07 Jan 2014

Truth Is Stranger Than Bryan Caplan’s Fiction

Bryan Caplan, Economics, Oil, Shameless Self-Promotion 21 Comments

From my new post at Mises Canada:

Caplan then goes on in his post to lament the odd fact that people do not respond to this potential of trillions of dollars in global wealth (via labor mobility) the way Caplan claims they would respond to the discovery of trillions of dollars of Leonium buried under the Empire State Building.

Whether one agrees with Caplan’s position on immigration or not, there’s a major problem with his argument: People in the U.S. (and Canada) currently are sitting on trillions of dollars of wealth buried under the ground, which their governments won’t let them access. It’s not a mythical substance called Leonium, but very real substances called oil and natural gas.

In case it’s not clear, this isn’t a hit piece on Bryan. Rather, I’m pointing out that “people” (really government policies) are as wealth-destroying when it comes to other assets too. It’s not just about immigration policy.

21 Responses to “Truth Is Stranger Than Bryan Caplan’s Fiction”

  1. Kevin Donoghue says:

    It took Mother Nature a long time to accumulate that stuff. You think failing to burn it fast is wealth-destroying?

    • Matt M (Dude Where's My Freedom) says:

      Fast? They aren’t letting us burn it at all.

      It’s stupid to avoid using a perfectly good product based solely on the concern that the product is finite.

    • Matt Tanous says:

      No, the oil and natural gas ARE the wealth. Wealth is not money, but in valued things.

      And he is not advocating “burning it fast”. Only allowing us to use it at all. The market, and not the government, is the only thing that can determine the proper relation of present consumption to future consumption, via prices.

    • Bob Murphy says:

      Kevin aren’t you supposed to be an economist?

      • Kevin Donoghue says:

        I study economists’ reasoning. It’s not quite the same thing.

        • skylien says:

          You are studying economists’ reasoning without being familiar with economics?

          Isn’t that like studying the prose of program-code written by programmers’ while you have not the first idea of how programming works and then criticizing them for bad structure and weird punctuation?

    • Major_Freedom says:

      To answer your question, yes. Burning oil enables the production of new goods that did not exist before. Overall wealth goes up. Look around you. Almost all of your possessions were produced on the basis of oil, directly and indirectly.

      Do you want a puddle of black liquid, or what you see around you?

  2. Silas Barta says:

    In case it’s not clear, this isn’t a hit piece on Bryan.

    It’s like you read our minds! (Seriously, that was my reaction before a thorough read.)

  3. Harold says:

    There is surely a difference between “technically recoverable” and “economically recoverable”. The figures for technically recoverable are currently irrelevant if it costs more to extract than it does to import.

    • Andrew Keen says:

      I wouldn’t put it past bureaucrats to regulate the recovery of economically irrecoverable resources.

    • Matt Tanous says:

      “Economically irrecoverable” merely means “the more difficult stuff the market has lead us to wait to extract until prices rise or technology improves (likely in response to a price rise)”.

  4. Harold says:

    Here is another way to “shatter the myth of energy scarcity”. USA electricity use is about 1.4E16 J/yr. Technically available energy from solar power in the Mojave desert (using an efficiency of 3.5% of total insolation – data from empirical studies of actual large scale solar power plants) is about 6E19 J/yr. Using only 0.2% of the Mojave desert would provide all of the USA with electricity.

    • Mike M says:


      That’s great in theory. Solar panels need ot be kept clean to operate properly. the desert is full of dust and sand. Where do you propose the water will come from to facilitate the massive persistent cleaning?

      • Harold says:

        Mexican labor with brushes? The point is that energy is not scarce regardless of the quantity of oil, coal and gas in the ground. There are challenges, but I think keeping the panels clean is not insurmountable.

        • Mike M says:

          Sounds like an interesting immigration jobs program

          The energy itself is not scarce, but if the material needed to harvest it is scarce (water in a desert) then the energy is de facto scarce. To make less scarce may be expensive then it becomes economically not feasible thius irelevent as a source.

          • Harold says:

            From wiki: “Technically recoverable resources represent that proportion of assessed in-place petroleum that may be recoverable using current recovery technology, without regard to cost”.

            Technically recoverable energy is not scarce, so pointing out that US is sitting on trillions of barrels of “technically recoverable” oil does not really shatter the energy scarcity myth any more than does the desert sun.

            • Mike M says:

              You’ve been poisoned. The antidote is locked safe for which you do not have the combination nor do you have enough money to bribe the guy with the combination. From your perspective, antidotes are scarce but technically recoverable. You die.

              • Harold says:

                You need oil which is located in a deep sea well -you don’t have enough money to build an expensive off-shore rig. From your perspective oil is scarce. The point is that technically available oil is, as you put it, irrelevant as an energy source unless it is economically available. Thus pointing out how many barrels are out there does not “shatter the energy scarcity myth” any more than pointing out that solar power is technically available.

  5. Mike M says:

    “People in the U.S. (and Canada) currently are sitting on trillions of dollars of wealth buried under the ground, which their governments won’t let them access”

    Makes perfect sense when you understand that governements don’t beleive in true private property. It’s thier resource not yours.

  6. Carl says:

    So you “counter” Caplan’s claims by pointing out another wealth-creating opportunity. And? Why would that be considered a “hit piece”, you haven’t actually contradicted the guy. Weird post.

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