rest of us impose on them. After all, the residents of New York City have made the place pretty uninhabitable to most wildlife, not just threatened ones – why should they get off the hook, and feel smugly secure in the knowledge that they had a hand in crafting things like the ESA?

Student: Oh, so you are a liberal.

I am already considering a new profession.

One Response to “Our Guys Versus Their Guys”

  1. […] if I was sure, I would announce my politics on day one, and then be done with it. So I remain a mystery to […]

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