A small but highly productive group of economists and libertarian legal scholars reject both the public property/regulatory approach and the mixed property/regulatory approach to environmental protection. The former they consider a form of “feudalism,” with government “lords” imposing Byzantine and irrational obligations on regulated “tenants” (Yandle 1992); the later a form of “market socialism,” with the government creating, overseeing, and limiting market transactions (Anderson and Leal 1991, pp. 158–9; McGee and Block 1994). Just as society has rejected both feudalism and market socialism as forms of economic organization, so they claim society should reject them as approaches to environmental protection. These self-styled “free-market environmentalists” deny the need for any form of government-sponsored environmental regulation. Instead, they promote a nonregulatory, complete private property “solution.” This chapter assesses their claims.

The worldwide trend toward privatization

Privatization has been sweeping the globe. Since the Reagan–Thatcher revolution of the 1980s, governments throughout the world have been selling off public assets to private owners in order to improve efficiency and increase production. Between 1985 and 1994, $468 billion worth of state-owned enterprises were sold off to private investors (Poole 1996, p. 1). But privatization so far has been limited to economic enterprises. Governments have not, with a few notable and highly controversial exceptions, begun selling off their vast natural resource holdings, including forests, parks, waterways, wildlife, and the atmosphere.