Saturday, January 08, 2005

Book Review

Published by EH.NET (January 2005)

Terry L. Anderson and Peter J. Hill,

The Not So Wild, Wild West: Property Rights on the Frontier. Stanford: Stanford UniversityPress, 2004. xii + 263 pp. $24.95 (hardcover), ISBN: 0-8047-4854-3.

Reviewed for EH.NET by Frank D. Lewis, Department of Economics, Queen's University.

Implicit in economic transactions is the understanding that the parties will fulfill the terms of the exchange to which they have agreed. Government is often the agent that enforces contracts, but where government is weak or non-existent, other enforcement mechanisms may emerge. The use of common property resources also may require an authority, whether a government entity or a substitute, to help ensure that the exploitation of the resource does become a"tragedy of the commons." Economic activity on the U.S. frontier during the nineteenth century took place in an environment where government was largely absent. Nevertheless, the West, as described by Terry Anderson and P J. Hill, was not nearly as "wild" as has been depicted by some historians and by Hollywood.

According to Anderson and Hill, the key to the successful and, by and large, peaceful enforcement of contracts, as well as the generally peaceful exploitation of what at the outset were common access resources, was the emergence of a set of rules, both formal and informal, that assigned property rights to agents operating in this new economy. Drawing on their own work and the work of others, Anderson and Hill illustrate how participants in the frontier economy avoided conflict, always a negative sum game, while securing the property rights that promoted the optimal resource exploitation.

The stories that fill this book -- and despite a fewreferences to statistical and econometric work, Anderson and Hill do present them as stories -- describe the practical problems that confronted those on the frontier, and the often ingenious ways they had of solving them. Despite the lack of a formal government structure, Native Americans developed a range of property rights to resources that they jointly exploited.

Following in the tradition of Harold Demsetz, Anderson andHill emphasize the comparison between the cost of establishing a property right and the benefit of that right to the Native economy. Bison, for example, were so numerous until the nineteenth century that there was little advantage to assigning rights to them; but once groups of Natives jointly hunted the animals, often using buffalo jumps, a method that required coordinated action, rights to the meat and hides were specified even to the extent of allotting larger shares to those who took on more important or more dangerous roles.

By contrast, salmon were at serious risk of over-harvesting because of the comparative ease with which they could be fished once they entered the rivers or streams that led to their spawning grounds. Tribes in the Pacific Northwest reacted by establishing property rights to the salmon runs even to the level of the family, a system that promoted conservation of the stocks.

European settlers to the frontier were faced with much the same problem that had long confronted Native Americans -- the lack of acentral authority to assign and enforce property rights. From 1840 to1860, nearly 300,000 traveled over land to Oregon, California andUtah, most by wagon train; and to fill the government void each group adopted a set of rules, a "constitution-like agreement," that specified the terms of the passage. For example, individuals often combined their property, such as cooking materials, while on the trail, but they retained ownership and these goods were remitted once the train reached its destination. The emigrants themselves created and enforced the contracts and, as Anderson and Hill describe it, the result was a large relocation of population that was relatively free of conflict.

The cattle drives of the late nineteenth century required contracts between cattle owners and drovers that addressed the problem of monitoring. And where there was the more serious problem of contactwith farmers, means were found to avoid violence. Cattle-trader Joseph McCoy, went to great lengths to ensure peace with the residents of Salina, Kansas and others close to the cattle route by compensating them for losses and offering other benefits.

The potential for violence among Europeans was perhaps greatest during the initial years of gold mining. Yet even the 1859 discovery of the Comstock Lode in Nevada was largely peaceful. At first, there were a variety of privately-enforced regulations; but ultimately, as issues became too complex, disputes were increasingly brought to territorial courts. As well, the Nevada legislature became involved, passing 47 mineral-rights laws between 1861 and 1866.

Anderson and Hill's history of the West also includes the development of water rights, where they give more emphasis to the role of government, a role that was not always positive, especially as it related to irrigation projects. There is a provocative account (though I find it persuasive) of the near extinction of the bison; and a discussion of federal land policy. And throughout, the common thread is the implications of property rights.

The Not So Wild, Wild West was developed in part from an economic history course the authors taught at Montana State University, and it should have special appeal to undergraduates. It is entirely accessible and often quite delightful. At the same time, those who adopt the book might wish to present students with other, more nuanced, interpretations. Anderson and Hill make a strong case that, in the absence of a government authority, property rights regimes emerged that allowed for the functioning, at least at some level, of a variety of frontier institutions. But how efficient were these institutions? Could a government authority have improved efficiency?Did the lack of a strong central authority seriously hamper some aspects of development? How much violence was there on the frontier? The historical examples in The Not So Wild, Wild West seem to provide answers to these questions; but, given the selective nature of the evidence and the way the evidence has been interpreted, the appeal of the book -- and it is an appealing book -- may lie less in the authors' conclusions than in their ability to provoke a lively debate.

Frank D. Lewis is editor (with David Eltis and Kenneth Sokoloff) of Slavery in the Development of the Americas (Cambridge UniversityPress, 2004). Recent articles include "Survival through Generosity:Property Rights and Hunting Practices of Native Americans in theSubarctic Region," in Land Rights, Ethno-Nationality, and Sovereignty in History, edited by Stanley Engerman and Jacob Metzer(Routledge, 2004).

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