Lost royalties cost taxpayers billions

[Doug]

DOUG
In the late '90's, the Republican Congress authorized leases to gas and oil companies to drill offshore in federal lands. After recouping their drilling investments, a percentage of the profits is supposed to go to the department of interior and to the government, to repay the taxpayers for allowing a private firm to use public land.

But the Republicans forgot (?) to write in the royalties agreement part that kicks in when companies are making profits, so oil and gas companies have been keeping all the profits and paying the federal government ZERO.

Now there is an uproar about this and the government is expected to correct the "oversight."

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Some oil firms willing to change drilling royalties
Lease errors could cost US $10 billion
By Associated Press | June 22, 2006

WASHINGTON -- Several major oil companies said yesterday they were willing to discuss with the Interior Department changes in offshore drilling leases containing a government error that could give the industry a $10 billion windfall.

But other companies, including Exxon Mobil Corp., said that while they are ready to work with the government on the issue, they oppose changes in the leases, issued in the late 1990s...

The error in contracts for deep-water drilling in the Gulf of Mexico could cost the government $10 billion in lost royalty payments given the current price of crude oil and natural gas, according to an analysis by the Government Accountability Office .

The contracts, issued when oil and gas prices were low, allowed lease holders to avoid royalty payments as a way to spur drilling in the deep waters of the Gulf. But they also were supposed to have language that the royalty relief would end if oil prices exceeded a certain level. Since then, prices have soared to more than double the royalty trigger.

See here.
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[Hogeye]

Government leasing of nationalized "property" has more serious problems than simply failure to collect royalties. There is corruption, favoritism, and most important for environmentalists, tragedy of the commons. All such property should be privatized, i.e. devolved from the State and converted into private property. It matters less how it is done than that it is done. Auction is off, or give it to Sierra Club type organizations, whatever. Just get it out of the hands of the State.

[Doug]

Government leasing of nationalized "property" has more serious problems than simply failure to collect royalties. There is corruption, favoritism, and most important for environmentalists, tragedy of the commons. All such property should be privatized, i.e. devolved from the State and converted into private property. It matters less how it is done than that it is done. Auction is off, or give it to Sierra Club type organizations, whatever. Just get it out of the hands of the State.

DOUG
So it doesn't matter what happens to it as long as the state doesn't own it? I don't agree with that. If it is important to preserve parts of our land for posterity, it is not a good idea to put all or even most of it in private hands. In private hands, there is less liklihood of accountability.

[Guest]

Doug - You said it!!

[Hogeye]

So it doesn't matter what happens to it as long as the state doesn't own it?

No, that's not what I said at all. I want these resources to be part of an incentive system which allows for human freedom and a strong likelihood of good uses. In other words, I favor market arrangements over government control. I trust the market and its diverse organizations, such as the Ozark Society and Nature Conservancy and Sierra Clubs more than I trust the government with its political suck and bureaucratic departments.

There is more "accountability" to society with private ownership than from state control. What will it take to convince you of this - Bush leasing the Alaskan wilderness to cronies? Hasn't all the past government rent-seeking in mining, grazing, and logging "rights" been enough evidence for you? Beware of naive wishful thinking that if only we could get our chumps in power, everything would be all wonderfulness. Look at real existing government; as it is, and not as a pie in the sky thing.

[Barbara Fitzpatrick]

There is only accountability if there is a governmental structure to work in. The organizations mentioned do very good work within that structure. Without that structure there is chaos, which kills or enslaves ordinary folks - especially women and children. Being a woman and having children and grandchildren, I am not in favor of chaos.

[Hogeye]

Anarchists like me are also against chaos. Our motto is: Liberty is the mother, not the daughter, of order. We consider government to be the main chaos-maker, with its wars, mass-murders, orgies of plunder/taxation, mass imprisonment of peaceful people, civil asset forfeiture, crippling regulation, and so on.

You still don't seem to understand that property rights, legal systems, police services, arbitration services, and so on could be done better, more morally, and, yes, with more order, without the yoke of State. I have not yet succeeded in convincing you that liberty is better than authority, contract better than coercion, society better than State. But I'll keep trying.

[Barbara Fitzpatrick]

Liberty is the mother of order, but "free market" is the greatest enslaver of all. Government is the only force able to reign in runaway capitalism. That is not to say all governments do their job of protecting "we the people" from megacorporations (those that are big enough to control the market instead of the market controlling them), most do not. In fact, at the moment, New Zealand is the only country that comes to mind that balances the needs of the people with the needs of the market - America certainly does not. It isn't government itself that is the problem. Any small powerful group, be it landed gentry or corporate CEOs, that gains control of government causes the problem. The only fault of government itself is in allowing itself to be "bought". Property rights, legal systems, police services, etc are only viable and valid within the framework of government. That we are struggling to bring true "government by, of, and for the people" from our current "government by, of, and for the corporate CEOs" does not make it any less true that order of and for large masses of people requires government.

[Doug]

You still don't seem to understand that property rights, legal systems, police services, arbitration services, and so on could be done better, more morally, and, yes, with more order, without the yoke of State.

DOUG
It would help if you were able to provide concrete examples of where this has been done. Despite repeated requests for such evidence, no anarchist has ever been able to provide any.

[Hogeye]

Hogeye> "You still don't seem to understand that property rights, legal systems, police services, arbitration services, and so on could be done better, more morally, and, yes, with more order, without the yoke of State.

Doug> "It would help if you were able to provide concrete examples of where this has been done."

I given many examples of these services being provided sans state on this board. You must have missed them. Here are a few examples.

Property rights - The American West (cf: An American Experiment in Anarcho-Capitalism: The Not So Wild, Wild West PDF, also the book "The Mystery of Capital" by Hernando de Soto available in the Fayetteville Library has a lot on "customary law" wrt property rights in pioneer America.)

Legal systems - Anglo-Saxon Common Law, Law Merchant, various indigenous legal systems from the Yurok American Indians to the nomadic Somali Xeer. Celtic Ireland, Classical Iceland. Also, google "polycentric law" for tons of examples.

Police services - besides those already mentioned connected to property or general legal systems, most cities did not have municipal police until Robert Peel conned London into statizing the service ("Bobbies") in 1829. Prior to that, private police ("thieftakers") accomplished that service. Even today, security firms, alarm firms, locksmiths, etc. provide many security services.

Arbitration - claims associations are discussed extensively in "Not so Wild, Wild West" cited above. In fact, much of the west did without statist law for a long time, relying on local juries and "common law." Going way back, the fairs of Charlemagne had private arbitration, and Law Merchant was not only private law but private courts. Today, the monopoly govt courts are so incompetent and inefficient that many disputants opt for private mediation and/or arbitration. Cf the American Arbitration Association.



Now your turn, Doug. Why do you (apparently) think that these services can only be done by State-sanctioned monopolies? Do you have any rationale whatsoever for believing that only a State can do these services?

[Doug]

I given many examples of these services being provided sans state on this board. You must have missed them. Here are a few examples.

DOUG
I saw them. It's just that none of them held up under scrutiny.

Property rights - The American West (cf: An American Experiment in Anarcho-Capitalism: The Not So Wild, Wild West PDF, also the book "The Mystery of Capital" by Hernando de Soto available in the Fayetteville Library has a lot on "customary law" wrt property rights in pioneer America.)

DOUG
Good example. It's not like the old west had a reputation for being lawless...

Legal systems - Anglo-Saxon Common Law, Law Merchant, various indigenous legal systems from the Yurok American Indians to the nomadic Somali Xeer. Celtic Ireland, Classical Iceland. Also, google "polycentric law" for tons of examples.

DOUG
I already roasted the Celtic Ireland stuff. The American Indians? All large tribes I've heard of were nations with strict social codes and penalties.

Police services - besides those already mentioned connected to property or general legal systems, most cities did not have municipal police until Robert Peel conned London into statizing the service ("Bobbies") in 1829. Prior to that, private police ("thieftakers") accomplished that service. Even today, security firms, alarm firms, locksmiths, etc. provide many security services.

DOUG
Most cities did not have much in the way of protection from theft. The mob can give you "protection" for a price. How is this any different than what you complain about regarding states and taxes? Besides, I still don't see any specifics here.

I've seen how a large city can have neighborhood police and fire fighters. It sucked. It was made into a movie called "The Gangs of New York." Lots of blood. Even the firefighters fought each other!

Arbitration - claims associations are discussed extensively in "Not so Wild, Wild West" cited above. In fact, much of the west did without statist law for a long time, relying on local juries and "common law."

DOUG
So what? As soon as the population was of the size where commune type arbitration was ineffective, federal and state governments stepped in to provide order. Tiny communities can take care of their own problems. Until they get big problems. That is not what we're talking about. The Walnut Grove (Little House on the Prairie) scenario works OK for very small populations, but as soon as the population reaches a certain size, and as soon as it has difficulties with neighboring cities, and so on, larger political bodies are needed.

Going way back, the fairs of Charlemagne had private arbitration, and Law Merchant was not only private law but private courts. Today, the monopoly govt courts are so incompetent and inefficient that many disputants opt for private mediation and/or arbitration. Cf the American Arbitration Association.

DOUG
That courts get full of cases has no bearing on this matter except to show that we need to spend more money on the court system.

Now your turn, Doug. Why do you (apparently) think that these services can only be done by State-sanctioned monopolies? Do you have any rationale whatsoever for believing that only a State can do these services?

DOUG
Only a state is large enough and powerful enough to have influence over many large communities. If there wasn't a state, people would have to invent one or live in misery, as in Somalia. I have yet to see you give any specifics except the Somalia and the Celtic Ireland, each of which was roasted on this forum as untenable examples of your claim that large societies can function well without a state. In Somalia they are not functioning well, and in Celtic Ireland they did have a state.

[Hogeye]

It's not like the old west had a reputation for being lawless...

Due to movies, most people don't realize that the murder rate was higher in the statist east than the "wild" west.

I already roasted the Celtic Ireland stuff.

Right - you wouldn't admit that organizations where people can opt out and switch are not governments.

The mob can give you "protection" for a price. How is this any different than what you complain about regarding states and taxes?

None! Governments are no different than any other mob protection racket. That's my point. Governments do have one advantage that most other criminal organizations lack - a mystique of legitimacy.

Mystification is the process by which the commonplace is elevated to the level of the divine by those who have a vested interest in its unassailability. Government is a perfect example of mystification at work. Government is a group of individuals organized for the purpose of extracting wealth and exerting power over people and resources in a given geographic area. Ordinarily people object to and resist thieves and robbers; but in the case of government, they do not because the government has created a mystique of legitimacy about its activities. - from Demystifying the State

I disagree with your claim, Doug, that "Only a state is large enough and powerful enough to have influence over many large communities." I think other organizations can have influence, and can use it non-aggressively. I don't see the necessity for violent monopolies of legitimized force, nor for having one ring to rule them all. I don't want an entity "powerful enough" to rule, but many entities able enough to provide goods and services by voluntary means.

[Doug]

It's not like the old west had a reputation for being lawless...

Due to movies, most people don't realize that the murder rate was higher in the statist east than the "wild" west.

DOUG
The population was higher there.

I already roasted the Celtic Ireland stuff.

Right - you wouldn't admit that organizations where people can opt out and switch are not governments.

DOUG
I produced quotations from reputable sources showing that there was a system of law more widespread than you wanted to admit.

The mob can give you "protection" for a price. How is this any different than what you complain about regarding states and taxes?

None! Governments are no different than any other mob protection racket. That's my point. Governments do have one advantage that most other criminal organizations lack - a mystique of legitimacy.

DOUG
So your preferred method of government is no different than the mob or a state?

I disagree with your claim, Doug, that "Only a state is large enough and powerful enough to have influence over many large communities." I think other organizations can have influence, and can use it non-aggressively. I don't see the necessity for violent monopolies of legitimized force, nor for having one ring to rule them all. I don't want an entity "powerful enough" to rule, but many entities able enough to provide goods and services by voluntary means.

DOUG
If you want to leave the U.S., you are free to do so. As long as you remain, you are volunteering to be under its laws. (See Plato's "Crito" for more details on this, an argument Socrates gave.)

[Hogeye]

Hogeye> Due to movies, most people don't realize that the murder rate was higher in the statist east than the "wild" west.

Doug> The population was higher there.

The murder rate. You must have missed the word "rate."

Regarding Celtic Ireland...

Hogeye> You wouldn't admit that organizations where people can opt out and switch are not governments.

Doug> I produced quotations from reputable sources showing that there was a system of law more widespread than you wanted to admit.

??? How widespread any system of law is, is quite irrelevant to whether it is provided voluntary or via a statist monopoly. The question under discussion was and is whether such services can only be provided by State monopolies. I have shown they can and have been provided by non-state entities.

Regarding States qua legal mobs...

Hogeye> Governments are no different than any other mob protection racket. That's my point. Governments do have one advantage that most other criminal organizations lack - a mystique of legitimacy.

Doug> So your preferred method of government is no different than the mob or a state?

No. A state is nothing more than a legal protection racket. I want an alternative: Competing organizations (PDAs - private defense associations) which people can employ (or not), from which people may opt out or switch. The essence of a protection racket is that one is not allowed to opt out (without getting knees broken or killed.)

I'll grant you this: It is possible for an outlaw PDA to become a State. Robert Nozick (in "Anarchy, State, and Utopia") argued that, via an invisible hand process, a dominant PDA would emerge and become a State, but I don't buy his argument.

Doug> As long as you remain, you are volunteering to be under its laws. (See Plato's "Crito" for more details on this, an argument Socrates gave.)

I disagree that simply occupying space constitutes consent. Nor do I agree with the statist premise that the government owns all the land (... thus by staying I agree to the owner's rules.) Socrates was a tired old fool who was too weak to conceive of living without being ruled. He committed suicide out of gratitude to his oppressors. Disgusting! What a wimp! Crito is a paeon to subservience to the State. For more on why people obey States, read The Politics of Obedience: The Discourse on Voluntary Servitude by Étienne de la Boétie, 1548.