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Government Conservation Leads To Black Markets

In banning the trade of rhino horns, the government has not only artificially inflated the price of the commodity but has also prevented the owners of rhinos to sell their horns on the open market.

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By Isaiah Minter | United States

As animal rights activists across the country mourn the death of Sudan, formerly the world’s last male northern white rhino, environmentalists continue to demonize the rhino horn trade. WildAid CEO Peter Knights said: 

We can only hope that the world learns from the sad loss of Sudan and takes every measure to end all trade in rhino horn. While prices of rhino horn are falling in China and Vietnam, poaching for horn still threatens all rhino species.

Knight’s take on the issue, while certainly well-intentioned, is misguided. The simple exchange of rhino horns in the market is not a threat to all rhino species:  horns can be removed without actually killing the rhino, and if done right, the horn will grow back. Rather, the current system of horn trade that is managed by the government is a threat to all rhino species, as rhinos are deliberately being killed just for their horns. In other words, while government action has only exacerbated the effects of horn trade on rhino populations, it does not have to be this way.

Instead of approaching rhino conservation with more government force and control, we should pursue free markets and property rights. Of course, none of this is pure ideology speaking, the southern white rhino is a testament to the wonders of this approach. However, before I address the role of the market in saving the southern white rhino, it is necessary to understand the situation rhino populations face, along with the government’s role in the said situation.

The Current Situation

To quote award-winning zoologist journalist Fiona Macdonald:

Right now, there are only 29,000 rhinos left on the planet, most of which are in South Africa. It’s an incredible drop from the 500,000 that roamed Earth at the start of the 1900s, and sadly, the majority have been killed as a result of poaching, which increased 9,000 percent (yes, you read that right) between 2007 and 2014.

That means more than 1,000 rhinos are now killed illegally each year for their horns. Most of these end up in Asia, where they can reach up to US$100,000 per kilogram on the black market. Those prices are driven by the fact that many countries see rhino horn as a status symbol, and in Vietnam it’s believed (with no evidence whatsoever) to cure cancer.

When rhino horns are more expensive than gold, the rapid rate at which rhino populations are declining should not come as a surprise to anyone. However, it may come as a surprise to many that government prohibition, not the vague notion of human greed, is to blame for the devastation inflicted on rhino populations.

The plain fact is, government banning a commodity does nothing to reduce the demand for it. In Asia, where horns are used for traditional medicines, the black market is alive and well. Black markets form in response to government prohibition: after the prohibition of drugs and prostitution, one would’ve hoped we had learned our lesson. Clearly, we have not, leaving yet another animal species to pay the price for our foolishness.

In banning the trade of rhino horns, the government has not only artificially inflated the price of the commodity but has also prevented the owners of rhinos to sell their horns on the open market. Thus, in order to meet the high demand of horns and capitalize on the high-profit opportunity, poachers routinely kill wild rhinos in wildlife reserves.

However well-intentioned politicians and animal rights activists may be, they ignore the question of incentives. Governments cannot abolish greed, we must not kid ourselves into believing that political actors are selfless and omniscient individuals. However, there is a crucial distinction to be made between public and private action:  the market harnesses greed and internalizes costs while government amplifies the destruction of greed and socializes costs.

The careers of politicians do not depend on the welfare of rhinos, therefore they have little incentive to preserve them. But private owners, who do depend on the welfare of their rhinos and vice versa, have every incentive to preserve them.

The government approach is the very source of the waste, mismanagement, and destruction that exists in the modern horn trade industry, the market approach the cure for the outlined ails. As an example, let us look to South Africa.

Yes to Property Rights

In 1900, the southern white rhino was the most endangered of the world’s rhinoceros species. Hunted to the brink of extinction by English and Dutch Settlers, swift action was taken in the mid-20th century to preserve the species. Courtesy of state-owned parks and a successful breeding program, the white rhino population was 840 in 1960. But, wildlife market institutions were still failing, as private ranchers had little incentive to breed rhinos.

Prior to 1991, all wildlife in South Africa was un-owned property, thus in order to benefit off any wild animal, it had to be captured, domesticated, or even killed. This condition was reversed following the Theft of Game Act of 1991, which allowed for private ownership of any animal provided that it could be identified according to specific criteria.

By securing property rights and allowing market prices to operate, this policy changed the entire incentive mechanism of private ranchers: they were now encouraged to breed and care for their rhinos, ensuring a continuous stream of cash, as opposed to the destructive past manner of shooting them on the spot. By privatizing ownership of animals, decision-makers directly bore the cost of their actions. In the decades since this policy, white rhino populations have flourished.

Market incentives and secure property rights are the most reasonable and proven model for African rhino conversation. In order to promote and preserve this model of free-market environmentalism, there must be government oversight, thus there is a role for government to play. But it is a limited role that creates a framework under which private ownership and voluntary exchange can flourish, not an active role that creates a framework under which corruption can flourish.

Nevertheless, governments across the globe have endorsed the latter model, which in turn has devastated the five species of rhinos. I hope I speak for all environmentalists when I say it is imperative that we put our governments back on the former model: not just for the sake of white rhinos, but for endangered species across the globe.


Featured image source.

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