Economic Responsibility for the By-Products of Production

Abstract

The central concepts governing resources- allocation in the United States have historically been private property, freedom of exchange, and competition. The social engine built on these concepts has produced rapid exploita tion of resources and rapidly rising per capita income in the United States. In recent years, however, resources which cannot readily be reduced to private ownership have become rapidly more important, and they are being overused and mis used. The pollution of such "common property" resources as water and the air mantle is inherent in an economic system such as ours, once a certain stage of economic development is reached. To deal successfully and efficiently with these prob lems will require designing new governmental institutions and, especially, altering our system of incentives in such a way that the value of common property resources is reflected in market-type decisions.