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Native American Economics

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Native American.jpg When most people try to conjure an image of Indian reservations today, it tends to be a gloomy one. And while this isn't true of all reservations, it does remain true of many. On this week's EconTalk episode, host Russ Roberts welcomes back Terry Anderson to discuss how to unlock the wealth of Indian nations.

Anderson and Roberts provide an overview of the history of economic institutions among Native Americans from pre-European times. The innovation and entrepreneurial spirit described is fascinating, and the story of their deterioration equally so. Most know the record of the confiscation or "sale" of native lands, the horrific effects of European diseases on native populations, and so on. This episode tells another part of the story not as often told. For example, I was unaware of just how much land within large swathes of reservation land is owned by non-Indians. Anderson likens the pattern of ownership on reservations to Swiss cheese. The question of ownership is a complicated one, as Bryan Caplan discussed in this 2012 post. The discussion of why so many tribes have been unable to find ways of continuing economic prosperity is enlightening, as is Anderson's subtle claim that the answer to the Indians' economic woes is not simply getting the federal government out of their business. (See also this 2006 Feature Article by Fred McChesney on the complicated relationship between Indian casinos and the state.)

We hope you'll head over to EconTalk and listen to this week's episode or read through the highlights. Look for our Extra coming soon...We hope to hear from you!

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COMMENTS (3 to date)
Hazel Meade writes:

It occurred to me the other day that the problems of Native Americans on reservations are actually very similar to the problems of people in rural places everywhere in America. White people in Appalachia have high rates of drug and alcohol abuse and systemic poverty, so do Native Americans living on the reservation.

Couldn't the problem really be that there just isn't a lot of productive activity to be done in rural areas, whether it is on reservations on in small towns? Maybe the idea of having lots of Native Americans living on reservations far away from the cities just isn't a good idea from an economic standpoint.

Side note, it probably doesn't help that when the cities grow into a reservation that the land is often not treated like private property and the tribe ends up not being able to profit from rising land prices.

Hazel Meade writes:

Second side note:
What about the Amish?
There's a group of people that has actually gotten rather rich living in small rural communities. What is it that the Amish are doing differently, and/or are there any differences in the way government policy treats Amish land versus Indian reservations?

ColoComment writes:

For inspiration, I would direct tribes' attention to The Cherokee Nation businesses, headquartered in Oklahoma, and find out how the Cherokees built their business "empire."

One factor that may have helped, but is not so significant as to be a primary factor, is that they enjoy preferences in contracting with the federal government (known from personal experience.)

If the Cherokees can do this, so can any other tribe.

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