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Subject Area: Political Theory
Topic: Progress

Private Property and Energy Resources - Leonard P. Liggio, Literature of Liberty, Winter 1981, vol. 4, No. 4 [1981]

Edition used:

Literature of Liberty: A Review of Contemporary Liberal Thought was published first by the Cato Institute (1978-1979) and later by the Institute for Humane Studies (1980-1982) under the editorial direction of Leonard P. Liggio.

Part of: Literature of Liberty: A Review of Contemporary Liberal Thought, 20 vols. 19781-982

About Liberty Fund:

Liberty Fund, Inc. is a private, educational foundation established to encourage the study of the ideal of a society of free and responsible individuals.


Private Property and Energy Resources

Richard Stroup and John Baden

  • Center for Political Economy and Natural Resources at Montana State University, Bozeman

“Responsible Individuals and the Nation's Energy Future.” The Cato Journal 1(Fall 1981):421–438.

Employing some basic insights from the Austrian school of economics and the private property rights paradigm, the authors find several reasons for believing that private property rights and free markets in energy would better serve both national security and efficiency. By contrast collective decision making of a political and democratic kind would create many problems. If we would establish and recognize secure and transferable property rights to resources, then we could expect that individuals who believe strongly in the advantages and profits from greater future energy reserves would provide for more fuel storage, energy conversion facilities, and energy raw materials for that anticipated future.

Investments in promising innovations are more likely to be funded in the private sector than in the public sector. The economic equivalent of biotic diversity is automatically fostered when individuals with different tastes, in various circumstances, are free to act and are also held responsible for their actions. The decision makers will be better informed in the private than in the public sector, when information is scarce and uncertainty is prevalent. Despite the greater degree of innovation, we can expect a smaller level of waste from the private sector than from the equivalent public sector innovations. This follows from the existence of the reality check of profit and loss in the private sector, as well as the smaller degree of rational ignorance in that same sector. Finally, we note that the public sector will be systematically unable to attract and hold successful forecasters in any market so important as that of energy. It would appear that in the energy market, as in so many other areas, that government is best which governs least.