🚀 go-pugleaf

Some people claim private ownership of natural resources is a panacea
for wasteful use of public resources.  I used to feel this way myself,
but things are more complex.  Consider the following very simplified
example.  Suppose you own some land which contains some trees.  These
trees don't grow very fast, suppose you can sustainably harvest 2.5%
of the standing timber each year and make $10000 profit.  I emphasize
this is sustainable, so if you do this you can be guaranteed of $10000
profit per year indefinitely.  However, if you cut down all the trees
immediately you can make $400000 (10000 x 40) profit which you can
then invest at (say), 5% interest, giving yourself $20000 per year
income.  If you are the sole owner of this resource and are guided by
only economic considerations, the rational course is to immediately
cut down all the trees.

Obviously this example is tremendously simplified.  But can we learn
anything from it?  Well, it suggests things might be a little bit more
complicated than simply than simply "The sole owner of a resource has
a motive to preserve it."  In fact, the sole owner of a resource has a
tendency to see it as capital which must return a sufficient yield to
make its maintenance worthwhile.  

For much more information on this subject, I heartily recommend Colin
Clark's book "Mathematical Bioeconomics".  My example is essentially
borrowed from the introduction to (the first edition of) that book.
--
Dennis Jespersen                Voice: (415) 604-6742                      
MS 202A-1		        FAX:   (415) 604-1095                      
NASA Ames Research Center       email: jesperse@rft28.nas.nasa.gov         
Moffett Field, CA 94035-1000    We have met the enemy and he is us. -- Pogo