The government owns a lot
more land than you think, By Mark Brandly, 3/20/16, Mises Institute
Land Socialism in the United States - My interest in this topic was inspired by Yuri Maltsev. A few years ago, Dr. Maltsev gave a talk at Ferris State University focusing on the evils of Soviet socialism (a portion of the presentation can be seen here). Nobody disagreed with Yuri's point that the Soviet economy was socialized, however, some took heavy issue with Yuri's claim that the US economy was also socialized to a large degree.
Government-owned Lands in the Oceans - What about the submerged lands? The federal government also claims ownership over what they call the submerged lands of the US. These claims began with 1799 legislation regarding the "customs waters," allowing the boarding of foreign flag vessels within 12 nautical miles of the coast. Over time, these claims have expanded and in 1945, Harry Truman declared US government jurisdiction and control over the continental shelf.
During the next decades, governments of the world claimed increasingly larger amounts of the ocean beds. Problems occurred, however, if two governments disagreed over these claims. This became a United Nations issue in the 1970s, and in 1982, at the United Nations Convention of the Law of the Sea, the countries of the world came to an agreement regarding their Exclusive Economic Zones (EEZ), whereby each country owned the sea and the sea beds out to 200 nautical miles offshore.
Back to the Calculation Problem - The government ownership of lands leads to several economic problems. Government officials can use their control of the natural resources to reward politically favored industries and punish their political enemies. Second, government restrictions on the use of resources on government lands limits economic growth. Third, and this is Mises's point regarding socialism, land socialism will create economic calculation problems.
In
"Economic Calculation in the Socialist Commonwealth," Ludwig von Mises challenged the
socialists to explain how economic calculation could be performed in a
socialist economy absent prices. Mises concluded that economic calculation in a
socialist economy is impossible, therefore socialism is impossible.
Mises
wasn't saying that you couldn't have a socialist society, he was saying that
it's not an economy, in the sense that decision makers are economizing
regarding their decisions about the allocation of resources.
Socialism,
at the time, was defined as a system where the state owns the means of
production. The state owns the natural resources and the capital, such as the
factories necessary for use in the production process. Given this state
ownership, the resources are not being traded in any market and since there are
no markets for the resources there are also no market prices for the resources.
In
an economy where resources are privately owned, the exchange of those resources
would provide us with market prices. And those prices provide us with a sound
basis for assigning resources to their most productive uses.
This
rational calculation is impossible in a socialist economy.
Mises
concluded, "Thus in the socialist commonwealth every economic change
becomes an undertaking whose success can be neither appraised in advance nor
later retrospectively determined. There is only groping in the dark. Socialism
is the abolition of rational economy." (p. 23)
This
led me to consider the degree of land socialism in this country. This is a
critical issue. Starting with the available land and labor, the structure of
production is determined by the available technology and the capital that we
derive from the available land and labor. Government control of the natural
resources gives the government tremendous control of the whole economy,
distorts prices, and diminishes the efficacy of our economic calculation.
Is
US land ownership heavily socialized? Let's begin answering this question by considering
the states with the largest percentages of government-owned lands.
In
Alaska, federal land is 61.2% state owned land is 30%.
In
Nevada federal land is 84.9%, state land is 0.2%.
In
Utah federal land is 64.9%, state land is 7.3%.
In
Idaho federal land is 61.6%, state land is 5.2%
In
Oregon federal land is 52.9%, state land is 4.9%.
In
Wyoming federal land is 48.1%, state land is 6.2%
In
Arizona federal land is 38.6%, state land is 12.5%.
In
New Mexico federal land is 34.7%, state land is 11.2%.
In
California federal land is 45.8%, state land is 2.2%
In
Colorado federal land is 35.9%, state land is 4.4%.
In New
York federal land is .03%, state land is 36.7%.
Nevada
has the largest percentage, 84.9 percent, of federally owned lands, but 30
percent of Alaska is state owned, so Alaska has the largest percentage of
government-owned lands. As you can see, due to the Louisiana Purchase and other factors,
much of the federal land ownership is in the Western states. I included New
York on the list because New York has the highest percentage of state-owned
land.
Admittedly
there is some false precision in these numbers as the states and the federal
government have some difficulty in accurately providing statistics on their
land ownership.
Next,
consider the largest federal agencies ranked by land ownership.
Bureau
of Land Management 247.3 million acres.
United
States Forest Service 192.9 million acres.
Fish
and Wildlife Service 89.1 million acres.
National
Park Service 79.6 million acres.
Department
of Defense 14.4 million acres.
Texas,
with 171 million acres, is the second largest state. We see here that the BLM
and the Forest Service are both larger than Texas. And the fourth largest
agency, the National Park Service, is larger than all but four states, Alaska,
Texas, California, and Montana, slightly larger than New Mexico's 77.6 million
acres.
Note
that these numbers do not include the Bureau of Indian Affairs. The federal
government claims that the 55 million acres of BIA lands are Indian lands not
federal lands. I don't know if the Indian tribes agree with this assessment.
The Indian lands, if they were a state would be the 11th largest state, almost
equal in size to Utah's 54.3 million acres.
The
Department of Defense administers 14.4 million acres of land, according to
a 2014 Congressional report. (By the way, a 2012 Congressional
report with the same title as this report claimed that the Department of
Defense administers 19 million acres of land. There is no explanation for the
missing 4.6 million acres in the 2014 report.)
The
federal government, according to this report, "owns and manages roughly
640 million acres of land" and there is an estimated 200 million acres
owned by the various state governments. Therefore, 37.1 percent of US dry
land is owned by some government.
A map of the government land ownership will help us put things in
perspective. Note that this map shows only the federal holdings and the Indian
lands and omits the 200 million acres of state lands. Still, it provides us
with an illustration of the degree of land socialism in this country. The
federal government owns most of the land roughly from the Continental Divide
west to the Pacific Ocean.
Due
to Congressional resistance of United Nations treaties, Congress did not ratify
this agreement. But Ronald Reagan, in 1983 simply proclaimed
sovereign rights over the US Exclusive Economic Zone. He ratified the agreement by
presidential mandate.
According
to a Department of the Interior report, there are 3.9 billion acres in the US EEZ. Reagan's proclamation was
the biggest land grab in US government history.
Consider this map of the US that includes the US EEZ. The various colors highlight the
regions of the EEZ.
The
federal government owns the sea beds out to 200 nautical miles off of the
Atlantic and Pacific coasts and much of the Gulf of Mexico. Due to the Alaska
Peninsula and the Aleutian Islands, there is a tremendous amount of EEZ lands
off of the Alaskan coast. And the US government claims ownership over immense
amounts of the Pacific Ocean, much of which is due to the military use of small
islands during World War II.
For
instance, the Johnston Atoll in the Pacific was used as an
airstrip of about one square mile during WWII. Since this tiny island is now a
federal holding it allows the government to claim ownership over 166,000 square
miles of ocean sea bed, which is approximately the size of California.
We
can now consider the total amount of US government lands. One point to make
here is that there is over 70 percent more submerged lands in the US than the
total amount of dry land in this country. That is, the federal government owns
more submerged land than the total amount of land in the 50 states.
Thus,
76.9 percent of total land in the United States is government owned. There is
no doubt that regarding this essential resource, land, our economy is heavily
socialized.
The
first calculation issue here is the government's decisions regarding the use of
this land and the resources on and under the land. Since the government owns
the land, we see no prices for these resources. The government has no way to
economize on these resources in the sense that government officials, even if
they wanted to, could not efficiently allocate these resources. They make these
allocation decisions based on political considerations, so they end up allowing
the private sector to access the wrong resources, wrong in the sense that if we
were allowed to have private ownership of these resources, we would choose to
use the resources much differently, and more efficiently.
The
second issue is that the economic calculation of private businesses is
distorted by government control of the resources, because government ownership
distorts the prices of the resources. If the prices were based on the private
ownership of land and resources, for instance, we would see a different array
of energy prices. The prices we see for resources do not accurately reflect the
underlying realities of resource availability. Even though we are engaged in
calculation when we allocate these resources, we are not economizing on the
resources in the sense that Mises described.
Due
to the high degree of government land ownership, the US government distorts
economic calculation in the exact manner that Mises explained and predicted in
1920.
Norb Leahy, Dunwoody
GA Tea Party Leader
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