Prisoner’s Dilemmas- XII: Juno, Proposition 16, and A Community Sanctioned Asset Seizure

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The decentralized governance on many cryptocurrency networks can be advantageous. Especially, when compared to the centralized authority of the legacy banking and monetary systems. There is a caveat; blockchains have well-touted advantages outside of crypto circles, but what about the design of the consensus mechanism? How transactions are validated can have a litany of ramifications rippling outside of the bounds of the DAO (Decentralized Autonomous Organization). For example, the environmental impact of proof-of-work validation, the consensus protocol used most notably by Bitcoin. Because this consensus mechanism requires several crypto miners to utilize large amounts of electricity as they race to validate the transaction on the blockchain and create a new block in the chain, Bitcoin has naturally become a target environmentalist.

One solution to the energy consumption conundrum is to shift the consensus protocol from proof-of-work mining to proof-of-stake validation. Several sources have noted that proof-of-stake consensus reduces energy consumption. In proof-of-stake blockchain operations, validating the new block by the machines of token holders, their holdings function as collateral for the ability to confirm the transaction. The validator is randomly selected based, avoiding the competition to finalize the new block. Even the popular cryptocurrency Ethereum is looking to transition to a proof-of-stake protocol. Are there any potential drawbacks to this governance model? One major issue that can arise from the proof-of-stake method of transaction consensus; is highlighted in the Juno Network’s Proposition 16 controversy.

The incident occurred back in October 2021, when the Cosmos Network launched the new token Juno. Cosmos initiated a stakedrop, similar to a cryptocurrency airdrop where coins of a new digital currency are sent to “.. wallet addresses to promote awareness of the new..” digital assets. Except, a stakedrop entails awarding individuals a sum of new tokens for holding an existing cryptocurrency on the blockchain network. At the time, Cosmos had an original coin offering, ATOM; the network matched an individual’s ATOM holdings with Juno with a ceiling of 50,000 tokens. One of the “whales” or entities that hold a large amount of ATOM on the blockchain contrived a crafty remedy to game the asset drop limitations. The “Whale” portrayed itself as but an investment group, acting as multiple individuals, and divided wallet addresses across several users and funneled it back to a single coin wallet.

The network community passed the resolution Proposition 16 purposed:

By voting yes on this proposal, you agree to reduce the gamed whale address to 50k (Whalecap set per entity before genesis).

Note: The facts are that the Juno genesis stakedrop was gamed by a single entity. Willingly or unwillingly is not relevant to this matter. The whale gamer poses a growing risk to the network and the stakedrop error may be corrected. Gamed funds were consolidated into 1 address right after genesis which proves that 1 entity had custody over all addresses (linked below). This considerably broke the stakedrop rules of having a max 50k ATOM: 50k JUNO per entity. At the time of the genesis stakedrop, there was no way for Core-1 to pro-actively counteract this behavior. If this information would have been known before launch, 51/52 of those addresses would have been removed entirely.

https://www.mintscan.io/juno/proposals/16

 Effectively, the resolution aimed to confiscate all but 50,000 tokens of the Whale’s Juno tokens. The Whale’s holding exceeding the cap has three consequences: a concentration of on-chain voting power (proof-of-stake consensus mechanism the more you hold the decision-making authority you possess), the Whale can bribe other validators on the blockchain, and this entity can wipe out all the liquidity in the exchange. This has resulted in a Prisoner’s Dilemma. Instead of negotiating a compromise, both parties acted in their interests by defecting.

 The Whale initially defected by attempting to violate the terms of the drop. The network defected by seizing the purported collectives’ coins. The results have been lackluster; this policy transgresses against one of the core pillars of blockchain currencies, the “immutability” of the blockchain. Some pundits have expressed that this move could shake the confidence of prospective investors. There is some fear that other networks adopting similar policies without any impartial due process. Madison’s “tyranny of the majority” problem assumes its most modern incarnation, perhaps? Aside from this issue, what if Whale acted as middleman holding assets for other investors? Is it just for innocent third parties to suffer? If this entity was a consortium or an investment firm, the commandeered funds did not even truly belong to the Whale.

Bootleggers & Baptists: XXXVII: Salmon in Alaska (The Fight Against GMO Food)

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Genetically modified food is a flashpoint in the public debate over the wholesomeness of the modern diet. Many speculate that consuming GMOs has been linked to several various health problems. Few people question whether there are any benefits to producing genetically modified food products. There is a bit of irony here since most anti-GMO activists also happen to be exponents of environmentalism. In certain situations, GMO food could feasibly be sustainable alternatives to dwindling supplies of natural food sources. One salient example is in the market for edible fish. 

The Fall 2021 issue of Regulation magazine details the struggle of AquAdvantage to obtain approval from the FDA for their edible genetically modified salmon. However, even after nearly 13 years of pending FDA approval, AquAdvantage still has other legal hurdles to clear, obstructing their entry into the market of consumable fish. This threat is coming from the political and business interests in the state of Alaska. Sen. Lisa Murkowski (R–AK) assuming the veneer of consumer production advocate; argues that consumers need to know what they are consuming. Murkowski:

“… attached a rider to the FY 2019 appropriations bill that required genetically engineered salmon approved before the labeling standards created by the U.S. Department of Agriculture’s National Bioengineered Food Disclosure Standard regulation to include the words “genetically engineered” in its market name — a requirement seemingly intended to spook consumers…” (P.3).

The “moral” concern expressed by Murkowski; creates a dynamic conducive to Bootlegger and Baptist’s (1983) coalitions. Murkowski can be considered a Baptist for articulating consumer protection concerns for the stringent labeling requirements. She also could arguably fall into the category of Duel-Role Actor if her consumer protection advocacy is sincere. After all, Murkowski is a politician and has an incentive to appease her constituency. Consumer protection advocacy is a win-win strategy. Since the average voter may superficially perceive this initiative as being in their best interest, of their health and safety, continue to vote for Murkowski. But arguably, the most more powerful voter-bloc she will need to win would be the salmon fisherman and hatcheries. The industry surrounding food-grade salmon production is estimated to generate $600 million annually in economic output. Making it quite evident who the Bootleggers are! However, placing restrictions on genetically modified salmon creates a bit of a Prisoners Dilemmaas the U.S. producers cannot meet domestic demand for salmon, 90 % of all salmon sold in America is imported.  

Bootleggers and Baptists- XXX: USB-C Mandate in Europe

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USB (Universal Serial Bus) connections and ports have become a ubiquitous item in our daily lives. Whether it temporarily storing documents on USB flash drives and other peripherals (e.g. hardwired keyboards), we all use USB connections in some capacity. The matter of USB connections would hardly be a topic that could be conceivably politicized. However, the European Union has succeeded in turning the USB ports on electronic devices into a public policy debate. Next month the European Commission intends on presenting a “draft law” that would require all electronics producers to have a “common charging interface”. This would effectively prohibit the Lightning connections utilized by iPhones. If passed all other formats other than a USB-C connection would be banned in the European Union.

The question becomes what is a USB-C connection and why is the European Union so adamant about making it the compliance standard for the continent? USB connections and ports have been in existence since 1996. One of the latest innovations in USB connections came in the form of the USB-C (software version 3.1) in 2014. The USB-C connection boasts several technological advantages USB 2.0 and USN 3.0. Some of the benefits include thinner cables, greater capacity for transmitting data, and backward compatibility. Although these are most likely not the reasons why the EU is pushing for all electronics to have the USB-C standard for charging ports. The campaign for the USB-C mandate is arguably not directed towards consumer protection. Rather is more oriented towards environmentalism. One outstanding advantage of the USB-C format is that is more durable, meaning that it will not wear out as quickly as previous models of electronic port connections. The goal of mandating USB-C connections would be to reduce the amount of E-Waste a plank in the platform of the EU’s New Circular Economy Action Plan.

This initiative brought forth by the European Commission cannot escape the potential of a Bootleggers and Baptist (1983)  coalition from forming. The moralizing agent in this situation would be the European Union. Yes, there are some political gains for advocating for environmental causes. For instance, you look “progressive” and you earn the right to virtue signal. Above all, you win over the progressive vote, which is presumably sizable in Europe. The EU  may be a potential Dual-Role Actor, but for the sake of clarity, let’s assign the role of “Baptist” to the EU. Who are the Bootleggers in this scenario? It is highly unlikely that no one would benefit from the EU placing such compliance requirements on the charging ports for electronic devices. Regardless of whether the regulation is purported to target consumer safety or environmentalism disparate effects are inevitable. This was an observation implicit in Yandle’s theory since the nascent period of its development. Hence why in Yandle’s seminal paper he suggests there is a “demand” for regulation among corporations. The implementation of regulations operates as a backdoor way of reducing competition without violating antitrust laws. Granted, antitrust laws in the EU are different than those in the United States; however, this is still circuitous means of subverting the legal constraints of anti-competitive market behavior among firms.

Most electronics producers are on board and have already adopted all of the purposed EU requirements; except for Apple. While other Apple products have been reformed to include USB-C ports, the iPhone still uses a Lightning connection. Apple has even openly stated that such a requirement would hinder innovation. Yet, the other giants such as Samsung have remained silent on the matter; expressing tacit agreement with the purposed EU measure. It should be noted that Apple is a major competitor in the Smartphone market. The iPhone has approximately a 50% market share of the Smartphone market in the U.S. However, the global market share is primarily held by Samsung and other competitors. Nevertheless, Apple is still a serious competitor for companies such as Samsung in the global market. The silence of other producers most likely is due to rational business interests rather than the normative virtues of environmentalism. Therefore, Apple’s competitors in the Smartphone market are the “Bootleggers” of the EU’s USB-C mandate.

Public Trust Doctrine-Part IV: The Aftermath of A Liberated Doctrine

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Part I

Part II

Part III

Since the introduction of the concept of an “unconfined” application of the Public Trust Doctrine the legal construct has been utilized in a diverse number of ways. Typically in a manner that is divorced from its original purpose of preventing public resources from being occupied by private use. For example, preventing a private owner of an interior river from blocking off passage to anyone headed down. This becomes problematic because the operator of the boat is effectively stuck with no means of arriving at his destination. While there are several ways to resolve the issue of the unreasonable blockade, for example treating the river as a club good, at least the original intentions of the construct were limited to a clear concern for the public good. In the years since the Just case, the public interest justification has become more opaque. The overall lack of clarity and formal limitations on the doctrine has led to an appalling erosion of private property rights. Arguably has created a two-tiered system of public interest. On one hand, the doctrine has served to undermine public interest by destroying confidence in the state’s protection of personal property. The Just case is not a dead ringer for being the Public Trust equivalent of Kelo V. New London. However, both are horrifying demonstrations of how the Eminent Domain and the Public Trust Doctrine can be used in a manner that side-steps the Fifth Amendment.

The ruling on the Kelo case was unacceptable. No proponent of private property rights would argue otherwise. At least this illegitimate transfer of property was purportedly done for economic development. While this approach may have been morally and economically flawed, it still had pragmatic intentions. Whereas the Just case aimed to benefit the public interest in a more circuitous manner. Many of the goals of environmental preservation tend to reflect abstract objectives and ecological metrics that are far removed from the concerns of the average person. This does not mean that is not harm imposed by pollution or other ecologically destructive actions are not problematic. Such actions are loaded with externalities and adverse consequences. It is nearly impossible to separate the pragmatic concerns of the conservation movement from its ideological agenda. In reality, conservation should be about voluntary resource management, rather than forcibly separating American citizens from their property. Much of this conflation between political goals and practical environmental concerns is evident in the Green New Deal proposal.

The aftermath of the “liberated” Public Trust Doctrine is evident in the subsequent ruling giving a difference to this uncodified legal norm. It is difficult to conclusively say that using this construct to hold public property is inherently in the interest of the public. Public interest infers that all individual citizens benefit from the policy. In actuality, it operates more as an averaged aggregate of well-being, “… following utilitarian standards…” (p.159). The individual who is forced to surrender their property for the sake of environmental objectives without compensation is worse off. The matter is only compounded by the fact that the decision to transfer private property for public use is made by a third party with no rights to that property (p.159). This third party is the judges interpreting the law on the behalf of the state. Having the conditions under which this amorphous construct can be applied in case law does little to inspire that individual property rights will be considered. Especially because the metrics and even definition of public welfare are as unclear as to the constraints of the Public Trust Doctrine.

National Audubon Society v. Superior Court (1983)

The National Audubon case colloquially knows as the Lake Mono case does not directly address the issue of the conflict between Public Trust and private property. As the dispute was focused on the interests of the municipal government of Los Angeles and environmentalism goals. But it demonstrates another graduation in the flexibility of the interpretation of the doctrine. The city of Los Angeles was diverting from tributaries to Lake mono, as prescribed under state law (p. 196). However, the National Audubon Society decide to challenge the validity of these water withdrawals from various tributaries. Why? As water levels began to fall it started to have adverse consequences for the wildlife native to the ecosystems surrounding these bodies of water (p.196). Justifying questioning these redistributions of water and suggesting that the state was neglecting its Public Trust responsibilities.

What makes this case significant to expanding the scope of the doctrine is that it was no longer being limited to navigable bodies of water. There may have been some hints of this departure from this unspoken restraint in Just. But the “Lake Mono” case formally cements this shift in jurisprudence in case law. The California court ruled :

“ The purpose of the trust; the scope of the trust, particularly as it applies to non-navigable tributaries of a navigable lake; and the powers and duties of the state as trustee of the public trust (33 Cal. 3d at 434).. (p.197)”

The above statement alone arguably is a departure from the traditional interpretation of public trust. In terms of managing navigable waters ways, the management of tributaries is an adjacent concern. Such an expansion appears to be a mild form of judicial mission creep. This 1983 ruling went further in its claims of further broadening the doctrine. Suggesting that the doctrine isn’t locked into merely sticking to the “traditional triad” of navigation, fishing, and commerce (p.197). The doctrine needs to be made amendable to the growing and ever-changing concerns of public welfare (p.197). Opening up the doctrine to more progressive and looser applications in the broad sphere of public interest. Without a precise definition or sound metrics to assess whether these open applications are benefiting the public, at best advocacy of the doctrine’s expansion is audaciously careless. Making any absolute claims of benefits spurious. Particularly when the outcomes of the unconstrained doctrine only benefit a select few.

The Expansion into Recreation:

If it wasn’t concerning enough that the doctrine was being applied to opaque conservation goals, the foray into recreational justifications only serves to push the doctrine one step closer to being a fixture of arbitrary law. In Montana Coalition for Stream Access v. Curran, it was decided that the public has the right to have access to any body of water in the state for recreational purposes (p.197). This serves to go beyond the original Common Law and Roman Law precepts of the doctrine. However, it does not go so far as to invalidate the navigability requirements of the submerged lands covered under the doctrine (p.197). In the years since this 1984 decision, the recreational justification for invoking the doctrine has continued to be used. However, over two decades later in 2008 test of navigability requirement comes under scrutiny. In a disturbing twist, in Bitterroot river protection Ass’n V. Bitterroot river Conservation Dist., which expanded public right to recreational use of water for non-navigable and private water sources. Citing the Steam Access Law “… enacted in response to Curran…” for justifying this expansion into privately owned bodies of water (p.198). This byproduct of an expanded Public Trust Doctrine defies even the most conventional Samuelsonian definitions of public goods. A privately owned body of water that is non-navigable is most certainly excludable. Would it be appropriate to allow strangers to use the Koi pond in your backyard for “recreational” purposes? I believe that most people would oppose such an encroachment on private property rights. Reading the Bitterroot River decision without any context and could lead to such obtuse conclusions.  

Public Trust Doctrine: Part I

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The Public Trust Doctrine is a legal concept that has its basis in ancient Roman law and English Common Law. Being a legal construct, it has been subject to interpretation causing it to evolve over the centuries. Arguably some of the most radical shifts in its judicial application have occurred in the nineteenth and twentieth-century American courts. Shapeshifting from a doctrine used to prevent monopolization of public waterways to a blunt instrument wielded by the interests of the environmentalism movement. Subordinating water usage rights and other forms of private property to loosen conditions that public trust law has been applied. Some scholars such as Joseph Sax perceiving a contextual application of the concept as being too narrow. Believing that having more malleability with the application of the doctrine will help sustains its core function (p.4). This function being putting common resources to the best use for society. Rather than allow these resources to be sold off and alienated by private interests.

At first glance, Sax’s assessment of the doctrine may seem fair to those who are concerned about economic equality. The keen insights of legal scholar Richard Epstein provide an interesting perspective on the Public Trust Doctrine. He essentially likens the concept to be an inverted version of Eminent Domain law (p.8). Meaning that the Public Trust Doctrine mitigates private individuals from commandeering public lands without just compensation. Implying that an individual for example buying public land should not be doing so below the market price. Mirroring how just compensation is an implied right in any takings case as depicted under the Fifth Amendment of the Constitution.  In a society where taxes have been collected this premise makes sense. As taxpayers being the primary contributors to public funds, they own all public assets. In instances, where the costs of selling a public good to a private party outweigh the benefits it can be disputed whether the asset(s) should be sold.

Epstein successfully demonstrates the reciprocal nature of both Eminent Domain and the Public Trust Doctrine. The reason why both legal concepts parallel each other is the fact they are at their core interpretations of property rights. Both provide a framework for the conditions under which property can be transferred from one party to another. One describing the contingencies under which private property can be transferred for public use. The other presenting the conditions under which public property can be alienated for the use of a private party. If we are to hold property rights in high esteem both are subject to the conditions of the Takings Clause.  Unfortunately, both concepts wavered in front of protecting property rights. Proponents of a liberated form of the Public Trust Doctrine have no problem utilizing its amorphous nature to circle property rights to achieve environmental objectives. Theorists such as Sax show little concern for this erosion of property rights. Anything even remotely of a Classical Liberal disposition can be nothing but horrified by the diminished regard for private property in the American legal system.  In terms of the property being misappropriated to satisfy environmental objectives, it is easy to point to Sax being the linchpin for this decades-long trend.

It is not fair or intellectually honest to point all of the blame on Sax, technically the unfettered application of the doctrine began back in the nineteenth century.  Formulating from the seminal case Illinois Central R. Co. v. Illinois, 146 U.S. 387 (1892) considered by many to layout the rubric for the modern American interpretation of the doctrine. However, legal scholars such as Richard J. Lazarus point out that there was a precipitous change in the interpretation of the legal doctrine in the years following the 1970s (p.3). Displaying that there was a radical shift in the jurisprudence surrounding the doctrine that happened to coincide not only with the insights of Sax but also with the nascent period of the Environmental movement. Surmising that the environmental movement hastened the development of the doctrine isn’t at all outlandish. Especially considering it has traditionally been utilized as a legal construct to manage public waterways. Shedding some light on why property rights and environmentalism have historically been at odds. Truly prudent environmentalism manifests itself in sound resource usage and allocation. This can only take place in a world where property rights are enforced. Not nullified through arbitrary and tilted interpretations of legal traditions. Particularly ones that have never even been fully fleshed out in statutory law that take on capricious attributes. Merely shift due to a change on the whim of social trends.

If good resource management aligns itself with good economic policy, why couldn’t more market-friendly approaches to environmental problems be proposed as a compromise? At the very least devise compromises that respect the ownership of private property. One such compromise could entail a theoretical statutory codification of the Public Trust Doctrine. This would mandate compensation regardless of conditions under which land is transferred by the state. While the author is not completely comfortable with the idea of formal written law, this would be a pragmatic solution for two reasons. First off, it would operate as a formal constraint against loose interpretations of the Public Trust Doctrine. Second, it would demand compensation to those who were experience damages by the transfer of a property. Through a formal revision, not only can the doctrine be constrained to its original purpose it also will serve as a safeguard against unjust takings.

Does The Market Pricing of Water Lead to Waste?

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The commodity of water is unquestionably crucial to sustaining human life.
Many humanitarians suggest that it is a basic human right that should not be subject to market pricing. However, market pricing serves a crucial role in bridging the information asymmetry between the consumer and supplier. Operating as a quantifiable signal to the consumer indicates the supply of a good or service. While the moral concern of safe drinking water for the poor is a valid consideration, distortions in the price may lead to other unintended consequences (p.228).If the equilibrium price of water is relatively high by the estimates of the consumer this could be an indication of a low water supply. Making pricing mechanisms the prime instrument for curtailing water shortages during a drought. Some pundits would find the idea of placing a premium on the water to be ethically objectionable. Not allowing water prices to rise to market levels may result in dwindling supplies of potable water. Potentially impeding any sincere conservation initiatives making these moral concerns somewhat inconsequential. If all the aquifers, reservoirs, rivers, and tributaries are dried up no one regardless of socio-economic status will have access to water.

Per the book Aquanomics, as of 2012, the state of Utah was the second-largest consumer of water in the western United States. Ironically, Utah also had some of the lowest prices in the region (p.225-226). Part of the reason why the cost of water is so low in Utah is related to the fact that water districts in the states are subsidized by ad valorem taxes. Property taxes have proven to be a “reliable” source of funding for various water projects and regular maintenance in the state of Utah(p.226). Due to water services being supplement by property taxes the connection between the cost of water and consumption has been severed (p.228).
Misaligning incentives away from conservation and making excessive use incentive to the price of water. Whereas if customers were directly billed for water usage based on consumption volumes, people would be more cautious about their overall consumption. As the water supply decreases, naturally the price would rise to make it a built-in mechanism to combat shortages.

Unfortunately, there are several objections to charging customers for water based on consumption.  One of the more perplexing arguments against directly billing customers for water services is that it would result in wasting water. Predicated upon a prima facie application of basic economics would assume that higher costs of water usage would incentivize more conservative consumption. Never the less this is a common objection against deriving all revenue from directly billing based upon water consumption. As one could predict that when the price of water increases the demand for water decreases. So what happens to the excess water that is left unconsumed due to the higher prices? In the state of Utah, unused water tends to be stored in “..reservoirs, lakes, and groundwater aquifers until filled..” (p.230). Demonstrating that the assertion that the excess water would be wasted is inconclusive (p.230).

 

Despite concerns of water being wasted due to allowing the cost of consumption to rise to market levels, there is a great irony in this justification. Even in a system where the cost of water is subsidized the water districts in the state of Utah still face surpluses (p.231). Considering the long duration of time it takes to appropriate water from new sources and that “… new water comes in lump quantities, supply and demand are seldom equated in the same year..” (p.231). Excess supplies will remain until population and industrial growth drive demand towards the water supply (p.231). Meaning that there will excess water supplies until demand reaches the equilibrium point. Single-handedly invalidating this justification for continual subsidizing, the water in the state of Utah. It has even been found that demand for water increases in lockstep with the rise in per capita household income (p.231). This fact only further serves to validate the point that with development the demand for water increases. Per capita income will not increase until more jobs come to a specific geographic area. This tends to be correlated with the development of infrastructure. Displaying the integral relationship between the demand for water and urbanization.

 

One variable that is outside of the realm of human economic behavior that can influence the water supply is participation. Regardless if more development occurs throughout the water districts of Utah, no one can control weather patterns
(p.231). Should customers be locked into a flat rate in years where there is a large amount of rainfall?  Vice versa in a year with scant precipitation is it reasonable to charge the same amount as a year with abundant rainfall? Anyone familiar with the underlying principle behind the Law of Supply and Demand would be baffled by this logic. Could easily speculate how the water supply could become distorted by such a flawed approach to pricing. Providing credence to the approach of utilizing market-style pricing to the provision of municipal water. Market pricing mechanisms provide a degree of flexibility based upon environmental conditions (p.231). This provides a rational approach to the allocation of water and would most likely not lead to the shortages projected by many critics.

 

 

A Free-Market Approach to Wolf Restoration

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Environmentalism and free-market economics have long been viewed as being adversarial. The very notion of combining these two ideas seem like nothing more than an oxymoron. This popularly perpetuated stereotype is echoed in the rhetoric of the Green New Deal. Why should conservation efforts not be guided by the signals of profit and loss mechanisms? Better yet, why should conservation efforts be insensitive to incentives and rely solely on legislative fiat and sanctions to enforce such initiatives? It is about time that environmentalism sheds its crunchy -granola image in exchange for more of a pragmatic approach. After all, conservation does entail conserving resources. Any economically conscious actor would consider the limitations on nonrenewable resources. Meaning that economic agents would strive for the more efficient use of resources of limited quantities. Efficient uses of resources tend to be rewarded in free-market economics. Ironically demonstrating how environmental conservation and free-market economics dovetails perfectly to one another.

One of the most notable leaders in market-based environmentalism has been PERC.  Founded in Bozeman, Montana back in 1980 and has been committed to devising economically sound solutions to environmental issues. All the while, respecting private property rights. This research institute flips the conventional notion of environmentalism on its head. Seeking to pursue private solutions to environmental versus automatically resorting to legislation and regulation. One of Terry Anderson’s, a senior fellow at PERC, favorite examples of this was the story of Hank Fisher. A leader in the wolf restoration effort in the 1980s.

Fisher came to an epiphany in 1984, after meeting with a group of local ranchers in a schoolhouse in St, Anthony, Idaho. Fisher assembled the ranchers to hear their concerns regarding wolf reintroduction at the Yellowstone national park.  The consensus was that the majority of the ranchers were concerned about the cost of losing livestock as a result of an increase in the wolf population. It was the response of one of the ranchers that solidified the foundation for Fisher’s market-based solution. One of the ranchers told Fisher: “It’s easy to be a wolf lover. It doesn’t cost anything. It’s the people who own livestock who end up paying for wolves.” Fisher then remembered a livestock compensation plan that was implemented previously in Minnesota. However, the ranchers were incredulous at the fact that they ever would be compensated for their losses.

In the summer of 1987, Fisher was able to test out the concept of a livestock compensation program in Montana. As wolves returned to northwestern Montana, local ranchers lost thousands of dollars’ worth of livestock. Killed by the wolves migrating back to their natural habitat. The indignation of the ranchers was reflected in the flurry of headlines in the local papers. Fisher quickly sent out a fundraising newsletter out to” ..Defenders of Wildlife members in Montana…”. He was able to raise the necessary funds to compensate the ranchers for their losses within 48 hours.  After seeing the success of his first initiative, Fisher decided to continue to implement and maintain rancher compensation programs.  He collaborated with local artist Monte Dolack creating posters depicting what Yellowstone would look like with a restored wolf population. Selling posters to the public for $30.00 apiece.  Since 1987 (reference article was published in 2001), the program has raised $175,000.00 in rancher compensation. The scope of the program has been extended to ranchers in Idaho, Wyoming, Arizona, and New Mexico. Defenders of Wildlife also implemented a program in 1997, compensating for grizzly bear damages. Raising $60,000.00 by 2001.

The story of the environmental efforts of Hank Fisher is an illuminating one. Challenging the conventional wisdom that we need to dispense with free-market economics when pursuing environmental restoration efforts. Both are perfectly compatible with one another. With a little bit of ingenuity and understanding of market incentives, other aspiring pioneers could follow in his footsteps. By doing so create a win-win scenario versus the zero-sum policies that are favored in government-sanctioned penalties and inflexible regulations.