Tuesday, July 8, 2008

Bowyer, the Common Law, and Monarchy

One of the writers I regularly pay attention to in matters of economics is Jerry Bowyer, chief economist of Benchmark Financial Network, regular contributor to National Review Online, CNBC, and regular guest on that network's Kudlow and Company. Jerry usually has interesting things to say. Lately he has been emphasizing the importance of the mineral deposits located in Pennsylvania, where he lives. He has been making some telling points regarding the importance of these deposits in the current climate of energy shortage and government regulation.

But his latest offering misses the mark somewhat. Not that the point he is trying to make is wrong; it isn't. The article of which I speak is Back to Monarchy in Land Rights?, in which Jerry argues for the benefit of the common-law regime of mineral rights, whereby private landowners enjoy the rights not only to the surface level of their property but to all underlying levels, extending straight downward. (It used to be that property rights also extended straight upward, but the government has usurped those rights in order to regulate air traffic.) This regime is contrasted by Jerry with the regime of "monarchy," whereby the crown reserved the right to all mineral deposits, so that landowners could be dispossessed of the resources lying below the surface of their land, and that without compensation. Thus, Jerry avers, "not surprisingly, farmers went to great trouble not to find subterranean resources, and to hide any they’d uncovered."

This was the system of the Spanish crown, and was exported to the countries Spain colonized. Thus, in Mexico, in Venezuela, the oil is the state's, and the state exploits the oil fields. Contrast this with Pennsylvania, where private landowners hold the rights to the oil under their lands. Because mineral rights (including oil) accrue to private landowners, the first commercial oil well was located in Titusville, Pennsylvania. Private enterprise exploits resources when and where they are needed, as opposed to government agencies, which act not in terms of market needs but in terms of elite policy. "Central planning environmentalists cordon off great swaths of energy-rich property from the use of any consumers except a few disproportionately wealthy eco-tourists."

All of this is well and good, accurate and to the point -- except for one thing. And that is Jerry's inveterate obsequiousness to natural rights ideology in general and Thomas Jefferson in particular, to which he attributes this common-law regime of private property rights. Apart from the fact that Jefferson did nothing for property rights, not even mentioning them in the Declaration of Independence -- which is his sole contribution to the institutions of America -- the common-law regime in which these property rights were embedded was imported from England, and the English common law is royal law.

That's right. Common law is the product originally of the English monarchy. Including the regime of mineral rights Jerry is so quick to ascribe to the Man from Monticello. Actually, the matter is even more cumbrous than that. The convention of property rights extended straight up into the air and straight down into the ground is originally derived from Roman law (which English law absorbed early on, prior to any so-called Reception: see here.) From Cawood and Minnitt, A Historical Perspective on the Economics of the Ownership of Mineral Rights Ownership [I'm not sure if that second "ownership" in the title is intended or not!]:

However, we [South Africans] inherited the principle rule of property law from Roman Common Law. This principle stated ‘Cuius est solum eius est usque ad coelum et usqne [sic] ad inferos’-Accurcius [sic], 13th century—meaning the owner of the land is not the owner of the surface only, but also of the ‘fruits of the land’ extending to the space above (up to the heavens) and below it (to the centre of the earth). In modern terminology this simply means the
recognition of private property rights (p. 370).

Thomas Jefferson did not discover the principle of private ownership of mineral rights. Those rights were enshrined in Roman law and later royal law, at least in England, but not exclusively there. After all, the Roman law served as a common law for all of Europe, and it took special legislation to overturn its principles. Some monarchs availed themselves of that. As are governments of every stripe today. All one has to do is run a Google search for mineral rights and one will see just how complex the situation has become, with original common law rights being undermined by state legislation (as for instance with rights to air space). See for instance this discussion.

Neither Thomas Jefferson nor natural rights had anything to do with the entailing of mineral rights onto private property. It was a common law and Roman law principle. Jerry should stick to the economics of the issue and leave the history to those who are not so interested in pushing a particular ideology.

No comments: