[WordWhiz]

[ QUOTE ]

People and companies are often greedy, short sighted and lacking in broad skills. Hence, when McDonalds wants to buy beef, a rancher in the Amazon clear fells a large area of his land, to grow grass for cattle. The land turns worthless after a decade; but he doesn't care - he made his money. And he goes on to buy some other cheap land. That the land is much more profitable in the long term through managed timber extraction, forest plantations and other means, doesn't matter. He wants cash money NOW.

[/ QUOTE ]

There seems to be a simple solution. A greedy capitalist could buy the land off the farmer for a lump sum payment > what the farmer could earn, but < the total value of the land if it is profitably managed.

You seem to anticipate this objection in your next paragraph when you say that the free market only works when people act rationally, have complete information, etc. But the same objections apply to govt regulation, only moreso. In my example, all it takes is 1 greedy capitalist in the world to fix the problem. In a regulatory world, one weak link anywhere can lead to imperfect and even perverse outcomes. The idea that govt will act rationally and correctly is rarely "borne out in the real world, least of all in the places that most need protection."