Privatization Movement

views updated

Privatization movement

This movement, initiated and supported primarily by economists, peaked in the early 1980s. Public ownership of land was inefficient because the administration of the lands was removed from the incentives and discipline of the free market. The case for the transfer of these lands to the private sector was made most strongly for lands managed for commodities (e.g., grazing lands, mineral lands, timber lands), but some also advocated transferring wilderness lands to the private sector, where it, too, would be more efficiently managed. Many of the economists who supported the program were a part of a movement referred to as the New Resource Economics (NRE), which advocated an increased reliance on private property rights and the free market for managing natural resources . Such an approach meshed well with the Reagan Administration's philosophy of free market economics.

The privatization idea moved from theory to practice in February 1982 at a Cabinet Council on Economic Affairs meeting with the creation of the Asset Management Program. This program was designed to identify federal property for disposal, to develop legislation needed to dispose the land, and to oversee the sale of the land. The program was formalized by President Reagan in February 1982. The Fiscal Year (FY) 1983 budget proposal called for the sale of 5 percent of the nation's land (excluding Alaska), approximately 35 million acres, over five years. The revenues projected from the program were $17 billion from FY 1983 through FY 1987, the bulk of which was to come from sales of Bureau of Land Management (BLM) and Forest Service lands.

The BLM began to develop a program for land disposal, but in July 1983, Secretary of the Interior James Watt removed Interior Department lands from the Asset Management Program. He thought that the program was a mistake and was undermining the President's support in the West that had developed through the good neighbor program (which had defused the Sagebrush Rebellion ).

In the summer of 1982, the Forest Service began to identify possible lands for disposal and announced that it would seek legislative authority to dispose the land. In March 1983, the agency announced that it would seek legislative authority to dispose of up to 6 million acres of land managed by the Forest Service (3.2% of the lands in the system). At this time, they indicated the specific amounts of land under consideration for disposal in each state, with high figures of 872,054 acres in Montana and 36 percent of its land in Ohio.

Opposition to the Asset Management Program was immediate and intense. The chief opponents were environmentalists, but they were also joined by the forestry profession and many western politicians. This already strong opposition to the program intensified once the specific areas for disposal were identified. In the face of this intense opposition, the Forest Service never presented legislation to Congress to allow the sale of these lands. The attempt to put privatization into practice was aborted by early 1984.

[Christopher McGrory Klyza ]