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taken on tho doalrabillty orpolidoa aiTcctlng privaUi property 

 righla oflon turn on a caso-by-caao dolormination of the 

 incidonco of tho costa and the bonoflts, rather than on quca* 

 tiona of economic ofndcncy (that I0, whothcr the boncnta 

 outweigh tho costs) or conatitutional principles relating to 

 uncompensated, do facto conTiacation of private property. 

 Jlodistribulional consequences of moro restricUvo policies aro 

 examples of regulations that Richard Posncr has called "tho 

 theory of indirect taxation." Legal precedents established 

 denying tho property rights of timbcrland owners might well 

 bo applied to other classes of property. The efTidcncy with 

 which tho market economy operates is seriously eroded if tho 

 suspension of private property rights through regulation is 

 carried too far and might well become a doublo-odgod sword. 



Policy analysis that focuses on private property rights, 

 their abuao through comprehensive regulation, and tho im« 

 plications for the economic system of doing so ought properly 

 to bo carried out in formulating policy changes. The rationale 

 for public policy intervention into tho operation of tho timber 

 industry and the conditions under which intervention can be 

 expected to operate ofTidontly and in the public interest, need 

 to bo addressed. Tho prospect for a worsening of the situation 

 rather than an improvement is a distinct possibility that 

 cannot be ignored. _ -- - - - - _ . 



Tho set ofsodal institutions for making economicdedslons, 

 (relating to tho allocation of resources) is basically exhausted 

 at two, namely: Either politics and its central planning 

 mechanism, or thodecentralized private planningmechanism 

 inherent in tho market. This is not to say that tho market 

 economy cannot bear Bomo admixture of political regulation. 

 But there is a level of regulation beyond which tho essence of 

 morkct mechanics is supplanted by stalo central planning 

 rather than merely being adjusted or augmented for fur* 

 thcrance of some extra-market goal. 



It is sometimes alleged that the preference for ono or the 

 other of these polar alternatives is purely "political," and thus 

 is not a legitimate subject for analysis. However, recentevents 

 still unfolding in centrally-planned economies around the 

 world have provided evidence on tho performance of political* 

 economic planning relative to that of the market that can lead 

 to only ono clear and objccdyo conclusion: Sodalism doesn't 

 work. Of course, government regulation of tho economy in tho 



