Self-Determination: The Other Path for Native Americans

Published by EH.NET (November 2010)

Terry L. Anderson, Bruce L. Benson, and Thomas E. Flanagan, editors, Self-Determination: The Other Path for Native Americans. Stanford, CA: Stanford University Press, 2006. xv + 332 pp. $39 (cloth), ISBN: 978-0-8047-5441-5.

Reviewed for EH.Net by Leonard Carlson, Department of Economics, Emory University.

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This is an interesting collection of ten essays about Indian tribes and their relationship with the federal governments in the United States and Canada.? All of the papers analyze the issues from a property rights and political economy (public choice) perspective.? The essays consider contemporary and historical issues in both the U.S. and Canada.? As the title of the volume suggests, most conclude that what is needed is more self-determination by Indians (as individuals or as tribes).? This often involves determining what policies create the right incentives through property rights.?

In the introduction, Douglass North calls for the examination of Indian societal performance in light of externally imposed rules as well as internal tribal rules and norms.? He argues that this can yield insights that will be useful understanding other societies as well.? In the first essay Craig Galbraith, Carlos Rodriquez and Curt Stiles argue that Indians respond to incentives and were interested in individual wealth and utility maximization.? In this view, Indian societies created institutions that provided implicit property rights which tried to guide Indian societies to make good use of their resources.? Many scholars, they argue, follow a ?false myth? that Indians were different from other people and placed collective values over the individual.?? People trained in economics will find that treating Indians as rational actors who have institutions to solve economic problems is a useful and sensible approach.?

Bruce Benson looks at how property rights were formed among the Plains tribes that adapted to the horse and to hunting the bison (buffalo).? Horses were obtained from the Spanish beginning in the late eighteenth century through trade or theft and marked a major change in how Indians could exploit the abundant food resource provided by the great bison herds.? Horses allowed previously pedestrian hunters, as well as new arrivals like the Sioux (Lakota), to be much more efficient at hunting bison or waging war.? The mounted tribes had private property rights in animals and other mobile goods and tried to establish tribal territorial hunting rights and exclude other tribes.? There were numerous conflicts between nomadic mounted tribes and agricultural tribes that lived in fixed villages and combined farming with hunting bison.? According to Benson?s analysis, nomadic tribes acquired goods from the sedentary tribes, especially corn, by trade or by raiding the villages, depending on the relative cost of each alternative.

Ann Carlos and Frank Lewis have long worked on the trade in beaver skins between native peoples and the Hudson?s Bay Company in northern Canada.? This paper addresses a paradox.? The Cree Indians of western Canada established property rights to valuable fur-bearing animals as described in the seminal work on property rights by Harold Demsetz.? Yet despite these rules, there was over hunting of beaver.? Carlos and Lewis conclude that this was due to cultural norms that allowed others to hunt beaver for food if they needed it, but not for sale.? This cultural norm provided a useful form of insurance, but also led to inefficiencies.

Other papers have more to do with contemporary legal and policy issues.? D. Bruce Johnsen, in ?A Culturally Correct Proposal to Privatize the British Columbia Salmon Fishery,? offers a way to privatize salmon fisheries consistent with Indian traditions.? This seems to be part of an ongoing policy dispute and more background would have helped to put this in context.? In particular, it would help to know what other alternatives have been proposed.?

In ?Customary Land Rights on Canadian Indian Reserves,? Thomas Flanagan and Christopher Alcantara discuss the role of customary land rights among tribes of the Five Nations in Canada.? In Canada, individual member of the tribe have the right to use tribal land on the reserve for their own purposes.? Such land is recognized as the private property of an individual but can only be sold or transferred to another member of the tribe.? This incomplete property right can lead to some degree of inefficiency.? But the authors conclude that the advantages outweigh the costs.? Under this system, the members of the tribe own all land on a reserve.? This enables members of the tribe to benefit from working together, sharing knowledge, and respecting traditions.? In other words, it allows members of the tribe to capture what have been called ?ethnic externalities? and avoid inefficiencies.

Terry Anderson and Dominic Parker?s ?The Wealth of Indian Nations: Economic Performance and Institutions on Reservations? uses regression techniques to test the impact of institutional factors on per capita income on Indian reservations.? They find that stable property rights have a positive impact on performance and rent seeking has a negative impact economic performance.? This is not surprising, but does challenge the notion that Indians behave differently than other people.

In ?Sovereignty Can Be a Liability: How Tribes Can Mitigate the Sovereign?s Paradox,? David Haddock and Robert Miller deal with a problem created by tribal sovereignty.? Since tribal governments have an element of sovereignty, they have the legal authority to change the terms of an agreement with a private corporation later, without the consent of the other party.? Haddock and Miller argue that there are ways a tribe can constrain itself so that an outsider could have it rights protected from this potential post-contractual opportunism on the part of the tribal governments.? This would benefit tribes by making it easier to attract outside investment, since outside investors will know that their investment will not be taken over by the tribe.?

Ronald Johnson, in ?Indian Casinos: Another Tragedy of the Commons,? addresses a high-profile aspect of Indian economic activities ? casino gambling.? The right of tribes to have legalized gambling derives from the Indian Gaming Regulatory Act (1988).? This gives some tribes (but certainly not all) considerable revenues.? But in order to open a casino, a tribe must have the consent of the government of the state in which it is located.? The profits generated by gambling, however, are desired by state governments in search of additional revenue.? As a result there may be conflict over the rents between tribes and state governments.? There is also competition for these rents by groups within tribes, which could potentially lead to waste.? Johnson concludes that ?How well gaming revenues advance the welfare of their individual tribal members and American Indians in general … may take the passing of a generation to answer? (pp 238-39).
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In ??Doing Business with the Devil:? Land, Sovereignty, and Corporate Partnerships in Membertou, Inc.,? Jacquelyn Scott discusses how a small indigenous community of 1000 people on Cape Breton, Nova Scotia has successfully managed and developed its resources.
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James Huffman and Robert Miller?s ?Indian Property Rights and American Federalism? is a concluding chapter that discusses the legal basis of Indian property rights in U.S. law.? These rights evolved from treaties with each tribe.? As result the legal standing of each tribe and the overall position of Indians in the federal system has a complicated history and the law is often a bit contradictory.?

I read this book with an eye to whether I could use it in a course, perhaps a special topics course on Indian economic issues.?? My conclusion is that it could be used, but the instructor would need to give students background to understand the controversies and issues discussed in each essay.? Some of the papers directly address a legal or policy opinion in the U.S. or Canada and it would have helped if the editors or authors had provided more background about the issues being discussed.? In particular Canadian law and policy is different in many important respects than U.S. law and some explanation of the institutional differences between the two would be useful.??

Leonard Carlson is an Associate Professor of Economics at Emory University and teaches courses on U.S. and Southern U.S. economic history.? His published work includes papers and a book on the effects of land allotment on American Indians; the politics of the passage of the Indian Removal Act of 1830; and the economic history of the southern U.S.? His most recent paper is ?Similar Societies, Different Solutions: United States Indian Policy in Light of Australian Policy towards Aboriginal Peoples,? in Economic Evolution and Revolutions in Context: Historical Approaches to Social Science, edited by Paul W. Rhode, Joshua L. Rosenbloom, and David Weiman, Stanford University Press (forthcoming).

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