My very first ever published book review.

Terry L. Anderson, Sovereign Nations or Reservations?: An Economic History of American Indians (San Francisco: Pacific Research Institute for Public Policy, 1995), xvii + 202 pages.ISBN: 0-036488-81-6.  Forward by Wilcomb E. Washburn. [reviewed for PACIFIC NORTHWEST QUARTERLY]

Falling neatly within the recent revival of interest in Indians as entrepreneurs and “middle grounders,” Anderson’s book considers the Indians as neither noble savages nor New-Age environmentalists.  Rather, he considers them fully human—religious, social, cultural, and economic beings.  Informed by the “institutional environment” theories of Douglass North and the public choice theories of Gordon Tullock and James Buchanan, Anderson, a professor of economics at Montana State University and Executive Director of the Political Economy Resource Center, attacks the current explanations for the penury prevalent on many Indian reservations.  Long before Europeans and Americans entered the scene, he argues, Indians throughout North America had developed cultural norms and customs that included effective property and individual rights specific to tribal needs and goals.  Anderson discusses these spontaneous and varied norms in such areas as land ownership and use, fishing and hunting rights, and personal property.  “Faced with the reality of scarcity,” Anderson argues, “Indians understood the importance of incentives and built their societies around institutions that encouraged good human and natural resource stewardship” (p. 43).  Native-American cultures that thrived, necessarily evolved.

The entrance of Europeans and Americans and their imposition of a oxymoronic combination of Lockean property rights and a paternalistic bureaucracy distorted and often destroyed the norms developed by individual tribes.  Anderson argues that these institutional impositions resulted in the extreme poverty pervasive on numerous Indian reservations.  “American Indians understood the importance of individual freedom and responsibility prior to their contact with Anglo-American government.”  Unfortunately, Anderson continues, with obvious irony, “the [Indian] institutions that promoted this were eroded as the federal government treated Indians as wards of the state” (p. xvi).

The federal bureaucracies cared more about their institutional survival than about ending Indian problems.  In fact, Anderson argues, bureaucrats have an incentive, then and today, to perpetuate problems rather than solve them; solving the problem could end the life of the bureaucracy.  Bureaucrats, Anderson writes, “are highly unlikely to sit back and watch their mission and jobs wither” (p. 106).  By the 1890s, after military conflict with the U.S. had ended, native peoples found themselves subjects of federal social engineering, their honed cultural norms thrown by the wayside.  This did not happen, of course, overnight.  Rather, the process was gradual but punctuated by certain government institutions and laws.  Anderson carefully recounts the history of U.S.-Indian policy, labeling several laws and agencies as particularly pernicious: the Dawes Act, the Indian Reorganization Act, Congress, and the Bureau of Indian Affairs.  All of them arrogantly and incorrectly assumed knowledge and right superior to those of the Indians.

While all of Anderson’s book is excellent, his best chapter is “The Political Economy of Indian-White Relations.”  In it, he offers an interesting view as to why federal policy turned from treaties to warfare.   First, technological advancements in the mid-nineteenth century, especially in communications, allowed the U.S. to coordinate effective attacks.  But, second, and more important, was the move after the Mexican and Civil Wars from polycentric militias to an increased and centralized military power.  Using public choice theory, Anderson explains: “A standing army meant full-time officers and, behind them, military bureaucrats, whose career and budgets were advanced by fighting wars” (p. 82).  Therefore, the greater concentration of military power, the greater the need to use it.  Anderson furthers his argument through a regression analysis, claiming that “the Mexican War caused a discontinuous increase of almost 11 battles per year, and the Civil War caused an increase of approximately 25 battles per year” (pp. 84-5).

In his conclusion, Anderson refuses to offer policy prescriptions, noting that the federal government is unlikely to solve any problems on reservations.  Instead, he argues that individual tribes should take the U.S. government’s classification of them as sovereign nations to the logical extreme.  Declaring themselves sovereign, they should break their dependency on the federal government and rediscover their tribal-specific cultural norms.

Bradley J. Birzer, Indiana University-Bloomington