The BLM, Mr. Grazer, and Mr. Enviro

I posted the following comment to a post over at Environmental Economics. You might be interested in checking out the post as well as the news article that prompted it.

I want to see if I have the facts straight with respect to the situation described in the news story. First, as an aside, I want to overlook the reference to party politics, but it makes me wonder what parts of the story I can take at face value.

Setting that aside, this is what I think is going on. Government owns some land. As the owner of the property right to this land, government can choose to do what it wants with it, as long as (just like with you and I as property owners) it does not harm the person or property of others. So, government decides to lease the land it owns to Mr. Grazer, of course with agreed upon terms which no doubt includes rules about the number of animals etc. Then Mr. Grazer meets Mr. Enviro who offers to buy the lease from Mr. Grazer. A deal is struck between these two, money changes hands and Mr Grazer takes his animals elsewhere. Does that sound about right?

If it does, the it looks alot like the idea of a sub-lease to me. If so, does it make sense that the original property owner can take back its land?

I have an example that might be on point here. Years ago my father owned about a section of land that was fairly well forested. At some point he was approached and asked if he would lease the land to a timber company to cut down trees. He agreed because of 2 things: (1) there was money, and (2) he wanted his trees "thinned" as he called it. Now suppose Mr. Timber had taken that lease and then made a deal with Mr. Hugger who did not cut down any trees. My Dad would have had money, but he would still have had more trees than he wanted. It seems to me that Mr. Timber failed to uphold the lease contract he agreed to, and my father should then have an opportunity to have the tree removal aspects of his contract enforced.

Perhaps the news article isn't describing a situation that is fairly characterized as use of the market. Perhaps so. Now, I'm not sure if I think a bureaucrat should decide the "chiefly valuable use" of BLM land. On the other hand, the government is the property owner, just as my father was the property owner, and I don't think any one (or at least very many of us) are going to say my father can't decide what is the "chiefly valuable use" of his land.

As a citizen, and in a way a shareholder in government's ownership of this parcel of land, I would encourage government to lease this parcel to be used by the highest bidder. I think that perhaps the best use of the market with this set of circumstances would be to have the BLM auction the leases to the highest bidder.