Thanks Tanks Wrap-up

April 26, 2002 at 8:29 AM
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WASHINGTON, April 26 (UPI) -- The UPI think tank wrap-up is a daily digest covering brief opinion pieces, reactions to recent news events and position statements released by various think tanks.

The Ludwig von Mises Institute

(The LVMI is a research and educational center devoted to classical liberalism -- often known as libertarianism -- and the Austrian School of economics. Grounded in the work of economists Ludwig von Mises and Murray N. Rothbard, LVMI seeks a radical shift in the intellectual climate by advancing the Austrian School of economics and by promoting the market economy, private property, sound money and peaceful international relations, while opposing government intervention as economically and socially destructive.)

AUBURN, Ala.--ANWR and Private Property by William L. Anderson.

During the debate on whether to drill for oil in the Arctic National Wildlife Refuge, the U.S. Department of the Interior has posted Web site pictures of the actual area where oil would be drilled -- and those pictures conclusively demonstrate that the pictures of mountains and abundant wildlife shown on television news broadcasts are misleading at best and dishonest at worst.

Of course, environmentalists and their congressional supporters have cried foul, for they would have us believe that scenic fields, mountains and wildlife would be ground into oblivion from oil drilling. But the Web site pictures tell us a different story.

Yet, the most important decision element has been missing from this debate, something that neither the pro- nor anti-drilling groups have addressed as they have argued with each other. Because ANWR is government property, the entire debate becomes skewed, as the issue of the Socialist Calculation Debate so eloquently presented by Ludwig von Mises raises its head again.

First, let us look at the reasons given both to drill or not to drill. Those who favor drilling say that (1) it makes sense to increase the available supply of oil products to consumers in the United States, especially given that much of the crude oil purchase by Americans comes from the volatile Middle East; (2) the process of drilling would disturb only a small portion of ANWR, so the environmental damage at worst would be minimal; and (3) the location of ANWR is so remote that very, very few people will ever visit the place anyway.

Environmentalists and their supporters counter with (1) any drilling will disturb a "priceless" and "pristine" wilderness that has "existence value" on its own; (2) the known reserves in ANWR by themselves would only amount to a 6-month supply of oil in this country at current usage; (3) forcing conservation measures on citizens would "save" more oil than is found in ANWR; and (4) the only real beneficiaries of drilling in ANWR would be private oil companies.

Thus, we are left with the reality that the political process -- which amounts to power by the group that either shouts the loudest or has the most votes in Congress (or both) -- will decide whether or not consumers will be able to use the oil located under the Arctic tundra. For all sorts of reasons, people should be alarmed that an important question like this is decided, not by individual buyers and sellers in the marketplace, but rather by what amounts to mob rule.

Should we drill in ANWR? While I personally believe drilling there might be a good thing, in truth I cannot answer that question one way or another. The reason is simple: ANWR is not private property, and one cannot engage in accurate economic calculation in its absence. Let me explain.

Most of Alaska has been in the federal government's hands since 1867, when U.S. Secretary of State William Seward "purchased" Alaska from Russia. At the time, the sale was derided as "Seward's Icebox" and "Seward's Folly," but it also most likely was unconstitutional, since Seward did not do it at the direction of Congress. (Of course, at that time, Congress was also doing its best to shred the U.S. Constitution by its imposition of Reconstruction regimes on the Southern states.)

Like much of the land in the Western states, Alaska finds most of its real estate controlled from Washington. Furthermore, much of this spectacular land is set aside in the form of national parks and wildlife preserves. For example, Dwight D. Eisenhower set ANWR aside during his presidency during the 1950s, and its very designation means that it will never be held in private hands unless Congress were to do a complete about-face -- something that is quite unlikely.

As Mises pointed out, the designation of private property is crucial when one engages in the very kind of economic calculation needed to determine whether or not oil companies should drill for oil in ANWR -- or anywhere else. For example, let us assume that I own a tract of land in the Appalachian Mountains near my home. Furthermore, let us assume that I am likely to have a large coal deposit beneath my property -- and that I also own the mineral rights to it.

I have a number options when it comes to making my decision. First, I could leave the land alone and let no one disturb it. Second, I could build a personal home there or even subdivide it and let others build homes as well. Third, I could mine the coal. Fourth, I might be able to do a mix of the first three options.

My decision of what to do with the land will be based upon how I value the land and its alternative uses -- something that is entirely subjective. I will weigh the costs and benefits as I see them in determining my choices.

According to Mises, socialism was doomed to failure because the lack of private property, plus the absence of a profit and loss system, meant that accurate economic calculation would be impossible in those regimes. Instead of order, there would be chaos -- something that was borne out time and again as we witnessed the poor performances of socialist economies. When Mises made these observations during the 1920s and 1930s and beyond, many of his peers derided him, calling him a "reactionary" and a "mossback."

In the end, they were forced to call him right.

Guess what? The Socialist Calculation Debate applies to the ANWR debate. As I noted before, we have no way to engage in the necessary economic calculation that tells us whether or not it is worth the time, money, and effort to extract oil from ANWR.& As long as ANWR remains in government hands, this condition will continue.

I see two, and only two, scenarios that would give us economically satisfactory outcomes. One would be for the government to permit oil companies to outright purchase the land that would be used for drilling. If there were no oil to be found in the mountainous areas of ANWR, or if the costs of extracting oil in that hostile

region were too high, one doubts that oil companies would be interested in disturbing even a small flower there, much less the caribou. Oil companies would decide according to the perceived costs and benefits of finding and drilling for oil.

My other scenario would be for environmental groups to purchase the land in question and set it aside for their own use. This "solution" is not entirely satisfactory, as environmental groups are nonprofit corporations and patterns of ownership would not yield the same results as what might be the case if individuals owned that land.

Whatever the pattern of ownership, the sale should be open to all, and not rigged so that one group or another would be able to take over the land because of political favoritism.

In fact, I hold that the federal government should be selling all of its lands, whether in Alaska or elsewhere in this country. The idea that government is an ideal "protector" of resources has been a sick joke. Mises understood that long before these debates even were taking place, and the results should convince the rest of us as well.

(William Anderson, an adjunct scholar of the Mises Institute, teaches economics at Frostburg State University.)

The Cato Institute

WASHINGTON--Banning 'freedom of engineering' is no remedy for movie and music piracy, scholar says.

Today, the House Energy and Commerce Subcommittee on Telecommunications and the Internet will hear testimony from News Corporation chief Peter Chernin and AOL Time Warner Chief Operating Officer Richard Parsons. The hearing's topic is "Ensuring Content Protection in the Digital Age."

Wayne Crews, director of technology policy studies at the Cato Institute, had the following remarks:

"Panicked by escalating digital piracy post-Napster, Hollywood movie studios and record companies are seeking government-mandated copy protection. Two bills dominate the debate. One by Sen. Ernest Hollings, D-S.C., and a companion House bill would prohibit the sale of digital devices that do not incorporate technology to shield digital

content, and would make it illegal to remove or disable the technology.

"But what would such a law really mean? The essence of personal computing is freely copying and playing files, evidenced by such pro-consumer moves as growing MP3 support in electronic devices like DVD players. Hollings' proposal apparently would make such initiatives -- as well as offerings like open source software media players -- illegal.

"Digitization has created a genuine crisis for copyright holders. But legislation that turns content providers and the computer and consumer-device makers they depend upon into enemies is outrageous. Mandated copy protection is worse than the run-of-the-mill protectionism that Hollings usually favors, which is often directed at market rivals.

Here, a complaining industry seeks to force its own market partners-hardware makers-to change their behavior so that it might thrive.

"Politicians have no legitimate authority to outlaw the development of entire categories of computing technology. More is at stake than simply a matter of a one-size-fits-all government standard having no place in computer programming, or the need to avoid "premature" regulation: legislators have no business telling us what kinds of machines and software we can invent for personal use -- period.

"Movie studios and record companies have ample incentives to develop a wide range of workable copy protection technologies, and to develop legitimate partnerships with hardware makers rather than try to push them around in Washington. That effort can begin when today's Washington-created expectation that others will shoulder the burden of one's piracy woes is finally put to rest.

"Content providers should be supported in their privately driven copy protection efforts. But they must not be allowed to sabotage the freedom of engineering that the technology industry absolutely cannot do without."

Pacific Research Institute

(PRI promotes individual freedom and personal responsibility as the cornerstones of a civil society, best achieved through a free-market economy, limited government, and private initiative. PRI researches and analyzes critical issues facing California and the nation, and crafts strategies for policy reform.)

SACRAMENTO, Calif.--Blame it on Rio, part deux. By K. Lloyd Billingsley.

Quick guess, what is the biggest crop in the United States? Wheat? Corn? Oats? Nice try. Actually it's lawn. It's spring and many homeowners are out working on their lawn, which may soon bear the heavy bootprints of government. Consider, for example, developments north of the border.

There, the Sierra Club, World Wildlife Fund, and dozens of local activist groups are pushing to ban the "cosmetic" use of pesticides on private property. In other words, no use of weed killer on your own grass. And the activists' motivation is not just personal. They invoke a measure that came out of the 1992 Rio Declaration on the Environment and Development.

It's called the "Precautionary Principle," but it would be a mistake to regard it as a common-sense measure based on "better safe than sorry." There's much more to it. Under the precautionary principle, the lack of full scientific certainty is no reason for postponing action to protect the environment. In other words, even if we don't have the facts, the government should take drastic measures as a first resort. This approach carries risks of its own.

Power corrupts and public officials always need careful monitoring, not more power. Further, public officials should pay more attention to science and less attention to discredited scaremongers.

Consider Stanford's Paul Ehrlich author of "The Population Bomb" (1968), a book that helped launch the modern environmental movement. Ehrlich, a bug expert, predicted that, because of pesticides, life expectancy in the United States would drop to 42 by 1980, when the U.S. population, he said, would be reduced to 22.6 million. Needless to say, the mass starvation and depletion of resources he predicted also failed to take place.

Likewise, the Alar scare, pushed by such great scientists as Meryl Streep, needlessly terrified millions of people. Likewise, electricity transmission and cellular phones do not, as some have charged, cause cancer.

No principle can alter the hard reality that the world is a risky place. Living in proven earthquake zones such as Los Angeles and San Francisco, is risky. Driving on the Santa Monica Freeway during rush hour is risky, as is riding a bicycle on city streets and eating in certain fast-food restaurants. Lighting and heating our homes and disposing of wastes also entail risk. In a world of limitations, actual risks must take priority over potential risk.

A chilling effect on technology is another likely consequence of the precautionary principle. New technologies, including those that make for a cleaner environment, seldom appear overnight. They require extended research and development. But under the precautionary principle, they could be quashed if their first efforts do not achieve

perfection. The principle could also halt the building of new bridges and high-speed rail lines that would reduce pollution.

Perfection is not attainable in public life or anywhere else. Therefore, sacrificing the good for the perfect, which the precautionary principle does, is no basis for public policy. Responsible public policy rejects fear-mongering, realizes the inevitability of tradeoffs, and carefully considers the best science before taking action. That is why, at this point

in history, policymakers need to reject the precautionary principle and consider instead a rule that usually applies to children: keep off the grass

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