What do you imagine when you think about a Native American reservation? Do you see sweeping vistas of the desert or plains? Glittering casinos? Or substandard housing, stray dogs, and young men milling about? In this episode, host Russ Roberts welcomes back Terry Anderson of the Property and Environment Research Center (PERC), who describes most reservations today as “islands of poverty in a sea of wealth.”


The conversation covers what life was like for Native Americans pre-Europeans through today, raising lots of interesting questions about the changing nature of Indian institutions and the effects of current policy on reservation life today. What did you learn from this week’s episode, and what questions linger in your mind?

1. Anderson insists that Native Americans had efficient and innovative economic institutions prior to the arrival of the Europeans, after which worsening relations prompted the Indians to adopt different strategies with the Europeans. When and why did this change? Put another way, why did Native Americans switch from “trade” to “raid?”2. In discussing some of the measures that have been taken in recent decades to try to improve the economic prospects of those living on reservations, Anderson notes the introduction of Indian colleges, which he says have had little effect. This raises the question: What do you do with human capital once you have it? How would you answer this in the context of Native Americans and/or persons from other poverty-stricken areas?

3. In his introduction to this week’s conversation, Roberts notes that Anderson is one of the founders of the free market environmentalism movement. What principles from the FME movement bear on the conditions facing reservations today? How might these principles be applied to better these conditions?

4. While Anderson is clear the he would like to see the federal government with less control over Indian nations, he also suggests that the reality is not that simple. What sort of changes need to occur to make reservations and tribal governments efficient and prosperous?