The “tragedy of the commons” is the terminology economists use when resources are plundered in the absence of defined property rights. These rights can give owners the incentive to conserve resources to maintain their value. But property rights alone are not enough, obviously.
A recent FT story on the destruction of forests in Romania’s Carpathian mountains is a case in point. These forests are the “last great wilderness in Europe.” Some trees are reportedly more than 700 years old. As the FT explains:
“When the dictator [Ceausescu] was dispatched, the new government of free Romania set about restoring the ancient forests to those who could prove they owned them before the communists seized power. This was often easier said than done. While forests are embedded deep in the Romanians’ sense of themselves, the Carpathian Mountains marked the boundary between Transylvania and Wallachia, which held very different concepts of “ownership” in the Austro-Hungarian and Ottoman empires. It took years but, by the early 21st century, restitution was under way.
Local farmers and others now found themselves the owners of tracts of forest. So far, so good. But this is a story about capitalism and its consequences — good and bad, intended and unintended. For with ownership came liability for land taxes and for dues payable to the forestry authorities. These turned a restored asset into a liability.”
The trouble is these local peasant farmers are very poor. The only way some can pay the taxes is to sell logging rights for cash. In came Europe's logging companies. Now this unique forest is being harvested industrial style, with clear felling. The treasure is vanishing. Clearly, tax and conservation policies also matter.
