Comments (25)

• EnEm

  Very simply put:
  o Taxes on any form of human effort and enterprise should be outlawed
  o The United States of America has a Constitution that upholds Individual Rights, of which Property Rights are a Corollary. It also upholds that rightly, property is owned by individuals and ownership presupposes effort as an Earned Value
  o This very act of imposing taxes in the name of the public and announcing natural resources to be public property goes against the Constitution and is therefore illegal.
  o A natural resource is just a resource until the human mind is applied to it, whereby it is turned into a product. And the owner of the product is the one who created it.
  

  Published: November 15, 2007 10:34 AM

• Michael A. Clem

  If I'm reading the article correctly, this would only be on mines on "public" lands, not on private lands. The obvious solution is that the government shouldn't be owning so much land, but should sell it off to private owners. This is much like the problem with public forest land, where private companies are charge below market rate and allowed by government to clearcut forests. The government is not a good custodian of the environment or natural resources, since they are always driven by political concerns, not economic.

  Published: November 15, 2007 11:25 AM

• happylee

  It saddens me to think the real ulterior motive is to bring mining on public lands to an end. They have already closed off most roads, banned recreational vehicles that allow mere mortals to penetrate a couple miles into hallowed territory, prohibited any new potentially profitable use of the surface areas (condos at grand canyon, cottages in yellow stone, etc), restricted public access so severely that you now need a bloody day pass to walk along the rocks or put a canoe in the water, etc.

  A few years ago two fellows gave an interesting presentation at a ASC noting that there is a massive gov't conspiracy to herd humans in dense metropolitan areas so as to make eventual total control easier. Having folks live in towns and village with one stop light and one part time sheriff will not cut it. Is this tax proposal part of the master plan? Mining companies, like logging companies, are often the only ones operating in the middle of nowhere. Building roads, building towns, setting up general infrastructure, etc.

  Published: November 15, 2007 11:47 AM

• coyote

  I almost never disagree with you, but I must in this case, some. If someone comes to prospect on my private land, I am going to negotiate a royalty with that person. Same with oil. I don't like the government owning a bunch of land, but if they do, it is not unreasonable they get a royalty from mining as any private owner would. I don't think the fact of requiring a royalty payment is any more unreasonable than, say, the government require someone who is occupying empty space in a government building to pay rent.

  I will agree that setting the royalty rate by statute is nuts. The problem is that negotiation does not work very well with the government. Cronyism comes into play, as well as skills, and a power imbalance, such that it seldom goes well. This is why in many of its use contracts the government is requiring minimum rents or royalties. One might argue an auction would make sense, but this would expropriate the prospector from his work obtaining unique knowledge that a deposit might even exist.
  

  Published: November 15, 2007 11:53 AM

• Virginia Hammon

  This is a fuzzy argument. Most business requires materials that go into the cost of production. The cost of those materials raises the cost of production, and thereby the cost of living for all who need the product. If you provide steel to a manufacturer, the manufacturer has not been "enslaved" because you require recompense. The public owns mineral assets, and just compensation is just business.

  Published: November 15, 2007 1:08 PM

• Kevin B

  Coyote,

  The government you refer to does not gain posession of land through rightful means, but through taxation and/or other physical coercion. Therefore, such government has no right to demand royalties on land that it really has no right to.

  Since you did not engage in theft to acquire your private land, you have the right to bargain for royalties.

  Published: November 15, 2007 1:09 PM

• Vedran Vuk

  Coyote,

  Your point on private land is true. But the government does not own the land in the same way as me and you. And I don't mean just public vs. private. I think this brings an issue of homesteading. Even if we did say that the government owns the land, we could not say that they properly homesteaded the unused land as would a private individual who uses land unused by anyone before. Saying, "This thousand mile area is mine." Does not make it rightfully yours. Not only do I think the mine has a right to continue its operations, but the land should be without charge given to the mining company who has properly homesteaded the land my mixing large amounts of their labor with it. Something the government has never done and therefore, should have absolutely no claim.

  Published: November 15, 2007 1:11 PM

• Anthony

  I agree with EnEm and Vedran.

  Published: November 15, 2007 6:51 PM

• TLWP Sam

  Bleh! It's quite clear here the term 'government ownership' apparently is a catch-all for all those who attained land from 'force and/or fraud'. The very fact seems to be the way people complain about 'goverment did this' and 'government did that' would be irrelevant if the land was privately owned and privately operated. Apparently if the land was privately owned every complaint become okay. "It's his land so if you to make use of it he gets to make rules if you can't abide by those rule you can leave".

  So this makes for interesting history revision. If a monarchy attained their land wrongfully they are 'government' and have no 'right' to their land and deserve to be overthrown. Whereas if a monarchy happened to be the descendents of a farming family that 'did good' then to overthrow the family would be criminal violence and theft. The new impromptu revolutionaries should be crushed by surrounding honest monarchies for their criminal actions.

  Published: November 15, 2007 7:36 PM

• Anthony

  Thanks for the article. It gave me a better understanding of the immense effort and capital involved in mining.

  Published: November 15, 2007 9:11 PM

• TokyoTom

  Mr. Poliquin, as previously, gives us half of the story on an interesting topic.

  We discussed many aspects of mining before at this link: http://blog.mises.org/archives/005094.asp; some of you may wish to take a look or to refresh your recollection.

  Unfortunately, Mr. Poliquin's post tells us nothing about either the existing mining law (essentially unmodified from 1872) or the reforms proposed by the House. More info here:

  http://resourcescommittee.house.gov/index.php?option=com_content&task=view&id=319&Itemid=27
  http://thomas.loc.gov/cgi-bin/query/D?c110:4:./temp/~c1104GzT58::
  http://www.nma.org/mining_law.asp
  http://www.gallupindependent.com/2007/november/110207kh_hrdrckmng.html

  General background information on hard rocok mining in the US:
  http://www.pewminingreform.com/problem.html
  http://opencrs.cdt.org/rpts/RL33908_20070308.pdf
  http://seattlepi.nwsource.com/specials/mining/
  http://westernskies.krcc.org/transcripts/10-27-2005/WS_10272005_B.html
  http://www.free-eco.org/articleDisplay.php?id=398
  http://www.free-eco.org/articleDisplay.php?id=293
  http://www.free-eco.org/articleDisplay.php?id=220
  http://www.free-eco.org/articleDisplay.php?id=185
  http://www.free-eco.org/articleDisplay.php?id=146
  http://www.free-eco.org/articleDisplay.php?id=8
  http://www.nocyanide.org/others.htm
  http://www.bettermines.org/

  Nor does Mr. Poliquin address what is the real issue: the fact of government ownership of most of the West and the related problems stemming from government's poor management of the land, the ability of miners to acquire "public" resources at very little cost and to leave the public holding the bag for huge and ongoing environmnetal costs, and the inability of other users of the public lands (ranchers, hunters, fishermen and others who increasingly value environmental amenitites) to influence resource use via the marketplace (other than the public choice marketplace).

  I would respect miners who would advocate a general privatization of public lands, but generally what we see instead is a desire to take resources for free, while passing costs off to others.

  Published: November 15, 2007 11:23 PM

• David Johnson

  Coyote gets it right. The owner of the land gets to make the rules about its use. That the government has no moral right to own that land is off-topic.

  Some of us don't have the luxury of living in the rarified air of purist anarchist theory, but have to reside in the real world instead. This pedantry is rather like criticizing public school cafeterias for charging for meals.

  Published: November 15, 2007 11:59 PM

• Jim

  We should never anthromorphize "Public." "Public" only exists as a conceptual construct. "Public" can not think for itself or do anything for itself, because it does not exist as an individual entity in the real world. It's always the rulers who do the thinking and doing in the name of "the Public" . . . for their own benefits. "Public" is just a euphamism for their fief.

  "Public ownership" should be only construed as nobody owning the property, or un-ownable property. "Owning" a property is meaningless if no rent can be saught on it; each one of us can be claiming to "own" Alpha-Centuri until humanity has the ability to reach it . . . such conflicting claims result in no conflict at all in real life because no rent can be sought upon such claims. Seeking rent however is the active part of ownership. That should never take place for "public owned" property. Otherwise, it's instant serfdom/slavery for whoever has to use such property. Why? because "the public" does not exist as a thinking person and is under no competitive pressure to make profitable use of its "ownership" except for the benefit the rulers who do not actually "own" it but seek rent from it. In other words, allowing rent seeking on "public owned" property is essentially expropriating the public for the benefit of the ruled, per force . . . in other words, serfdom.

  How to maintain public property? pay for the maintenance out of other general tax collection. If the public is unwilling to be taxed in general to pay for such maintenance, sell the property off to those who can actually manage it for themselves.

  Published: November 16, 2007 4:21 AM

• Eduardo

  I agree with the concept that public land has no moral basis. But I think that this "original sin" also applies to private land.

  Historically all governments/countries come to be after taking the place of an older one, and the new one reshuffles the deck of private property; as taking the old public lands, confiscating/expropiating/reassigning the lands of the people loyal to the older regime, and consenting that the rest keep what they have.

  I think that very few, almost nil, private properties could be traced back uninterruptedly to be bought/traded/ceded to its original homesteader. Almost always have been a government which cut the chain, whith its inmoral and abusive intrusion.

  Considering this, I think that to try to restore property to a moral begginning is almost impossible, and would be very disturbing. So we must start from where we are, and try to privatize public lands.
  Which should be part of the effort to steadily shrink government until its extintion.
  

  Published: November 16, 2007 7:06 AM

• Whiskey3

  I am a little stuck philosophically on this issue. While I respect that the company is putting up it's capital on the risk, they have historically left costly and dangerous messes behind for which all of us pay hugely. While the people in FL from the example should not receive money (from company XX) based on membership in the political system, neither should they have to pay to clean up the mess left behind by the same company XX.
  

  Published: November 16, 2007 10:44 AM

• Kevin B

  Agreed Eduardo.

  Published: November 16, 2007 12:01 PM

• david

  4% ? Be glad you don't live where I do. here the government stripped mineral rights from land ownership long ago. These in turn are leased to big mining companies for fat royalty payments paid directly into state coffers.

  Published: November 16, 2007 12:45 PM

• Jim

  The "sin" in this case has nothing to do with "original sin" but the sin of ongoing rent-seeking in the name of physically non-existent entity called "public" for the benefit of the rulers.

  On the "original sin" concept itself, there has to be statute of limitation, in terms of a few generations of being passed along through non-violent means. Just like Henry IV was a usurper, but his son Henry V was a rightful king through inheritance. Perhaps on the subject of modern property ownership, more than one generation of peaceful passing is needed, but it certainly can not trace back indefinitely; otherwise, like you said, there wouldn't be titles at all.

  On the cost of cleaning up afterwards. The answer is quite simple: if a private entity is given ownership of the land, there will be incentive to clean up and sell the land afterwards. If the land is not worth selling, then obviously the land is not really worth cleaning up either. Wait until there is more economic use of the land invented, then someone will claim the land and clean it up. The woods of New England had been clear-cut several times over the past 400 hundred years. Once for building Royal Navy ships, several times for farming, sheep herding and maple syrup making. They are not "restored" what see today as the beautiful New England woods until the highway system of the 50's solved all the food need so that New Englanders could get all their food requirement from California, Florida and the Midwest. The nature has tremendous recuperative power. That power enalbled generations of New Englanders to make livings over the past 400 years.

  "Public land" has to be thought of as Public Domain . . . i.e. nobody, not even the government should be able to seek rent from it.

  Published: November 16, 2007 12:49 PM

• Jim

  Forgot to mention: when "Public land" is Public Domain, "the public" (or more precisely market place consumers) derive benefit from lowered product costs . . . whatever is being produced.

  Published: November 16, 2007 12:53 PM

• Jesse

  Calling something "Public Domain" is just another way of saying that it has no owner. Any land that has no owner is available for homesteading, and as soon as someone homesteads part of the former Public Domain they have every right to seek rent for what is now their property.

  Anyone who attempts to inhibit homesteading a piece of land is effectively making a claim on the land themselves, since only a valid claim of ownership, established through homesteading and subsequent voluntary contractual transfer, could prevent another from homesteading it. Either way the land must become private property before the choice of whether or not to seek rent for it presents itself.

  Published: November 16, 2007 5:56 PM

• Jim

  Jesse, exactly! It should be illegal to seek rent in the name "the public." "The public" is not a physical individual, therefore not capable of homesteading, therefore can not collect rent.

  The land should belong to whoever works on it first (homesteading) . . . and the fruit from that work benefit other consumers at large . . . that's how "the public" can benefit from the use of the land without random self-appointed bureacrats seeking rent in their names only.

  Published: November 16, 2007 11:53 PM

• TLWP Sam

  What on earth are you saying Jim? The relatives of the thief can legally/morally benefit from ill-gotten gains? If so then history has followed rather libertarian lines. A similar question is - do people who have bought stolen goods in good faith obligated to return the goods to the original owner? Apparently in parts in Europe = no, but in Australia = yes.

  Published: November 17, 2007 12:27 AM

• Quietly

  An ancient story set the precedent: "Pharaoh told the slave drivers and foreman in charge of the people. You are no longer to supply the people with straw for making bricks. Let them go and get their own straw. But require them to make the same number of bricks as before, don't reduce the quota. They are lazy, that is why they are crying out. The slave drivers and the foremen went out and said to the people, 'This is what Pharaoh says, 'I will not give you any more straw. Go and get your own straw wherever you can find it, but your work will not be reduced at all.'"

  We should be content that the house did not write in 40% and 80% royalty, or 140% and 180%. Or that they didn't mandate nationalizing all mines... and then make the people work them for nothing.....They missed their chance this time around....Let's see what they come up with next.

  What should we expect when we hire jackals to guard our babies?

  Published: November 17, 2007 7:43 PM

• Jim

  TLWP, there are two dimensions on this issue:

  1. Are people who have bought stolen goods in good faith obligated to return the goods to the original owner? Some jurisdictions say yes; others consider the good faith purchaser victims too of the fraudulent seller, on par with the original owner. That's all assuming the original owner, or his/her direct immediate descedent is still alive

  2. The issue becomes much more complicated if the original owner is long dead, and we are talking about the n-th generation heir. On the topic of land, it would be hard to imagine any piece of land was not "stolen" at some point in the past 5000 years of history. If "return to original owner" were mandated, we'd have endless disputes just like in the middleast, except for every square foot of land all over the world. For practicality, there has to be statute of limitation; otherwise, no land title could ever be secure.

  Published: November 18, 2007 12:44 AM

• Tom Hurst

  Issues of "government land" aside, I would not that even prior to this new royalty requirement the government-imposed expenses associated with opening a new mine in the U.S. were so cost-prohibitive that they drove most of the mining industry to other countries. Two years ago while at a mining convention, I made it a point to ask every mining company representative there whether they would consider developing new properties here. Every single one of them emphatically said absolutely not, because it was much faster, cheaper and easier elsewhere.

  Real data supports those results. As I recall, the National Mining Association reports that it takes, on average, over 8 years and tens of millions of dollars to negotiate all of the various government permits required before mining can even start. No other industry endures such long lead times and high up front investment, while at the same having to accept great uncertainty in future economic returns and regulatory changes.

  Published: November 18, 2007 5:08 PM