1 62 The Political Economy of Resource Use 



use the term, therefore, it is a particular kind of economizing — the 

 avoidance of wastes associated with a faulty time distribution of the 

 use of resources. So used, the term is obviously not "objective" or 

 wertfrei; value judgments are of the essence of conservation policy. 

 And the values of a private planning agent are not necessarily the 

 same as those of the government. 



So much for definition. There seems little point in arguing further 

 the merits of a broad versus a narrow meaning of conservation. I pre- 

 fer the narrow meaning, and the fourth problem area I shall discuss 

 deals with conservation in this sense. If conservation is defined as the 

 avoidance of waste in natural resource use, a discussion of all four of 

 my "problems" is relevant. 



Subsidies to Mineral Discovery and Development 



Most countries with important mineral deposits subsidize, in one 

 way or another, discovery and development activity. The United States 

 offers powerful tax inducements in the form of depletion allowances 

 and the "expensing" of discovery and development costs. Special in- 

 centives are also offered to small discovery enterprises. Canada has 

 somewhat lower depletion allowances but grants a three and one-half 

 year exemption from income taxation to new producing properties. 



What is at issue here is not a policy, motivated by security consid- 

 erations, of granting special inducement, limited in time, to producers 

 of strategic materials at home or abroad. We are not concerned with 

 guaranteed prices, special development contracts, premium pricing, 

 and all the other devices used during and, to some extent, after the 

 war to stimulate production of materials for military use. These were 

 short-term measures designed to meet a special problem. Our concern 

 is with the continuing special advantages given to mineral exploration 

 and production on the ground, apparently, that, without subsidy, in- 

 vestment and output in the minerals field will fall substantially short 

 of what is desired. 



The term "subsidy," of course, is a kind of swear word in the 

 American business community, which is strange considering the uni- 

 versality of the phenomenon. But manufacturers whose domestic pro- 



