Economy as instituted process: the case of hard rock mining in the United States

Christopher Brown

Journal of Institutional Economics, 2018, vol. 14, issue 4, 579-593

Abstract: I examine the origin and development of institutions that assign and enforce rights to hard rock minerals located on federal lands in the United States. Hard rock mining gives a prime example of the ‘artificial selection’ of settled customs or working rules by jurists and legislators. The evolving structure of the industry, conditioned by technological and market factors, produced a parallel shift in the locus and control of sovereignty. In the early days sovereignty vested in the mining clubs. The enlarging scale and complexity of mining catalysed a change in both the uses and location of sovereignty. With the transition from prospecting to large-scale industrial mining, the ‘right to use’ mineral deposits obtained through patents became contingent on the cooperation of labour. At this stage, the capture of the state's monopoly on legitimate violence to protect the right to use became a crucial dimension of property. Mining companies have also enjoyed liberties with respect to the externalization of environmental costs. The emergent structure of rights, duties, capacities and exposures was instrumental in bringing forth a quantum increase in the mining of hard rock minerals necessary for industrial expansion. There is, however, an urgent need for reform of the mineral patent system.

Date: 2018
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