Economist: Tropicorp, which constantly seeks profitable investment opportunities, has been
buying and clearing sections of tropical forest for cattle ranching, although pastures newly
created there become useless for grazing after just a few years. The company has not gone
into rubber tapping, even though greater profits can be made from rubber tapping, which
leaves the forest intact. Thus, some environmentalists conclude that Tropicorp has not
acted wholly out of economic self-interest. However, these environmentalists are probably
wrong. The initial investment required for a successful rubber-tapping operation is larger
than that needed for a cattle ranch. Furthermore, there is a shortage of workers employable
in rubber-tapping operations, and finally, taxes are higher on profits from rubber tapping
than on profits from cattle ranching.
Thus, some environmentalists conclude that Tropicorp has not
acted wholly out of economic self-interest.
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