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Property rights and market forces

By David Leyonhjelm - posted Thursday, 4 August 2011


It also requires the right incentives so that it never becomes a zero sum game. Farmers need to have an interest in mineral rights, as in the US, but should also retain an interest in any water rights or carbon credits linked to their property. Miners may need a stake in the water rights and carbon credits associated with their area of activity, so there is an incentive to preserve them. In some cases an interest in the farming enterprise itself may be warranted, so there is an incentive to protect it.

Owners of water rights might need a stake in mineral and carbon rights so they are never in conflict, while owners of carbon credits certainly need to have a stake in any water rights.

Although these are issues of property rights with three out of of four created by government, that does not mean the government needs to take a major role. Intellectual property was also created by government, yet its market functions efficiently without intrusion by bureaucrats or politicians.

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A bit of smart thinking now could avoid any need to choose between mining and farming and get an increasingly fractious monkey off the government's back.

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David Leyonhjelm is a former Senator for the Liberal Democrats.

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