Part Two: Dissemination of the New Resource Economics

Print Insight

Part Two: Dissemination of the New Resource Economics

By: John A. Baden, Ph.D.
Posted on June 30, 2016 FREE Insights Topics:

John and Ramona are in Europe presenting a series of talks on the creation and dissemination of the New Resource Economics, the NRE. They and other professors at MSU developed the NRE approach to environmental policy in the 1970s and as their invitation to speak in Europe indicates, it flourishes today.  

The NRE emphasizes the importance of entrepreneurship in protecting, promoting, and restoring ecological sustainability. It is a constructive alternative to the bureaucratic command-and-control model of the Progressive Era reformers a century ago. The NRE provides an innovative policy framework for harmonizing ecology, liberty, and prosperity. Its principles are increasingly adopted by leaders in the conservation community. We expect this trend to accelerate as governmental agencies are faced with even tighter constraints.


These wise men I met at UCLA Economics Department in 1976 were prescience in warning me of the dangers of running a free market oriented institute at a state university. And for the right reasons. We were doomed by our success in exposing environmental damages compounded by economic waste.

Most of this mischief and worse was generated by explicit and implicit subsidies. And subsidies develop constituencies. The result was political pressure to constrain, censure, and condemn. After a long and extremely unpleasant battle, I closed the Center for Political Economy and Natural Resources and left MSU.

The university president, under pressure from the state's governor, claimed I had no intellectual credibility and our work no value. They University raised the overhead rate on our grants from 9.5% to 72%. The university president and VP for Research had to approve all future publications, proposals, and programs.* 

One last thing: The MSU administration first denied the existence of and then squelched a peer review report headed by Prof. M. Bruce Johnson of the University of California Santa Barbara, then president of the Western Economic Association. The full report is on FREE's website under “History”. **

Finally, after experiencing recurrent lies, cowardice, extortion, and threats of censorship I decided to leave the university. That was the only honorable course*** 

However, we had grants pending to my MSU institute so I needed to call the foundation presidents to explain the sorry situation. Dick Larry, one of my original three wise men, responded with this when I told him I was leaving MSU:

“John, there is something you should understand. People in my situation, foundation heads, don't buy restaurants: We follow chefs. As long as you continue your good work, we'll be back.”

He came back and encouraged his foundation friends to come with him. They did. I founded PERC, the Political Economy Research Center (now the Property and Environment Research Center) in 1982 and FREE in 1985.

FREE and PERC have prospered and the NRE spread. While in 1980 the NRE perspective was unlikely to appear in an environmental policy textbook, it is now featured as a sophisticated and enlightened way to understand resource issues. What ever their philosophical orientation, intelligent people interested in environmental policy recognize the analytic leverage offered by the NRE.  However intellectually sound, the political costs of hosting it were far too high for our land grant university.

In July Ramona and I will be in France at the Univ. of Aix en Provence giving two talks on the NRE. A few days later I'll address the 10th International Conference of Environmental Entrepreneurship, again using the NRE paradigm. Several other scholars with Bozeman ties and NRE publications will be speaking at these meetings. Truth and logic are stubborn forces indeed. 

I'm sorry the NRE no longer has a home where it was born. While ecology, prosperity, and liberty can be strong complements, rarely do we see intellectual integrity, courage, and politics coexist in a university setting. Think tanks offer more congenial homes.

However, as universities become increasingly stressed, and they surely will, intellectual entrepreneurs may find vacant niches to pioneer within them. One thing is certain: one can never predict what entrepreneurs will do. As the NRE demonstrates, the results may be successful and satisfying.

Ramona and I will surely enjoy again taking the NRE paradigm to Aix en Provence. We will share the foundations of liberty, ecology, and prosperity and celebrate our success in promoting them.



*External pressure on the Center and the University grew and eventually the program fell casualty to academic politics. (You can find a 1982 peer review of the Center’s work by Professors M. Bruce Johnson and Vernon W. Ruttan at Baden left MSU in 1982 to found the Political Economy Research Center (PERC), of which he was Chairman until creating FREE in 1985. PERC, now known as the Property and Environment Research Center, and FREE have no formal relationship. 


**UNIVERSITY OF CALIFORNIA, SANTA BARBARA Department of Economics December 10, 1982 Dr. William Tietz, President President’s Office 103 Montana Hall Montana State University Bozeman, Mont. 59717 Re: REPORT OF THE SITE VISITATION COMMITTEE CENTER FOR POLITICAL ECONOMY AND NATURAL RESOURCES.

I. FINDINGS A. We find that the benefits of the Center outweigh the costs. The Center has had an impact on the national debate and agenda concerned with Natural Resource Policy. In other words, Center personnel have made intellectual contributions to the debate and have made an impact. B. We find the Center staff to be a group of intellectually active and productive scholars. There is strong support for the Center among all of the “general” economists in the department. However, we also found that the Center personnel are not a monolithic, single-minded group. Our interviews suggested that there was a wide diversity of interests in both potential research topics and potential research techniques. The most frequently mentioned benefit of the Center was its success in bringing distinguished, outside scholars into contact and communication with Center and, to a lesser extent, campus personnel.)


***That president was later dismissed but alas not for failing to respect and protect freedom of inquiry and dissemination of scholarship. Rather, his departure was due to remarkable personal indiscretions and abuse of privileges. Fortunately for the University's reputation, two subsequent MSU presidents recognized our national stature and for over twenty years MSU was listed as co-sponsor of FREE's seminar series for Article III federal judges, law professors, and religious leaders. Numerous MSU professors spoke at these academic programs.

Enjoy FREE Insights?

Sign up below to be notified via email when new Insights are posted!

* indicates required