How do you put a price on the "value" of the Grand Canyon? For environmental economists, the first person to take a solid analytical stab at answering that question was an economist named John Krutilla, in the essay "Conservation Reconsidered," published in 1967 in the journal The American Economic Review.
John Whitehead, writing at his blog Environmental Economics, points us to a celebration of Krutilla's contributions at Resources for the Future, a think tank at which Krutilla worked for many years. Gathered together there one can read the original essay and several tributes to Krutilla, most of which feature some formulation along the following lines:
"In 1967, preserved natural environments were essentially worthless according to conventional economic analysis."
The insights of environmental economics, which suggest that there should be ways to structure markets so that the natural environment isn't chewed up and spit out by capitalism's innate tendency towards irreversible resource exploitation, are of enduring interest at How the World Works. Intrigued by the thought that there was one easily identifiable wellspring from which the whole discipline flowed, like so much pure Rocky Mountain spring water, I trundled off and read the essay. I'm glad I did. One senses an agile mind at work, striving to come up with a framework, intelligible in the rigorous language of economics, that captures the essence of why someone might not want Exxon to drill in the Arctic National Wildlife Refuge, even if he or she has no intention of ever going there. And I am immensely grateful to the man for finding a way to quantify natural beauty for the benefit of, as he puts its in a footnote, "the spiritual descendants of John Muir, the present members of the Sierra Club, the Wilderness Society, National Wildlife Federation, Audubon Society and others to whom the loss of a species or the disfigurement of a scenic area causes acute distress and a sense of genuine relative impoverishment." It's good stuff.
But did society really need a new way to think about that "impoverishment." Conventional economic analysis may have considered the natural environment worthless before 1967, but that tells us more about economics than it does about the value of nature. After all, decades earlier, Teddy Roosevelt didn't need to crunch the numbers before making the case for conservation and signing legislation establishing national parks across the land.
As he wrote in "Bird Reserves at the Mouth of the Mississippi":
Birds should be saved because of utilitarian reasons; and, moreover, they should be saved because of reasons unconnected with any return in dollars and cents. A grove of giant redwoods or sequoias should be kept just as we keep a great and beautiful cathedral. The extermination of the passenger pigeon meant that mankind was just so much poorer; exactly as in the case of the destruction of the cathedral at Rheims.
Yes, you read that right -- a Republican President bemoaning the extinction of a species. Because we are poorer in spirit, and not in the pocketbook, in the aftermath. And yes, I understand that Krutilla was trying to figure out a way to monetize that quality, and I respect the cleverness with which he went about it. But sometimes the right answer is readily apparent, even without the brilliant logic.