Claims that oil deposits and other extractive resources are exhaustible often conflate physical exhaustion (total depletion of the physical stock of a resource) with economic exhaustion (loss of the expected profitability required to induce resource owners to continue extracting and marketing the resource). Yet that distinction is crucial, because when private-property rights are unencumbered, entrepreneurs usually have several strategies available for maintaining the economic value of their firms while they continue to operate them.
Read the Full Article
(PDF, 25 pages)
|Other Independent Review articles by John Brätland|
|Summer 2010||Capital Concepts as Insights into the Maintenance and Neglect of Infrastructure|
|Spring 2004||Externalities, Conflict, and Offshore Lands: Resolution Through the Institutions of Private Property|