The Not So Wild, Wild West: Property Rights on the Frontier
Alston, Lee J., Independent Review
* The Not So Wild, Wild West: Property Rights on the Frontier By Terry L. Anderson and Peter J. Hill Stanford, Calif.: Stanford University Press, 2004. Pp. xii, 263. $24.95 cloth.
As the tide suggests, Terry Anderson and P. J. Hill's new book is not about the exploits of Butch Cassidy, Wyatt Earp, Billy the Kid, or John Wayne. Radier, it is an analytical narrative about the property rights established in the North American West to allocate land and other exploitable assets, such as beavers, gold, silver, and water. I use the term analytical narrative because even though the book has a clear theory underlying its analysis, it does not present the kind of analysis that composes the daily diet of academic economists-there is neither a single equation nor any econometrics to lull the reader to sleep. The book's informal style, however, should not cause the potential reader to suppose that its analysis is shallow. Anderson and Hill present a compelling history based a great deal of their own research as well as that of others who have studied property rights in the West. They also include considerable evidence in graphs, tables, and quotations from contemporary observers as well as from historians. Their approach will enable them to reach both academics and nonacademics.
The book consists of eleven chapters: 1, an entertaining introduction; 2, the framework used to analyze property-rights arrangements; 3, Native Americans' property rights prior to the arrival of Europeans; 4, the U.S. government's shifting policies toward Native Americans and Native American lands; 5, property rights over the beaver and buffalo; 6, property rights over gold and silver; 7, property rights of assets used in wagon trains; 8, property rights of cattle drives and range rights; 9, property rights in land; 10, water rights; and 11, implications for new frontiers. The only conspicuous absences with regard to property rights over resources are full accounts concerning timber and fisheries. This omission was apparently made for good reason, however: the authors stick to the subject areas they know best.
The underlying basis of the analytical framework is that well-defined and well-enforced property rights reduce the dissipation of value entailed by competition over property rights and their associated income streams. Because Anderson and Hill focus on a frontier, which is not an equilibrium situation, they develop hypotheses concerning the tendencies toward equilibrium. For the most part, the hypodieses are straightforward, sensible, and already well developed in the economic literature. For example, Anderson and Hill argue that as resources become more valuable, people will devote more effort to defining, redistributing, and enforcing property rights. (I wish they had added that the additional stream of rents from a better definition of property rights, as compared to the status quo, drives the effort to define or rearrange property rights.) Two hypotheses pertain to technological change that can drastically alter the costs of defining and enforcing property rights. Technological change can also alter how goods are produced, thereby influencing who supplies what in productive activities.
Four hypotheses involve the optimal size of the collective that assigns property rights or, given that the collective has a predetermined size, the implications for the likely assignment of property rights. Anderson and Hill argue that the more mobile resources are or the larger the geographic scale of the production unit is, the larger will be the collective that defines and enforces property rights. This result is analogous to the implications in public finance concerning externalities and spending and taxing units. The authors argue strongly that because members of smaller collectives have a greater share of the residual profit, they will have a greater tendency to reduce transaction costs. If the narrative has any villains, they are the larger collectives, such as the U. …