Keith Rankin: Saving Orang-utan

Thursday, 19 July 2001, 8:53 am
Column: Keith Rankin

Saving orang-utan

Recently I saw a television programme about the plight of the orang-utan, whose only remaining habitat is a few formerly protected rainforests in Sumatra and Borneo, in the north of Indonesia. The Indonesian economy is now so weak that, Indonesia's national parks are for sale; for sale to loggers and to gold-diggers. It's not just the orang-utan that might die if Indonesia's forests (and others like them) are destroyed. We might die too.

There is a solution. It's not to remonstrate with the Indonesian authorities. Any person or society under that much stress must focus on immediate rather than long-term survival. It is up to the many of us, who together want to save the orang-utan (which I'm using, in part, as a metaphor for homo sapiens sapiens) to pay a higher price than the profiteering loggers and gold-diggers.

One of the most important theorems in economics - the Coase theorem - basically says that resources will be allocated efficiently if property rights are properly defined. If we want to modify the way others use their property, we have to "bribe" them.

It all sounds horribly amoral, if not corrupt. But then, paying someone to not do the wrong thing may be the lesser evil. Paying Indonesia to save its orang-utans seems like a lesser evil than not paying and allowing them to become extinct.

The Coase theorem is usually illustrated using local neighbourhood disputes. I'll use an example which some New Zealanders might relate to.

Consider a vehicle turning zone used by residents of a block of flats or town houses. What do we do when a new flatmate of one of the other residents parks his big car wholly or party on the turning zone, preventing the rest of us from manoeuvring our vehicles in the ways we had become accustomed to doing.

Here we have a private party (the new flatmate) and a public party (all of the residents including the new flatmate). Coase's theorem says that the appropriate (efficient) outcome will occur if we are clear about (and able to enforce) the respective legal rights of the two parties. In particular, if the flatmate is deemed to have a legal right to park anywhere, he will cede that right if the residents collectively pay him enough to persuade him to shift his car and park somewhere else. Or, if the residents taken together are deemed to have the right to remove the new flatmate's car from the offending position, he may pay the collective (which includes himself) whatever it take's to allow him to park in that place. The end result is that the parking arrangements will end up the same, regardless of who has the right to decide who parks where. This is called an 'efficient' outcome.

The outcome may not be equitable. But an inequitable outcome would only reflect a pre-existing injustice in the allocation of property.

(With many people these days choosing to use their garages for storage rather than for parking, with vehicles getting larger, with most two-adult households having two vehicles, and with more high-density living, off-road parking in our cities is clearly an increasing problem.)

The problem in my example is not one of justice; it is one of definition. And it's one of agreement. Public property rights are not generally well- defined, whether 'public' means a group of residents, a nation's citizens or the planet's biosphere. It is very hard to enforce public property rights because publics are typically not united. Not only does the rogue flatmate place his private rights ahead of his public rights, but some other residents may also have private privileges that compromise their commitment to their public rights. The 'public', rarely united, finds it difficult to settle on the right price either to pay or to be paid.

The global public is at a particularly difficult disadvantage. Global public property is the least well defined of all property. And the global public is least likely to assert their rights even when defined. Rogue flatmates (like President Bush and his contemptuous attitude towards his co- residents over global warming) abound. They tend to be richer than everyone else. We (who are not rich) recoil at the thought of having to pay the world's richest men to behave with more consideration towards the global public.

In the absence of defined global public property rights, the world's tycoons and corporations have usurped those global public property as de facto private property. If we ignore the neighbour's flatmate who parks selfishly in the communal parking area, the established public right is ceded to the flatmate.

National institutions are not strong enough or united enough to deal with global property violations. How does the global public become organised enough? National governments are too small and divided to carry the load. And global institutions are too big both in the sense of being unwieldy and in the sense that we rightly fear the emergence of world development. (Just imaging a Muldoon-type or a Richardson-type figure as world Treasurer, or Don Brash as governor of the Reserve Bank of the World.)

The solution is, I believe, as I outlined last week. If the world divides into about six commonwealths (certainly more than the three in Orwell's 1984), with each developing its own institutions of extra-national governance. An America-Pacific commonwealth (an evolution of Nafta) would have enough formal clout to outmanoeuvre by democratic means any US stonewalling on environmental issues. And it would have the public financial strength to pay Brazil, say, to stop destroying the Amazon rainforests that are tantamount to private property within Brazil's borders.

We should be able to look towards an East Asian commonwealth (with leadership presumably from Japan and Singapore) to 'buy' Indonesia's national parks and other orang-utan habitats, thereby protecting them from abuse by loggers and gold-diggers. Actually, it is regional initiatives such as the protection of the habitat of the orang-utan that will prove to be the means through which extra-national commonwealths will be created.

Commonwealths are means of solving global problems - and providing global governance - without providing global government.

Our planet depends on the way we manage its public spaces. We can manage these spaces through the formation of commonwealths, thus averting the only two other possibilities: today's global anarchy whereby rogue transnational interests rearrange the world to suit their immediate convenience, or the global tyranny that a single world government implies.

© Scoop Media

Keith Rankin

Political Economist, Scoop Columnist

Keith Rankin taught economics at Unitec in Mt Albert since 1999. An economic historian by training, his research has included an analysis of labour supply in the Great Depression of the 1930s, and has included estimates of New Zealand's GNP going back to the 1850s.

Keith believes that many of the economic issues that beguile us cannot be understood by relying on the orthodox interpretations of our social science disciplines. Keith favours a critical approach that emphasises new perspectives rather than simply opposing those practices and policies that we don't like.

Keith retired in 2020 and lives with his family in Glen Eden, Auckland.

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