This WILL be on the exam

JDB points to this article from the Economist on endagered species, trade and conservation. It reads like Public Finance 101.

Bans may cut out legal wildlife trade, but some economists say they undermine efforts to conserve animals and plants in the wild and may even create incentives to get rid of them. If people have no economic interest in maintaining wild animals or their habitat, the attraction of converting the land to some other use, such as agriculture, increases.

The obvious economic explanation is that the over-exploitation of animals and plants is an example of the “tragedy of the commons”. If no one owns the wildlife or the land on which it lives, the behaviour that is individually rational—poaching, clearing land and so forth—may be collective folly. Trade ban or no trade ban, without enforceable property rights, the underlying tragedy remains.

Timothy Swanson, a professor in resource economics at University College, London, argues that the tragedy lies not in the commons itself but in governments' failure to control access to wildlife and the land it occupies. The reason lies in their “opportunity costs, alternative development priorities, governance problems and resources”.

Admittedly, markets may not solve every problem… Nevertheless, [price] mechanisms are likely to be useful means to moral ends.

Lesson: markets GOOD, command and control BAD. Give that rhino some property rights!