Sand heists and property rights in the Caribbean (Summer School)

13:05Noah Smith:A lot of wind. Woo! And then you just hear the windows started to burst, the doors started, pash, pash, you know? All over the island, just shells of buildings were left. No doors, no roofs. Open to the sky. Barbutans were totally exposed. And then they heard another hurricane was coming in three days. Hurricane Jose.

13:29Katie Long:And the prime minister, who, remember, lives in Antigua, he doesn't really come to Barbuda. Antigans rarely do. He does this kind of dramatic thing. He gets a private helicopter, takes himself and a cameraman to Barbuda, lands, jumps on the bed of a pickup truck, and makes a big announcement. The entire country has been decimated. I have never seen anything like this before.

13:51Noah Smith:He orders a mandatory evacuation of the island.

13:54Katie Long:Barbudans were sent to shelters. Some went with family in Antigua. But actually, the second hurricane never hit. It ended up turning out to sea.

14:03Noah Smith:So everyone is like, OK, we're going to go back now. The prime minister calls all Barbudans to a meeting at some university in Antigua. Like every Barbudan come to this meeting. A little weird. The prime minister, the guy who flew in on a helicopter, he's still the prime minister today, Gaston Brown. He tells Barbudans, you know that lot you've already been living on for free all these years? New plan. We're going to sell it to you for$1. Eastern Caribbean, about 37 cents U.S. And now, now you'll have a title. And titles open up all these opportunities. You can take a title to a bank.

14:39Katie Long:If the individual is going to take responsibility and would want to get a mortgage or short-term loan to rebuild or to repair his or her home, he would require ownership. So it was a sensible thing to do to help them to unlock capital so that they could rebuild.

14:56Noah Smith:Meaning that they could go to the bank with their title in their hands and say, use my property value as collateral to give me a loan. For$1. For$1.

15:05Katie Long:Which sounds a little strange to many Barbudans. They're like, hold on, your rebuilding plan is to sell us the land we already own for$1 each?

15:15Noah Smith:And he's like, yeah, because this whole communal land thing, I think it's just a big misunderstanding, a myth.

15:25Katie Long:In the 1700s, 1800s, Barbudans carrying that type of myth, one could empathize with them as individuals who were illiterate. Today, in the 21st century, it is unconscionable, inconceivable, that any educated person could believe in that myth today. It is a form of ignorance that has to be broken.

15:52Noah Smith:You say that Barbudans have been thinking that they own the land and that it is a myth that they own the land. But there is a law that Parliament, the Antiguan and Barbudan government passed that says Barbudans own the land.

16:04Katie Long:It was a law that violated the constitution of the country and a law that had sought to give credence to a longstanding myth. Barbudians are challenging this whole thing in court. It'll likely go to their version of the Supreme Court. But for now, under the prime minister's new plan, communal land is out, property titles are in. He says now Barbudians can have actual legally binding titles to whatever plot of land they had been living on.

16:30Noah Smith:But just that plot, though. The rest of the island, which is about 90 % of the island, that'd be open to foreign investment and development. The prime minister wants Barbuda to become a big vacation spot. And at least in Barbuda, his plan is not super popular.

16:46Katie Long:Barbudans are not stupid. This is John Mussington. He lives in Barbuda. And let me tell you why. As a Barbudan, I own 62 square miles. Remember, the prime minister is only offering Barbudans ownership over the little piece of Barbuda where their homes are built.

17:02Noah Smith:And John, John does not live on some prime beachfront property. No one in Barbuda does. They're like, why would we build a house on a beach? Beaches are dangerous. They all live on one strip in the middle of the island. So it's not like hotel developers are going to be super interested in their plots of land.

17:20Katie Long:So John says it feels like the prime minister is stealing the island. 62 square miles is not just the physical land. It is the resources which are sustained by that 62 square miles. The farming resources, the animal resources, the real estate value which increases over time, the food security, the clean air. If every single Barbudan accepted that offer in one stroke of the pen, we would have converted our ownership of 62 square miles to one little itsy-bitsy piece of that. And Natalia, she says she actually would like to see Barbuda developed more, but she thinks people on the island should have a say over what projects get approved, the way it's always been.

18:09We just want it to be just like what it is.

18:13Noah Smith:Just pink and peach and mint greenhouses and mango trees and pomegranate trees and watermelon and flowers. Yes. Okay. I can see why you would want that. Just us.

18:32Katie Long:That was Scott Gurian and Sarah Gonzalez from the year 2020. Here in 2026, there is still a legal fight over the land in Barbuda. One court ruled that the residents there have limited property rights, not communal ownership, and a new law allows for the development of resorts on the island. But the High Court is still considering an environmental challenge by Barbuda residents over a new private development. Let's get our professor back in here, Damien King. Hey, Damien. Hi, Robert. Why is the debate on Barbuda about land so important to the economics world? I can see how excited you are to talk about this.

19:12Katie Long:If you were to ask me what is the single most important institution that underpins the tremendous growth in prosperity through the history of mankind, my answer would be the invention of the idea of property rights. Once property rights are invented, and I think this was probably 5 ,000 years ago in Mesopotamia, Then for the first time, people have an incentive to save a part of their current product, to invest in the property, and then you get the miracle of compounding. You invest a little in the capacity of your productive resource, then you produce more, then you reinvest in it again, and that underlies the exponential growth of property.

20:04Katie Long:That all makes sense. But growth means wealth. And there's a question in the story of who gets the wealth eventually, who benefits the most. The prime minister argues that if residents have title to the land, then banks will lend them money to improve the land. But some of these residents have no income. They have no assets. It's not guaranteed that banks will want to let them borrow money. So it seems like land ownership alone can't guarantee prosperity. No, it's not a sufficient condition. Other factors have to be in place. other than private property rights. So you need to have a secure environment so that whatever you earn from your economic activity, you have a reason to believe it is safe.

20:49Katie Long:That is not going to come and be stolen. In particular, you need to know that it's not going to be stolen by the government itself. So as much as property rights are an important institution, there are other institutions that need to be in place for an economy to invest and grow. I guess it's also a question about whether the people themselves can form those institutions. There have been successful rural land cooperatives around the world in places like Spain, Portugal, Mexico, where land is shared in common among the farmers. And Barbudians have figured out how to avoid the tragedy of the commons where people abuse the collective land.

21:32Katie Long:Why isn't that system enough on Barbuda? There are institutions and practices which Barbuda engaged in, which eliminates one aspect of the tragedy of the commons, which is the main aspect, which is just over-exploitation of a common resource. But it doesn't solve the problem of there being no incentive to invest in the common property, to put up a costly investment that will have a high return. Because it is common property, then there is no way for the investor to keep the returns to themselves. Listening to the story reminded me of an interesting economic concept called path dependence, which is that sometimes the accidents of history can last not just for generations, but for centuries.

22:22Katie Long:And in the case of this particular story, the way the island was ignored for so long, the history of slavery on the island and the people who brought them there, those historical facts have lived all the way up to this very moment. I feel like you see this accident of history issue pop up a lot in the Caribbean. You know, that's actually a great point. It's a great example of path dependence because there is no other island on which they have a history of individual private property that are considering changing to communal land ownership. So it does make the point that where you start out kind of determines down the road what your interests are and what you want to maintain.

23:05Katie Long:Damien, I've been reporting on economics a long time, so I do understand the private property arguments. I understand what the prime minister is saying. But I can't help but root for the Barbudians to pull this off. Like, it is a tiny island. What is the harm in letting Barbudians run it like they want to run it? The people don't know what's good for them. Sounds like you should run for political office in Antigua. I don't think the people don't know what's good for them is a good political slogan. Okay. Thank you. Thank you, but I won't. Up next, a mystery, a crime thriller complete with a hard-nosed detective, a chase scene, and a Planet Money host seeking the truth that no one wants to hear.

23:49Katie Long:The game is afoot after the break.

23:57Katie Long:Support for this podcast and for Planet Money Summer School comes from Capital One. With no fees or minimums on checking accounts, it's no wonder the Capital One Bank Guy is passionate about banking with Capital One. If he were here, he wouldn't just tell you about no fees or minimums. He'd also talk about how Capital One cafes are open seven days a week to handle your banking needs. It's pretty much all he talks about, in a good way. What's in your wallet? Terms apply. See CapitalOne.com slash bank. Capital One N-A. Member FDIC. Support for this podcast and the following message come from Square.

24:32Katie Long:Whether you're selling lattes, cutting hair, detailing cars, or running a design studio, Square helps you run your business without running yourself into the ground. With Square, you get all the tools to run your business with none of the contracts or complexity. And why wait? Right now, you can get up to$200 off Square hardware at square.com slash go slash money. That's S-Q-U-A-R-E dot com slash G-O slash money. Run your business smarter with Square. Get started today. Hello, class. It is Jamaica time, which does not mean we're doing a story on the economics of rum and reggae. That would be too obvious.

25:13Katie Long:This is an elite educational institution. We are going to talk about the allocation of scarce resources. And yes, okay, the resource is a beautiful white sand beach overlooking azure waters, and I am not out on the rum part. But first, our professor Damien King is here. What should our students keep in mind as they listen to this mysterious case study about sand? They should think about any resource that is large or vast, like the rivers, the seas, the oceans, the air, that is difficult to police. How do you police the unpoliceable? I like it. And one other thing to keep in mind as you listen to this story, sand is very valuable.

26:00Katie Long:Not just for tourist beaches, but as construction material to make concrete, to make glass. Modern Life Needs Sand. This story first aired in 2018, and it was hosted by Karen Duffin, and once again, with the difficult beach assignment, Sarah Gonzalez.

26:20Noah Smith:There's this rustic little beach town in northern Jamaica. One reggae bar on the beach with a tin roof. When the tropical rain comes out of nowhere, everyone runs into this bar. A self-described Rasta man is in there singing reggae, calling everyone girlfriend.

26:42Noah Smith:It's not the kind of beach town that tourists flock to. This is a local beach. Okay, it's called Silver Sands. And it's because it's white glyphosate sand against blue waters. Sandra James loves this water. Oh, live on the beach. What a girl. The waves just calms you. But Sandra feels protective, very specifically of that white glistening sand. Because everyone seems to want it. It happens a lot in this area. Sand theft. Sand theft. A lot in this area. You can hear the trucks at night moving with sand. In Jamaica, sand is valuable. So valuable that a few years ago, just down the road, an entire beach was stolen.

27:38Noah Smith:There's a lawyer in Kingston, Michael Hilton, real quiet talker, born and raised in Jamaica. Michael was running what is essentially the Justice Department in Jamaica. And then he decided to go into private practice. And in 2008, he gets a call. A beach has been stolen, taken in the dead of the night, hauled out in dump trucks.

28:02Katie Long:So there were witnesses who saw trucks in the night moving sand, but who could not see where the sand was being taken.

28:09Noah Smith:And Michael Hilton, his job was to find this missing sand. The challenge would be to prove where the sand went, who took it, and who benefited from it. So Michael heads to the scene of the crime, drives down a rocky, overgrown dirt road, and peeking out through the beautiful mango trees is that aqua-blue Caribbean sea. And then he sees it.

28:37Katie Long:There were holes that were probably 10 feet deep.

28:44Noah Smith:Oh, there were holes? Well, there were trenches. Deep trenches. Like if someone went down one of these, you probably would not be able to see them. Digging trenches like this would require some kind of excavator type of equipment. The amount that was stolen was not something that you could just hide in some warehouse. It was way too much sand. So Michael thinks there has to be a huge just pile of sand somewhere on this island. It must have been spread out somewhere. And where would sand be spread out? And who has the money to buy a million dollars worth of sand? Beachfront Resorts. They become Michael's primary suspects.

29:25Noah Smith:Michael sends one of the owners of the stolen beach, a sand scientist and a justice of the peace, on a mission, up on a helicopter. And this scrappy, eagle-eyed sand squad, they notice something at two particular hotels. These hotels looked like they were built on beaches that had brown sand. And it kind of looked like white sand had been sprinkled over the brown sand. The pilot lands the helicopter on the border of one of these private resorts. The sand scientist runs out, collects some sand samples, and then runs back onto the helicopter. And while they were flying around in helicopters, a guy from the United Nations was wandering around the beaches.

30:09Noah Smith:Hello, can you hear us over there?

30:11Katie Long:Yes, absolutely. Hello, Sarah.

30:13Noah Smith:This is Pascal.

30:14Katie Long:I'm Pascal Peduzzi. I'm from Switzerland.

30:17Noah Smith:Pascal is with the environmental arm of the United Nations. He happened to be in Jamaica at the time doing research for the UN, talking to the locals.

30:26Katie Long:In one village, people told us that some people came overnight, the guns and trucks, and they stole the sand. They stole the beach away overnight.

30:35Noah Smith:And he discovers that this sand theft in Jamaica is just one tiny part of a huge and growing sand shortage. And a ton of money is at stake.

30:47Katie Long:The sand business is big, at a very minimum$250 billion per year.

30:54Noah Smith:Most sand is actually just bought and sold legally. But humans are extracting sand faster than the Earth can create sand because it takes forever to make. So Pascal takes all of his research and he publishes a report, calls it sand, rarer than one thinks.

31:11Katie Long:And we think it's just infinite. And it's not.

31:14Noah Smith:And where sand is running out, things are getting violent.

31:18Katie Long:And in fact, people have been killed in Mexico and India and probably in many other areas just for sand destruction.

31:24Noah Smith:And Pascal says the biggest sand importer in the world these days is Singapore. They have imported hundreds of millions of tons of sand. Singapore is, in terms of land mass, they don't have a whole, whole lot. Where do they put their sand?

31:38Katie Long:Oh, they do sea reclamation. So they take, they expand their territory by placing sand in the sea.

31:44Noah Smith:Singapore dumps all of the sand that it buys onto the edges of the country to make Singapore bigger. You can see this from satellite images. Singapore used to get all of its sand from Vietnam, Thailand and Indonesia. But then Vietnam, Thailand and Indonesia started shrinking. They were literally selling their countries to Singapore. The UN says around 24 Indonesian islands disappeared. They no longer exist because all of their sand went to Singapore. Now, Pascal, he did eventually leave Jamaica. But Michael, he would be on the trail of the missing sand for years. Michael needs to prove that the white sand grains they saw from the helicopter and snuck off with came from his beach.

32:34Noah Smith:He hires sedimentologists and marine geologists to run forensics on these tiny white sand grains. And Jamaican police are also on the sand forensic beat. They're knocking on these hotel doors like, excuse me, we have a warrant to collect some sand samples. There was a whole criminal case. Who would have brought the criminal case? The government, the crown, yes. The crown. As in Queen Elizabeth.

33:00Katie Long:Gosh, she's the queen of Jamaica.

33:02Noah Smith:But is she really? It's a long story.

33:04Katie Long:Long story.

33:06Noah Smith:Jamaica is part of the Commonwealth, the old British colonies, and nobody messes with the monarch sand.

33:13Katie Long:Because you don't steal beaches from parts of anybody's country.

33:17Noah Smith:That's Mark Shields. He was the head of the National Police Force in Jamaica during this sand heist. Mark is thinking, how many people were involved in this scheme? And how high did this crime go up? There were allegations that police were escorting these dump trucks, helping them make a clean getaway.

33:38Katie Long:Quite clearly, the police would not, under normal circumstances, be escorting sand from one location to another.

33:46Noah Smith:Years into this case, the Crown says that their main witness starts getting death threats. Real and specific intimidation, they said. The witness no longer wants to testify, and the Crown is forced to drop the charges.

34:01Katie Long:It was clearly quite a conspiracy, and some of the people that will be involved in this will be quite influential.

34:08Noah Smith:So in the end, the hotel's just settled with the beach owners without admitting guilt. Jamaica's great sand heist, so big the evidence could be seen from a helicopter, whoever did it got away with it.

34:22Katie Long:My disappointment in this case is how it ended. There's a part of me that would almost have preferred to have lost the case than to not have gotten over it. So it's not my favorite place.

34:35Noah Smith:And since that theft and the U.N. report, the problem has just gotten worse. In India alone, the U.N. is aware of thousands of illegal sand mining sites. When I was in Jamaica, I went to one of the resorts that was accused of buying that stolen sand. Pools and bars and rum everywhere. Catamarans and tiki huts on stilts in the middle of the water. and, of course, a big, expansive, white sand beach. And everyone I spoke to for this story told me the same thing. Wherever this hotel got that white sand from all those years ago, that sand is long gone.

35:20Katie Long:That was Sarah Gonzalez and Karen Duffin from 2018. After the break, we'll talk about a possible solution to the problem of sand theft, or the tourists aren't going to like it.

35:37Katie Long:Support for this podcast and for Planet Money Summer School comes from Capital One. With no fees or minimums on checking accounts, it's no wonder the Capital One bank guy is passionate about banking with Capital One. If he were here, he wouldn't just tell you about no fees or minimums. He'd also talk about how Capital One cafes are open seven days a week to handle your banking needs. It's pretty much all he talks about, in a good way. What's in your wallet? Terms apply. See CapitalOne.com slash bank. Capital One N-A. Member FDIC. We are back with our Jamaican economist, Damian King. Thanks for showing us around and for being our professor today.

36:16Katie Long:Happy to be here and happy to be discussing lessons that the Caribbean can teach the rest of the world. One of the reasons I love this story is, in my mind, sand is infinite. We say something is as numerous as the grains of sand, but of course it's not infinite. The right sand in the right place is actually a scarce resource. And once you're dealing with scarce resources, then you are dealing with economics. In economics, scarce doesn't mean that there is not a lot of it. It just means that there are more uses for it than the amount that exists, just that the amount is finite. The big concept here is it is inherently difficult to protect numerous or vast public access spaces, rivers, oceans, air, coastlines.

37:05Katie Long:It's difficult even in countries that have great public bureaucratic capacity and have lots of money. It's even worse in a small island in which the government's capacity is weak and poor simply because they don't have enough people and they don't have enough money. There's an economic term we've gone over before for this kind of situation, and that is a negative externality, which is something bad that happens that is not accounted for in the cost of a good. So when I go to a beautiful resort in Jamaica, I pay a lot for the rum and the food and the towels. But I am not paying for the environmental damage that could have happened in the public beach next door.

37:50Katie Long:Very much so. And I'm going to remind you of this the next time you're on that beach and I happen to walk by. You know very well there are guards to keep rogue economists from walking onto the beach. I see. But why not raise the taxes on the tourists and on the resorts to fund a police force to protect the natural resources? That would work. You know, when 10 to 20 percent of your GDP is the tourism sector, then the tourism interests are going to say, well, I'm not going to build a hotel. and they can and do hold governments to ransom. And the point is that this is not sort of blaming the investors in hotels.

38:38The government itself is not going to be willing

38:41Katie Long:to make that step because the governments tend to be desperate to get investment. And so they are really not making that calculus. So Damien, we are asking all of our professors this season to give us a lesson we can take back with us to the United States. So is there anything that Jamaica does economically that we should steal here in the United States? I'm kind of sorry that you added economically, because I was going to say, you know, that with a hundredth of your population and one thousandth of your GDP, we produce world-beating sprinters. Like in the Olympics, like Usain Bolt. Yes, Usain Bolt and Shelley and Fraser Price.

39:23Katie Long:All right, but economically, what can a country like the U.S. learn from the Caribbean as a whole? When you look at the different Caribbean islands, they have pursued different international trade policies over the years. And all of the countries that had high import tariffs are the ones that have done worse in the Caribbean over the last half a century. So that might be a lesson for the United States in the effect of import tariffs, even though they are going to have a smaller effect and take a longer time to be manifest. So you're saying the lesson to take from the Caribbean is the value of free trade?

40:02Katie Long:Yes. Our students will have to pass a test on the concepts we have discussed today. So we'd like to review them here at the end of the show. We talked about the perils of being a small, open economy, and one of those dangers is vulnerability. What is that? Vulnerability refers to the fact that developments outside of the control of the residents of that country greatly affect their economic fortunes. And that can be hurricanes or the price of oil. A small economy is like a cork bobbing in the vast ocean. Professor, can you, in one sentence, just one, remind us of the importance of property rights?

40:42Katie Long:Property rights incentivizes individual investment, which increases wealth. Excellent. And we talked a bit about how Barbuda ended up without private property, and that was path dependence. Path dependence is the idea that where a system ends up is dependent on your starting point. Damien King is the executive director of the Caribbean Policy Research Institute, a think tank in Jamaica, and a former professor of economics, I should say, and our professor today. Thank you so much, Damien, for doing this. We appreciate it. It's been a joy to become a part of the Planet Money Academy. We'll send you a fake diploma, please.

41:30Katie Long:If you want more stories about how a government can influence the economy of a small island nation, I recommend page 51 of the new Planet Money book where they talk about Taiwan. Whole different experience, great new lessons. That's Planet Money, a guide to the economic forces that shape your life. And hey, if you've ever lived in a country with some sort of smart economic idea that the rest of the world should know about, please tell us and you might be featured in our graduation episode. Get in touch now. Email us at planetmoney at npr.org and put summer school in the subject. Summer School is produced by Sophia Polisakar and edited by Alex Goldmark.

42:10Katie Long:It is fact-checked by Leila Doss. This show is engineered by An Lee Huang. I'm Robert Smith, and, you know, when I'm not hosting Summer School and stuck on the tarmac in an airplane, I'm also the host of the new podcast, Business History, a show about the history of business. This is NPR. Thanks for listening.

42:32Katie Long:Ladies and gentlemen of Planet Money Summer School World Tour, I'm sure the jet lag at this point is really setting in,

42:38Noah Smith:so make sure and get your naps in because we are not done. Next up on World Tour, we'll be heading south to Argentina to learn about what happens when inflation goes off the rails. Next up on Planet Money Summer School World Tour, next Wednesday.

42:53Katie Long:This message comes from Insperity, providing HR services and technology from payroll, benefits, and HR compliance to talent development. Learn more at insperity.com slash HR matters.

43:07Noah Smith:This message comes from Allianz Travel Insurance. Making travel memories is better with peace of mind. Protect as many scrapbook-worthy trips as you want to take this year with an all-trips annual plan. Learn more at allianztravelinsurance.com. This message comes from Working Forest's initiative. Keeping a working forest growing takes a massive commitment. That's why working forest professionals plant over 1 billion seedlings annually in the U.S., ensuring more trees are planted than harvested. But it takes more than planting to sustain these ecosystems. It means caring for everything in the forest, from clean water to thriving wildlife.

43:45Noah Smith:Because when forests are taken care of, they'll thrive for generations. Learn more at WorkingForestsInitiative.com.