Private owners
Private owners have an incentive to conserve for the future-particularly if the property is expected to increase in value. People have a much stronger incentive to conserve privately owned property than they do commonly owned property. For example, when Steven was in college, the general rule among his roommates was that any food or drink in the house was common property-open game for the hungry or thirsty mouth of anyone who stumbled across it. There was never a reason for Steven to conserve food or drinks in the house because it would be quickly consumed by a roommate coming in later that night. When Steven first started living alone, he noticed a dramatic change in his behavior. When he ordered a pizza, he would save some for the next day’s lunch rather than eating it all that night. Steven began counting his drinks before he had one to make sure there were enough left for the next day. When Steven was the sole owner, he began delaying his current consumption to conserve for the future because he was the one, not his roommates, who reaped the benefit from his conservation.
Similarly, when more than one individual has the right to drill oil from an underground pool of oil, each has an incentive to extract as much as possible, as quickly as possible. Any oil conserved for the future will probably be taken by someone else. In contrast, when only one owner has the right to drill, the oil will be extracted more slowly. The same applies to the common-property problems involved in overfishing of the sea compared with fisheries that use privately owned ponds. ’’
Someone who owns land, a house, or a factory, has a strong incentive to bear costs now, if necessary, to preserve the asset’s value for the future. The owner’s wealth is tied up in the value of the property, which reflects nothing more than the net benefits that will be available to a future owner. Thus, the wealth of private owners is dependent on their willingness and ability to look ahead, maintain, and conserve those things that will be more highly valued in the future. This is why private ownership is particularly important for the optimal conservation of natural resources.
Did you enjoy this post? Why not leave a comment below
Comments
No comments yet.
Sorry, the comment form is closed at this time.