Public versus Private Ownership
Now think of the price system, or lack of one, in the context of Siegfried’s discovery.
When land is privately owned, the price system facilitates numerical comparisons between different possible uses of each plot of land (or useful subdivision thereof), such as people living on it, or excavating it for minerals, or growing crops on it, or conserving its current state—or countless other possibilities.
There is no way of knowing with certainty which is the best use of each plot of land, given the virtually infinite variables such as what alternative resources could be used for each of the possible uses of the land, how scarce and applicable to alternate uses each of those resources are, and so on. And of course, even the price system can’t account for all the variables, given that every event in the world comes with externalities, millions of uncertainties and butterfly effects that constantly shape our perception of the future into reality. But the price system accounts for more of the variables, and does so with more accuracy, than any other system because prices reflect each individual’s specific preferences and needs down to the cent whereas all other systems reflect either randomness or the preferences of some authoritarian subset of the population that has managed to dictate resource allocations according to their preferences while excluding the preferences of others.
(It is worth noting that the assumptions people make about the relative significance of one set of externalities over another tend to be totally unjustified. For example, there is a common assumption that the negative environmental externalities of industrial development such as logging or oil drilling outweigh the positive economic externalities. But it can just as easily be the case that when commodity prices are reduced by such supply increases, the resulting poverty alleviation and wealth creation generates positive externalities, such as more education and technological and scientific research, that outweigh the negative externalities.)
Private land is more likely than land governed any other way to be used for its optimal purpose, because its owner is free to sell it to the highest bidder, and the bidder with the most valuable idea of how to use it will typically be willing to pay the most for it. By contrast, “public” land is doomed to be allocated comparatively suboptimally. Because no individual is free to sell it to the highest bidder, it is instead trapped in its current use by whatever regulatory mire is preventing individuals from optimizing it.
Only in such a mire could the 15 million acres discovered by Eric Siegfried have been so tragically wasted. Individual property owners would almost certainly be too aware of their major assets to lose track of 15 million acres of real estate, because they themselves would be the ones to reap the rewards or punishments of the quality of their capital allocation choices.
Those acres, being “public” and thus illegal for individuals to settle, develop, or cultivate, were of so little use to anyone that nobody even bothered to do the basic research or exploration required to learn of their existence before it was discovered by accident. And all while there are millions of people without basic necessities, such as a peaceful place to sleep or grow food.
This arbitrary and incompetent allocation of 15 million acres should come as no surprise given the economics of public versus private ownership that have been well understood in the context of socialism and capitalism for more than a century. To solve the problem of rampant resource misallocation, the resources should be privatized so that individuals can start freely investing and innovating to make the most out of that which may otherwise be worthless enough to have abandoned completely.