Who Rightfully Owns Mineral Resources?
Dave Killion — October 22, 2012
Advocates of estate/inheritance taxes argue, in part, that the heir has not earned the newly-acquired wealth and is therefore not entitled to keep all of it. But have said advocates considered the ramifications such an argument has for people in poor countries where there are substantial natural resources? Tim Newman asks us to consider…
“… a country which sits on a sizeable mineral wealth which it has no idea how to extract. For hundreds of years this wealth remains unrealised as it sits beneath the ground, whilst the people living above it barely know it exists. Then some foreigners turn up and spend years (sometimes decades), millions if not billions of dollars, and the lives of thousands of individuals working in pretty dire conditions to figure out how to extract this resource and make it worth something. Eventually these efforts pay off, and the foreigners start making some money. Thus far, the locals have contributed next to nothing. So what share of the proceeds are they entitled to?
According to the likes of Richard Murphy, they are entitled to most of it. After all, they happened to be born sitting on top of an oilfield. Yet the same justification is not applied to our fortunate heir in the example I gave above. He is…. reaping the rewards of unearned wealth, whereas the governments of oil exporting countries are reaping the rewards of what is theirs by right.
The two positions are somewhat inconsistent, aren’t they?”
I don’t think Newman is doing much here to counter the estate-tax proponents. All the same, I’m happy to encounter this argument because I have been worried that when I buy oil, gas, and other mineral resources from countries with corrupt governments, I have essentially been buying stolen goods (because those resources are actually the property of the populace, rather than the state). But Newman’s example reminds me that government claims of ownership over dormant mineral resources are, from a libertarian point of view, very weak. In fact, businesses that extract and distribute those resources establish a much more robust claim of ownership, by dint of their efforts and investments. That certainly goes a long way toward alleviating my anxiety.
Disclaimer: The articles and opinions expressed here are the views of the writer and do not necessarily reflect the views and opinions of the Libertarian Book Club.