Wednesday, 17 January 2007

Market forces in the Amazon?

"The market forces of globalization are invading the Amazon, hastening the demise of the forest and thwarting its most committed stewards."

So begins the latest National Geographic cover story, documenting the Amazon's demise in pictures and stories -- "during the past 40 years, close to 20 percent of the Amazon rain forest has been cut down, more than in all the previous 450 years since European colonization began" -- and sheeting home the blame to the ubiquitous enemy named in that opening line: "market forces and globalization."

The destruction of the Amazon has been a common theme for journalists and professional busybodies more than a decade. Today's highest profile busybody Al Gore wrote in his 1989 vice-Presidential manifesto Earth in the Balance that the devastation of Brazil's forest was "one of the great tragedies of all history." Gore, too, blamed the desire of "large landowners to earn short-term profits," ignoring "long-term ecological tragedy."

But there's a problem with this analysis. As Tom Bethell writes in his book The Noblest Triumph: Property and Prosperity Through the Ages,
Although he visited Brazil and is a professional politician, Gore showed little interest in the political origins of the Brazilian debacle. [Neither does the National Geographic.] ... It's real cause, however, was not greedy landowners, but unwise laws governing land ownership.
Those familiar with the subsidies and destruction wrought in rural New Zealand by Muldoon's Marginal Lands Board would recognise the debacle in the Amazon, but on a very much larger scale. You might say that (just as with the land clearances promoted under Muldoon's programme) the forest clearances were not so much a sign of market forces and globalization, but instead of government forces and nationalistic sentiment.

Here's the story that's not told by either Gore or the National Geographic. Notes Jorge Cappato, writing for the UN Environment Programme,
Towards 1970, the Brazilian president Medici decided to build a Transamazonian highway of 5,000 kilometers to offer "a land without men to men without lands". However, neither the land was fertile nor was it empty: there were natives, riverside people, seringueiros, and people who lived from and took care of the forest.
The project, run by Brazil's military government, was funded by the World Bank over opposition from its own ecological officer. Said Adrian Cowell in his Decade of Destruction documenting the disaster,
The momentum of the Bank's financial machine, the need to lend money to Brazil as its debt developed, had overidden the practical warnings of its specialists.
As Tom Bethell notes in his book, the construction of the Federal road
opened up access to the Amazon region, and a competition for the (state-owned) land ensued. Squatters received the right to 100 hectares if they could show effective use of the land for a year. The problem was that only cutting down the trees counted as effective use...
And here's where the "unwise laws governing land ownership" come in. None of those people displaced by the military government's project -- in Capatto's words, the "natives, riverside people, seringueiros, and people who lived from and took care of the forest" -- none of them had their pre-existing property rights protected, or their rights to the use of the forest protected. Instead, the military government claimed ownership of all land 100 kilometres either side of their highway (as Bethell notes, such a claim made in the US would see "most of the US mainland nationalised") and then parcelled it out to friends, fellow-travellers and squatters who could clear trees fast enough to claim 'their' 100 acres. Bethell again:
Only the traditional "sustainable use" of harvesting rubber and nuts did not count. For those who had already arrived and staked their claims, the best way to guard against competition from newcomers was to cut down trees as quickly as possible... In effect, if not in law, "the land-claiming process itself has required deforestation," the economist Gary Libecap wrote.
Even the World Bank's own advisers belatedly acknowledged the problem they themselves had helped cause:
Governments responsible for the Amazon region, for example, have exacerbated the negative environmental externalities. Public subsidies and tax incentives to large cattle producers and loggers were responsible for more than 50 percent of the deforestation in the Amazon region in the 1970s and the 1980s (Binswanger 1991). Moreover, public investments in infrastructure into the frontier areas have magnified the externalities associated with the lack of well-defined property rights in such areas.
So there you have it.

And now ask yourself: who's the real villain here then? Market forces and globalization? Greedy landowners? Or, as Bethell and others argue, Big Government, nationalistic sentiment, a lack of real property rights and "unwise laws governing land ownership."

And why doesn't National Geographic tell this side of the story at all?

LINKS: Last of the Amazon - National Geographic magazine
The Noblest Triumph: Property and Prosperity Through the Ages - Tom Bethell, Amazon.Com
Who was Chico Mendes? - Jorge Cappato, Global 500 Forum, UN Environment Programme
The Decade of Destruction - Adrian Cowell, Bullfrog Films [film review]
Land Reform Policies, the Sources of Violent Conflict and Implications for Deforestation in the Brazilian Amazon - Gary Libecap, Social Science Research Network [Abstract]
The Quality of Growth - World Bank, 2000

RELATED: Politics-World, Property Rights, Environment, History-Modern


  1. Big Government, nationalistic sentiment, a lack of real property rights and "unwise laws governing land ownership."

    There is your cause of course. As for why National Geographic doesn't mention I would say that it is the fact that they are indoctrinated/institutionalised just like most of society is.

  2. Great summary, PC. Thanks.

  3. facsinating analysis of root cause.

    I would be interested in your opinion on the NZ high country tenure review process where government as a landowner is selling out its share for less than real worth.

    should government recognise the work done by leaseholders in developing the properties or should they take full advantage of the foresight of a previous government in keeping the freehold and make sure full commercial value is paid. It is an interesting argument as it turns traditional allies into opponents

  4. Gradually the scientific community is becoming more capitalistic - it's not all bad news out there.

    Also the tradeable fishing quotas coming online are good news for overfishing. The tragedy of the commons is a major problem with the oceans and this goes some way in creating long-term property rights.


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