According to the latest unemployment numbers from the Bureau of Labor Statistics, Nevada once again tops the nation with a staggering 11.7 percent unemployment rate. And yet, the state ranks strikingly high in many measures of economic freedom, a key driving force in economic growth, prosperity and better living standards for all.
So what is holding the state back?
One problem is that Nevada is fighting an uphill battle with one arm tied behind its back: The federal government owns approximately 85 percent of Nevada's land, preventing the state from developing those lands to improve its economy and allow for job creation.
With just 15 percent of the state left to its people for potential private development, Nevadans are restrained in realizing their entrepreneurial potential. Making due with only 15 percent of one's resources would hinder anyone. Who can flourish on 15 percent of their present assets? Nevada's economic problems are rooted in the fact that a vast majority of its land is unavailable for use in the private market.
According to the Bureau of Land Management, only 1.2 percent of the land owned by the federal government is used for national parks. The remainder - which, for now, is sitting, unused or underdeveloped - is divided up between different bureaucratic government agencies to manage as they please.
All of this federally owned land is "dead property," meaning it is not available for development and its value is not being realized. It is like being given an economic engine that can make your life better but having an invisible barrier blocking you from using it.
Land is a valuable resource for economic growth. It can be developed for a range of uses including farming or raising livestock, mining valuable minerals or extracting other natural resources as well as residential or business construction - all of which provide job and income opportunities.
Additionally, land can be used as collateral to obtain money for investment back into the land or for other investment opportunities. Yet, the situation in Nevada is such that no one can own, develop or use this land to create jobs; the entrepreneurial spirit is not enough without property rights.
Property rights are at the core of economic freedom - the engine behind economic growth and job creation. First, property rights facilitate value creation by enabling voluntary trade. When two parties engage in trade, they voluntarily exchange something they have for something they want more. Subsequently, both parties end up better off. Trade is only possible if free individuals own something to trade.
Furthermore, ownership creates a situation in which the owner has incentives to get the most out of what he owns, while taking care of his resource so that it is useful for as long as possible. Property rights provide a natural incentive to take care of something and to make it grow so that the owner has something to subsist on in the future. For example, many public school textbooks look like they've taken a good beating. The reason is that the students who use them do not own them and, therefore, lack the incentive to take care of the books. The student just returns the book at the end of the year. Similarly, the federal government does not have an incentive to develop Nevada's land, make it grow or protect it.
Liberating Nevada's land from federal ownership and expanding property rights will allow Nevada citizens to create income and jobs. Freeing land opens the door for entrepreneurs to buy mineral rights so more mines can open and hire miners; for developers to hire construction workers to build new homes, restaurants, industrial parks and the like; for industries to move plants and factories to Nevada by being able to buy or lease land that was previously unavailable for development.
If we want to get Nevada's economy growing and reduce unemployment, one solution is to give the people of Nevada back their land for private ownership. Free Nevada and unleash the entrepreneur.
Derek Yonai is the Lundy chair of business philosophy and an associate professor of economics at Campbell University in Blues Creek, N.C.