Roughly half of the world’s original forested surface area no longer exists. In some countries, forests are eliminated at a rate as high as two percent per year. This is significant cause for alarm, given that we depend on these forests for our survival. The mainstream intellectual movement has pointed its finger at a number of factors: uncaring governments which remove forested land in order to build urban sprawl or governments which respond to profit, turning a blind eye to the destructive powers of multinational logging companies. The principle cause comes down to humanity’s apparent lust for profit. Our drive for wealth is causing us to ignore the negative effects of deforestation, instead looking for the short-term advantages of selling lumber. To a degree, the mainstream is right. Deforestation is a result of logging. What else would be the cause? What the intellectual left fail to answer is why worldwide logging persists to be unsustainable. Why are we losing a significant amount of forested land mass every year? In their defense, they are worried about the apparently glum future. The majority of these so-called intellectuals do not realize that there are deeper issues at hand. They continue to blame some human characteristic which drives men to become illogical. Men suddenly turn from rational beings into beings driven only by the lure of profit. Ultimately, through 
this so-called logic the intellectual-left derives the conclusion that it is the market economy that is at fault. In a conference some three decades ago Doctor David Suzuki, Canadian expert on climate change, accused market-driven economics of promoting unsustainable consumption. In his opinion, market-driven economics had pushed companies to go from location to location, scavenging the Earth for her resources and then leaving her bare. Capitalism, in his opinion, was an ecological disaster.
In the opinion of many ecological activists the market must be regulated to force it to become sustainable. They are of the opinion that market-driven economics is a practice of unsustainable consumption of resources. Doctor Suzuki, in his infinite wisdom, proclaimed that Capitalism assumed the existence of limitless resources. Implicitly admitting that Capitalism is the most powerful economic catalyst for economic growth, he proclaimed that this massive growth had to be sacrificed in order to guarantee the long-term availability of the necessary resources for human survival. A cursory glance at current economic trends, without a doubt, offers much evidence in support of these arguments. During the past three decades there has been an unprecedented era of prosperity. The housing boom alone probably caused a spike in the demand for lumber. This demand was met by an increase in supply, provided by loggers. The problem is seemingly obvious. Economic prosperity causes an increase in demand for certain resources, and these resources can only be provided by exploiting the Earth. There is no evidence that this exploitation has been sustainable. The existence of deforestation alone makes any arguments for any semblance of sustainability ludicrous. In this case, the conclusions the intellectual-left make are sound. But, they do not unveil the whole truth.
Fortunately for those who love their economic prosperity, deforestation is not the cause of an unregulated market. It is exactly the opposite which is true. Deforestation is the cause of regulated property rights and common ownership of prime logging territory. Although the intellectual’s case has merit, what they fail to account for are the reasons why individual economic agents aggregately conduct unsustainable economic facts. For what reasons do they not produce in sustainable fashion? Is it out of refusal? There are no economic reasons to do so? Or is it because they have no incentive to do so? The weak link in the pro-regulation movement’s chain of logic is this lapse between long-term profit and lack of sustainability. If they were to fill this gap, they would find that their conclusions are no longer logically derivable. Instead, they would be forced to opt for a pro-market approach, where the relevant individuals who partake in the lumber industry are given full access to their profits. The fact of the matter is that farmers with full property rights have incentive to harvest their forests in sustainable fashion. It is only when the owner of the property is ambiguous that the logger or the farmer lack incentive in long-term profit, given that their profit is uninsured. There is ample empirical evidence which supports this argument, given that the lumber industry in Spain is largely entirely privatized (although, not free from a fair amount of government regulation). Despite this privatized lumber industry, there is not widespread deforestation of forests which are privately owned. This is because the incentive is in place for farmers to take into consideration a long-term profit, creating a sustainable industry.
Nature of privatized forests and profit
In several regions of Spain, it is not uncommon to see plots of land populated by tall pine trees. This crop is actually quite profitable in the long-run. It requires a large initial investment, and is a dangerous gamble given that there is no short-term profit. The farmer must wait until the trees are fully grown in order to take advantage of them to sell them for lumber. Usually, this process can last around ten years. Nevertheless, it is a profitable venture, given that loggers pay very well per tree. Foresting your land is not only valuable for lumber. Profits can be made by selling hunting permits to those looking for small animal prey, like rabbits. For many, it is more profitable to “sell rifles” than it is to plot any other type of crop and profit from the harvest. This has given rise to a large amount of isolated forests in relevant regions of Spain. These are not relatively short-term forests. They are not grown and then logged. Many of these forests have existed for several decades, or perhaps even a century. Because the farmer has full property rights to the forest, it is within his interest to maintain the sustainability of his land and profit. This profit-motivated relationship between privatized foresting and sustainability is not understood by the intellectual-left. It is this fact which ultimately delays the movement from communal foresting (government-owned forests) to a completely privatized system. And, if there is no general movement towards a Capitalistic solution then the intellectual-left’s greatest fears may ultimately come true.
Why does the farmer not sell his entire stock of trees to the logger? Because the farmer is not interested in maximizing present profit, as opposed to maximizing profit over the length of his tenure as a farmer. There are several reasons this holds true. First, the price of lumber fluctuates in accordance with supply and demand. The farmer must speculate, to some degree, what the price of lumber may be in the future. Because the farmer is not always aware of the mechanisms of the lumber market it is far easier to sell trees in terms of fraction of a plot. Usually, a farmer will sell a third or a fourth of his plot, in order to guarantee the existence of a more trees for future profit. This is advantageous if the price of lumber increases in the future, increasing the farmer’s profit. Second, for some psychological reason, it is more attractive to have a steady, long-term income, as opposed to a single, large paycheck. Third, the farmer can have multiple sources of income for one crop—he can make a profit off selling a fraction of his plot of trees for lumber, while also receiving money from hu
nting licenses. Logging in sustainable fashion also makes the profit sustainable, and maximizes profit over the long run. As a result, if you were to live in Spain and take note, you would not witness the sporadic creation and then destruction of forests. Ultimately, one would realize that free-market Capitalism is all about sustainability, not maximizing present profit at the expense of long-term wealth.
The next question may be: why don’t loggers currently act in a sustainable fashion? The lack of property rights in major logging countries, such as Brazil or several countries in central Africa (specifically, along the Atlantic coastline, such as the Cameroon, the Democratic Republic of Congo, et cetera), leads to unsustainable logging. There is no incentive for the logging industry to limit logging, because their long-term profit is not guaranteed. If they were to only log a fourth of the trees and then re-plant them, so that when they harvested the final fourth of that plot they would have fully grown trees to continue their harvesting cycle, there is nothing that guarantees that they would reap the profits of their investment. Their claims to those trees and the consequent profits are not respected, because legally they are not entitled to that land. That catalyzes deforestation, because businesses no longer care about investing. They will not see the fruits of their investment. A clear indication of the reality of this industry is that deforestation takes place mostly on publicly owned land, not on privately owned land.
The only solution to the problem of deforestation is the free-market. Specifically, forests must be transferred to the private sector, creating the incentive to maintain its existence. The common notion is that profit-motivation leads to unsustainable economic action. This couldn’t be farther from the truth. When an investor is guaranteed the profit from his investment, he has the profit-motivation to harvest in a sustainable fashion. One would come to this conclusion if they were to study the private logging industry in Spain and other European countries. This provides perfect empirical evidence for a free-market solution.
