conditions and generating the information relatively cheaply,nin comparison to alternative means of obtaining thatnsame knowledge. A private property system allows communicationnand coordination among millions of individuals,neach with bits of knowledge carefully developed and expressednand crucial to the coordination process.nPublic resource managers face very different sets ofninformation. Prices generated by a market are essentially anseries of statements about willingness to buy or sell propertynrights. Since, under public ownership property rights arenincomplete, the information content of prices for publicnproperty (if they exist at all) is deficient. In such cases it isndifficult to find out what values people really do place onnresources. One does not know the views of others onnalternative uses, and expectations about the future are notnprocessed so carefully or stated as clearly as under privatenrights.nPrivate property also encourages mutual accommodation.nMuch of our discussion of natural resources revolves aroundnthe question of “who is going to get his or her way.”nHowever, under a market system based on private property,nexchange allows both parties to come out better off. Thenexistence of gains from trade means both participants cannexpect to profit. Cooperation, rather than conflict, is thenhallmark of the private property market system. In contrast,nunder public management, conflict dominates. The lack ofncomplete property rights means both decision-makers andnspecial interest groups have little incentive to understand thenposition of opposing groups or to accommodate theirndesires.nA prime example of bureaucratic mismanagement of annimportant natural resource is to be found in the UnitednStates Forest Service. Responsible for the operation of somen140 million acres of forestiands, the agency personnel havencontinually taken environmentally and economically unsoundnactions. Much of the land which they administer hasnpotentially conflicting multiple uses. However, professionalnpride and personal advancement encourage budget maximizationnfor each forest district. These incentives are so strongnthat, despite stated multiple-use objectives, commercialntimber production tends to dominate all other uses. Estimatingnproduction, putting tracts up for bid, building thennecessary roads, and reforesting all involve high employmentnand large expenditures. Bureaucrats who promotentimber production find their agency growing and theirnpromotions more rapid.nManaging forests for commercial timber production isnnot necessarily bad. Timber products are in demand, andnboth the private and the public sector are meeting thatndemand. However, public sector timber managers face veryndifferent incentives and can ignore costs which their privatensector counterparts can’t. For instance, the U.S. ForestnService encourages the logging of areas that no privatenlandowner would ever consider economically viable. Fromn1974 through 1978 over half the timber sales in the nationalnforests did not cover the costs of timber management andnreforestation (Emerson, Stout, and Kloepfer). The case isneven worse in the Northern Rocky Mountains and innAlaska. In 1981 over 88 percent of the sales in two RockynMountain regions were below cost, and in 1982, 96 percentnfailed to cover costs. In 1983 each dollar spent on timbernsales in Alaska generated two cents in receipts (Emerson,nStout, and Kloepfer). Private sector forest managers could illnafford such economically suicidal behavior.nIt should also be remembered that much of the land onnwhich the forest service is subsidizing logging has considerablenenvironmental amenities. Its highest valued use is innsomething other than commercial timber production. Thisnland contains some of the most spectacular scenery innAmerica and offers recreation to backpackers, hunters, andnfishermen. Logging often conflicts with these uses. Theninaccountability of public sector resource managers hasnproduced both resource waste and environmental degradation.nAnother illustration of poor public sector accountability isnthe infamous Love Canal case in Niagara Falls, New York.nLove Canal was an unused waterway designed in the 1890’snas a part of a never completed hydroelectric project. It wasnpurchased by Hooker Chemical and Plastics Corporation inn1942 and used for disposal of over 21,800 tons of toxicnchemical wastes. Hooker chose the site because it was in anrelatively unpopulated area and because impermeable claynmade it suitable for the disposal of hazardous materials.nDuring the use of the canal for disposal. Hooker actednresponsibly, in accordance with the accepted technology ofnthe time. Care was taken not to breach the clay walls of thencanal, and four feet of clay was deposited over the chemicalnwastes. Among Hooker’s motivations, surely the least wasnnot accountability for its private actions, through liability fornany adverse consequences of its disposal practices. Hooker’snlawyers advised proper management, and the companynacted accordingly.nIn 1953, however, the story takes a turn when thenNiagara Falls Board of Education acquired Love Canal as anpotential site for a school. Hooker first refused to sell, citingnthe potential danger, but later sold the land to the board forn$1.00 under threat of condemnation. They attached anparagraph to the deed stating that they had used the canalnfor disposal and wanted to be relieved of future liability if thenland was used in a way that released the chemicals. Hookernalso required the school board officials to inspect the landnand be present while eight test borings were made. Twonwere sunk into the canal proper and encountered chemicalsnfour feet below the surface; the other six outside of the canalnran into no chemicals. Hooker further requested that thenland be used only for park purposes, in conjunction with anschool on nearby land.nDespite the repeated attempts of Hooker Chemical tonwarn of the dangers inherent in the use of the Love Canalnsite, six months later the school board voted to removen4,000 cubic yards of fill from the top of the canal to providendirt for grading at another school site. Another 3,000 yardsnwere removed in 1954. In 1957 the board debated anproposal to trade the site to a developer in return for cashnand other land. Hooker found out about the proposed tradenand again went before the board to remind them of thenoriginal verbal and written agreements on the use of thenland. They reiterated that the land was unsuitable fornconstruction which might breach the canal and repeatedntheir recommendations that only surface use should bencontemplated.nDespite Hooker Chemical’s continued expressed con-nnnFEBRUARY 1988 j 21n