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 phi1618
old hand
Registered: 02/14/04
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 On markets and ownership: Pricing of Rhinos
#8242181 - 04/05/08 11:37 AM (7 months, 26 days ago) |
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One system of belief I run into frequently, particularly around here, is what I term "free market fundamentalism" (I didn't come up with the name, just like it). There are various formulations of this idea floating around, but basically it is the idea that markets are like magic - if you can get a market price for something, that's its value. Also frequently associated with this is the idea that private property is a natural right and that regulation should be minimized or eliminated.
As a whole, this is a pretty complex idea, but I think it's really predicated on a misunderstanding of history and of the nature of markets. I find markets and the idea of private property fascinating, and markets are a natural way to organize human affairs, as demonstrated by the fact that variously formed and regulated markets have been with humans for as long as writing and have developed independently several times. However, there are features to a resource that make it amenable to markets, and the structure of markets varies widely, is dependent on technology, and has fundamental implications for the overall effects of the market.
Ultimately, any market is, like a government, tribe, or family, a social and economic institution that has specific and various effects. Any dogmatism in the approach to studying markets can blind you to their actual effects and applicability - they are important and natural, but not the end-all of human social organization.
With that opinion as a background here's an interesting blog post I ran into recently:
http://stumblingandmumbling.typepad.com/stumbling_and_mumbling/2008/04/pricing-rhinos.html
Quote:
Pricing rhinos
Louis Theroux reports on the market in big-game hunting in South Africa: you can pay up to $100,000 for the right to kill a rhino.
Commonsense economics says this is the way to conserve wildlife. If a farmer is given ownership rights over the rhinos on his land and the right to charge hunters to kill rhino, he'll take care to breed rhinos and protect them from other hunters. The result will be more rhinos than if rhinos are unowned - because then the tragedy of the commons will ensure they are hunted to extinction.
Sure enough, some economists have indeed found that private ownership is a great way of conserving wildlife.
Sounds simple. But there's a problem. Property rights have to be enforced. As Theroux points out, that means fencing farms in. And that can be expensive. As this paper (pdf) describes, property rights don't arise from nothing - they only exist if the (private) benefits of establishing them outweigh the costs.
Worse, migratory animals can't be enclosed. And as they migrate, they'll be killed. This paper (pdf) describes how this is a problem for wildebeest in the Serengeti. And it was probably the reason why American bison were hunted almost to extinction in the 1880s; it was just impossible to create private property rights in them.
So, property rights are great in theory. But the practice of creating and maintaining them is a little trickier.
I'm not sure if there's any real interest here for this, or if Philosophy might be a more appropriate forum. Let me know.
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Capatalistc nomad
Positivelyscandalous
Registered: 06/17/03
Posts: 9,927
Loc: Pongyang, North Korea
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Re: On markets and ownership: Pricing of Rhinos [Re: phi1618]
#8247425 - 04/06/08 05:17 PM (7 months, 25 days ago) |
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i think that this makes a very clear point of the fact that in the end all markets and values placed on real items are truly abstract.
in some ways you could look at the stock markets as one of the human races largest pieces of abstract art.
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PEACE
 zippoz
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in times of widespread chaos and cofusion, it has ben the duty of more advanced human beings - artists, scientists, clowns, and philosophers - to create order. In such times as ours however, when there is too much order, too much m anagment, too much programming and controll, it becomes the duty of superior men and women and women to fling their favorite monkey wrenches into the machinery. To relieve the repression of the human spirit, they must sow doubt and disruption
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geokills
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Registered: 05/08/01
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It's pretty wicked the way we've built and patched together a quasi-cohesive system of operation, ain't it? 
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