Monday, January 30, 2006

Applying DeSoto to the Reservation

The Wall Street Journal has an opinion story on poverty on Indian reservations that might be of interest to fans of Hernando de Soto:

The main problem with Indian reservations isn't, as some argue, that they were established on worthless tracts of grassland. Consider the case of Buffalo County, S.D., which Census data reveal to be America's poorest county. Some 2,000 people live there. More than 30% of the homes are headed by women without husbands. The median household income is less than $13,000. The unemployment rate is sky high.

Just to the east of Buffalo County lies Jerauld County, which is similar in size and population. Yet only 6% of its homes are headed by women without husbands, the median household income is more than $30,000, and the unemployment rate hovers around 3%. The fundamental difference between these two counties is that the Crow Creek Indian Reservation occupies much of Buffalo County. The place is a pocket of poverty in a land of plenty.

Maybe we should give land back to the rez-dwellers, so that they may own private property the way other Americans do. Currently, the inability to put up land as collateral for personal mortgages and loans is a major obstacle to economic development. This problem is complicated by the fact that not all reservations have adopted uniform commercial codes or created court systems that are independent branches of tribal government -- the sorts of devices and institutions that give confidence to investors who might have the means to fund the small businesses that are the engines of rural economies.

Tribal ownership of the land is defended as the sine qua non of Indian sovereignty, which many activists regard as sacrosanct. It maintains the semifictional notion that the reservations are separate nations within the U.S. Although tribal members are American citizens, the reservations themselves are exempt from many federal and state laws. This is why so many Indian casinos have sprung up in areas that otherwise curb gambling.

Sovereignty also is understood as a form of cultural protectionism. Without it, goes the thinking, Indians eventually will follow the course of immigrant groups and assimilate into the great American melting pot. . . .

Yet the real tragedy is that reservations, as collectivist enclaves within a capitalist society, have beaten down their inhabitants with brute force rather than lifting them up with opportunity. . . .

Ben Barros

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