Selling Yellowstone: Capitalism and the Construction of Nature

Published by EH.NET (August 2002)

Mark Daniel Barringer, Selling Yellowstone: Capitalism and the Construction

of Nature. Lawrence, KS: University Press of Kansas, 2002. viii +250 pp.

$29.95 (hardback), ISBN: 0-7006-1167-3.

Reviewed for EH.NET by Peter J. Hill, Department of Business and Economics,

Wheaton College, Wheaton, Illinois.

On March 1, 1872, President Ulysses S. Grant signed the Yellowstone Park Act,

setting aside over two million acres “as a pleasuring ground for the benefit

and the enjoyment of the people” with the additional provision that there was

to be protection against “wanton destruction of the fish and game found within

said Park.” Further guidance for the operation of Yellowstone came with the

creation of the National Park Service in 1916, which specified that it was duty

of the new agency “to conserve the scenery and the natural and historic objects

and wildlife therein, and to provide for the enjoyment of the same in such a

manner and by such means as will leave them unimpaired for future generations.”

Needless to say, there is much room for interpretation in phrases such as “the

benefit and the enjoyment of the people” and “unimpaired for future

generations.” Does this mean that any and all visitors should be welcomed to

the park? What if such visitations resulted in ecological damage? And how

should the visitors to be cared for? What sort of services should be provided

for them? Should the provision be carried out by government or by private

entities? In the case of Yellowstone National Park, the lodging, meals, and

transportation services have been provided for by private enterprise, and Mark

Barringer has provided a useful history of this commercial activity.

From the very beginning, it was clear that Congress did not plan to maintain

and operate the commercial facilities that would be necessary for tourists to

enjoy the features of the park. However, Congress was also unclear as to the

nature of the contract between the federal government as owner and private

individuals as providers of transportation, housing, and meals. There were

ongoing incentive problems in that a private entity needed an assurance of a

long-term contract in order to make any substantial investment in facilities.

But such a contract meant the concessionaire would face little competition and

could charge monopoly prices. The result was that the private operations in the

park became a regulated monopoly, with all of the incentive and information

problems inherent in such an arrangement. To complicate matters, the

perceptions of the role of the park in the American psyche have changed

dramatically and, particularly in more recent decades, have resulted in

conflict over how the park should be used and preserved.

From the creation of the park in 1872 until the completion of the Northern

Pacific (NP) Railway close to its northern boundary in 1883, small-scale

commercial interests provided accommodation and transportation services within

the park. The original enabling act required leases to conduct commerce but

none of these early entrepreneurs possessed such leases, nor did the

superintendent have sufficient budget to enforce the lease provision.

The NP Railway quickly understood that if it was to profit from hauling

passengers to Yellowstone, appropriate facilities would need to be provided.

Therefore several individuals, all major investors in the NP, formed the

Yellowstone National Park Improvement Company (YNPIC) and applied for an

exclusive lease to provide hotel services and stage coach tours of the park.

Although people could still enter the park in their own wagons, the YNPIC

controlled most of the services within the bounds of the park and cooperated

with the Northern Pacific Railway in bringing tourists to the area. Barringer

recognizes the problem of monopoly control by private interests over the

provision of services, but there is another side to the coin that he does not

acknowledge. With very low access fees, the park suffered from a congestion

externality, but the fact that the Northern Pacific Railway had an almost

complete monopoly on transportation to the park and the YNPIC controlled most

of the transportation and lodging within the park meant that they had strong

incentives to internalize that externality. Therefore, from 1883 until 1915,

when automobiles were allowed into Yellowstone, the park probably experienced

its best management. There was a strong incentive by the railroad to operate

the park in a business-like manner and to provide the optimal experience for

visitors.

The YNPIC evolved into another entity, the Yellowstone Park Association, in

1886, again with Northern Pacific financial backing. Throughout this period

most of the visitors entered Yellowstone by way of Mammoth Hot Springs, after

having purchased an excursion fare on the railroad that included a

five-and-a-half-day tour of the park, staying in YPA facilities and traveling

in company stage coaches.

In 1915, the park opened its borders to automobiles, which changed the nature

of the business for concessionaires, and in 1916 the National Park Service was

created. This new government agency had the explicit responsibility of granting

the rights to provide commercial services and also to regulate the nature and

quality of those services. The first director of the National Park Service,

Stephen Mather, believed that competition among concessionaires was harmful to

the traveling public and that monopolies for each part of the operation would

make the administrative tasks simpler and also better satisfy visitors. He

chose a company with close ties to the Northern Pacific to be the primary

operator of concessions. Although private individuals could enter in their own

automobiles, the railroad was still the primary means of cross-country

transportation and the touring buses provided by the Yellowstone Park

Transportation Company were a popular way of seeing the park.

Throughout the 1920s, the commercial interests in the park formed an active

alliance with the National Park Service to provide a sanitized experience of

the natural wonders of the region. The National Park Service killed predators

in order to protect antelope, deer and elk. In the Lamar Valley a buffalo ranch

was established where bison were bred and fed for the viewing enjoyment of the

public.

The 1930s, however, saw the beginning of a struggle over the appropriate use of

the park. Until this point, the National Park Service (NPS) and the

concessionaires had operated with the same overall objective, to provide

services for a large number of visitors and to give them a safe and somewhat

artificial “wilderness experience.” The Wilderness Society was founded in 1935

and it provided a rallying point for those who believed that human intrusion in

the park needed to be reduced.

The conflict between those who wanted development and expansion of facilities

and those who preferred to limit any human encroachment upon nature intensified

throughout the 1940s and 1950s. In 1955, the National Park Service created

Mission 66, a long-term project scheduled for completion in 1966, the fiftieth

anniversary of the NPS. Mission 66 involved massive development of concessions

facilities in almost all of the national parks with a major focus on

Yellowstone. The plan involved large-scale expansion of facilities within the

park by private developers and accompanying improvements in roads and other

facilities by the government. Mission 66 turned into a major battleground

between those who wished to preserve the park in its “natural” state and those

who wished to develop it. The traditional alliance between the National Park

Service and the concessionaires fell apart in the 1960s and since then there

have been continued revisions of contracts between private entities and the

government, and continued debates about the role that Yellowstone National Park

is to play in the national experience.

Selling Yellowstone provides numerous insights into the awkward

structure of the contract between the public and the private sector in

Yellowstone National Park. Both the private operators of facilities and the

National Park Service faced an incentive structure that made it difficult to

have efficient management and an accurate representation of consumer and voter

preferences. And, since the right to operate in the park was valuable,

rent-seeking occurred to obtain that privilege.

The most significant problem with the book is that the author’s rhetoric

sometimes gets carried away and he claims more than his evidence can support.

For instance, he concludes the book by suggesting that “despite popular

perceptions that the park was protected from commercial exploitation, the NPS

and its concessioner partners virtually owned Yellowstone, selling it piecemeal

to receptive customers as if it were an inexhaustible, self-replenishing

commodity” (p. 173-74). Barringer seems to think it necessary to make rather

sweeping claims of exploitation and of “selling off the park.” However, his

analysis leads to the more modest conclusion that competing interest groups,

both inside and outside of government, tried to gain control to further their

own interests. Neither the government nor the private sector operated in a very

workable institutional structure and it is not surprising that the results were

somewhat disappointing. Nevertheless, as a narrative history of the attempts to

provide services to visitors through a combination of public and private

efforts, the book is a successful enterprise.

Peter J. Hill is professor of economics at Wheaton College and a Senior

Associate at PERC, Bozeman, Montana. He is the author of numerous articles on

property rights in the American West. He is presently working on a book-length

manuscript with Terry L. Anderson entitled The Not So Wild, Wild West:

Property Rights on the Frontier.