Pat Gunning wrote:
> If a tax on oil was anticipated, it would reduce the 
> incentive to search for oil. The larger the tax, the lower 
> the incentive. Oil may be a "gift of nature" but that 
> "gift" must be discovered. Take away the reward for 
> discovery and you take away the discovery itself. 


That feels like a bit of slight of hand at the end,
for two reasons.

1. Discovery can be serendipitous
2. More importantly, taking away some of the reward
   is very different than taking away all of the reward.

When one moves away from natural resource discoveries,
the slight of hand becomes even more misleading,
for the very notion of reward can shift markedly.
(Think art and math, or if you like the success of open 
source software.)

Furthermore, even ignoring the non-financial incentives that 
clearly have contributed to both cultural and material 
progress (if I may use the word), raising the reward to 
productive discovery can be a bad thing, as illustrated by 
post-Chakrabarty patent law in the US.

Finally, as a matter of political economy, it seems to me 
that those who speak loudest for rewards to discovery are 
most often talking about rewards to resources they already 
control or are highly likely to control.  (Think of the 
battles of US copyright law, the last major change of which 
is often called the Mickey Mouse protection act.)  This is 
one other reason why I bother to harass Pat over what might 
seem to have been a simple and common sense observation.

Cheers,
Alan Isaac