As we mix oil with water in the Gulf, it might be a good time to consider the role of natural resources in a free marketplace. by Gene DeNardo
(libertarian)
Sunday, June 13, 2010
In the wake of the biggest environmental disaster in the history of our nation, it would be prudent to assess what is the best course to take when managing energy resources that lie beneath public lands. Obviously, they have been mismanaged, squandered and virtually given away to grow corporate profits, but is there a better way to handle nature's bounty?
We must first submit to the fact that large percentages of our resources are owned by the State. This tends to occur when governments are formed and they lay claim to vast sections of continents, disregarding any past claims to private or common property. The formation of the United States of America was a blatant example of land appropriation in the interest of the new state.
Once this confiscation occurs, the resource must be managed in a socialized manner. There just is no way around this fact. It can be "privatized", the land can either be deeded or "rented" to private parties, but absolutely nothing can be done without "socialization" of the land. Once government is involved in land ownership, the land in question has become social property by definition.
How it is socialized, depends on the interests on those who have the power to make or influence decisions within the particular government. The choice is always between whether the land is interpreted as "collective" property or common property.
In the case of the United States, the land and resource contained within it are viewed by our government as "collective" property. Collective property is fundamentally private property owned by the state. The state can decide exactly what it wants to do with the resource and land. If we study the history of land appropriation and resource allotment in America, we will see time and time again that our government appropriated the public lands and resources to enrich a select few. There has been no change of late in this policy, although obviously some of the appropriation is also taking place in our waters.
If our land was instead perceived as "common" property, how would a benevolent [if that is actually possible!] state manage the vast resource?
When it comes to the resource, it must first be recognized that land title does not in any way contribute to the creation or formation of our energy resources. Oil like land, is not "discovered". In the human scale of time, it has always been there. Title to land that harbors oil reserves in no way has any connection to the creation of oil itself.
In order to view our public resources as "common" land, land which is owned by all citizens and to be appropriated in a manner that benefits all rather than the few, we must eliminate "chance" from the equation. Individuals in their pursuit of private property cannot by "chance" discover oil and reap the "common" benefit for themselves. This again would be a "collective" decision to award the benefit of the resource randomly by a form of lottery dictated and enforced by the laws of the state. We can be certain that all common owners would never agree on this outcome.
This has nothing to do with reaping the reward from the effort it takes to "extract" or even "recognize" a resource. Individual effort should always be rewarded freely in a free society. If those activities have value, then that value should be freely exchanged without encumbrance by the state. But if we wish to allow the population to benefit from that which no individual has expended any effort in creating, the resource, then the chance recognition of an oil or gas deposit must be accounted for to its common owners.
The debate as to whether the resource should be "rented" or sold as private property is needless. It doesn't matter one bit. The only factor that needs to be metered is the withdrawal of the resource. Once the resource has become scarce and has a raw commodity price, then that basic cost should be awarded to those who own the resource. Dealing with the resource in this manner has absolutely no effect on all other rights of private property.
If we truly own this in common, then every penny of that royalty should be divided up by every citizen as the resource is withdrawn for use. This dividend should be entirely removed from the concept of "taxation". If the state wants the money back, they should have to ask for it. If this isn't the case, if the state instead collects the royalties and uses the proceeds for their own projects, then again the resource is "collectively" owned by the state. The land is not held in common.
This is the only just way to handle a common resource. It is also the way most in tune with a purely free market. It becomes a transaction between the common owners of the resource and those who wish to attain private ownership. A price is arrived at in which the owners are willing to turn over title to the resource and the buyers are willing to pay. The market will determine that cost, not energy policy, not corporate entitlement or crony capitalism, not national security.
If we prefer to continue to pursue the highway of collective ownership, then we merely need to stay the course. We can continue to allow the state to appropriate the resource to the privileged until the last drop of oil is withdrawn [or gushed into the seas]. Oil will go the way of the great stands of virgin timber that once crowded our land, allotted to fatten corporate pocketbooks; railroad barons morphed into timber barons due to their prime feeding location at the public trough.
The problem we face in enacting any solution similar to the one described above is that the state long ago laid claim to "collective" title of our public lands. This has been upheld time and time again in the courts and is unlikely to change. We are stuck between a rock and a hard place. We are already "privatizing" the public lands. Continuing the same policies will simply further corporate socialism. Allowing the state even greater collective control will attain the same goal and may not even be possible given the enormous amount of government control over the resource already present.
Recognizing the problem and being aware of the actual conditions rather than perceived conditions is a big step in the right direction. Rectifying the situation is more like a giant leap!
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