With that, I have a bone to pick with the economics of Dr. Seuss.
Warning: Spoiler alert for those of you who have never read or seen The Lorax.
At its core, The Lorax is a story of corporate greed and its affect on the environment. An initially well-meaning entrepreneur, the Once-ler, harvests the tufts of the Truffula trees to produce a thing that everyone needs, a Thneed. At the urging of Louis DePalma, er, The Lorax, who speaks for the tree, the Once-ler establishes a production process based on harvesting the Trufulla tufts without chopping the trees. Ultimately, due to the high opportunity cost of harvesting the tufts while leaving the trees intact, the Once-ler succumbs to greed, abandons principle and prior agreements with Frank Reynolds, er, The Lorax, and resorts to cutting the trees before harvesting the tufts. In the end, greed corrupts and the Once-ler ends up cutting all the Truffula trees, going bankrupt and leaving the forest bare.
A classic tragedy of the commons outcome...right?
Wrong.
Here's the problem from my inner environmental economist's, er dork, point of view. Dr. Seuss either 1) is intent on portraying the entrepreneurial Once-ler as a horrible businessman, or, 2) fails to understand the conditions necessary for the tragedy of the commons.
In The Lorax, the Once-ler drives himself out of business. In his efforts to make as much money as possible, he completely depletes a renewable resource. Now, on the surface this seems like it might be consistent with the overexploitation of potentially depletable resources, but if a potentially depletable resource like a forest, is harvested by a monopolist, then the monopolist has every incentive to harvest the resource sustainably--that is, maximinizing the present value of the stream of future profits. Assuming Truffula trees regrow, which they obviously do since the The Lorax ends with the planting of a single Truffula seed which eventually regenerates the forest, the Once-ler has no incentive to chop down all the trees. That's not profit maximizing.
You see, the tragedy of the commons occurs from competition combined with open access. The only incentive the Once-ler would have to chop down all the trees would be to beat a competitor to the profits of the trees being left in the ground. But nowhere in the The Lorax is there mention of any potential competitors swooping and racing for profit. If the Once-ler felt he had exclusive rights to the forest, he would have every incentive to maintain a renewable stand of Truffula trees. It might be a smaller stand than is socially optimal, but it wouldn't be zero.
So, either the Once-ler was a horrible businessman, Dr. Seuss was a bad economists, or I overanalyze kids movies.
And for some reason my kids failed to find my discussion of economics and the failings of Dr. Seuss interesting on the car ride home.
