The Economics of Waste and Conservation

THE story of Realmah, by Sir Arthur Helps, contains a description of a so-called ‘House of Wisdom.’ This was the dwelling-place of a number of prophets, who possessed differing degrees of prophetic power, lived upon fees, and had incomes varying with the number of their clients. In an outer inclosure two men were living in the deepest poverty. They were called ‘Spoolans,’ and were contemptuously treated and almost never consulted, since their special gift consisted in predicting events that would occur a hundred or more years in the future. In the next inclosure there were men who were only a shade less miserable. They were the ‘Raths,’ and had few clients, because they could foretell only what would occur after a lapse of twentyseven years. In another and better apartment there were five ‘Uraths,’ who could tell what would happen after a single year should elapse; and these men were in good spirits, handsomely dressed, and evidently well off; while the ‘Auraths,’ who could prophesy what would happen after a month, had a superabundance of clients and of fees. Vastly wealthy were the ‘Mauraths,’ who could foretell what would happen after three days; but the multi-millionaire of the company was the great ‘ Amaurath,’ who was approached with the awe with which a servant might have approached Sardanapalus, for this man could foresee what would occur after six hours.

This description applies to a common mental attitude toward the future. Intelligence does indeed modify it, and the man of property who is providing for his descendants is by no means on a plane in respect of forethought with a happy-go-lucky southern Negro. The founder of an estate would have need of the services of the most far-seeing class in the House of Wisdom; but the average man would pass by, or at most, in a leisure moment, satisfy curiosity at the cost of a trifling tip. The Amauraths and their great chief would get the rich fees.

If we judge by appearances it seems that states come in the same category; and it is certainly true that a people in its entirety will often act more blindly than a select class would ever do in a private capacity. Yet there is every reason why a state should make use of forethought. A century is as nothing in its life; and yet how many acts do legislatures, congresses, and parliaments pass for the benefit of coming ages? In all that concerns those periods, the national consciousness is dull. Representatives are allowed to take short views and, in their capacity as politicians, are compelled to use their efforts in ways that afford quick results. Where an act insures a benefit that will begin at once and continue forever, the continuance does not tell against it, but counts somewhat in its favor, and more and more, it is fair to say, the nearer part of the endless future counts as a make-weight; but the real test comes when it is necessary to sacrifice something now in order to gain something hereafter. When an economic measure will cost us something but will enrich posterity, how general and ardent is the support of it? We seem willing that the earth should be largely used up in a generation or two.

A riotous waste of material resources has gone on, and still continues. The degree of prodigality we have displayed would, if shown by an individual owner of property, tell an alarming story as to his mental state; and yet it is done by a collective body without throwing doubt on the sanity of its members. A nation of intelligent men is doing what no such man, acting in his own interest, would do. There is an economic law which accounts for the course of action we deplore, and it also points the way to a remedy. A lack of altruism, coupled with the possession of keen individual intelligence, causes the depleting of the resources of the country. The state exists for the sake of making individuals act altruistically — of compelling them to do much that the general good requires.

The doctrine of ‘Economic Harmonies’ seemed to prove that, in most production, what is good for one person is good for all others. It afforded a scientific basis for optimism, and for the laissez-faire rule of practical politics. Let men have their way and let the state do nothing it can avoid, and we shall have the best of all possible worlds. Where men thrive, as in the main they do, by successful competition, — that is, by outdoing their rivals in serving the public, — the law holds true, and is an important bit of economic theory. The man who undersells others offers the public a better service for a given return. He may be enabled to do it by inventing a good machine, by discovering a cheap material, or by organizing his shop more effectively than do other employers. In all such cases his interests and those of the public are identical; but will any one claim that this is true when it comes to exploiting forests or hunting game to extermination? Does seal-hunting show the identity of interest of hunters and public? Does the quest of natural gas and the use made of it show this? In these, and in many other instances, the individual wins a profit by what inflicts on the public a melancholy waste. In all mere grabs there is at work a principle of economic antagonism, and not one of harmony.

Exploitation usually makes the individual richer and the people poorer, and it nearly always gives to the individual far less than it takes from the public. This combination of quasi-robbery and absolute waste completely reverses the action of the law of harmonies. It presents two distinct issues, of which the first is whether a kind of property should be given to individuals at all; and the second, what, in case it is so given, the recipients should be allowed to do with it. Wherever a new value is created and the public wealth increased because of individual ownership, the law of harmonies is at work; but where existing wealth is recklessly destroyed in consequence of individual ownership, the law is reversed and the reason for intervention by the state is clear. In general these two cases represent true production, on the one hand, and exploitation on the other, and it is competitive exploitation which shows the most complete reversal of the harmony principle.

If we turn a hunter loose in a wellstocked deer forest, will he so use the game as to perpetuate the supply? Not if there are other hunters who have access to the preserve. In that case he will shoot bucks, does, and fawns lest, while he is sparing the does and fawns, another man may kill them. If he taps a reservoir of natural gas, he will draw off the supply as fast as possible, knowing that his neighbors will do so if he does not. These cases represent the condition that insures the most injurious, but also the most morally pardonable, type of exploitation. A single individual cannot prevent or greatly reduce the destruction; all he can do is to hold his hands and let others do the destroying and get the return. The game and the gas are at the mercy of whoever is near enough to them to take a hand in the scramble. If the hunter had the preserve well fenced and in his own exclusive possession, he would not exterminate the game. A very little intelligence would make him rear this herd as a ranchman rears domestic cattle; and a similar thing is true of the men who tap reservoirs of gas, since if they could confine and hold their several shares of the elusive material, they would not waste it as rapidly as they do.

Exposing any valuable thing to a free-for-all seizure is insuring the surest and speediest destruction of it, and private ownership marks an advance on this condition, even from the point of view of public interest. Only a monumental idiot will kill a goose that lays golden eggs when he has her securely penned; but when she is at large and other men are chasing her, an intelligent selfish man will do it, since under those circumstances only a quick use of his gun will make her afford to him personally even so much as a dinner. And refraining from shooting would not save the goose. The whole issue lies between this particular destroyer and some other, and the situation fairly well describes the attitude of many who prey on public resources. They would do better, though not usually very well, if they owned the resources outright. Private ownership confers a power to preserve, and affords some motive for doing it, and it is for the state to supply what will decisively reinforce that motive. Resources that are needed by the public may well be privately owned when, either spontaneously or under compulsion, owners use them for the public.

There will always remain a choice between such a system and a genuine public ownership, under which all exploiters may be made to stand off, and a systematic utilizing of the property may be secured. Here the desirable policy varies according to the nature of the resource, and in some cases private ownership yields the best possible results in the present without sacrificing the future. Taking a positive thought for the future and making an intelligent provision for it is however, in the main, a public function, since in the cases in which the future is recklessly sacrificed, it is the interests of the people as a whole that suffer and not those of the exploiters.

Biologists say that the human race has, at the very least, lived on this planet for a hundred and fifty thousand years. If it is destined to live here for as much longer, of how much comparative consequence is the present year or decade, or even the whole present century? It is microscopic in the life of man, and properly guarding the interests of a century is an indefinitely small part of the real duty of one generation toward the unending life of humanity. Yet at present there is no adequate care for the single century. The friends of conservation scarcely hope for more than the warding off of calamities that will otherwise fall far within that period.

What would be a perfectly ideal course for a nation to pursue with reference to the future? Give its people a keen enough perception of conditions, and altruism enough to estimate the welfare of coming generations at its true value, and how far would it trench on its own immediate gains for the sake of later benefits? The supposition itself departs from the realm of fact, for no such keen intelligence and perfect altruism have ever existed; and in asking what would happen if they did exist, we part company with realities. We find at once that what ideally should be done goes too far beyond what is ever thought of as practicable, to be advocated without bringing suspicion on the mental state of those who favor it. And yet it is well worth while to see how far into the future a national policy would look if it were governed by perfect intelligence and high sense of obligation. A mere glance will show how little danger there is of overdoing the care for future interests or of becoming fanatics on the subject of protecting them.

In view of the unending ages that will be affected by its action, an ideal government would begin by making a very searching inquiry into the extent of existing resources, and would secure, if not complete knowledge, at least a basis for a confident estimate of the length of time they would hold out under given rates of consumption. It would also do another thing which it strains the imagination to picture as a reality, in that it would estimate the welfare of the people of the future as quite on a plane of importance with the people of the present, and would use one and the same degree of care in guarding the welfare of all. As an end of effort it would count the happiness of a thousand generations not yet born as a thousand times as important as the welfare of one generation now living. It would, indeed, recognize the fact that the future population will receive many of its blessings by transmission from the present one, and that there must be no breaks in the transmission. To impoverish the present generation would be bad for later ones. Men of to-day must be well enough off to endow their children with the means of maintaining and gradually raising their standard of living, and this fact would prove highly important as bearing on a practical policy. Merely as helping to make up the summum bonum of economics, human welfare is scientifically one and the same thing wherever, in point of time, it is located.

Still recognizing the fact that we are idealizing humanity, and assuming an insight and an altruism which is far from existing, we may ask what are a very few of the things that with a really just regard for a thousand generations — a small fraction of the number that have already lived and passed away — a government would do. It would call a halt on the unlimited burning of coal for motive power. Long before a hundred generations will have passed, this will be sorely needed for heating dwellings and workshops and for smelting ores. A steam-engine utilizes a small fraction of the potential energy of the coal, while a smelting furnace utilizes more, and an apparatus for heating dwellings, even where it is wasteful, puts the fuel to a very necessary use and gets a great absolute benefit from it. A policy that would protect the interests of the later dwellers on the planet would stop burning up the combustible part of it in an unnecessary way, and would get motive power from waterfalls, tidal movements, and waves. In the end it might conceivably utilize the electricity that is wasted in thunder-storms, and stop the storm; or, as Edward Atkinson once suggested, it might create electrical currents by induction, through the motion of the earth. The revolving planet would thus be converted into a dynamo, and if the other planets and the sun served the purpose of magnets, and the combination were made to drive our ships and our railroad trains, then of a truth we should have ‘hitched our wagons to a star.' It is probably doing that, in the more familiar and figurative sense, to suggest this possibility at all; and decidedly it is doing this in a fatuous and unhappy way, to make the chance of working such mechanical miracles in the future a reason for destroying our stock of fuel and letting coming generations shift for themselves. What if, after the fuel is gone, the earth declines to be the dynamo we need? What is not fanciful is the opinion that, in simpler and more obvious ways, it is possible to get from other sources much of the power that we now get from coal.

Crude brutality cares nothing for all this. It demands, ‘What do I care for posterity? It has done nothing for me.’ Even with a certain care for posterity, however, a man may be unwilling to do much for it if his imagination is dazzled by its expected wonder-working power. He may become a destroyer because of this play of fancy, and it is then the conservator who keeps closer to facts. In another way he does this; for while he may think and care for the remote future of humanity, yet in the practical steps he would take, he would also guard the nearer future from impending calamity. He acts in part for that microscopic fraction of the life of humanity which is embraced within a single century.

On the basis of a policy that has only such a period in view, very decided measures of conservation are called for. There is coal enough to last, even in wasteful uses, for far more than a century, and we shall continue to burn it for motive power. Probably, however, we shall soon use water-power more freely, and so save some of the coal, and probably we shall ere long substitute gas-engines for steam-engines, and so save more. The remote future may suffer for what we destroy in spite of this, but we are now letting it take its chance, and shall continue to do so till our insight is keener and our moral purpose higher.

Preserving forests and husbanding natural gas and mineral oil are demanded in the interest of a very near period. For within the single century is likely to come the evil which destruction of these gifts of nature will cause. Moreover, it is perfectly certain that, quite apart from causing destruction of coal, the making over to private citizens of a vast value in known deposits of it now in public ownership will misuse the people’s property in a way of which they should and will take account. Without in any wise limiting the use of the fuel or ceasing to treat it as an asset of the people now living, we shall call a halt on recklessly alienating it.

Forests present a problem by themselves, and it is much in the foreground. The interests dependent on them are vital, and the general policy that is needed is clear. At stake are the preservation of the water-supply and, in mountainous regions, of the soil, and the furnishing of lumber, fuel, paperpulp, and many other products. Much of the exploitation that is now going on both destroys existing trees and prevents others from growing, and it exposes untouched areas of forest to destruction by fire. Lumbermen are barely beginning to destroy the treetops and branches which the cutting of a forest leaves strewn on the ground. When they are burned, one pine forest is naturally succeeded by another, whereas, when they are left, it is usually followed by cottonwoods. To save a very slight present expense the supply of lumber for the near future is put in jeopardy, and the case for rigorous public regulation is a clear one.

In another respect forestry is peculiar. Conservation not only permits, but requires, the use of the thing that is the object of care. When the crew of a ship are on a short allowance of food, the purpose is so to conserve the food as to make it do its utmost for the consumers. If the voyage is long enough, the supply will come to an end despite all efforts; but it is not so with forests. There is no need of their ever disappearing or dwindling. Cutting may be followed by renewed growing, and the supply may last forever. Humanity is on an unending voyage, and may secure, in the case of lumber, an unfailing supply — but not till the slaughtering of forests that has thus far gone on is brought to an end.

We have nearly if not quite reached the point where the measures that the state needs to prescribe would be profitable for private owners. Such regulation would, at least, impose on private owners a far lighter burden than would many another measure of rational conservation. The scientific treatment of forests not only does not preclude a use of them, but positively requires it, and complete disuse is itself wasteful. Judicious cutting may go on forever without lessening the supply of timber which a forest contains, while refraining from all cutting is like letting fruit or growing crops go to decay. The trees that are ripe for use may give place to others which will keep up the succession and preserve forever the integrity of the forest; and few indeed are the public measures which would do as much for the general welfare as insisting on this amount of conservation.

There is one point in forest economy which demands especial emphasizing, namely, that in a certain sense the common allegation is true that a small area of growing trees is capable of meeting the entire demand of the country for lumber. It will do so at a price. With the forests depleted the price rises, the use of lumber falls off, and for many purposes for which we once used it, we go without it. For imperative needs there is enough of it still, but is it right that we should have to limit ourselves to those uses and pay famine rates for the lumber that they require? Yet that is the condition we shall rapidly approach if no care is used to keep in available condition the forests that we have. It is the time for prescribing the simple beginnings of scientific forestry, for inaugurating it on public lands and enforcing the practice on private lands. We may not yet be ready for the German system, that in the future will be called for here; but we are more than ready for the measures that will stop the destruction both of growing timber and of the sources of future timber.

Private monopoly is a hateful thing, for which good words are seldom to be said; but there is one palliative fact about a monopoly of forests, — that it would probably curtail production, and it would let new forests grow. In the single point of perpetuating the supply of lumber, the interests of a monopoly would more nearly harmonize with those of the state than those of ordinary proprietors. Vanishing resources would last longer in its hands than they will when held by private and competing owners. It would be more endurable to pay, in the shape of a high price, a small and permanent tax to a monopoly than to pay to anybody a famine price after the forests are largely destroyed. But why should we do either? If we must have nothing but purely private action, there is something to be said in favor of monopoly; but if we can have efficient regulation, all such apologetic pleas fail.

We can, if we choose, own forests publicly and manage them for the common good. The aversion to monopoly should be and is greater than the aversion to a limited amount of public production; and it is far greater than is the opposition to public regulation. These two measures afford the escape from the hard alternative of the ‘ Devil and the deep sea,’ — the former being the control of the lumber-supply by a great self-seeking corporation; and the other, the destroying of it by competing lumbermen. The logic of the entire situation points to some public forestry as one of the admissible and, within limits, desirable functions of the state; and a bold and effective statesmanship will lose no time in recognizing this fact and preparing to act on it. There is no taint of real socialism in such a policy. For various good reasons we must have forest reserves, and it is proper to use them in better ways than by letting the lumber go altogether to waste, or by intrusting the cutting to contractors. Let private forestry also continue on its present great scale, but let it be under regulation.

There are other wastes going on which rival the destruction of forests in sacrificing the future to the present. Oil is now offered as a fuel, and the owners of engines are invited to consider the comparative cost per horsepower of oil and of coal. The immediate cost-account, and no further consideration, will decide whether this material shall go the way of natural gas. Exploitation of the coal-supply is a serious matter in a view that is rational enough to range over the coming centuries. To a world that neither knows nor cares what will happen more than a hundred years hence,it is a matter of indifference. Conservation in the case of coal, however, has to do with something besides the manner of using it, namely, the question of owning it. We shall use it freely enough in any case, but there is no reason for directly giving vast quantities of it to private persons or corporations. That depletes the immediate estate of the people.

In the general policy of conservation the issue is one of transient interests as against permanent ones, of small benefits as against great ones, of private gain as against public welfare. The appeal throughout is to the collective intelligence of the people. The more rational is the view that is taken, the more radical is the conservation that is favored. The people are as yet not fully alive to the necessity for a thoroughgoing protection of the resources of the near future; and those who thrive by wasting them are extremely alive to the desirability of continuing the operation. The case calls for a leadership that shall organize the people and enable them to act on the principles which they vaguely perceive in both guarding and utilizing their rich inheritance. The utmost that any party is practically trying to get is less than the welfare of even a single century requires.