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Pastimes : Let's Talk About Our Feelings!!! -- Ignore unavailable to you. Want to Upgrade?

To: Chuzzlewit who wrote (33568)	3/31/1999 12:07:00 PM
From: nihil	Read Replies (2) \| Respond to of 108807

A Calculus to rationalize greed --- Oh, perhaps, but I think that the economic analysis of accumulation of capital as a replacement for wasting assets encourages, rather than accelerates, environmental waste. The economically rational resource owner faces two problems: (1) selling (or exploiting) too soon; (2) selling (or exploiting) too late. Sell too soon -- You bring in a new oil field ($15 bbl crude) and develop the field and pump it rapidly dry selling everything for what you can get (or selling the field to someone else). If everyone is doing this, the easily exploited (cheap to produce oil) is used up pronto and the price of oil goes up, up, up as the last drops run oit. When you've finally drilled every acre of productive rock as deep as you can go the game is up. Overexploitation of fields led producers to demand regulation, compulsory unitization of fields, and limited allowable extraction. This conspiracy saved the American oil industry. Every petroleum economist will explain to you (if you will listen) how rational exploitation of an oil field requires such controls. Rational exploitation of a nation's oil resources requires a national plan and controls. Rational exploitation of the world's oil resources requires ...[left as an exercise for the student]. Sell Too Late Resources are a dynamically redefined asset. One of the major sources of precious minerals today is reprocessing the waste from prior mining operations abandoned after being insufficiently processed. (Some very deep gold mines with plenty of gold left are being shut down because operating expenses (negative cash flow) exceed the current price of gold.) New mines, sufficiently rich to repay investment with new extraction techniques, are being opened. Today they are a resource. Ten years ago (when gold was higher priced) they weren't. Offshore deep oil resources were not exploitable 20 years ago. Today they are (although the real price of oil is much lower than 20 years ago. Easily exploited "Naval Oil Reserves" should have been exploited 50 years ago and the proceeds used to buy leases on domestic resources that were not yet reserves. One thing investment theory teaches is the power of compound interest. Rich people know this power (that is one reason that they are rich). Poor people and poor peoples do not (that one reason they are poor). Japan's capital plant and resources were nearly wiped out in the war. They never changed the yen in defeat. One single yen was worth about $.50 US (3/4 oz. of silver) in 1928. In 1950, it was worth 1/270th of a US dollar. By brutal saving and control, Japan rebuilt itself to become on of the richest countries in the world and the major exporter of capital that had been wrung out of the people's hides. Now Japan can afford to preserve its forests and shut down its mines. It still likes to do whale research for a snack. Now Japan destroys American, Indonesian, and everyone else's environment with its ravenous appetite for materials and its exported capital -- most of these people are too badly organized to price their assets rationally (put some high-grade tropical hardwoods -- ebony, rosewood, and teak away to season if you really want to get rich). I don't think sentimentality and high thoughts will get us anywhere. If we want our environment to survive the owners must be paid to keep it natural -- either by expectations of future values or grants and tax credits to keep what we want. I own 100 acres of forest and have to pay taxes to continue to own. If I give it to a nature conservatory or other charity, I can receive tax deductions against my other income. Given a suitable valuation, I will give this forest to charity. Instead, the county assesses it a ridiculously low value that make it cheap for me to keep it, although I earn no revenue. Tax the land at its full developed value and I will happily give it away to be preserved. A California condor costs at least a half-million each to hatch and rear and provide for range. If you want condors you have to buy them now. They will never be cheaper. Pay for them now, or do without and visit their skins in the museum. What makes me furious looking back is that I didn't sell my land for what I could get and buy Microsoft or Dell. Don't expect me or anyone else to continue to make this mistake. Think I'll dump my gold and put the proceeds in internuts.