Freeman

ARTICLE

Protecting Precious Resources

The Profit Motive Makes Natural Resources Secure

MARCH 01, 2002 by SCOTT MCPHERSON

Filed Under : Collectivism

“If our progress is to continue, it is important that we do not forget the things which have brought us thus far.”

-HENRY GRADY WEAVER, The Mainspring of Human Progress

Ever since President George W. Bush proposed opening up parts of the federally owned Arctic National Wildlife Refuge (ANWR) for drilling, the debate has raged over America’s energy policies and the best way to guarantee independence from foreign energy, particularly oil, sources. In battles typical of American politics, these arguments have never focused on the proper role of government and how best to ensure a free society in an increasingly interdependent world. Instead the argument has revolved around the popular collectivist notion of community ownership.

A common refrain these days is that government, especially the federal government, has a duty to act as a “steward” over “our” natural resources. This is often stated in very explicit terms–that woodlands, oil-rich lands, and natural-gas deposits, among other things, are “national” property, requiring state ownership and, of course, bureaucratic control. Whenever the issue of natural resources is raised, it is accepted as given that elected officials know better than entrepreneurs how to provide for the needs of the American people. Such thinking is dangerous not only because it is wrong, but also because it feeds the growing trend in mainstream thinking that the products of the marketplace are Americans’ by right.

The most common mistake in this discussion is the assumption that because a specific commodity happens to lie within the political borders of a country, it is a “national” good. For example, because ANWR is in the state of Alaska, anything of value there belongs collectively to the American people–which means, in effect, that it belongs to the federal government. The question to ask is, should government own resources? Do we want it dictating the terms by which certain commodities will be released into the economy, and is this the best way of securing their long-term use?

To many people, the answer is categorically yes. Who, they ask, is going to assure the continued provision of oil, gasoline, or wood, if private interests are allowed to exploit them for profit. If left to the free market, they believe, there simply wouldn’t be any of these stocks left, as more and more greedy businessmen pulled them from the ground to offer up to a consumption-mad populace.

Critics of the free market want things both ways in this respect. On the one hand, it is presumed that if private companies were allowed to own “vital” resources, they would rush to flood the market in the hopes of quick gains and deplete the supply. However, it is by increasing supply that prices are caused to decline, not rise. Conversely, others fear that these resources would be hoarded and kept off the market for the opposite reason–to raise the price. That hardly jibes with fears of quick exhaustion.

It is precisely because of the profit motive that precious resources would be the most secure in private hands. If someone owns something of value, the last thing he wants to do is anything that would depreciate his investment. Woodland is only valuable because of the large number of trees on it, which is why timber companies not beholden to government replant their forests and avoid clear cutting. Natural-gas deposits, too, are no good once they are gone. After last year’s huge increase in the cost of natural gas, providers didn’t sit on their laurels and allow the price to continue to skyrocket. They invested heavily in finding more.

Government, by contrast, has no real understanding of the usefulness and importance of what it owns, exactly because it never has to face any economic consequences for its bad business decisions.

What Is Precious?

More important, those who call for government control of certain commodities live by an arbitrary definition of what is considered “precious.” If only government can be trusted with property deemed of vital importance to our “national well-being,” then a whole host of things should be added to the list of “national resources”–not the least of which are our automobiles, farms, supermarkets, and large manufacturers. No one but the most hardcore Marxist would suggest that these life-affirming goods and services be nationalized, yet a piece of frozen real estate in the Arctic Circle is “too important” to be left to the “instability” of the free market.

The longer this debate goes on, the more it sounds like Americans view their conveniences as a God-given right. The Declaration of Independence mentioned life, liberty, and the pursuit of happiness–not cheap gasoline, bountiful harvests, and inexpensive heat.

Electricity, food, homes, computers, medicine, cars, and the fuel needed to power them are the products of the labor of industrious people who sought to satisfy unfulfilled desires. The resources they had to use to create those goods are only valuable because someone invested the time and energy required to extract them from the earth. We are suffering under a dangerous illusion when we allow a disconnect between the individual initiative and motivation that made all these marvels available and individual ownership of the basic means of production-the land itself. Claims that government should manage the resources that provide the living standards we enjoy ignore the fact that government had nothing to do with creating that standard of living in the first place.

Government should have no role in the energy business, or any business for that matter, because it is inconsistent with its stated goal of preserving the rights of its citizens. It is government’s job to protect the property rights of the entrepreneur seeking to exploit natural resources–not compete with him. With bureaucrats and politicians out of the way, profit-driven individuals will do all that needs to be done to assure that wants and needs are fulfilled in a timely and efficient manner for as little as possible. Let’s not pretend that government can do that job.

Scott McPherson is a freelance writer in Tulsa, Oklahoma.


Download File

ASSOCIATED ISSUE

March 2002

comments powered by Disqus

EMAIL UPDATES

* indicates required

CURRENT ISSUE

December 2014

Unfortunately, educating people about phenomena that are counterintuitive, not-so-easy to remember, and suggest our individual lack of human control (for starters) can seem like an uphill battle in the war of ideas. So we sally forth into a kind of wilderness, an economic fairyland. We are myth busters in a world where people crave myths more than reality. Why do they so readily embrace untruth? Primarily because the immediate costs of doing so are so low and the psychic benefits are so high.
Download Free PDF

PAST ISSUES

SUBSCRIBE

RENEW YOUR SUBSCRIPTION

Essential Works from FEE

Economics in One Lesson (full text)

By HENRY HAZLITT

The full text of Hazlitt's famed primer on economic principles: read this first!


By FREDERIC BASTIAT

Frederic Bastiat's timeless defense of liberty for all. Once read and understood, nothing ever looks the same.


By F. A. HAYEK

There can be little doubt that man owes some of his greatest suc­cesses in the past to the fact that he has not been able to control so­cial life.


By JEFFREY A. TUCKER

Leonard Read took the lessons of entrepreneurship with him when he started his ideological venture.


By LEONARD E. READ

No one knows how to make a pencil: Leonard Read's classic (Audio, HTML, and PDF)