Conservation and Property Rights

0:00Okay, tonight we're going to talk about conservation. We've heard a lot about capitalist greed, in quotes, ravaging our natural resources and destroying it, sort of like a mighty blight coming over the land. There are many areas where capitalist greed is supposed to ravage our resources. The main one for many years used to be the forests, and we'll get to that in a minute. First question to ask about this point, about capitalist greed ravaging our resources, is how come it hasn't ravaged a lot of other stuff? I mean, how come it's ravaged, say, the forest and various other specific items, How come the capitalist greed has done its evil work in those areas and not in the second areas?

0:52There must be something about the areas themselves that are the problem and not alleged capitalist greed. First of all, about the forests, which I may as well just mention passing. True, there's a lot less forest now than there was in 1492 when Columbus landed. In those days, the whole country, the whole land was covered with forests. The problem then is, if you really want to preserve the forest's primeval state, in which it was in 1490, we'd be in pretty bad shape. As a matter of fact, we wouldn't be here at all, because the only way in which we could land and clear the established houses and factories and roads and all that sort of stuff The basic problem here that the forests are occupying this land, which turned out to be more valuable for other things, for other uses, and so we had to chop down the forest. If the Sierra Club had been around in 1492, we never would have gotten off the boat.

1:41So you have the basic problem with the conservationists that if they want to preserve everything, it's a darn good thing that didn't start a long time ago. Okay, but obviously if you want to preserve the entire forest of the continent, it's either that or us, it's either the trees or mankind that has to survive. Okay, so what is there, before we get back to the forest and the ally problems, what is there on the market that prevents ravaging, total destruction of copper and iron and all these other natural resources? What happens is that the free market has a built-in mechanism, if I can use the word mechanism, there's a built-in mechanism which provides what we can call optimal conservation, Which provides a situation where business firms in the market produce a certain optimal amount per year and leave the rest of it, also an optimal amount, on the ground.

2:26Put it this way, supposing we have a mine, it could be a copper mine or whatever, and the mine has, say, a hundred million dollars' worth in the ground. The mine owner, say the copper mine owner, is faced with a choice. How much should he dig out this year and how much should he leave? Well, if he digs out $10 million this year, okay, let's say he gets a certain profit on that, but then he's got $90 million worth of copper left. If, on the other hand, he digs out $20 million, then he's got $80 million left. Now, this illustrates the point that if he increases his annual production, or if he steps up his current rate of production, he will get higher profits, let's say, this year. However, he is then left with a problem and he has $20 million less capital value than he had before. So in other words, he always has to choose, on the market, he's faced with a constant

3:11series of choices, and one of these series of choices is between annual production, revving up your current income, but then having a lower capital value. A lower capital value means that if he wants to sell either the mine itself or the shares of stock in the mine, he's going to have to accept a lower price because then the capital value declines. So these are the two things he always has to guard against. So in other words, he's not going to just shoot the whole 100 million this year because and if he does that, his capital value of what he has remaining goes down to zero. So the corrective mechanism, or part of the corrective mechanism, we can see right away on the market, even though he wants current profits, he doesn't want to lose the present capital value of his future profits. In other words, the mine as a whole, he owns the copper mine as a whole, he owns shares in the copper mine as a whole.

3:55The value of that copper mine as a whole is the discount of future returns. These future returns are brought back by the market into the current capital value. Basically, choice depends on several things. Suppose he expects the price to rise in copper in the fairly near future. Say he expects there's going to be a big copper shortage next year or two years from now. Well, as he's concerned, the expected capital value has increased. He expects the price of copper to go up in the near future. And then, because the capital value is now greater in relation to the current price, he will then hold back copper. It's very similar to the wheat speculator who expects the price of wheat, say, to go up in six months.

5:02This capital value mechanism leads him to hold back copper and albinism at prices cheaper and therefore not as valued by the consumer, and then sell it two years from now, three years from now, and the copper shortage emerges, and therefore it's more valued by the consumer and the price is higher, and he sells it. This is part of the way the free market mechanism shifts resources from where they're less valued to where they're more valued by the consumer, in this case, from the present to the future, thereby benefiting the consumers as a whole by shifting the production of copper from now to three years from now. On the other hand, closing, he expects that in two or three years there'll be a new substitute for copper, some big new alloy will come up, or something like that, or some new technological development to make copper more or less obsolete, which will outcompete copper. In that case, he expects the price of copper to fall, his estimate of the capital value

5:49will decline, and he will therefore step up his current production and deplete his capital value, because his effort will be going down anyway, and thereby shift from future production and the present production, again benefiting the consumers because what's the point of producing copper in 20 years when there's a new substitute that will be almost worthless? Better produce it now. And this market mechanism provides the incentive to do that. It gets the signal from the market, so to speak, uh-uh, capital value is going down, the effect is going to be a future obsolescence of copper, therefore let's produce it now when the profits are greater. So expected changes in the price are a key thing. to reflect on the capital value and give the signal to the producer or the mine owner or the natural resource owner to produce either more or less now or less or more in the future.

6:36Another point, time preference, the higher the rate of interest, the rate of returns are discounted. In other words, the lower the capital value of the mine, the lower the rate of interest, the higher the capital value of the mine. This means that the higher the rate of interest, the more the mine owner will be induced to produce now rather than later. And the lower the rate of interest, the more you'll be induced to save up now and produce and mine the copper later. Rate of interest is a reflection of time preferences of consumers. If the rate of time preference goes up, in other words, if consumers decide they'd like to consume now rather than later, they want to shift their allocation, consume more now and less saving and investment for later, then the rate of interest will go up and this will be reflected in the lower capital value of the mine and then this will induce the The copper mine owners have produced more now and let the capital value go down further

7:26and produce less in the future. If on the other hand the time preference falls, consumers decide they'd like to consume less now and more proportionately later and save and invest more for the future, then the rate of interest will fall, capital value of the mine will go up, mine owners will hold back more production now, will cut down their current production and shift toward future production, or invest, in other words, more in the copper mine. The new market has a smooth and rapid reflection, provides rapid reflection of consumer wishes, consumer desires here because changes are expected to be either from the supply side or the demand side. In other words, if from the supply side there's going to be a big shortage, a couple of years of copper, this will be reflected in the higher capital value now. The copper mine owner will hold onto more of the copper, produce less of it now.

8:14Or if there's going to be a greater supply later on, copper mine owner will produce more now and less later. Similarly, consumer time preferences are reflected in the rate of interest. In other words, the changes in demand side by consumers are reflected in the capital value also. So the capital value mechanism, the fact that the mine owner owns the mine itself, owns the natural resource itself, he can then allocate his current production versus his future production. Okay, let's go to another point about copper miner. Supposing supply of copper does dwindle. We're forgetting now exactly about the present versus the future. Supply of copper gets short. The price of copper therefore goes up. Now what happens in this situation when the price of copper goes up? The rise in copper, the price of copper itself provides another built-in mechanism.

9:03The first place, the fact that the price of copper goes up means the consumers, they'll start buying less copper. In other words, the individual buyer, on the basis of his value scales and income, etc., will voluntarily ration his own purchases, especially the marginal buyers who really just don't really want that much copper anyway, they could easily shift to aluminum or some other metal. The really gung-ho copper buyers will still buy more or less the same amount. So we have, then, a rationing system which is smooth and voluntary, and where each individual decides on his own boat tightening. In contrast, of course, the government rationing system, where a meat-axe approaches you, and everybody's got to suffer equally or suffer together.

9:49Suffer, of course, a lot more. Secondly, the rise in the copper price will then stimulate a greater search for supply. So the price of copper is now higher. People start going around with their whatever copper, whatever the Geiger counter equivalent is in the copper business, and start looking for more copper, since now it would be well worthwhile to start finding it and using it. There's a lot of minerals down underneath the ground, an enormous number of minerals which haven't been discovered yet. For example, a natural gas caper, everybody knows there's an enormous amount of natural gas, it's just they haven't been found yet, but it hasn't been worthwhile if anybody go out and look for it for about 20 years, because the price of natural gas has been held down about 25 cents per thousand cubic feet when the free market price is somewhere between 55 cents and a dollar. So, on the other hand, if the price goes up of copper, the higher the price will be and

10:36the greater the incentive to go out there with your copper Geiger counters or whatever and try to find more copper. And more copper will inevitably be found, by the way. Supply will eventually increase and the price will then fall. And third of all, the rise in the price of copper will stimulate substitutes, will stimulate people to start using substitutes or whatever other metal will be used or to try to invest in technologies which will discover substitutes because technology follows the market in most Nobody's going to start looking around for copper substitutes very much, a great deal of enthusiasm, and invest resources in it, unless there's a big copper scarcity, and the price of copper is high. Then you start looking around for all sorts of ways of getting around it, and something which will perform the same function as copper. It's the same way with this energy caper now. There's lots of energy sources around, solar energy, and nuclear, and shale oil, and tropical oceans, and all sorts of other stuff.

11:26and some other stuff. It just has been too uneconomic to even look around and try to invest in the technology for these things. If the price of energy is ever allowed to go up to its free market level, then these other sources will start...the economic will start investigating these sources and start trying to exploit them and use them, and then they will start pouring on the market in a few years. If not, of course, then the price of energy remains at their current price control level, and there's no incentive to go out there and invest in the new technology. Okay, so where the free market operates, where private property rights and the free market are allowed to operate, we have these built-in mechanisms in the market, which one, eliminating any problem with ravaging of all, you know, suddenly you wake up tomorrow morning and all the copper is gone. It doesn't work that way. And if there is an increased scarcity of copper, there are mechanisms that work to voluntarily ration and to also induce greater supply.

12:17So all of these things are at work. How come, then, the forests were ravaged and how come the fish in the ocean were ravaged, and so forth. How come there are these areas where it seems that the market didn't work successfully? It seems that there's overproduction or overuse or depletion. Before I get to that, just one more point about technology and market and resources. We think of the Industrial Revolution and technology as using up a lot of resources, gas guzzling as the current term is and so forth and all these various areas. Actually technology often creates a lot of resources which weren't resources before technology or industry came on the scene. For example, petroleum, which we're now a lot of belly-aching about is going on. Petroleum wasn't a resource until the Industrial Revolution, before, in other words, the advent of automobiles, and also kerosene lamps, but basically before the advent of automobiles, petroleum was just a pain in the neck, just a black ooze, it's a complete waste, I mean,

13:11it wasn't used for anything, it was just a, ugh, yeah, and it was only the development of automobiles and petroleum technology that created a resource out of something which The Theory of Money and Credit

13:51writes the function. Instead of it being capitalist greed as its fault, the fault is the capitalist greed hasn't been allowed to operate enough. In other words, the government has come in to restrict private property and capitalist greed in quotes from performing its function, the sort of function we've been talking about. The major problem is coming back in those cases where the government has not allowed private property to function in the resource itself, but has allowed private property in the use of the resource. For example, the government says no private property is permissible The copper mine itself. Nobody is allowed to... It's evil and immoral for the private individuals to own a copper mine. However, you can take as much copper out of the ground as you want to, and then you own that. But you can't own the copper mine itself, and actually the resource itself. Well, what's going to happen? This can be done in either one of two ways.

14:36Either the government can declare what we can call copper communism. In other words, the mine itself will be used by the first guy who comes there and starts digging it up. That's one way of doing it. or, the other way, the government can own the copper mine and lease it out to whoever it wants to lease it to. First function, the copper communism, first the system, so to speak, sets up a situation where if I don't go in there and mine the copper right now, the other guy is going to mine it. There's no way of protecting myself from this other guy coming in and grabbing the copper. Therefore, this induces a holy rush to produce as much copper as you can as fast as possible. Also, of course, bolstered by the fact, very much so, that nobody owns the copper mine itself. If I come in there and start mining as much copper as I can, 24 hours a day, etc., all the equipment I can possibly muster,

15:24I don't lose the capital value as this guy does, because there ain't no capital value. Nobody owns the capital value. And since nobody can own the capital value, then the sky's the limit. This system induces a maximization of current production and of forgetting about future production, because there's nobody around to reap the benefits of the future production. The government owns it. It usually works out to the same thing. The government leases it to some copper miner. Again, the government owns the resource. The copper miner owner doesn't. And so the copper miner owner will be induced to mine as fast as possible, get as much copper out of the ground as he can. Also, in addition to that, if nobody owns the capital resource, the mine itself, there's no incentive to somehow redeplete it if you can, and replete it to improve the technology on a long-term basis in some way.

16:09Because, again, nobody can reap the benefit of this. If you do that, then the other guy will come in and grab the copper. Nobody owns the capital value. The government owners will get back to government ownership a little later, but the point is, of course, government controls the copper mine and owns it in a sort of philosophical sense, but it doesn't own the capital value. The government regulates it or rules it or governs it, but the government official, the head of the Department of the Interior, can't sell the copper mine, sell one-fifth share. But there ain't no shares. There's really no ownership. and so there's nobody there has the economic incentive to govern the thing in a kind of long-range basis it's always said that I mean it's typical in economic literature political science literature that the government should control natural resources or regulate them or even own them because private individuals are short-sighted they've got time preference for us which means that they prefer present the future at some sort of rate the private people out there undervalue the future whereas we as a government government officials are farsighted they look for 200 years ahead

17:37The government, since government doesn't own the resources, even if it regulates it, the government has no long-range interests whatsoever. They don't have to preserve anything. As a matter of fact, government officials, as we all know, have only one interest, which is baiting everything along to the next election. Their time horizon is about six months. In other words, say, if it's now March, the election is November, that's about their time horizon. They don't care if the world collapses in December, as long as they get re-elected in November. So far from the government being far-sighted, looking for the social future, the custodian of Humanity and Future Generations, it's just the opposite. The government's the last person to go to because they're really just interested in the next election. So let's get the specifics now of the various areas. Private capitalism is also ravaged and plundered and so forth and so on. There's the forest. Okay, I already said my piece about the forest in general, about the, if you expect 300 million square miles

18:25or whatever the acreage of the American continent is, you can't expect that to be preserved. One other thing though, I think, when it gets to either the forest or anything else, The environmentalists, the conservationists, want to preserve the forest unpainted and all that stuff. They want to preserve this and the other thing. What they should do, of course, is go out in the market and buy it. If they do that, nobody would have any gripe. I certainly wouldn't have any gripe. If they want to preserve the forest primeval, they should buy it. If they want to preserve the whatever, go out and buy it. If they want to buy the tundra, then go ahead and buy it. Now, of course, if they do that, that means they'll have to spend a lot of their own money. They won't be able to be intellectuals sitting around in the clubs in New York or Washington telling everybody else and telling the taxpayers to pick up the tab for their aesthetics.

19:10We have a question here of competing aesthetics. I really don't care about the tundra, but those who do care about the tundra should buy it and then preserve it forevermore. As a matter of fact, as Professor Dolman makes the point of a cute point on this whole question, the error club is always wiping about the government selling them out or the government allowing the tundra to be used or for us to be chopped down or whatever. And he says sort of ingenuously, wow, since the government has always been betraying them, why don't they do it themselves? Why don't they go out and buy all this stuff? And then they can certainly trust themselves to preserve it forevermore, so why don't they do that? Of course, the preserving of this stuff will lie, or it should lie, and those who want to do the preserving, and those who are really hopped up about the tundra and the caribou, they should go out and buy it. However, if the conservationists use the government, that means the rest of us have to pick up

19:54the tab. This is like using the taxpayer's money to build a $300 billion monument to something or other, if you want. If the people want to kick in the monument, they should go ahead and do it on their own hook. Let's get to the specific areas, the forest again. The problem with the forest, aside from the fact, the inevitable fact of the forest, hundreds of millions of square miles of forest, they're not going to make it on the market for a good reason. Aside from that fact, the problem with the forest, especially in the West, is the Federal Government owns most of the land west of the Great Plains. They still own it. Federal government has never really allowed private ownership of the forest in the United States. There are some, of course, but looking at it sort of on a large scale, we have placed all sorts of restrictions on being able to own forest, homestead forest, etc.

20:40We have, in other words, government ownership of most of the forests. As a result, if you want to cut down lumber, what you have to do usually is to lease parts of the forest from the government on an annual basis. Now when that happens, this sets up the same mechanism I've been talking about. In other words, the government doesn't own anything anyway. the Federal Reserve, fiat money, fractional reserve banking, Human Action, man economy, and the way the copper owner balances expected future prices, interest rates, expected shortages and so forth and so on, and also another very important thing which comes in more obviously in the, because of technological reasons in the forest than it does in the copper mine, the five owners of the forest will have the incentive to maintain the forest, chop down the right spacing of trees and rebuild it and all that sort of stuff.

21:46Forest technology is very complicated, I'm obviously not an expert in it, but the point is there's all sorts of ways, if you own the forest, to chop down trees and preserve it at the same time, so you can keep the capital value more or less constant and still chop down a lot of trees. And in Western Europe, for example, most forests are privately owned. In Western Europe, nobody belly aches about ravaging of forests, there are no complaints about total destruction of forests, because since you have largely private ownership of the forests in Europe, they are maintained in this way, that's just to conserve them and replant the trees and all that sort of stuff. In addition to keeping forests off the market, trees off the market, the government has kept Shale oil off the market has prevented any leases from taking place in shale oil and various other, and coal mining, a lot of possible strip mining of coal that could be taking place in the western states, but again the land is almost all owned by the federal government, they haven't allowed any leasing for the, they just haven't leased anything, they just haven't used the land. Now this is an interesting point about the federal government because before that from approximately 1861 when the Homestead Act came in, but unfortunately it wasn't applied to large-scale ranches, the tragedy was

22:52The Homestead Act came in just at the point where it became obsolete in the sense of the homesteading was 160 acres, which was allowed to the settler in his own fee simple, if he could clear the land, et cetera, and use it. He was granted the land by the government, which officially forced-owned it. But shortly after that, the settlement crossed the Mississippi and got into the Western Great Prairies. And at that point, where agriculture is much, where the climate is much drier, the 160 acres doesn't mean a darn thing, but you really have to have a much larger number, acreage, to raise cattle, for example, 160 acres doesn't give you a thing. And the homestead law was never changed to accommodate this. It kept on with the old original sort of wet agriculture of the eastern and middle western states, instead of the further west. So as a result, we never really got the homesteading applied very much west of, say, Iowa.

23:41as a result of that, finally, by 1900 or so, the government finally clamps down, it just reserves all the land that it has now and prevents anybody from homesteading it. So we have this conservation movement since about 1900, which has closed off all this land in the west. The government just holds on to it, doesn't do anything with it, or leases it out in some way, but doesn't really use it properly. Why did conservation come in in a big way with Teddy Roosevelt? The usual story is that it came in because of left-wing intellectuals sitting in New York and belly-aching about the trees. Well, there's no question about the fact that was a, that was an important factor. It's usually true, by the way, that the people actually living out west, living with the trees, don't belly-ache about it. They don't really care much about the trees. New York intellectuals who never see a tree will constantly want to preserve it out there when it's 3,000 miles away.

24:29New York intellectuals and Washington intellectuals did, yes, indeed, spark the conservation movement. The First World War, they didn't really finance it, financing of the conservation movement came from very interesting sources, they came from two sources, the railroads, Western railroads, and the Western real estate owners, Western land owners, because the railroad, which had a land grant of a huge amount of land, which was granted to the railroads, the seller they saw fit. The settlers, either sitting on this land, and also you have private real estate owners, private land owners also sitting on land, you could induce the Federal Government some way to keep all of its land, I hear you, off the market, completely, forever and ever, because the name of conservation is forevermore. If you can do that, then the value of your land goes way up, because if anybody wants to settle on land in the West, they have to settle on your land.

25:15So what you have is a beautiful example of an unholy alliance between liberal intellectuals, or liberal conservationists, kooks, and sinister forces who knew exactly what they were doing, or didn't really care about the Western caribou, whatever. They were keeping all the government's land off the market, preventing hope-studdings, This is supposed to raise the value of their real estate, and so the Western Railroads financed the National Conservation Association and their paper, their magazine in Washington. Cute story. It's probably still going on if anybody bothered investigating this. If you're looking at waste, then you're looking at ravaging, etc. It seems to me the real waste of a resource is not to use it. I mean, after all, what's the resource around for except to use? If your conservationists get their way and one way or another keeps all of this land or keeps the copper or whatever off the market forever and doesn't allow it to be used, That's the real waste, because then you're just compulsorily, coercively deleting all these resources for possible use for mankind, for production and consumption.

26:12So the real waste is not using it too fast, the real waste is not using it at all, which is a conservationist's holy dream. There's another argument which should be mentioned at this point, a philosophic argument. We should cut down our own production, our own consumption, in order to benefit future generations. In our belts, it was to preserve the copper and the land and the forest for the future. There are several problems with this. One big problem is that, see, if you use this argument, the future generations will eventually become present. In other words, 30 years from now, our children will emerge, and they'll be told the same crappy argument. They'll also be told you have to preserve a future generation, which means, of course, the resource will never be used because the future will stretch on infinitely. And if at one point, let's say 100 years from now, they will allow the future generation,

27:26In other words, you catch the fish, you go out there on a boat or whatever, you catch the fish, then it's yours, you can use it. However, nobody can own the fish resource itself, nobody can own parts of the ocean. Nobody can fence it off, nobody can do anything with it. As a result, we have ocean communism, also known as freedom of the seas, that's a euphemistic term. The point is that, as a result of that, we're now in the ocean the same way that we were before agriculture. In other words, the same way we were on the land in the hunting and gathering stage, before farming and agriculture came in. Hunting and gathering meant you went out there, you got seeds, you got berries off the bush, you got turnips and whatever other stuff you got down there, and walnuts. You picked them off and you shot wild animals with your bow and arrow, and so forth.

28:15In other words, you could use the fruits of the land, but you couldn't do anything with the land itself. You couldn't preserve it, you couldn't transform it, you couldn't do anything with it. As a result, the productivity of the land was very low. The thing is, originally, in the hunting and gathering stage, land was really super-abundant. There was no point even talking about property and land, or private property, because it was so abundant. So many forests out there and so forth, that nobody even thought in those terms. However, in order for agriculture to take place, in order for somebody to lop off a certain portion of the earth and do something with it and grow wheat and barley, etc. You had to have private property or some sort of property rights because otherwise somebody across the mountain is going to come in and the next guy across the field come in and take your wheat away. It was because private property comes in, the land gets a little scarcer, the population increases, private property is then

29:03allowed in the land itself and not just things you pick off the land, the things you, the berries you pick off the bush, the private property in the land itself, the productivity of the land increases enormously, just no comparison. In other words, as soon as you allow agriculture, which means, you know, cultivation of the land, then the farmer can come in, he can use fertilizer, and he can use all sorts of techniques, and et cetera, et cetera. Productivity increases enormously. We're still in the ocean, we're still in the hunting and gathering state, because we don't allow private property in parts of the ocean. And so everybody rushes out and fishes as much as they can, and then nobody has any incentive to preserve the fish, to maintain it, to increase the productivity of fish. And there's also no incentive for anybody to engage in fish technology, and aquaculture would be the comparable term. There's no incentive for anybody to engage in aquacultural technological research, because there's no possibility of applying it.

29:53Because there's no point in having all sorts of fancy technological ways of improving ocean technology, if the government doesn't allow property in it, nobody would be allowed to do it. Now we have a situation, more and more of course, where the ocean... The reason why the freedom of seas came in is because in the 18th century, the 17th century and the freedom of seas doctrine comes in, the ocean was super abundant with so many fish nobody even thought in terms of property resource in them. However, we're getting to the point obviously more and more where the fish are getting scarcer and scarcer. The government tries to meet this by having all sorts of crazy regulations like limiting the number of months you can catch the fish, or limiting the size, and having anti-technological regulation where you can't use super nets, you can only use small hand nets. cut down the size of the catch, or having seasons, or any way you do it. First of all, it doesn't help. It's like rationing. It doesn't help increase the resource of aquaculture wood and private property.

30:44And second of all, it messes things up. It distorts things. For example, if you say you can only fish starting on March the 1st, then you have a certain limit, say, on the catch. And what happens is, this is what happens with salmon in the Northwest, everybody comes in with these huge boats and they fish like mad to try to beat out the other guy until the total number of salmon reaches its maximum limit. As a result, the amount of salmon gets cut in the season for catching salmon. It gets compressed from six months to three weeks to six weeks, whatever it is. And this distorts everything. It distorts the technology. The salmon aren't as tasty. Too many big boats get built as an overinvestment in huge boats. And all the rest is a complete distortion of the salmon market as a result of these regulations. Aside from the craziness of not allowing super nets or whatever other super technology to increase fish productivity, Now, if private property were allowed in parts of the ocean, you have things like that, you're fencing off of parts of the ocean.

31:36It could have been done even before the electronic period. You could have anchors in the ocean. But now with electronics, it's duck soup. You can easily have electronic fencing. There's no problem with that. You know, if they allow you to do it, in other words, if you're assured of the fact, some other fisherman is not going to come along and grab all your fish inside the fence. Okay, if you have private property rights then in parts of the ocean, you have this sort of electronic fencing. You can use the equivalent of fertilizer. The first thing you can do right now, even before any improvement in fish technology, is you can segregate the big fish from the little fish, segregate by size. Unfortunately, fish have not found out about natural rights and the non-aggression axiom. The big fish have to eat little fish, even incestuously. If you separate the little fish from the big fish, you'll enormously increase fish production just right there.

32:21You give them something else to eat, give them plankton or whatever. Just that, and doing nothing else but electronic fencing and segregating fish by size, enormously increase fish productivity, and lots of other things, obviously, that could be done. If aquaculture were allowed, if private property and parts of the ocean were allowed. Now, this is getting to be a very dicey question, because we're getting now, not all the ocean, by the way, is really important in this connection. We're really talking about the continental shelves and the North Atlantic and parts of the North Pacific. When we have a situation with the ocean in these areas, we're getting very scarce. We're getting to a point where we have many areas where, say, Russian trawlers are trying to fish, fishermen are trying to fish from their boats, nets are coming out in some other way land-based, somebody's trying to drill for offshore oil, and something else is happening.

33:07Five or six people competing for one lousy piece of ocean. They cannot resolve that unless private property rights are allowed in parts of the ocean. I think that probably something like this will happen. If it won't be private property, at least it will be national property. In some way, to be able to keep out, to allocate, of course obviously private property is the only correct solution here, but at least there must be some way of ending ocean communism, because otherwise there would be no way of exploiting these resources at all. Of course there's some offshore drilling, the Japanese have their beds which are underneath the water, where they have private property. That's not really separate from the land, it's really just out from the coast. So there's been a little bit of that, but obviously this is the next great frontier for production, and it can only be used if we allow private property in it. So that's the fish caper.

33:52This one I recommend here is a very good book by Christie and Scott called The Commonwealth and Ocean Fisheries, which deals with legal, economic, political, all the problems connected with international fish, the whole ocean question. Another area which partakes of both water and land is oil pools, petroleum. One of the problems with petroleum, which led to an original overdrilling, ravaging of our petroleum food oil resources, which then led to a monstrous cartelization by the government, was that because of the way the law of capture worked with oil, well, the way the common law was applied when oil was first discovered, you dig a drill down to the part of the pool, you find this pool, and then you can use as much as you want of that oil, drill as much as you want of it.

34:38Nobody owns the pool itself. Well, obviously the pool, the oil pool, is a technological unit. And yet, since no private property is allowed in the oil pool, but only in the use of the oil, we have the same situation developed as in the case of the fisheries. Every man and his brother rushes in and take advantage of this and put a drill down there. You have hundreds of drills going now. First of all, you have over-drilling, a lot of investment in drilling, etc. If I don't drill oil as fast as possible, the other guys will pump it up and pretty soon be in an oil pool. The way to solve this is to allow private property and the resource itself, and not just in the annual use of it. Plenty of guys now drilling in the same oil pool, they should be allowed to unitize, to have to merge in one corporation or company, which would then own the whole oil pool. It's now, I believe, illegal to do that, some sort of antitrust violation or something.

35:26To unitize your oil holdings that you can then, one corporation, one firm, and own the whole pool. So, until we do that, there'll be then a tendency toward overuse and over-depletion of this oil pool. And then, of course, the government comes in and has this proration plan, formalizes and restricts production on top of all of this. Not, of course, solving this problem, just adding another one on top of it. But again, you have the same problem not allowing, because of the legal structure, the government's legal structure, not allowing private property in the technological unit. Then we have the oil pool. Now we have another area where the government doesn't allow private property ownership in a sense of overuse, I guess. Here the problems are a little bit different. But again, you have an area where the government allows the use of something but doesn't allow property and resource itself.

36:13These are radio and TV channels. Again, you have a situation where radio was first invented. The question is, how do the courts deal with this whole question? Who owns what? And during the early 20s, when radio was first coming in, people were operating radio stations in Detroit at certain kilo-cycles, etc., etc. And somebody else would then beam something at the same kilo-cycle nearby, and it would be interference. And they went to the courts, and the courts would then decide, could only decide on the basis of common law, which is basically libertarian. And as they began to make decisions, the Illinois courts, for example, made decisions, okay, here's what you do. The guy who homesteads, in a sense, the guy who first sets up his channel, a 1600 kilocycle, blah, blah, blah, owns that kilocycle, or owns the right to beam out on that frequency. Then you have to find a technological unit. This is, you find it for 160 acres of wet land or for an oil pool.

37:04A technological unit is fairly easy to find out. It's a certain width, whatever the width of the band is, so you don't have interference, and the radius of the frequency of the beam is sent out. So you decide, okay, you have a 200-mile radius, let's say, and you own the 1,600-kilocycles within a band of plus or minus a certain number of kilocycles for this 200-mile period. And anybody who interferes with this is a transgressor and, you know, is an aggressive issue of property, you can take an injunction and smash them. Now, this is beginning to be developed in the early 20s. Now, what happens is that Herbert Hoover, now, why he did this, I don't really know. I know, nobody as far as I know has investigated the infamous Radio Act of 1926, I think it was. Hoover decided, there's a terrible thing going on, people interfering with each other's radio channels.

37:51We can't allow this, and private enterprise hasn't worked in this area, and private property, therefore we have to nationalize the radio frequencies. He did, because he did not tell the rest of the country about the court decisions, which were quietly going on at the same time. So Hoover, who was the secretary of commerce at the time, pushes through the Radio Act, which nationalized radio channels and later on TV channels. This means the channels are all owned by the government, not by private people. In order to be allowed graciously to use channel 1600 kilocycles, you have to get a license from the Federal Communications Commission. And this means, of course, total totalitarian control over the media, radio and TV media. And it's a total suppression of free speech, free press, and I don't know why nobody seems to realize this, The FCC requires so-called balanced news. For a long time, they didn't allow any editorials, because an editorial means somehow you're loading the dice.

38:45They demand equal time by every cluck that comes on with a certain point of view. There's got to be balance, it can't be this, it can't be that, which really means if you take any kind of position at all, which is certainly any position which differs from the majority, you get a clobber by the FCC. The FCC doesn't renew your license. New Year License And this is complete totalitarianism. Supposing, for example, it's applied to the press, and the magazines and books and newspapers. Supposing the government said, okay, from now on there's blah, blah, blah, we have interference, there's scarcity of newsprint. That's another argument for nationalization, the fact that the radio and TV channels are scarce. Of course, everything is scarce, as we should know by this time. Every darn thing that's not free is scarce. So newsprint is scarce, we nationalize everything. The government then nationalizes everything and then licenses people to be allowed to print stuff. Well, in that case, we would have a similar situation.

39:31Any newspaper steps out of line a little bit, a little too radical, a little too rambunctious. Your license is not gonna be a renew-buster. Of course, you have complete freedom of speech, but you can't operate without a license. You can't produce anything, you can't sell anything without a license. Now, this would be considered total totalitarianism, fascism of the worst sort. And yet, we allow the same thing to happen on radio and TV and nobody protests about it. This is the exact same situation. There was, for example, a heroic libertarian radio station, Hawaii, not too long ago, an FM station, I think, which was quite popular, which was beaming libertarian broadcasts several hours a night, which then got clobbered by the FCC because of unbalanced reporting or whatever, and they threatened to take their license away, and they didn't have the money even to fight the legal fee to fight the license, so they just folded up. So this is just a small indication. The thing is, it obviously permeates. It has what the courts call a chilling effect on any kind of real freedom of speech.

40:25and the media. And this direct result of nationalization, what happens is that the networks, for example, have this big bonus in the fact that they're allowed to use these channels for nothing. They don't have to pay any money for it, either to anybody else or the government or whatever. You have this peculiar situation where the networks are locked into a subsidy because they're getting the use of the channel free, and yet they have no real power over it. They have no power over what they say, et cetera. Of course, one argument technologically is that now with UHF and with FM, et cetera, The idea that you should nationalize something because it's scarce, you know, completely just by any kind of collective, except the air, which also isn't going to collectivize anyway. So the government owns the air, we'll get to that in a minute.

41:10Okay, I think I've already talked about traffic ingestion as part of the reflux of price control, but here again we have a situation looking at it from another angle, the streets and the roads are all owned by the government, there's no private property allowed on the in the United States, except for few isolated communities, and again the government has no incentive for any kind of rational pricing system or any kind of preservation of resource or whatever, and as a result you have a situation where the government keeps the price at zero, the price of using the streets, as a result of course of congestion, shortages, in other words traffic congestion, especially in downtown areas, especially in rush hours, etc. And the parking pricing is... We've discussed now the various areas of so-called overuse and capitalist depletion. We also have other areas where part of the conservation argument is so-called pollution.

41:58Two really very different wings for the conservationist argument. One is the idea of overuse and ravaging of resource and destruction and depletion. The other is the idea of pollution, which is really two different things. However, the problem is still the same. and Money. Pollution comes about, or rather, pollution beyond the optimum comes about because the government does not allow private property to function in these areas. Somehow this has not been stressed of the cause of the pollution problem in the media. But this is what it boils down to. Private property has not been either used or been allowed to exert itself to the full. We can't be against all pollution, period. There's obviously a certain optimal

43:05the value he's got in his mind. He also wants to maximize his revenue and of course people on the one hand don't want to go to a dirty beach and on the other hand they don't want to be oppressed by some guard hanging, breathing out of their neck all the time as they drop a popsicle wrapper. Now probably in a free market there would be different degrees of beaches. There would be really tough beaches where you can't hardly do anything. And other beaches would be sort of permissive and you can litter around and stuff around etc. And people would then gravitate at what they're interested in. There would be different qualities of beach and different prices of beach also. And of course, when the government comes in, you immediately have this uniform sort of thing, and either you have complete littering or else you have the hot hand of fascism down your neck, arresting you for six months or something for litter, either complete non-use of the resource or also the Medax approach, which incidentally, again, going back to the traffic congestion, is typical of a government. They set the price of riding the streets at zero, and then when the traffic appears and develops, etc., then they turn for the Medax as a solution and threaten to prohibit private cars altogether.

44:04which is the mayor of New York is always trying to do, is always threatening to prohibit all private cars from entering Manhattan. It's a typical government solution, a problem which the government itself creates by setting the price at zero, either a zero price or a total outworry, the only way the government can look at things. Okay, two areas of pollution which are particularly, of course, talked about, and again where the non-use of private property provides us with a key explanation, One is water pollution. Waters are being deadened, the waters are being destroyed, and so forth. Again, of course, in the case of the oceans, we've already seen the fact nobody can own parts of the ocean, so we dump sewage out of the ocean without any compunction. The oil companies, you all allow oil slicks to develop, et cetera, because nobody owns it. And second of all, the same way with the rivers. The rivers are non-owned. In other words, they're owned by the government.

44:51You have an effect, river communism. Nobody really owns the rivers. And so everybody dumps sewage into the rivers, and you have polluted rivers, et cetera. And incidentally, the main culprit in the dumping sewage is none other than the municipal sewer system. The government itself is the major river dumper. So what you have is a system where essentially municipal governments are providing sewage service for free. Of course, they're doing it out of taxpayer, but the user doesn't really pay for it. And then, of course, everybody uses it. If this didn't occur, if you had a proper pricing system, you had private ownership of the rivers, in a proper pricing system, then you would turn more and more to things, for example, like chemical toilets. There are, even right now, a technology that has been developed, a super chemical toilet, which completely eliminates all pollutants. No pollution gets out, no water pollution, no air pollution, no nothing.

45:37But of course, who's going to pay for it? Who's going to buy it? Who's going to invest in a chemical toilet so they can turn the good old free municipal government for the sewage system? Then the sewage system is going to turn, dump it in the good old free government-owned communist quotes river. So again, we have a situation developed where private ownership is not allowed in a river The Hudson River resource, which is an important resource, as a result of that, not only is it not used properly, but there's no incentive to develop technology to preserve the river. I mean, who knows? If the Hudson River were owned by a corporation, they probably would have found a way by this time to allow stuff to be dumped down the river and then quickly clean it up and recycle it, whatever, and preserve the river for all these different uses, for beaches and for... which of course, I mean, nobody swum without taking their life in their hands on the Hudson River for about 60 years.

46:22If the river were owned by somebody, they would want to maximize either the highest value of their revenue, first of all, to use the river for the highest economic resource, and secondly, if they can possibly do it technologically, to allow all these things to take place. Industrial use and then recycle it and somehow clean it up, and then allow the beach use and residential use and pleasure craft and whatever. The law does exist right now in the western states which permit private ownership of the rivers. There are two kinds of water law. There's the old common law, the Parian common law, which is pretty unfortunate, because what it said was, again, the common law was evolved, of course, in the days when the river was not considered a scarce resource. So you have something like freedom of the seas in the sense that if you happen to own a piece of land abutting a river, then you own that part of the river, which doesn't make too much sense. This is the Parian ownership.

47:10As a result, you might have 300,000 owners of this river, each one only because he happens to be sitting near it and looking out at it, which doesn't seem to be a very useful kind of definition of ownership. And of course, you can't really do much of anything in that situation. Now, on the other hand, this riparian water level has been adopted by the eastern states. On the other hand, the western states adopted the so-called appropriation form of water ownership, which is almost geared toward this kind of private property and river that we've been talking about. Appropriation theory is that, of course, in the western space it's very dry, so there's a lot of use of irrigation and so forth. If you start using, say, 10% of the flow of the river at a certain point, then you own 10%, you have the rights to 10%. The next guy has the rights to the second 30% or whatever. And the allocation then is sort of a private property basis.

47:56The problem with appropriation theory is that, first of all, the government regulates it very severely. You can't use it for this, you can't use that for that, etc. And second of all, you can't transfer the ownership. In other words, if I happen to have the rights to the first 10% of a river flow, I can't sell it. I have to give it back. If I want to stop using it, I have to give it back to the government. As a result, there's no real market or full private property has been allowed, even in the Western situation. But it's pretty clear that you can start with a Western appropriation system and move pretty quickly to a full private property in either the whole river or part of the river. It would be interesting to discuss that, what the technological unit of the river is. I'm not really sure. I'm sure that could be worked out if we all have the end in mind, the object in mind of establishing private property and water resources.

48:41If somebody owned Lake Erie, everybody's wiping about Lake Erie, but if somebody really owned it, then you wouldn't be able to pollute it because the Lake Erie owner would take you to court and sue you, etc., take out an injunction. In order to be able to pollute Lake Erie, you have to make an agreement with the Lake Erie owner and pay him for allowing you to pollute, which means that you then have the optimal amount of pollution, in quotes. In other words, the polluter is then paying for his pollution. He's paying the cost of it. If it becomes too expensive, and it obviously will become much more expensive than now because now the pollution is free, now you can dump this stuff in Lake Erie because nobody owns Lake Erie. So if somebody owned it and then charged you for this pollution, the amount of pollution obviously decreased enormously, and certainly the amount of invasive pollution, in other words, aggressive pollution, would decrease to zero, whereas now it's whatever.

49:25It's hard to know how much it is now, because nobody owns the river. That leads us to the final, probably the gutsiest, in a way, form of pollution, which is air pollution. What about air pollution? Doesn't capitalist greed bring about air pollution? First place, of course, we can say that one of the worst pollution problems is in Soviet Russia. Capitalist greed is very responsible, and second of all, perhaps the biggest single air polluter is Con Ed, the monopoly utilities and so forth, which are government regulated and whatever, it's hardly an example of free market activity. However, once again what you have is a situation where instead of capitalist greed being in full, the problem is the government has not allowed full use of private property, namely in your lungs and the air space around your head, or around your orchards and around your property. This problem first came up in the middle and late 19th century when factories first came in.

50:11First factories come in, say, around the mid-19th century. Somebody would set up a factory and they'd bulge smoke. In those days we weren't sophisticated, we didn't know too much about nitrous oxide and all the rest of it, but they knew about smoke, boy. They could see the smoke pour out, they could see the smoke, they could breathe in the smoke, they didn't like it, and they could see the smoke injure the orchards and the grass and the trees of the farmers. So the farmers began to take the factories to court, say, look, we've got to either The Court began systematically to say, well, we realize, former Jones, that you're really right, that this industry is invading your private property, however, and it's too bad, however, there's something more, we know, this is 1868, or whatever the year was, this is now progressive, no longer back in the old 18th century hydropower, hydropower companies, hydropower companies, and the private-bound kind of framework, we now realize there's something more important than private property, and that's public policy.

51:10Public policy and the common good and the general welfare and all that sort of jazz, and these things decree the factories are a good thing. We can't allow the development of factories to be limited or restricted by some kind of many farmers' private property. Therefore, we will permit this to continue. As systematically the law was changed by the judges, the whole common law system of tort law and nuisance law and all the things which would have corroborated the polluting factories immediately, before they hardly got started, all these laws were changed by the judges because before that, before, let's say, the Civil War period, any factory, the poor smoker, farmer, etc., could be, you know, it's an invasion of property and you get smashed and the farmer can come in, get an injunction, stop it and pay damages. But then they changed it systematically to say, well, because public policy The industry is important, etc. They changed the law to say the factory can only be paid damages, etc., if the factory is pouring more smoke than most of its fellow factory owners.

52:04Sort of an unusual smoke pourer, sort of maliciously doing it and so forth, then you can zap them, otherwise you can't. The thing is, it's only been discovered within the last couple of years that this has been done, this systematic change by the courts. It wasn't really done by statute so much as by judicial reinterpretation and burglarizing of the common law. The question is, why do they do it? And that hasn't been investigated at all yet. This has been a great open area for historical research. Why do the courts systematically do this? Of course, I have my own hunches about it, which is they were in league with the manufacturers, but that has not yet been proven. I can only say this is the first place I would look if I were doing the study of it. So we have the government changing the guidelines, saying, okay, we permit invasion of property in this area because the industry and factories are important.

52:49What's happened is over the last hundred years or so, the whole technology is of course geared toward a polluting technology, toward air pollution technology. My favorite analogy on this is, supposing the court decided when trucks were first coming in, you know, early 20th century, there was a traffic jam, the trucks started cutting across people's lawns in order to get to the other street. People would take their trucks to court, and the court would say, well, it's too bad about your lawn. We really weep about it and so forth, but it's really more important for the society to get the truck through. and so therefore if the truck isn't really doing significantly more damage to your lawn than other trucks will allow them to keep doing it. If that were true by this time you'd have a big lawn crushing technology and nobody would have any lawns at all and the trucks would be zipping over everybody's property. The whole system would be geared to it.

53:33And the same thing has happened in the industry now because the legal structure has been changed, because invasive pollution has been claimed to be free and permitted by the courts, industrial technology has been geared in that direction. Direction. What we have to do is to change this and establish private property once again in people's air and lungs and orchards etc. So that invasives non-polluting technology, but that was the government that set this whole thing up by changing the common-law structure. We see in every area that something peculiar has happened on the market, either a ravaging of a resource, undue depletion, pollution. In some way the market hasn't really functioned. It hasn't been because of the The market hasn't been because of capitalist greed. It's been precisely because the market of private property has not been allowed to function by the government itself.

54:19Call upon the government itself to do the remedying is like, in one of my favorite analogies, call upon the fox to guard the chicken coop against predation. It's obviously the government that's the main problem in this whole business, and we should then call upon the government to allow private property to function in these areas as it has allowed in other areas, or at least even more so. to catch up with the other areas of the market so that we don't have these extra problems messing up the system. Thank you.