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Brooks Wilson's Economics Blog: A B Western with a Great Economic Foundation

Tuesday, June 7, 2011

A B Western with a Great Economic Foundation

Feeling nostalgic for old cowboy movies I watched every Saturday morning when I was a lad, I downloaded a Gene Autry movie, “Cow Town” through Netflix.  In addition to a few songs, horse chases and shootouts, it had a very plausible economic foundation, a rare event in any movie let alone a B Western.

The story was written by Gerald Geraghty in 1950 and explains how barbed wire changed the West.  The movie opens with a documentary description of hardships faced by cattlemen raising their herds on the open range: lightning caused stampedes, hard winters, and rustling.  The description could have been improved by explaining how the common range was a “common resource” and was overgrazed, a problem that economists named the “tragedy of the commons.”The story pitted open range cattlemen against those who wished to control it by fencing property with barbed wire.  Closed range cattlemen believed that barbed wire fences would reduce operating costs and improve cattle genetics.  Cow hands, who were after all an operating cost, feared that the innovation would reduce employment opportunities, opposed closing the range.  Finally, two sheepherders attempted to fan the animosity between the three other groups into open warfare to push down land prices so they could make a killing on the market and turn cattle country into sheep country. 

Two scenes exemplified problems with ill defined property rights and resource allocation.  In one scene, open range cattlemen complain to the sheriff about fences blocking roads, the delivery of the mail and injuring cattle.  The sheriff asks for time to solve the problem stating that their is no law to covering their complaints.  These cattlemen were asking for enforcement of “range rights” or unwritten but respected rules governing behavior on the frontier.  Another scene anticipates the Coase theorem: if private parties can bargain without costs, they can solve problems with externalities (fences) and allocate resources efficiently.  In the scene, Autry confronts a neighbor who cut his fence. She said she had the right to use the road to get to town.  He replies that he would have built a gate had she asked.

1 comment:

  1. Morgan Heeke10/7/11 11:29 AM

    I could see how the invention of barbed wire significantly improved the cattle herding in the West. There is so much open land and such a large number of cattle that one could easily wander off and there would go your investment. It would lessen the chances of losing your investment and reduce your need for other ranch hands. The open land is a common resource and the overuse of a common resource is a Tragedy of Commons. Those opposed to the wire fence would ask for range rights. It is up to the ranch hand if they would like to use the wire, but it is not right for those who are opposed to dismantle it either.