Saturday, September 1, 2012

Gary Judd: Undiscovered resources do not constitute wealth

In relation to water rights, at the beginning of Chapter 2 “Wealth and its Role in Human Life” of Reisman's Capitalism*, this appears:

Wealth is material goods made by man. It is houses and automobiles, piles of lumbar and bars of copper, steel mills and pipelines, foodstuffs and clothing. It is also land and natural resources in the ground in so far as man has made them usable and accessible. Man, of course, does not make the material stuff of land and natural resources, but he certainly does create their character as wealth. 

Air, sunlight, rainfall, and wind are also material goods. But in so far as they come to us automatically, without any need for labour or effort on our part to cause their existence or our benefit from them, they are outside the province of economic activity and of economics. They are nature-given conditions that automatically benefit us; historically, they have been described as 'free goods'.

And then, on the next page:

Things which have the power to satisfy our needs but which we do not recognise as possessing that power are not goods and do not form part of our wealth. For example, before the second half of the 19th century, petroleum was not a good; before the 20th century, uranium was not a good. People did not know the beneficial properties of petroleum or uranium and thus did not know how to use them for anything. Thus, at the time, such things could do them no actual good and were therefore not goods and not a part of wealth....

In the same way, even if technological knowledge exists concerning the usefulness of a given type of mineral, all of the specific deposits of the mineral which are as yet undiscovered are not goods and do not constitute wealth. They too can do us no actual good in such a case. Further, things are not goods and do not constitute wealth whose useful properties and specific locations are unknown, but over which we lack sufficient command to direct them to the satisfaction of our needs. For example, iron on Mars, or even 50 miles down in the earth, is not a good and not wealth, even if we are aware of its specific location, given our present inability to gain access to it.

In 1840, bodies of water such as lakes and rivers would have been used as fisheries. It may be that some iwi/hapu would have had the right to take fish, to the exclusion of other iwi/hapu (in the sense that force may have been used to prevent others from taking fish and other foods).

Such bodies of water would also have been used for transportation. Possibly use by Maori who were not members of iwi/hapu adjacent to the body of water may have been a perilous activity, but unlike fish and shellfish and other foods growing in the water, it is difficult to conceive of there being any property right involved in relation to transportation. In addition, use of the bodies of water for transportation whether by Maori or by anyone else became largely redundant with the advent of other forms of transport.

Use of the body of water for hydroelectric generation is akin to use of the body of water for transportation. In addition, nobody recognised the rivers as having the possibility of the use for generation of electricity, because electricity generation of that type did not occur at that time. So whatever may be said about compensation for disturbance of fisheries (fisheries being specifically referred to in the version of the Treaty in the schedule to the Treaty of Waitangi Act 1975), the idea that there may be some entitlement in relation to use of the water for hydroelectric generation is simply ridiculous.

*George Reisman, Capitalism A Treatise on Economics, 1996, www.capitalism.net

Gary Judd QC is a Queen's Counsel, former Chairman of ASB and Ports of Auckland and former member APEC Business Advisory Council.


6 comments:

Anonymous said...

Thank you for researching this issue, Gary.

It is heartening to read the building of arguments from people with better minds than mine.

Here is hoping the Government squashes this claim . . . I repeat, here's hoping.

Anonymous said...

No amount of hokum about taniwhas and Maori creation myths can justify Maori claims to New Zealand’s water.

What next? A claim for the light from the stars and the air that we breathe?

After all, didn’t Tane create the airspace when he separated his parents, Ranginui and Papatuanuku, and let in the light?

Back to reality.

The Crown manages our river system and the water in it for the benefit of all New Zealanders. Subject to the Crown’s right to manage, power companies and local authorities collect water in dams and reservoirs to provide electricity and reticulated water to end users. At this point it acquires a commercial value, which rightly belongs to the owner of the collection system. This water eventually goes back into the water cycle and becomes available again to anyone.

For a non-owner of the means of collection to claim ownership of water someone else has collected is an unearned increment. This means they want something for nothing, while putting up none of the capital and assuming none of the business risk.

Article III of the Treaty of Waitangi grants to individual Maori – not just to the chiefs – “all the rights and privileges of British subjects,” meaning today's New Zealanders of Anglo-Maori descent each have a 1/4.43 millionth share in the Crown, just like the rest of us. When the Crown sells the power company shares, they will have the same right as everyone else to participate in the share float.

Despite this, we are hit with yet another try-on by Corporate Iwi – emboldened by the passivity of previous governments – to line their pockets at the expense of their fellow New Zealanders.

Watch the threats of legal action over water evaporate as soon as the Crown cuts a sweetheart deal with the self-anointed “Brown Table” elite for free shares.

Ray S said...

As expected, the government is poised to roll over on this issue in favour of maori elite. The probable issue of "share plus" shares to them will give them power and influence not available to "ordinary" shareholders. What value shares when a group of shareholders hold sway over the operation of the company.

Might I also suggest that involvement of maori in the way proposed will lead to vastly reduced share value thereby letting maori buy more shares at bargain prices.

Shameful, Mr. Key, where are your principles and where are your balls? make a stand against all this for ALL New Zealanders.

Anonymous said...

Come on John Key. Toughen up and on behalf of the majority of the voters of New Zealand tell the Waitangi Tribunal and the Maori Council where to go as regards to their claim for ownership of New Zealands water plus many other spurious claims

Anonymous said...

You ask where Key's balls are?

They've been taken over by maori who perform poi dances with them.

But that unelected lefty-liberal Finlayson is actively assisting maori by supporting their every whim. He is the best argument we have against allowing "list" candidates into parliament. Not ONE list MP has been any use whatever.
Auntie Podes

Anonymous said...

Finlayson's primary goal in life (like all wiggers), is giving away large wads of other people's money, so he can hug himself for saving the Maoris.

Once someone is captured by one leftist argument (in Finlayson's case "Gays are oppressed people") it becomes that much easier to accept the same narrative applied to another leftist-designated "victim" group.

Asswad!