Making Economic Sense
Making
Economic Sense
by Murray Rothbard
(Contents
by Publication Date)
Chapter 24
Government vs. Natural Resources
It is a common myth that the near-disappearance of
the whale and of various species of
fish was caused by "capitalist greed," which, in a short-sighted grab
for profits, despoiled the
natural resources, the geese that laid the golden eggs from which those
profits used to flow.
Hence, the call for government to step in and either seize the
ownership of these resources, or at
least to regulate strictly their use and development.
It is private enterprise, however, not government,
that we can rely on to take the long and
not the short view. For example, if a private investor or business firm
owns a natural resource,
say a forest, it knows that every tree cut down and sold for short-run
profits will have to be
balanced by a decline in the capital value of the forest remaining.
Every firm, then, must balance
short-run returns as against the loss of capital assets. Therefore,
private owners have every
economic incentive to be far-sighted, to replant trees for every tree
cut down, to increase the
productivity and to maintain the resource, etc. It is precisely
government--or firms allowed to
rent resources from government but not own them--whose every incentive
is to be short-run.
Since government bureaucrats control but do not own the resource
"owned" by government, they
have no incentive to maximize or even consider the long-run value of
the resource. Their every
incentive is to loot the resource as quickly as possible.
And, so, it should not be surprising that every
instance of "overuse" and destruction of a
natural resource has been caused, not by private property rights in
natural resources, but by
government. Destruction of the grass cover in the West in the late
19th-century was caused by the
Federal government's failure to recognize homesteading of land in
large-enough technological
units to be feasible. The 160-acre legal maximum for private
homesteading imposed during the
Civil War made sense for the wet agriculture of the East; but it made
no sense in the dry area of
the West, where no farm of less than one or two thousand acres was
feasible.
As a result, grassland and cattle ranches became
land owned by the federal government
but used by or leased to private firms. The private firms had no
incentive to develop the land
resource, since it could be invaded by other firms or revert to the
government. In fact, their
incentive was to use up the land resource quickly to destroy the grass
cover, because they were
prevented from owning it.
Water, rivers, parts of oceans, have been in far
worse shape than land, since private
individuals and firms have been almost universally prevented from
owning parts of that water,
from owning schools of fish, etc. In short, since homesteading private
property rights has
generally not been permitted in parts of the ocean, the oceans and
other water resources have
remained in a primitive state, much as land had been in the days before
private property in land
was permitted and recognized. Then, land was only in a
hunting-and-gathering stage, where
people were permitted to own or transform the land itself. Only private
ownership in the land
itself can permit the emergence of agriculture--the transformation and
cultivation of the land
itself--bringing about an enormous growth in productivity and increase
in everyone's standard of
living.
The world has accepted private agriculture, and the
marvelous fruits of such ownership
and cultivation. It is high time to expand the dominion of man to one
of the last frontiers on
earth: aquaculture. Already, private property rights are being
developed in water and ocean
resources, and we are just beginning to glimpse the wonders in store.
More and more, in oceans
and rivers, fish are being "farmed" instead of relying on random supply
by nature. Whereas only
three percent of all seafood produced in the United States in 1975 came
from fish-farms, this
proportion quadrupled to twelve percent by 1984.
In Buhl, Idaho, the Clear Spring Trout Company, a
fish-farm, has become the single
largest trout producer in the world, expanding its trout production
from 10 million pounds per
year in 1981 to 14 million pounds this year. Furthermore, Clear Springs
is not content to follow
nature blindly; as all farmers try to do, it improves on nature by
breeding better and more
productive trout. Thus, two years ago Clear Springs trout converted two
pounds of food
into one pound of edible flesh; Clear Springs scientists have developed
trout that will convert
only 1.3 pounds of food into one pound of flesh. And Clear Springs
researchers are in the process
of developing that long-desired paradise for consumers: a boneless
trout.
At this point, indeed, all rainbow trout sold
commercially in the United States are
produced in farms, as well as forty percent of the nation's oysters,
and ninety-five percent of
commercial catfish.
Aquaculture, the wave of the future, is already
here to stay, not only in fishery but also in
such activities as off-shore oil drilling and the mining of manganese
nodules on the ocean floor.
What aquaculture needs above all is the expansion of private property
rights and ownership to all
useful parts of the oceans and other water resources.
Fortunately, the Reagan Administration rejected the
Law of the Sea Treaty, which would
have permanently subjected the world's ocean resources to ownership and
control by a
world-government body under the aegis of the United Nations. With that
threat over, it is high
time to seize the opportunity to allow the expansion of private
property in one of its last frontiers.
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