 I'm Mark Bradley and I get to talk about one of my favorite topics, the oil industry. I'm biased towards this industry. I've worked in the oil industry for many years. My dad was an oil man and other family members were oil men. And I just thought it was important to reveal my biases here before we start. I think while this is not a specifically Austrian topic, I think there are lessons to be learned here. So when I read, say, Rothbard's Power and Market, and he explains how interventions will have certain effects, you can clearly see some of these effects in this industry. So this industry sort of illustrates some of the things Mises and Rothbard have said here. Let me just introduce you to a couple of pictures here regarding the oil industry. Here we have, this is just an onshore drilling rig drilling into the ground. And then of course there's also offshore drilling rigs where we're able to recover oil from underneath the oceans. And here's an infamous frack job in Texas pumping, I don't know, millions of gallons of water into the ground to fracture the zone to recover oil and gas. And if you're in oil country you probably see these pumping units, pumping oil out of the ground continually. And I've been around these rigs and pumping units and frack jobs quite a bit. The oil industry for decades and the other fossil fuel industries have sort of been under attack. I can remember in the 1970s when Paul Ehrlich and others were winning awards by telling us that if we didn't decrease our use of fossil fuels, we were all going to die soon and fortunately their dire predictions never came to pass. And instead of decreasing our use of fossil fuels, fortunately we've ignored those warnings and we've increased our burning of fossil fuels from 1980 to 2012. The world increased its usage of oil 39% and its usage of natural gas 131%. Despite those advances, still today about 1.3 billion people in the world have no electricity and 3 billion people do not have adequate electricity, so they have intermittent electricity. And somewhere, depending on what statistics you look at, somewhere between 10% and 50% of the world's population are underfed and do not have enough food to lead a healthy life. So I think we need to burn more fossil fuels to produce the food and the electricity so these people will stay alive. We need to ignore these warnings that have proved to be false in the past. And we should appreciate the oil entrepreneurs who have brought us these oil and gas. The story of oil, at least the drilling of oil in the US, goes back to 1859. What was happening was we were killing lots of whales for whale oil to put in our lamps to illuminate things and whale oil was getting expensive and a Canadian chemist named Abraham Gessner realized we could take crude oil and convert it to kerosene and if we had enough crude oil we could stop killing the whales. And this led to an incentive to drill for oil and this is the first oil well in the US near Titusville, Pennsylvania. And because of the resulting oil boom we were able to stop the slaughter or at least reduce the slaughter of whales and I don't have any data to back this up but I suspect the oil industry has saved more whales than Greenpeace. I suspect, I don't have it. Being a good Austrian I have no data here to back this up. And then the plaque here, the plaque, this is now a tourist site. Edwin Drake was the entrepreneur that drilled the well. He didn't finance the well but he engineered the well. I don't know if you can see it, he's the gentleman on the right there. And this is now a tourist attraction and the plaque there says among other things that few events in history have so transformed the face of civilization and I think that's probably correct. So the discovery that we could recover all of this oil from the ground led to not only the expansion of the production of kerosene replacing whale oil but a few years later we realized we could, at the time we were just basically throwing the gasoline away through the refinery process. And we realized, people realize with the invention of the internal combustion engine and other machinery we realized we could start using this gasoline and so in addition to powering to a degree the industry of the industrial revolution the oil industry really gave us the fuel we need to transport goods around the globe and this has led to a tremendous increase in the extent of the market and the division of labor and the resulting prosperity of this that Dr. Rittenauer talked about earlier in the week. So I think we should applaud these oil entrepreneurs. There's a lot of them but I won't spend too much time on that. I would like to talk about one oil entrepreneur that's one of the entrepreneurs responsible for the current revolution in oil production from these tight oil sands. He's not the only one responsible for this but George Mitchell was the owner of Mitchell Energy in Texas. He did a lot of work in the Barnett Shale near Dallas and he put a lot of money into environmental issues and he wanted to replace the burning of coal for electricity with natural gas and for a long time we've known there were these tight oil shales that were just full of oil and natural gas, mainly natural gas but we didn't know how to get it out of the ground. If you wait long enough the oil from those source rocks will work its way up to another formation in 20 million years and then we can get it out of the ground. But George Mitchell said we want to get it out of the ground now so he poured lots of money, millions of dollars into developing drilling techniques where we could drill horizontally through the zones and more effective fracturing techniques and I think this is a good example of the Misesi and capitalist entrepreneurs, the driving force in an industry and it turned out he eventually was successful in developing these technologies and there are articles where his employees were saying they thought he was wasting his money and they thought he was crazy for doing all of this but he was able to sell Mitchell Energy for 3.1 billion dollars but the government has spent 160 years interfering with this entrepreneurial role in the oil and gas industry, not surprisingly and I have time to tell you a few examples here. I'll skip the first 110 years of government intervention and I'll jump to the famous price controls of the 1970s here. So there's an organization you're probably aware of, the Organization of Petroleum Exporting Countries. It was formed in 1959. It didn't have really any market power for the first 15 years or so. Even in 1971, OPEC had no market power. The price of oil was hovering around only $2 a barrel but the federal government instituted some price ceilings here in this market. The price ceilings really had almost no effect on what was going on and then late in 1973, these Arab countries, these Arab governments were angry at our government for geopolitical reasons and they wanted to punish us so they started refusing to sell us oil, this famous oil embargo. So the price of oil started trending up and then the federal government stepped in with a series of price ceilings and then throughout the 1970s, the price ceilings kept changing as conditions changed so I won't go through the whole history here but in 1979, we ended up with three different prices for oil. So early in 1979, the price was only about $20 a barrel for oil hovering around that and then in 1979, the Iranians overthrew the Shah that was supported by the U.S. federal government and this completely disrupted oil supplies out of the mid-east and over the course of the year, the price went up to close to $40 a barrel. But during this time, there were three prices for oil. So they called it old oil so any oil wells drilled before the embargo had this old oil price of $5.75 a barrel. So the reasoning was since you drilled the well when the price of oil was $2 a barrel you shouldn't be allowed to have these tremendous profits from the fact that Arab countries are mad at us. But then if you capped all oil at $5.75 a barrel then there wouldn't be much new drilling because it just wouldn't be profitable. So any wells drilled after the oil embargo, that was called new oil they had a price ceiling of $12.66 a barrel. Most of the time they were trying to keep the new oil at about two-thirds of the OPEC price but suddenly there's this jump in around 1979 to 80 up to $40 a barrel. Now to prevent wells from just being plugged and abandoned when they didn't have much production they also have stripper wells which are wells that make 10 barrels of oil a day or less and those had no price ceiling. So you could sell that oil for the same price as imported oil. So what happened here was we know that price ceilings tend to cause shortages but in a sense there were no shortages because you could buy all the oil you wanted to as long as you were willing to pay for imported oil. It was a very odd situation. And the problem was the government was trying to accomplish two things at once. One thing they were trying to do, they kept saying they were trying to reduce our dependence on foreign oil but at the other time they were saying well we need low energy prices and we need to prevent companies from having these, reaping these windfall profits simply by selling oil. So if some of the oil cost $12 a barrel they were thinking well gasoline will be a little cheaper another energy cost will be a little cheaper. So this will save the American consumer money. However the two goals are in conflict with one another. If we're going to produce less oil, if we're going to keep the price down we're going to produce less oil so we're going to import more oil. If you follow this history it appears that since the oil embargo the U.S. government has spent most of its time regarding oil policies supporting OPEC, doing things to drive up the price of oil and giving OPEC more market power. And this is one example of that. You could probably see where we're headed here. These controls of course negatively impacted oil production and increased oil imports an obvious conclusion but it also led to this misallocation of resources. So if you had oil wells you could sell some oil for $5.75 a barrel and some for $12.66 a barrel and some $40 a barrel. So of course you spent your time trying to produce the expense of oil. So if it cost you $20 a barrel to get oil out of the ground out of a stripper well that was profitable, very profitable. However if it cost you $6 a barrel to get a barrel of oil out of the ground from an old oil well that was not profitable. So you end up spending your time wasting your resources getting the uneconomical oil out of the ground. I was aware of one situation where a company drilled a well that they knew would not produce any oil. They drilled it, they produced it, it would make about three barrels a month or something. But it gave the other wells, three other wells in the field a higher oil price. It moved it into a different category of oil. So your whole decision making process is not about getting oil out of the ground efficiently. It's about trying to figure out the system and trying to sort of game the system to maximize your profits. But the problems were so obvious that eventually they scrapped the system and they said let's just replace it with a windfall profits tax. In the proposal for the tax Jimmy Carter said this tax will collect as much revenue as any tax in history. Something like that. And he was saying this approvingly. This was his statement in favor of the tax. But the tax ended up not collecting much revenue because the oil prices fell during the 1980s and for years companies would fill out the windfall profits tax form and put zeros on them every month and say we don't owe you any money. Murray Rothbard said he's not talking about this specific tax but he's saying windfall profits tax, he says it's difficult to find a tax more indefensible from more points of view than this one. Because the profits tax, windfall profits tax completely reduces the entrepreneur's incentive to make decisions here. All right, that allows me to segue to another tax which technically is not a profits tax, it's a revenue tax. There are taxes on oil and gas called severance taxes. These are at least in the United States, they're state level taxes for the most part and a lot of states put taxes on various non-renewable resources. The argument is that the resources under the ground in Alabama are sort of owned, doesn't the whole population of Alabama sort of have a claim on these? Well that's the argument. And so if you're going to sever the resources you should have to pay a tax. If you're going to sever the resources from the ground. You get taxed even if you don't sell the oil. If you sever the oil from the ground there's a tax. There's $8 billion of tax revenue from the various severance taxes in two years ago. Here are some of the tax rates. Alabama has a basic tax rate of 8% and you can see Alaska's tax is actually a profits tax. Florida, Louisiana is a big oil estate and their tax is 12.5%. These are the basic tax rates. Some states, a lot of states have lower tax rates for stripper wells that produce less than 10 barrels of oil a day or less. But this is the basic tax rate. Alright, these might not look like very high taxes. What's 8%? But it's not 8% of profits, it's 8% of revenues. So if you invest $4 million drilling oil wells in Alabama and you make revenues of $5 million, this huge 25% return on your investment you have to pay 8% of $5 million. So you have to pay $400,000 of taxes. So you have to pay 40% of your profits for this hugely profitable investment would go to the state. And if you only make 8% profit, which is a fair profit, I mean not by fair, I don't mean ethically fair, I mean you can make money at 8% profit. The state takes all of your profit. So they take 8% of your revenue. So these taxes really distort the, all companies consider these taxes when they're making their drilling and production decisions because it's, even though they look like relatively low rates these are high percentage of your profits. All right, again the various states are helping out OPEC by imposing these taxes and decreasing production. But there are other things going on here. In the oil field the costs of capital and services and wages tend to fluctuate rather quickly. So they're not locked in. Like when oil prices fell in the 1980s workers were just taking pay cuts overnight. You want the job, you're getting paid less today than you were getting paid yesterday. All right, this is, and this fits the analysis we see by Murray Rothbard regarding tax shifting under the factors of production. Rothbard says if you tax a product that you lower the demand for the workers and you lower the demand for the capital. So of course your capital prices and the price of services and labor all fall and so you're shifting the tax onto these factors of production just like he, just like Rothbard explains. And it's just a very obvious result here in the oil industry. Now there's more going on here I'd like to point out. The demand for any state's oil is very, very, very elastic. So Alabama's oil production whether it increased or decreased 20% probably does not affect the price of oil or affects it very little and that's the same for basically every state. So if that's true and that is true if that's the case then if you tax this product you tend to have a relatively large effect on the number of jobs in the amount of production relative to industries where demand's not elastic like that. So in neoclassical terms they would say there's a large dead weight loss and this is an inefficient tax. And we could agree with the inefficiency part even if we don't accept this dead weight loss idea. So the question on the table is why do states impose these taxes? Why do they impose, do they just hate oil companies? Why do they impose these significant taxes on oil and gas production when we know that they have a significant effect on production and jobs? And here's their reasoning. Their reasoning is if you taxed another industry at 8% of their revenues in Alabama they would eventually in the long run they would leave the state you would have no jobs in that industry. If you taxed automakers 8% of their revenue they're all going to go to Tennessee or somewhere or overseas. But if you taxed Alabama's oil production they can't move that to Tennessee. It's a trapped industry. You can't produce Alabama's oil in Tennessee. So you have this trapped industry. So even though it's a relatively inefficient relative to other taxes an inefficient tax the industry can't do anything about it. They're stuck, right? So state legislators think this is a good target for taxes. And there's another reason. Rothbard and others talk about when they analyze taxes they emphasize the distinction between taxpayers and tax consumers. People were saying this before there was an Austrian school. But it's very clear with these oil taxes there are taxpayers and there are tax consumers. The oil companies are taxpayers and the states collect the taxes and spend it on goods and services in their state. And this is why it makes another good target for state legislators. So what's happening with oil is the taxes are exported. And when you're exporting taxes you're taxing people who can't vote for you. So you're taxing people, you're collecting them but they're not going to be mad at you because they don't live in your state. So the burden of the taxes falls on people outside of your state. So Alaska has very owners, severance taxes which is why they missed out in the recent oil boom. Their taxes were so high people did not want to invest there. But the oil companies aren't in Alaska, they're in Texas and elsewhere. So these oil companies in Texas are the taxpayers and then the state government of Alaska collects the taxes, the tax revenue and they end up paying people simply to live in Alaska. There's no state income tax in Alaska. There's sort of a negative tax for everybody. All right, so these are essentially taxes on profits and Rothbard of course condemns these taxes as interfering with entrepreneurship as of course that makes perfect sense here. All right, there's another industry or there's another policy that probably is not that big of a deal, it just really irks me. So I want to talk about it. It probably doesn't have that big of an effect on things. All right, there's this strategic petroleum reserve. Throughout the course of history, our government at times has stockpiled oil. And this is one example of that. They've done it during various wars and stuff. But in response again to the situation in the 1970s, the federal government implemented this strategic petroleum reserve. It's very straightforward how this works. We pump oil out of the ground around the globe in the U.S. and around the globe. The U.S. government takes taxpayer dollars, buys that oil, ships that oil to Louisiana and Texas and pumps it back in the ground. The idea is if we need it, we'll pump it out of the ground again. This is the strategic petroleum reserve. And I don't even know where to begin here. But anyway, the program started in 1977. And the first 412,000 barrels was actually purchased from Saudi Arabia. 412,000 barrels of Saudi Arabian crude. So they pumped it out of the ground in Saudi Arabia and then we used taxpayer dollars to purchase OPEC oil and pump it back in the ground here. It has a capacity of over 700 million barrels. For some reason, if you check it from year to year, the capacity might change by 10 million barrels. I don't understand what the statistic is, but you would think it's the same capacity. Last year it was about, I think, 15 million barrels more capacity. I don't know what's going on here. But it holds a little less than 7 million barrels. I know, I think the price of oil fell today, but it's roughly $42 billion of oil, which really isn't that much oil. I mean, in the grand scheme of the government's budget, it's nothing really. They claim they can withdraw oil at the rate of 4.4 million barrels of oil a day. So the idea is, if we needed the oil, this could account for roughly 22% of our oil usage, but the government could suddenly access if they needed to. The alleged purpose here, if you look at some of the comments at the time, I'm not sure that was the purpose, but the alleged purpose was to provide the government with this ability to influence oil prices. So oil prices tend to fluctuate quite a bit because the demand and the supply of oil are both inelastic. You expect them to fluctuate. That's an important price signal in oil. We want them to fluctuate, so we make good decisions regarding these resources. But the argument we hear from various presidents is they might need to intervene to stop these fluctuations because the price is volatile. So when George W. Bush was president, the price was about $30 a barrel, and it started trending downwards, and he said, we can't have that. He said he was stabilizing the price of oil, so he started buying up lots of oil to drive the price back up to $30 a barrel because for some reason $30 a barrel was the right price at the time. And we can't have inexpensive oil, I suppose. It's kind of a political payoff to the oil companies. We promise you produce the oil, we promise to buy it from you, but we won't let any consumers have it. So all industries would appreciate to have, the furniture industry would appreciate it. The government would buy up lots of furniture and just store it. But it does interfere with the industry's decisions here. As Dr. Klein, Dr. Klein-Wann, I guess, told you that the entrepreneur is making decisions basing risk and uncertainty, of course, and he's basing his decisions on his forecast of future events. Somebody has to make these decisions, and the entrepreneur makes them. So what the Strategic Petroleum Reserve does is now it takes this forecasting away from the entrepreneur and puts it in the hands of government officials wherever the administration is. They're deciding what's going to happen, and they're releasing oil from and filling up the Strategic Petroleum Reserve based on their forecasts here. So you might think this is a good thing, but this makes it harder for the entrepreneur for the entrepreneur to make decisions. So if you're drilling oil wells and making these millions of dollars of investments, you're thinking to yourself, what's going to happen in China regarding the demand for oil in the next decade or so? What's going to happen in the U.S. regarding the demand and the supply of oil? What's going to happen in the mid-east regarding the supply of oil? And now you have this additional uncertainty. What is the president going to do when oil prices fluctuate? So you've introduced more uncertainty into their decision-making. And so this uncertainty, this complication, it's led private producers to not stockpile oil. So they stockpile about, they have, in private reserves, we have about a third as much as the Strategic Petroleum Reserve. Because if you're an entrepreneur and you're thinking to yourself, the price of oil is going to go up, then you think to yourself, well, if it goes up, the president's going to intervene and drive the price back down. Very might. I'm uncertain about this. So you've reduced my incentive to have private stockpiles of oil. So instead of having the private stockpiles of oil, we have the government holding this oil for us. At the time that they implemented the Strategic Petroleum Reserve, the Louisiana Governor was not a... On one hand, he wasn't a big fan of the policy, so he's quoted as saying, if the federal government is going to pour money down a rat hole, I'd just assume that it was a rat hole in Louisiana. So Louisiana is an oil state and he thought that this was not maybe the best use of federal resources, but if they're going to spend the money, he was glad that they were building the capital and hiring workers in Louisiana here. All right. So my next topic applies to a lot more than oil, but I just can't resist talking about it. And that's the fact that the government owns a lot of land. This is probably not a surprise to you. There's land socialism in a sense. Here's a government map of federal lands. The red is the federal lands. This does not include the state lands and the local lands, the lands owned by state and local governments. This is just the federal lands. So for instance, there's almost no federal lands in New York, but New York has the highest percentage of state-owned lands. So if we included that, there's actually a significant amount of land owned by the government in New York. At one point, the federal government owned almost all of Alaska, but they've relinquished their ownership and they're down to about 69% of Alaska. But where did the rest of the land go? To the state government, for the most part. So almost all of Alaska is owned by the state. The feds own almost all of Nevada and Utah, they own about a third of Colorado, but from the great divide of the Rocky Mountains westward, that's what the federal government owns in various agencies. The largest agencies of land ownership, if they were states, would be a, like the Bureau of Land Management would be the fourth largest state. And they have 248 million acres. There's just massive amounts of government owned land here. And this land is just full of oil and gas and other resources. So if we include the land owned by the state governments and the federal governments, then the governments own 39% of the dry land in the United States. I'm taking these numbers from congressional reports. Every congressional report that talks about this says we're not sure how much land we own. This is within, say, 5 to 10 million acres. It's our margin of error. And the states don't know how much land they own either. A few years ago there were two governors saying we're going to find out how much land we own. Wyoming and South Carolina, there were new governors elected and they said, how much land do you own? Well, we're not sure. It's a lot. If there's 900 million acres, it's hard to keep track of this stuff. There is one caveat here. This includes the Indian lands. The Bureau of Indian Affairs has 55 million acres. And when I do the data, I include that as federal lands because sometimes Congress includes it and sometimes they say those are not federal lands. Those are the Indians on those lands. If you're reading the data, 55 million is quite a few acres. If you're reading the data and you come up with another number, they may be leaving out the Indian lands. It doesn't appear to me the Indians think they own the lands, but sometimes the federal government says it's not our lands. That's for the Indians. There's that caveat here in my numbers. All right. Here's the dry lands again owned by the federal government. You may think that ends the discussion. It does not. A few people know that the federal government has also laid claim to lands offshore under the ocean. This started in the 1790s when Thomas Jefferson was the secretary of state and they proposed that the federal government owns all the offshore lands up to three miles offshore. It was called the cannonball rule. They said, since we can fire a cannonball out there, we own it. The government owns it. And then over time, particularly in the 20th century, the government claimed more and more land just sort of informally saying we own it and around mid-century, the last century, they said we own out to the outer continental shelf, but no one really knows where that is. It was a very vague... Sometimes it's not clear where the outer continental shelf is and where it's deeper waters. And then around the 1970s, the governments of the world kept claiming more and more land out in the oceans. And then by the 1970s, they realized they were claiming the same lands. Right? So two different governments, because they were starting to overlap. So they started having meetings on this, how should we divide up the oceans and through the auspices of the United Nations. And they came to an agreement in the 1980s about who owns what and the agreement went to the Senate and it's never been ratified. But President Reagan said they own it, so they own it. It's never went through Congress that they own this land, but they claim they own this land more to a higher degree than you've ever owned anything. They own every right of exclusion, every right of exploitation, every right of sale, everything. So how much do they own? They say they own all the land up to 200 nautical miles offshore, here's another government map of land ownership. This is the proclamation by Reagan in the 1980s. These are called the Exclusive Economic Zones and that's the underwater lands owned by the federal government. Again, this is a government map showing this. The government owns all these circles, they say, in the Pacific because some ships stopped at some tall in World War II. So now they say they own they own up to 200 nautical miles around around this landing spot in World War II. For instance, this Johnston at all here was only 94 acres and then they built it up to a little less than a square mile so they could land planes on it and then nobody lives there because they did atomic testing on it and the people that were there died. Eventually they were all radiated but the feds still say they own it. So you own 166,000 acres of land surrounding it because you own less than a square mile of this little atoll that nobody lives on that's now claimed by the US government. So they say that's the reason that's the reason for all of these circles here in the Pacific other than Hawaii Hawaii is here too. And then Russia has a little sting here so there's this little carve out because you don't want to start a war with Russia over this situation. Alright, so how much is this? The US government the federal government owns more land offshore than there is dry land in the 50 states by a significant amount. If we consider federal lands to be part of the country of the United States most of the US is under water that's one way to look at it. The majority is I mean there's more there's various they don't even know how many acres there are but all the estimates are more than the dry lands right even the conservative estimates of how much acreage this is how many square miles of land this is tells us that they own an awful lot of land here and again they say they own it completely every right they own it it's like in the agreement it's like four pages we can do this we can do that we own everything alright so why am I so upset about this well they don't let us use the lands we can't use it this is a restricting seasteading we can't they're just limiting our ability to get to this stuff here by the way part of the agreement is any peaceful ships are allowed to go over the lands as long as they're not military ships but our government violates this rule all the time they put military ships other people's shores all the time violating the agreement with Reagan we have military ships within 200 nautical miles of multiple multiple countries but anyway there's there's several congressional reports about this the numbers keep changing but certainly the lands are full of resources one congressional report says the onshore lands contain 31 billion dollars of oil from conventional sources and 231 trillion cubic feet of natural gas and 1.23 trillion barrels of oil from non-conventional sources which we are now figuring out how to get out of the ground if they would let us this is the tight oil sands these are the non-conventional sources 60% of these onshore lands are completely close to oil and gas exploration 8% are open there's a standard federal lease for leasing these things if you want to pay you have to bid for the you have to buy the rights from the government they're standing leasing arrangements then 32% of lands have these restrictive leasing arrangements that limit drilling and production and things so we just can't get to much of these to much of this oil and gas there are estimates of the offshore stuff but until they let us explore out there there's just no certainly the offshore lands the submerged lands have lots of oil and gas on the resources and there are estimates of it I don't trust the estimates because until entrepreneurs are able to drill some oil wells out there to figure out what's going on we're just guessing about how many billions of barrels of oil are offshore that we're not allowed to access but in addition to restricting our ability to get to this oil and gas there's another issue that's similar to the tax issue and that's similar to what Dr. Terrell was talking about just an hour ago there's a calculation problem here because there's different royalties and there's different taxes across these various lands so we're not always getting out the most economical oil because sometimes the most economical oil is the oil they won't even let us look at sometimes that's the cheapest oil to get out of the ground and then there are different royalty rates here so we end up making decisions that entrepreneurs are making calculations but the prices are not really free market prices because the government owns so much of these resources so Rothbard says the allocation of resources in a private enterprise will better satisfy consumer demands while government enterprise will distort allocations and introduce islands of calculational chaos and that's what we see that's what we see with the government restriction on drilling in these various lands and that's what we see with the different tax rates across the various states at the end of power and market Rothbard warns us about three things in particular he said we should be worried about the government controlling the money supply controlling transportation and controlling land because they will control the resources and he thinks this is a great danger he says in almost all countries governments have laid claim to ownership of new unused land governments could never own original land on the free market this act of appropriation by the government already sows the seeds for distortion of market allocation when the land goes into use if you're able to control these original factors of production you have great control throughout the rest of the economy and you introduce these calculational chaos throughout the economy and this is what one of the many things that Murray Rothbard is concerned about here thank you very much