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Property Rights Conflict

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Voievod Posted: Tue, Aug 5 2008 7:12 AM

A strange situation arose in Romania lately, a conflict of property rights, so let me explain the situation in a few steps:

1) After the Revolution, all the nationalized forests were eventually returned under the property of their rightful owners.

2) Many saw in this an opportunity to get rich, so they cut down the wood and sold it.

3) Apparently, high-altitude forests act like a natural dam, absorbing and slowing down water when it rains.

4) With no forests left on high hills and mountains, (the hydrographic basin of several rivers), stronger rains quickly turn those rivers into devastating floods that wreak havoc in villages and towns at lower altitude.

5) In an effort to protect the property of the people living downstream, the state has limited or completely forbidden people from cutting down wood in their own property and even ordered some to let state officials plant more trees that they'll never be able to exploit.

 

What's your point of view on this? Which property right takes precedence?

- The forrest owner's right to exploit their property.

OR

- The people affected by the floods.

?

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I believe the correct answer is the latter, based on the recent thread about groins.

"When you're young you worry about people stealing your ideas, when you're old you worry that they won't." - David Friedman
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David Z replied on Tue, Aug 5 2008 8:55 AM

It's a government distortion of the market that caused wholesale deforestation; or at least that's what it sounds like, to me. 

My guess is that had the forests never been nationalized, they never would have been repatriated, and therefore no opportunity for a seeming "windfall" profit would have occurred.  Over time, portions of the forest(s) may or may not have been sold, piece-meal. But by taking them out of private ownership and acting as a quasi-trustee, and then returning them to their (alleged) rightful owners all at once, the government created a hazard.

So it's probably not really a problem of conflicting property rights.  One could certainly make the argument that the "rightful" owners are no more rightful (after the passage of a considerable amount of time) than those villagers who live in the floodplains; the reason being that all citizens were systematically exploited, but only those with a clear and traceable chain of title to real property were compensated after the revolution.

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David Z

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Certainly those who engaged in deforestation are responsible for the floods and owe compensation to the victims. That should be enough to keep them from engaging in more deforestation.

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David Z replied on Tue, Aug 5 2008 4:57 PM

They're responsible (and should be held accountable) if and only if the people living below the trees can exercise a legitimate right against the tree-owners' properties.

Whether this condition holds, or ought to hold, is probably topic for another discussion.

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