department of interior dodd frank eiti gas

Owning Matters in Games, Less so in Real Life
gold gao mining oil monopoly henry george progress

US Gov't Gives Away Public Gold to Private Firms

Christmas time do-gooders plea for charity but what's left when the non-needy get too much? We still need to learn monopoly's lesson. These two 2012 excerpts of Dec 13 are from (1) Oxfam, on gold by I. Gary, and (2) Common Dreams, on a game by A. Zimet.

by Ian Gary and by Abby Zimet

The US government receives no royalty payments for gold extracted from federal lands. Not only does the government not collect any royalty for “hardrock minerals” such as gold, silver, copper, and uranium, it does not even know how much of such minerals are being mined!

This bizarre state of affairs is a result of the General Mining Act of 1872 which still governs hardrock mining and allows operators to mine without paying any royalty. No benefits yet significant impacts on the environment and Native and other communities. In contrast, oil and gas royalties from federal lands provided $10.1 billion to the Treasury each year in 2010 and 2011.

Even when royalties are collected for oil and gas, the rates are quite low. Many offshore oil lease royalty rates are as low as 12.5 percent. But it gets worse. The effective rate some pay is significantly lower than the rate specified in the lease.

The Securities and Exchange Commission has issued final rules that require all oil, gas, and mining companies reporting to the SEC to disclose royalties and other payments both in the US and abroad. The Interior Department suppors this provision. Oxfam and the Publish What You Pay US coalition promote it and Oxfam is now part of a legal battle pitting the US oil industry against the SEC.

Ultimately, it is up to Congress to reform the outdated 1872 mining law. Rep. Grijalva has cosponsored a bill, the Fair Payment for Fair Payment for Energy and Mineral Production on Public Lands Act, which would set a 12.5 percent royalty rate on hardrock minerals.

To read more

JJS: If government were to operate as a business, it would have both a floor -- an entry fee for extractors to get started that could be set in a competitive auction -- and a ceiling like that low 12.5% but perhaps much higher. Norway charges oil extractors a total of 80% of the world price for a barrel! By charging more, politicians would not be behaving like a miserly Scrooge or a stingy Grinch but like a responsible steward for the public. While government should not give away the store to wealthy insiders, if this December you gave or got the board game MONOPOLY, here’s the true story of its origin.

This week Nigeria became the first African country to launch its own version of Monopoly, which officials hope will teach "financial literacy." Irony alert: Long ago, the world's best-selling board game began life as a way to teach the radical philosophy of Henry George, a 19th-century activist and author of Progress and Poverty: An Inquiry into the Cause of Industrial Depressions and of Increase of Want with Increase of Wealth—The Remedy.

As the United Labor's candidate for mayor of New York, George offered a radical vision -- government-run social services, public-owned utilities, free transportation -- supported by a big-tent coalition with slogans like "Honest Labor Against Thieving Landlords" and "Hi! Ho! The leeches must go!" That vision inspired The Landlord's Game, with cards that said “Labor Upon Mother Earth Produces Wages” alongside quotes from John Ruskin: “It begins to be asked on many sides how the possessors of the land became possessed of it.”

“So long as all the increased wealth which modern progress brings goes but to build up great fortunes...progress is not real and cannot be permanent.” -- Henry George.

To read more

JJS: Even more crucial than who owns land is who collects the rent. As noted above, the public owns a lot of gold in the ground but big insider firms get to harvest all its value. And we say that somebody “owns” a home even when they owe thirty-years worth of mortgage payments to a bank; a good portion of those payments are actually a rent paid to the lender. So if we the people recovered and shared all the money we spend for the nature we use, then it would not matter who owned how much of what. Everyone would get a fair share of this common wealth, the worth of Mother Earth -- that’d be a good reason to ring in the glad tidings of this season!

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Editor Jeffery J. Smith runs the Forum on Geonomics and helped prepare a course for the UN on geonomics. To take the “Land Rights” course, click here .

Also see:

Tax Breaks For, and Taxes Upon, Polluters
http://www.progress.org/2012/seahorse.htm

How to Break Up With Big Oil
http://www.progress.org/2012/stringer.htm

Monopoly, the Land Bubble, and the Financial Crisis
http://www.progress.org/2012/nonprofi.htm

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