Property: Of the People, For the People

When the government has legal title to property there is an explicit assumption that the property is held and operated for the benefit of the public.  In fact, government owned property is never managed for the general welfare, but for the welfare of upper level politicians and the special interests they serve which in turn compensate them through good old fashioned “honest graft”.

This is not a polemic railing at dishonest politicians and bumbling bureaucrats.  It is a statement of fundamental economic principle.  People respond to incentives.  If you want to know the economic effect of an action or policy you must first understand how the incentives line up and then follow the money.

The general public has no interest in following the day by day management of government owned assets.  However, as any administrative lawyer will tell you, there are a myriad of businesses deeply interested in those assets which expend great amounts of time and money influencing government mismanagement of those assets for their own interest.  On the other side of that ledger, politicians’ incentives are to get reelected, and the currency for that need is campaign contributions.  Put the two together and you have the easy computation of gross mismanagement of public lands and mineral assets from the public’s perspective.

Forbes magazine has repeatedly exposed the gross incompetence and malfeasance of the parks department and forest service management of federal timberland.  They charge too little, subsidize timber companies by building the access roads, and do a terrible job when using any method of environmental calculation.

The same applies to more than a century of insanely low charges for mineral rights.

Economic principles teach that this is to be expected.  Privately owned assets are managed for maximum return.  In the case of timberland, that means preserving and increasing the value of the asset even as income is realized from it.  This is precisely the case with privately owned timberland.  Private landowners would never allow depletion of underground assets at the giveaway prices that government allows.  All this adds up to outrageous treatment of public property plus another example of waste on a colossal scale which in turn pressures the environment.

Of course the very interested special interests love this.  So do the politicians who reap many $millions in critically important campaign funding.  Never mind the law.  There is no way to stop the money flow.  If you really want to end this cozy relationship and ultimately preserve the environment, then you must eliminate the governmental power over the assets.  Then, and only then, will the mismanagement and graft stop.

Environmental safety is also severely compromised by government ownership and control.  The recent BP blowout in the Gulf of Mexico is a classical case in point.  The government owns the water, the land under the water, plus the land and water to the high water mark on the beaches.  Worse yet, the government has also eliminated the long standing historical property rights of adjacent landowners and holders of rights of way like commercial fishermen.

This means those same politicians and special business interests have been left free to game the safety rules and procedures to their own short term benefit with no other immediately interested parties given standing to object based on their property interests. The unfortunate results were predictable, even if the immediate cause was not.

A key intermediary in the process of drilling in the Gulf under a free market, private property regime would be the insurance companies.  There is no way an insurance company would be as lax as the government when its very existence is on the line for payment of claims.  In addition, without the opaque umbrella of government control, transparency is vastly increased.  Now the drillers could not hide behind government regulation to refuse access for safety inspections and insurance coverage.

This is not to be interpreted as a thorough analysis of how the market would deal with all these issues.  That would take more than a very thick book.  It is only to shine a light down one possible path the market would take to preserve the value of what is now public property and significantly reduce the likelihood of future environmental disasters.

As with so many other issues, the transition to a true market based system of private ownership of government assets is hard for most people to imagine.  Too often free marketeers get trapped into assuming their opponents’ premise that they must set forth all the details of how things will shake out before anyone should consider scrapping our fascists system.  While I do not fall into such traps, I will say that, disgusting as it may sound to libertarians, I would much prefer organizations like the Sierra Club have title of government land, for example.  I will wager that such organizations would do a much better job than government bureaucrats ordered around by moron politicians under the thumb of crony capitalists.

Read the original story at SedonaCyberLink