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Terry Anderson Asks Who Washes A Rental Car?

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Environmental problems result from the tragedy of the commons. In order to solve those problems, free market environmentalists look toward the one place where the tragedy of the commons doesn’t happen – in markets with clearly defined, enforced, and tradeable property rights. Property rights give people the incentive to protect their assets, and environmental problems often come down to the fact no one has an incentive to conserve the environment.

This video’s audio is excerpted from Terry Anderson’s 2017 Hoover Institution Summer Policy Boot Camp lecture. 

The Hoover Institution’s Summer Policy Boot Camp an intensive, one-week residential immersion program in the essentials of today’s national and international United States policy for upperclassmen and recent graduates. To learn more, click here.

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Property rights provide incentives for people to act. 

I wrote a book for the Hoover Institution Press, co-authored with Laura Huggins. 

As we were writing it, Laura came up with a creative title that said "No One Washes a Rental Car."

And so I use that all the time to illustrate incentives matter and property rights make a difference. 

I have a rental car that I have for the few days that I’m here now, and I can assure you I will not, no matter how muddy it might get, I will not take it to the carwash and get it washed before I return it. 

I used to give this lecture and I’d always say, “No one washes a rental car.” Someone came up to me after the lecture and said, “You’re wrong.” “What do you mean?” 

They said, “Except Hertz.” That even adds better to the point. I don’t wash it because I don’t own it, but Hertz washes it because it does own it.

If we can make the environment an asset as the car is to Hertz, then people are more likely to take of them.If we make the environment as asset, as car is to Hertz, then people are more likely to take care of it.