Latest LTE. Response to Gillard’s comments on resource taxes

18 05 2010

It seems many people in our community believe they should properly be considered collective owners of minerals in the ground which apart from sharing the same country, they have nothing to do with.  While our legislation reflects this belief, it is both wrong and impractical.  Based on this idea people expect payment for mined ore.  Generally, these people don’t own or lease the land for mining, they didn’t invest any money, they didn’t do any work to extract the ore or refine it, they don’t transport anything to or from the mines, they don’t own the mining equipment, they didn’t invent the mining techniques required and they didn’t invent ways of using the ore to benefit people.  Therefore they shouldn’t own a cent.  To think otherwise is absurd.  By their logic, next time I’m holidaying on the Great Barrier Reef, I should be able to snap off some coral and take “my fair share”.  Additionally, anyone who thinks they have the right to a “fair share” of my veggie patch better look out.  Clearly, many people haven’t thought too hard about the concept of property rights.  (20/5/10 please read the rest of this entry below)

I sent this in today 18/5/10.  Hopefully will be published

Update 20/5/10: 

I’m actually quite unhappy with the above LTE.  This issue raises many points of discussion that require some explanation.  I need to focus in on one or two points better.  Also my metaphors do not fully fit the situation.  The idea that I deserve a cut of the profits to ANY good someone else produces (which will always necessarily rely on some physical resource one way or another) is absurd to me.  But it’s not to most people.

My original letter is trying to ask, why is it that people think they have a right to the proceeds of extracting a natural resource?  It’s trying to get people to think about property rights.  I’m also trying to work out why people think they should collectively own the land in a country? 

One of the arguments for taxing mining profits is that extracting the ore can only be done once. 
To me this is a non-essential.  But perhaps I could point out that a tree can only be cut down once.  Or perhaps I could point out that metal has been recycled for hundreds, probably thousands of years.  ie: it’s reusable.  But even if it wasn’t I’d still hold the same position.  I could point out that a miniscule percentage of the earth has been mined.  I could mention the dependence on intellectual discoveries and human creativity.  Wow, there’re so many ideas I wish to convey. 

Here’s take two:

Revised letter: 
It seems many people in our community believe they should properly be considered collective owners of minerals in the ground which apart from sharing the same country, they have nothing to do with.  While our legislation reflects this belief, it is both wrong and impractical.  Based on this false idea people expect payment for mined ore.  But what right do I have to ore in the ground considering I haven’t paid to own or lease the land for mining, I didn’t invest any money, I didn’t do any work to extract the ore or refine it, I don’t transport anything to or from the mines, I don’t own the mining equipment, I didn’t invent the mining techniques required and I didn’t invent ways of using the ore to benefit people.  I don’t deserve a cent of mining profits in the same way as I don’t deserve any profits made by a lumberjack.  I believe the key to this issue is a correct understanding of property rights. 

Letter two:

Human beings require material goods in order survive and prosper.  We must produce goods such as food from agriculture, timber from lumbering, clean water, plastics and metals from mining.  In fact all products necessarily require natural resources of one kind or another as well as knowledge (the often forgotten and most important resource without which many natural resources would be useless).  Mining ore is supposedly different because ore can “only be mined once”.  Considering the vast quantities of un-mined land on the earth this is a strange argument.  But what I want to know is why does the fact that ore can only be mined once mean that the community at large deserve a cut of any profits made by mining companies?  There is nothing wrong with humans extracting materials from the environment in order to survive and prosper.  Is it wrong for a beaver to build a dam or a bird to build a nest?  Further, in the case of mining and metal production, these resources are recyclable.  Metals have been recycled for hundreds of years.

Update: 24/5/10

Doh!  The Adelaide Advertiser printed my first letter.  The worst of the lot unfortunately.  But maybe it could fire up a few synapses amongst those who read it.

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