In less than 10 years near the end of the 19th century, the US buffalo population fell from up to 15 million to fewer than 100. This near extinction is directly linked to much of the early environmental movement in America, as it was directly witnessed by Roosevelt and Muir, among others. Historians have long asked why the slaughter was so punctuated. Was it a result of the railroad easing access? Indian hunts made easier with the gun? A US government policy aimed at starving out troublesome tribes? In a new AER, Taylor presents quite interesting cliometric evidence that another source is primarily responsible: a technological development on the other side of the Atlantic.
Until 1870, buffalo were hunted mainly for meat or, in the case of the Northern Herd during winter, their heavy robes. The meat rotted relatively quickly and was difficult to transport – a fact you know if you’ve played the old computer game Oregon Trail. There was no simple way to tan the hides and create leather. But sometime around 1870 or ’71, German and English inventors discovered how to tan buffalo. This discovery made the shooting of buffalo much more lucrative. Ox leather was also roughly a substitute for buffalo leather, so even a massive slaughter of buffalo, which represented at the peak only a small percentage of world hides, would have had little impact on the price of hides. Following the invention, kills of buffalo and exports to England and Germany of buffalo hides – a series constructed using a nifty set of assumptions, actually – soared. The Southern Herd was totally depleted by 1879. In 1881, following the defeat of the Sioux, relatively safe hunting was again possible among the (smaller) Northern Herd, which itself was depleted within a couple years.
Evidence is provided that this increase in exports was related to the tanning technology, and was not simply the result of a US supply or a different European demand shock. The relative share of hides in Europe that came from the US soared; this was not true of Canada and other countries, which did not have access to the tanning knowledge. Canada saw no large increase in US-exported hides during the buffalo slaughter. The raw number of exports, plus reasonable estimates of wastage, roughly matches the size of the slaughter.
The other stories about buffalo extinction are less compelling. No direct evidence has ever been found of a US policy to exterminate the buffalo, though there are certainly instances of individuals or groups from the Army killing wantonly. The railroad arrived in the region of the Southern Herd a few years before the slaughter began; the large increase in buffalo killed was only seen after the tanning technology was invented.
What does this tell us about today? It is another example of potential harms when a country joins the international market. A lack of property rights plus demand for exports can be devastating to newly integrating countries. This suggests that development plans and loosening of trade restriction may, in some cases, indeed best be linked with environmental regulation – the buffalo slaughter, Taylor argues, would not have occurred as it did if the US had been in a state of technological autarky.
http://works.bepress.com/cgi/viewcontent.cgi?article=1000&context=taylor (2007 Working Paper. Final version in December 2011 AER. I see this paper listed as an R&R at AER as far back as 2008 – yet more evidence of the utterly ridiculous publication lags in economics. Are journal editors aware that when lags reach 4 or 5 years, to say nothing of longer ones, the journal itself is in danger of becoming useless? Or that editors in other fields, and some in economics like the J. Urban E., seem to have problem running peer review and revision in well under a year?)
I’m not going to check the paper but I am puzzled by your ending of the post … it must take a pretty huge preference for buffalos to reach the conclusion that trade is not beneficial… no mention of the other benefits from trading buffalos for money? Where are there externalities from buffalos? Plus, despite the nice story, you go to south dakota and see pleny of buffalos!
It’s not that trade itself is bad, but that environmental regs may be necessary at the same time as trade as expanded even if the country has few environmental worries while in autarky.
And though there are a decent number of bison today, this is the result of an extraordinary effort at the government level plus some completely lucky reserves of buffalo held on private land in the 1880s.