Fully a third of the land area of the United States is owned by the federal government. Although many Americans support the preservation of those lands, analysts on the left and the right agree that the federal government has done an exceedingly poor job of stewarding those resources. Indeed, the failure of socialism is as evident in the realm of resource economics as it is in other areas of the economy.

Four criteria should guide reform efforts: land should be allocated to the highest-valued use; transaction costs should be kept to a minimum; there must be broad participation in the divestiture process; and “squatters’ rights” should be protected. Unfortunately, the land reform proposals on the table today fail to meet some or all of those criteria.

Accordingly, we offer a blueprint for auctioning off all public lands over 20 to 40 years. Both environmental quality and economic efficiency would be enhanced by private rather than public ownership. Land would be auctioned not for dollars but for public land share certificates (analogous to no par value stock certificates) distributed equally to all Americans. Those certificates could be freely transferred at any time during the divestiture period and would not expire until after the final auction. Land would be partitioned into tracts or primary units, and corresponding to each tract would be a set of distinct, separable, elemental deed rights. Any individual with a documented claim to rights defined by those deeds, however, would be assigned the appropriate deed or deeds. Once divested, tract deed rights would be freely transferable.