tv Stossel FOX Business November 29, 2013 12:00am-1:01am EST
so our churches. both are more accessible than public-school. also, public sometimes is not very nice. what comes to mind when you hear the words public toilet? >> us grows. >> yes. this is the image i have a public toilets. my town's public parks, cluding this one. garbage everywhere. buildings covered with graffiti. fields bear of grass. caring is not necessarily sharing. this part now so nice. it's under the management. john: but that goes agains what people expect. >> this is a privately managed property. >> really? john: even the tour let's are better. because when you own something you take care of it.
when no one owns it nobody takes care of it. nobody watches a rental car. >> people destroy the other, a property like much of the world's rainforests, american settlers nearly killed. now we are overfishing the ocean . no one really cares about it. no one really takes care of it. that's our show tonight. >> hands now john stossel. john: the idea of sharing, communal property. it does lead to what economists call the tragedy of the comic. the tragedy because nasty things happen when everyone on something. i first heard that phrase and a story about some shepherds who live around a grassy area they call the commons.
of the shepherds shared this free green grass and they grab as much as possible. captain breeding sheep. many more to raise. soon all the grass was gone. the sheep died. the shepherd said nothing. so then ey debt divided it into parcels. now each one owned one. each had an incentive to limit the number that grazed on his grass. prosperity happened. everyone lives happily ever after. okay. is not quite that simple, but we should think about this today on thanksgiving. this week school children were taught, it's a day of saring. pilgrims and indians shared the fruits of the harvest, bu that misses the point. most of their teachers don't even know. thanks to sharing the programs almost starved. george mason university economist brush roberts as the real thanksgiving story. what's the real story? >> an important lesson we learn from the programs which was when
they first came to this country they thought it would be nice to share. communal property, a big area that they farmed. john: the corporation actually ordered them. >> work on this together and then we will divvy it up equally well, it was pretty harsh. it was cold. a lot of them got sick. they didn't grow much food for two reasons. one was that everybody is working together there is a tendency to shirk. let the other guy do it. i still get my share. similarly, when stuff grew and the harvest came some people poked. they picked the fruit, corn in this case. depicted early thinking of get a whole year if a ticket and keep it. otherwise and sharing it with everybody else. >> get a bigger share overall as a result. their productivity in that first year was atrocious. governor bradford realize this immediately after a so what happened that the incentives or wrong. john: wrote in his diary.
what must they do so they might not languish thus in misery? >> what he did was imposed the right kind of incentives on the system. if you produce it you get to keep it. the essence of capitalism. you work hard, produce something. it's yours. if you shirt and a lazy you don't give much. >> sd corn. every man for his own particular. and so assign every family a parcel of land. this simple change took them from near starvation two and f plenty test in a fight the indians in and say let's share. >> i don't think there were celebrating banks giving because they realize that capitalism works and communal property is a failure. there just happy to be alive. i sure they share with the indians because they're good people to get along with. the real lesson is, what is the role of incentives? and private property as opposed to communal property the incentives for artwork and
storage of to take care of the land and use it productively of there. communal property is very weak. john: morning your own stuff makes you work harder to take care of it. it's not really a surprise. >> the incentives are there to protect it. john: it just sounds wrong to people. it has this instinct to say that is selfish. we want equality. we want government to take care of the important things. >> there is a place where communal property works pretty well, and that's my family and yours. in a family situation because we all know each other, it's much harder to get away with it. we like each other. and so i don't mind working for the other person if it's somebody of loving care about. my wife and i don't have a problem. in general home life is communal. people interact with each other constantly. we are going to have social norms and conventions and all kinds of ways to make sure
people the right thing. get into a larger setting. that is where communal property struggles and fails. a great economist understood we have this natural urge to take the socialism of the family and expanded out to the society. at could be better? let's take this love and make it wider, but we are not build the weight. we tend to spread it water and take advantage of each other. it leads to tyranny. john: let's look at the rain forest. we keep hearing, they are destroying the rainforest. >> they ar public property if you let a tree grow larger tonight it should be, if it's on your land you capture that benefit for yourself in the form of more would. if you're in a public land or you can't control who will come after you, you can't incident. it's not yours to claman take care of. the next person that comes in cuts down the tree they decided to bypass and capture it. everyone has that incentive, and as a result the rain forest its
butchered. john: in america people own sections a forest. the government house forest. there a more forest fires in the government-owned forest and privately-owned forests. people have more incentive to take care of their would. >> plant more and to not cut it down early. that is the biggest problem. we see it with the pilgrims. they pick the corner early. fishing. keep the small fish rather than throwing it back if it's not your pond. it's a notion you throw it back. someone else will get it. keep it. if it's yours, let it grow to the size that it should. it is publicly owned, you worry about the other pochard coming in and taking a. john: i understand how private ownership would work in some and land area, but i can't see how you do with the ocean. >> a coupl migrating fish, you can't really on the property. you can on the fish, have a certain tagged fish with
electronic surveillance and other technologies, but the way they solve the problem with notions as the tuna. theyuild these enormous bins. it's a fish farm in the ocean. saltwater. they are case then. it's a big case. they get that natural exercise. it makes the face healthier and tastier and that is one where the technology is helping convert a public area into something private with the appropriate incentives. john: you say traffic would go faster if we had a private. >> it comes from the fact that there is no incentive for the owner of the road, which is all of us, but the ower of the road has no incentive to maximize productivity. as a result we get stuck in traffic and complain. john: finally, animals, endangered animals. what should we do about that? bear in mind we are on thanksgiving, no turkey shotage >> an amazing thing. some animals are scarce and some
animals are plentiful. we worry about animals going extinct, endangered species. here's the puzzle. if you want to save an animal which encourage people to edith? you would think -- john: donated. >> but if you can make a profit from eating it, that creates the incentive, and if you can prioritize the ownership that creates an incentive to take care of it and grow. as a result there isplenty of turkey, but you chicken, and other animals are scarce because there is no incentive, unfortunately to take care of them. john: both humans and hot seat taken, but the more hawks the fewer chickens, the more seamen's the more chickens. >> that was an inside of henry george, early economist. he understood that this nature, more hawks, they eat the chickens. come deplete the population. if we get numerous more chickens . that is the power of incentives. john: breed chickens. make sure we have plenty.
>> uprighted to be made from growing demand taking care of them and making unhealthy and beating them. if we made it illegal to sell seconds we would be in trouble. john: profit saves things. thank you. george mason university. coming up, these animals are endangered. was the best way to save them? kill them. that's right. kill them. you really love, what would you do?" ♪ [ woman ] i'd be a writer. [ man ] i'd be a baker. [ woman ] i wanna be a pie maker. [ man ] i wanna be a pilot. [ woman ] i'd be an architect. what if i told you someone could pay you and what that person were you? ♪ when you think about it, isn't that what retirement should be, paying ourselves to do what we love? ♪
♪ john: look at the buffalo roam. bison are a great example of tragedy. 30 million of them once roamed in america. that's because no one knows them or ratherveryone knows them. indians and the white settlers kept haunting them until there were nearly extinct. the buffalo herd went from 30 million to 1,000. now they have made a comeback, because now people own them. here to help explain what happened. what happens? >> well, property rights were established over the very few remaining by some of left. when they got down to about 1,000 there were some cattle ranchers have roger been a real enough to figure out that the bison were worth more alive than dead at that point. sohey went out to the great plains and gthered the remnants
of what was left, 10-15 bison and grew them into the herds that today have made -- led to the comeback. john: they protected them for their own profit. >> they found a way to make them pay. the market, for them, was me. they sold bison to circuses, zoos, and public preserves. john: before that when there werr 30 millin, at first there were not enough indians to ill them. they were doing okay. the white settlers could not really get to kill enough to endanger them. >> you had a commons without access. right after the civil war, of a sudden you could give hunters into the plains and you could get the bison back to the markets in the east and overseas. that is when the real tragedy occurred. john: some people shut them from the transfer of sport. >> 110 waste. there were not even collecting the bison. just remember fun.
>> the same concepts have been used to save elephants and zimbabwe. but essentially has been done is they provided an ownership interest of villagers, and that is helping to save them. prior to that you had to milan's . john: the government saying don't kill t elephants. >> don't't kill t elephants. villagers are growing crops, but livestock, aquino land and the elephants were coming through in destroying those crops and other wildlife was running out there while stock. the villagers did not have any interest. >> villagers were allowed to start getting proceeds from trough the hunts and from safari tourism that came through. all of a sudden the wild life became an asset. they hired their own game wardens. wildlife had -- habitat doubled. because now it was a benefit. as a result the elephant
population also doubled over 13 years. john: why you know about this? you are with -- >> property in environ research center. john: based in bozeman, montana. you folks city areas where private property can help protect animals. >> we believe that ownership provides the best incentives for conservation. john: most of the buffalo are owned by private ranchers, but there are still some in state parks or one state park. one has a roundup. >> and they are actually treating their bison most like private ranchers are, making them pay. what they do is once a year for 45 years they have this huge round with a bring in their 1500 bison. toists come from all over the world among pay money to watch these bison get heard it, and all wild west fashion with cowboys and cowgirls, and the bison come sweeping down the planes. the earth shakes. they did move in the corrals,
and we all go eat bison murders after words. the point is, the park is making money from the tourism. then about a month later they auction off a portion to private ranchers and they're also making moy now wait. all that money goes back into custer state park to pay for operations of the park. so they're paying their own way. john: more benefit from profit. coming of, how govenment made the indians poor and how private property made america rich. as a business owner, i'm constantly putting out fires. so i deserve a small business credit card with amazing rewards. with the spark cascard from capital one, i get 2% cash back on ery purchase, every day. i break my back around here. finally soone's recognizing me with unlimited rewards! meetings start at 11, cindy.
>> nobody chooses poverty. we have been legislated by the federal government's both in the united states and canada. john: they have been taking care of you. that sounds like the best deal. >> well, by taking care of us that means providing social welfare programs. the only way to break the cycle of poverty, i believe, is by the recognition that every other canadian and american takes for granted, real property rights. john: in canada reserves are on by the government. so the indian has some piece of paper that says this is my lot. >> but underlying that is t fact that in canada the federal government owns the land. john: so you can't borrow against it. >> you can borrow, get a mortgage, be bonded. there is nothing that you can have that will allow you to be able to go to the bank on your own without the minister cosigning that loan.
john: does bring another guest. economist terry anderson. you find indians do much better when they own their own land. >> yes. i first get interested in this subject in 1976 when i visited a member of the flathead indian reservation. and while visiting his house i noted just how well off he was. he was not in poverty. i asked how he explained that. on never forget in many across the table, rested his chin on his hand and elbow and saying, i own this place. that was my first introduction to the fact that many reservations in the united states to have some privately-owned land like you and i own our houses. and the indians that have privately-owned land too much, much better. their land is way more productive than a land that is overseen by the federal
government, held in trust. john: 90% more productive. >> yes. the statistics are just astounding. i have done a lot of gathering of that data. they show that the lands, anywhere from 40 to 90 percent more productive than the lands held in trust. and as he said, these indians to have their land under their trusteeship of the federal government to my can't borrow against them. they are really locked into a poverty cycle as a result. john: pretty amazing that no group has been more taking care of by big government and the indians, and no group in america has done worse. >> fundamentally the group -- root of the problem is the fact that we don't have the same property rights as others take for granted, and that has to fundamentally change. we have to be able to recognize the collective ownership and free the imagination of the individual entrepreneur.
we had economies that went back many, many millennia and were successful until 1492. john: indiaans had a form of property rights before white settlers came here and mess that up. some indians actually owned the salmon streams. they manage those streams so that they let the larger salmon go up to spawn. the result is that even today those streams have larger salmon and the streams that were held in common owned by everyone and hence managed by no one. john: not an individual indian, but a plan would on the stream. why today would they still have more salmon? >> that just goes back to what s superior management over a
century ago. and at the same time i should know we are mismanaging our salmon stocks by chasing them around the ocean, open ocean and over harvesting salmon and many other species. we could learn from what the native americans did. john: you say you can see the private property difference by driving through some indian land >> it is fascinating to drive through the reservation in the west. recently i drove through the crow indian reservation in south-central montana, and when you come to fence line and on one side see overgrazing, a few scrawny cattle, maybe a house and if so not a very little boss, right next door you would see cultivated fields, irrigation systems, beautiful barns, and so on. and you don't even need to look at the property records to know that the productive one is held in private and the other one is held in common interest by the
federal government's. john: indians on both sides of the road, property on one. you can even see a. the difference. >> you can see it. it's fascinating to adjust to will a reservatn, the blackfeet reservation, growth. john: there is not much development. very few farms. here is one. >>ou can see this same thing on manas reserves were they have managed to develop an industrial park. they are creating jobs, wealth, and at least getting 1 foot up the ladder out of poverty. john: i'll give you the last word. >> well, what we have to do is reserve -- reverse 500 years of colonization. but first nations, indian tribes in theedriver's seat. we can be successful where the federal governments in both countries a failed. the only way that that
♪ john: now, i want to introduce you to one of the most impressive people i know. i first met in maybe 15 years ago, one of those lunches. ideas about solving poverty. i go to lunch is like that because it bugs me that america is so rich when most of the world's poor and the world is not figured out a way to give them what it was that gave us power to prosper. so i go to lunch. i'm skeptical, but there since
hernando de soto of the institute for liberty and democracy, a think tank based in peru. he starts pulling these pictures out of his briefcase, pictures that show slum dwellings built on top of each other, much like this. he went on to explain, well, i will let you explain it. what to these pictures show? >> they show that roughly about 4 billion people in the world actually build their homes and all their businesses outside the legal system. it's all haphazard and disorganized, but because of the lack of rule of law, the definition of who owns what in because they don't have addresses, can't get the credit. john: don't have addresses. >> well, to get an address somebody has to recognize the that is where you live. legal recognition. legal recognition means property when you have property, mailing address is command when you make a deal was someone you can be identified. the first -- the second characteristic in the is the address. if you go anywhere they say what is in a minority live.
and some property is defined by law they cannot get into the kind of deals or the division of labor which is cooperation, specializing and create wealth because that is what makes you will the, the fact you don't have to milk a cow every day. you don't have to us borderland every day, build your own house. you can stick to doing a tv program. this part of a blackberry. the all market put together. the whole building, take care of it, and they can specialize. the day that they get titles, the day that the business in their homes, the sewing machines , whatever it is, the car repair shop finally gets recognized, start expanding. start using skills. and. john: the need to be recognized by local authorities, this is yours. john: they need to work with them a lot. they take arrest. they just work a deal with the
guy on the first floor and build their house in the second floor. >> that's right. barely begun the first floor have the guts to scott and make a deal with someone from government decided to look the other way has got an invisible property right. it is not very different from when you americans started going west following the california. for example, the california gold rush. a land didn't belong to them. the country did not belong to them. it was mexico. you went in, but 800 mining claims association got 3 million americans. after a while you decided, why keep on shooting at each other. in the beginning of the 20th century you go out, create a private property system. that brought in banks, and you create. >> but california really got rich. the rest of the world is not. what is the difference? >> you americans at that time were absolutely conscious of what the rule of law was about. people kept on moving from the east coast to the west coast
george washington called in bandied. the band is don't have a right to be here. congress can around and said, oh, yes they do. you start rewarding property on the basis of improvement. john: we did not always have these in america. american settlers worked out their own generally exempted right to property. >> those areas where you shaved off part of the tree. indicate they had accepted it. in some cases where they grew corn, for example, the corn grew from here to there and that established a ride from here to there. those are actually called corn rights. it was an improvement on land that gave you the type. you had worked it. ohn: still developing such property rights. >> much of the countryside, the past prevail.
>> the whole notion of property rights has been pretty alien tow formerly socialist countries because right from the beginning , in the 19th century, property -- john: compare the countryside to cities like shanghai. >> i visited shanghai about 30 years ago. none of these buildings existed at that time. it is incredible what happens when you change the rules of the game. john: should the rules of the game. >> the rules of the game have to say and recognize who really knows what because how you relate to the assets you have determine size you relate to your neighbor and the rest of the world. we work on paper and plastic, and if you don't have what you own on paper and plastic you will not be recognized and you can't play the game. john: this idea of eddied protecting property seems
simple, but it is very powerful. all this commerce between total strangers, but it wouldn't happen otherwise and applies to more than just skyscrapers and factories. we cover stock markets. tussaud taught me that they only work because of the-like paper work that we trust because we have rule of law. >> that represents about 40,000 head of cattle. i never see this. i have never been outside chicago to the west to see where these animals are. >> in the united states and western europe your documents go to the market and practically work for you and think for you. in developing countries and most of the former soviet union the majority of people actually have to bring their animals to market >> people in the developing world have cattle, land, and houses the same way they do in the western world.
what is missing is the rule of law. john: you say, if they just said rule of law that would be as rich as we. >> of course. let me tell you, bringing in the rule of law is no easy thing. they're trying it in afghanistan . and not getting there. john: you started your working in peru working, trying to establish property rights. an economic adviser to the president. reform to the extent that other countries and by you to go to -- you got to russia, libya. twenty-three countries. egypt and honduras and the philippines. the leaders of these countries must get that they are doing something wrong. >> they did it easier than in north america. the people who brought in the rule of law and property rights into the united states, the 18th and 19th century, you can't remember that. in the case of these guys, they see that they are poor relative to your wealth.
it's easy for them to sycamore is the difference? they are constantly looking so they can recognize much faster. we did not realize the fact it you can determine that a piece of land went from there to year, you can also do it with a movie script. you can also do it with an idea, an invention. and certainly. all of a sudden we started seeing that people just the paper. on top of that, you build a stock market and all that leverage. get you into some kind of trouble, but without which you would not have gotten where you are today. john: property rights give us the power to prosper. thank you. we will be right back.
♪ john: al over america there are parks that are filthy, dangerous, badly maintained. the government is in charge and say, what can we do? budget cuts took our money. we don't have enough for maintenance and security. that's what they say. do we let them rot? let them become havens for drug dealers, prostitution, violent crime? now it's nice. parts of a few blocks from the studio. what changed it? this man changed it. he essentially privatize the part. now he wants to do the same
thing to the boston,. that is a terrible idea. a boston journalist. so how did you save it? >> well, you have to make the park great if it is going to attract private funding. security, sanitation. whole cultural. a lot of programming to a draw people into the park at off hours. it's always safe. the best safety is not tha tough security. john: the businesses around the park to cough up the money. and since 1996 we have not as the city government for a single dollar. john: it sounds good to me. the park looks great. what's wrong. >> well, the park looks good, but it could be better, and it could be public. john: what is so wrong with sucking money from private businesses?
>> it goes into private pockets. john: so what? >> is very good to use, for dan to use the public land for running a private business or re apart where all year round there is commercial revenue from renting in up to businesses. he keeps all that money. people don't realize that. i was in the park yesterday. i walked around and did a survey i asked 20 people if they thought this money was going to the city, and they'll think it is. so. john: so what if they think it's going to mars. the park is nice. >> it would not have the taxes. we have the money left over. the park could be just as good. john: well, it certainly is true that the park is very commercial these days. but buying and selling going on. holiday gifts. very commercial. on the other hand, the public seems fine with that.
>> its and look very nice. a different story. >> a lot of the things that they should be doing. you should -- john: some money. >> that's right. you will study. if everyone good. >> is a very public. nobody has viewed it as privatized, and the final answer to these arguments, every dollar that is earned by concessions and sponsorships and events goes right back into the park. all that money is earned in these ways. the way we provide private skating complex skati for free which we do is from those booze and a sponsorship from city which has been very generous. john: less talk about your next one combustion. boston, and was once a common breezy feel.
so for the tragedy. it was overgrazed. now it's a part. managed by government for about four and years. badly managed, and this is the result. your plans. >> well, last thing we want to do is privatize boston common. it's not new york. it's not as commercial. we are in the position of coming up with ways to greatly augment the city's budget, which everyone involved feels is inadequate. john: if the people around the park to pay most of the money. >> private companies, the central part model is a little tougher. john: just for clarity. i have a bias. i am on the board of the charity that helps manage center part. i joined people because i saw what they did. government manage central park. it was buried in dangerous. now it is wonderful.
the model is that i give money. people live around there. it's not a business arrangement you're doing some mixturof that in boston. john: it would be a mixture. bill of money from private sector companies, sponsorships or they don't demand a billboard they demand almost nothing. give them a little small plaque of retribution and a bottle of money into the. >> we already have plutocrats and now we will get the corporations. the best of both worlds. first of all, the point is not what the size of the billboard is. the problem is that we don't need to do this. we don't need said -- john: what is the heart? >> teach our next generation of children that the only way they can get a public brown is as the charityward of rich people and corporations. we can afford our public ground and are entitled to it and pay taxes and that is the government's job.
this is not a model. this is not a model. john: a good model. >> it's not a model. we have dollar government accountable. john: i don't know what will happen to the rest of the country. it's working in some central park. >> it's working for your corporations, and is working for your billionaires'. john: is working for the public. >> it's not. these people, the money bags did decide how the park is used and who goes there and to -- john: do they keep out. >> to the desirable are into the undesirables. john: sewer the undesirables. >> primarily homeless people. always the first thing on the list of how to deal with the homeless people. john: more homeless people. >> well, homeless people have to be somewhere. if we don't make a system that accommodates people who don't have a place to live, they have to be in the public from. unless you can suggest something better. john: you're on 42nd street. >> we have an answer to that. the same number of homeless
people today that we had when it was viewed by everyone including yourself as horrible. what we did not have been and we have now is 4,000 other people. the ratio of almost a homeless as 4,000 to 13 1/7 to 5213. any fema walking into brian parker might have in the past been concerned about security, this doesn't look like promising not to me. they're welcomed if they ollow the rules. the same 13 people there almost every day. >> i appreciate that. john: that is another major thing. when people get mad at their government to have to be able to take it to the streets of the park, and that is one of the most -- since time immemorial the purposes of public space. and a lot of this privatization, and mr. of other parks in boston and i'm sure here also, to stop the rallies and all that. john: 50,000 people wanted to
protest abortion central park. >> or not allowed. john: not allowed. >> what's more important, democratic free-speech or the grass you can replace the grass. >> whatever it will take. john: we don't have enough democratic free-speech they can protest in the street. >> this is the place where they would get their proper publicity , the legitimacy. john: it was government that said no, not corporations. john: the kind of government that is now giving prices over corporations. that is what the real problem is. what we have to do is fix the government because we are ending up with two tiers. john: of give you the last word. >> a quick word on events and free speech. the parks department right the permits, so they are the final. any time a politicianants to demonstrate we have had an obnoxious people on both sides, racist preacher, a gay pride demonstration. both were permitted because under the first amendment we are
the agent of the city and have to let it be. we do not a bridge in the streets. john: thank you. i wish i could say good luck to both of you. also good luck to him. up next, how can i convince the public and private ownership and management is a good thing? here is a guy who talked about how great the privately run bryant park is. >> you just said public is better.
♪ john: isn't that sweet. it reminds me, i'd like to wish yohappy starvation day. well, that is what thanksgiving would be called if the pilgrims had kept to the communal property rules they started with when they first settled. there were told share everything share the work. should harvest. there was to be a common. sellers wereto receive there necessaries out of the common stock. no individual property. the labor the colony was to the organized according to the
different capabilities of the settlers. each according to his need. and that sounds fair. they nearly starved. it is the tragedy. people can get the same stuff by working less. they will. plummets of less fake illness rather than work the common property. the colony's governor they should set corn every man for is of particular, assigned to every family, a parcel of land. the results were dramatic. this had very good success and made all hands very industrious. much more corn was planted instead of famine, plenty. things to private property they got food, and we have food. be thankful. now if only more people realize
that is private property that allows us to have wealth, to create wealth. some people in the privatized part understood that private ownership does good things. >> private ownership public. >> private. >> private. >> they run things better than the government does. >> private. >> others have to have explains to them. private managers delivered when government did not. private property does, as the pilgrim discovered, connect efforts to reward. that creates an incentive for people to care much more and protect things. that is what has protected the elephants in zimbabwe, the buffalo in the west, and these atlantic salmon. it's would save the pilgrims. and then it made america the richest country in the history of the world. live in a slum in egypt that has no deed to your proprty. you're stuck in poverty. when you know that your home or your store or whenever you mak
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