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Is it patronizing theft to buy natural resources?
Leif Wenar says yes:
You very likely own stolen goods. The gas in your car, the circuits in your cell phone, the diamond in your ring, the chemicals in your lipstick or shaving cream — even the plastic in your computer may be the product of theft. Americans buy huge quantities of goods every day that are literally stolen from some of the world’s poorest people.
...The very worst countries — the “sevens” — are places like Burma, Equatorial Guinea, Libya, North Korea, Somalia, Sudan and Zimbabwe. Taking these very worst countries as the places where the people could not possibly be authorizing the dictators and civil warriors to sell off their country’s resources, we can measure the amounts of stolen resources that enter America each year. By these official U.S. criteria over 600 million barrels of oil–more than one barrel in eight — have been taken illegitimately from their countries of origin. Stolen oil may be in your car’s gas tank right now. Stolen oil might have been used to make the computer mouse in your hand.
That's Leif Wenar, here is more. He proposes suing Exxon to create a chain reaction, thereby lowering the value of dictatorial seizures of natural resources and perhaps preventing them. I'm sure the Chinese are on board. But no -- read further: we must sue them too. After all, their cheap toys are made with stolen oil.
Posted by Tyler Cowen on May 14, 2008 at 11:34 AM in Philosophy | Permalink
Comments
Is this basically a call to embargo all nations without sufficiently representative forms of government?
Given the debate over the Cuba embargo, would this really make the citizens of these countries better off, or teach their governments a lesson?
Posted by: Brian Moore at May 14, 2008 12:00:24 PM
This is stupid and stuff like this just diverts liberal do-gooders from concentrating on more important things. Free markets are good; it's a lack of transparency and accountability that leads to abuses and ridiculous CEO pay and taxpayer bailouts of the financial industry. This is what people should be outraged about, not by corruption in Third World countries.
Posted by: Dirk at May 14, 2008 12:13:53 PM
Why, the land my house sits on is stolen, too! Who says the King of France (or England or Spain, for you coasties) had clear title when the pink people rolled over North America?
And no, no sympathy for the First Nations. They don't have title either. Whatever they got out of Louis (or George/Isabella/President X) was fraud, too.
Posted by: foxmarks at May 14, 2008 12:32:21 PM
Thomas Pogge, (I think it's him--I heard a talk a long time ago, and can't remember the details) argues on the basis of this consideration that we have a debt to the developing world that justifies increases in aid. Sounds like a more reasonable and nuanced position than suing Exxon.
Of course that wouldn't quite work while the dictators are in power--it would only help those nations that have escaped dictatorship.
Posted by: Justin at May 14, 2008 12:33:44 PM
Does Wenar suggest getting the UN involved?
I mean, I know the US court system has a lot of de facto legislative power over domestic issues, but is Wenar arguing that it has some authority to dictate how sovereign countries' governments utilize their natural resources?
Posted by: brent at May 14, 2008 12:36:10 PM
Yes, let's embargo these nations. And then we can invade them to free the citizens from the bonds of tyranny. Clearly this has worked very well in Iraq.
Posted by: Mercutio.Mont at May 14, 2008 12:39:26 PM
Since when does Cato publish closet collectivists who can't spell? ("Oppresed"?) I'm disappointed.
Debatable assumptions underlying the argument:
That the inhabitants of a certain region have some sort of collective property right in the natural resources thereof;
That a government must be somehow "authorized" by said people to dispose of those resources;
That "dictatorial" regimes have no such authorization.
I'd like him to back up a few miles and justify these assumptions before I worry about his main rant.
Posted by: Tim of Angle at May 14, 2008 12:45:30 PM
Its not resources, its emperialism!
Posted by: at May 14, 2008 12:54:46 PM
Yeah, man, theft from those poor people is WRONG. I really feel for all those poor 3rd worlders who
homesteaded all that deep underground oil, only to have it taken from them, who dug up all those
diamond mines, who farmed that tiny portion of the beach that was melted to make silicon.
I just hate when people get their natural resources nationalized and stolen from them, people like
Exxon's shareholders.
Posted by: Person at May 14, 2008 1:01:41 PM
I suspect that the US government is bright enough to spot the thin end of a wedge when it sees one. Cato framing a debate so that (illegitimate, non-democratic, foreign) government is sometimes theft? Can't see where that's going at all.
Posted by: Seamus McCauley at May 14, 2008 1:09:41 PM
The larger question here is, do we in the U.S. owe any duties to the citizens of other countries; this is an important and fascinating question, but is more of a philosophical question that is not susceptible to a falsifiable answer
Posted by: enrique at May 14, 2008 1:55:50 PM
Regardless of what one thinks of Lenar's policy proposals, I think his fundamental point - that some of the natural resources we buy are effectively stolen goods - has merit. Look at his examples.
And the question is not whether the locals drilled oil wells or dug diamond mines. The rulers didn't do that either. They just let Exxon or whoever do it and seized the proceeds to benefit themselves rather than their country. Exxon is more in the nature of a receiver of stolen property than a thief, in Lenar's view.
Now, I don't happen to think that suing Exxon is going to accomplish very much, but I am interested to know why the basic question of property rights in these resources seems so clearcut to so many people here.
Posted by: Bernard Yomtov at May 14, 2008 2:07:04 PM
Yeah, the Saudis wish we would steal more oil....
Posted by: jorod at May 14, 2008 2:11:47 PM
Of course, the communists would argue that everything made in the U.S. is suspect as well, since the necessary labor was stolen from the proletariat.
"Indigenous" peoples around the world would argue that the factories and offices were built on land stolen from them.
Posted by: g at May 14, 2008 2:11:59 PM
From a positive standpoint, is there anything wrong with assigning to the dictator the property rights over the natural resources?
Clearly there are huge distributional problems with assigning all property rights to the dictator (or sham democratic govt.), but I imagine that the quantity of oil extracted, who it is sold to at what price etc... would be substantially similar.
Even at a normative level, the borders of these countries are incredibly arbitrary anyway. Should all the oil revenue go to the group/tribe that lives on top of the oil? Should it go to other groups living far away on the correct side of some completely arbitrary border?
Posted by: mgunn at May 14, 2008 2:30:57 PM
Interesting concept, but it seems 1) unworkable because it's such a slippery slope (every government will have someone challenge its legitimacy) 2) likely to cause more harm than good in many cases. I don't believe that reducing the proceeds from goods that we posit as stolen will necessarily engender more democratic, beneficial forms of government more effectively than economic growth. And since this policy would deter economic growth, it's working at cross-purposes.
I'd rather just protest poor government and create more economic ties with well-governed countries than trying back-door embargoes. Those clearly haven't worked well in many cases such as Cuba, Iraq, etc.
Posted by: Greg at May 14, 2008 2:48:43 PM
From a positive standpoint, is there anything wrong with assigning to the dictator the property rights over the natural resources?
Do you think the proceeds are invested just as productively?
Also, if the dictator controls the nation's wealth for his personal use then it seems that that would encourage insatbility, civil war, etc., because the incentives to overthrow him are so great. In turn, the dictator will spend lots of money on secret police, elite military forces, etc., to keep power.
Posted by: Bernard Yomtov at May 14, 2008 3:03:00 PM
It's nice to see Cato examining the normative aspects of commerce. But they're not radical enough to deal with the contradictory ethics of their institutions.
[Property and society are utterly irreconcilable institutions.] - Pierre-Joseph Proudhon
Posted by: ideogenetic at May 14, 2008 3:05:57 PM
This is entirely reasonable given the assumption that government is supposed to act in the interests of the governed, and that any government that does not is therefore defective or "not a proper government"
The catch is that that assumption, popular as it is, has no connection to the real world. Some governments are forced, to a greater or lesser degree, to make compromises with powerful groups among the governed, even in some cases to the extent of giving them voting rights over part of the government's function. But the purpose of every government is to serve the interests of the governors.
Posted by: Andrew McG at May 14, 2008 3:11:33 PM
I don't like it much, but I also think he has a point. I would argue that it is similar when dictators amass debt, especially when doing it for their own benefit entirely. I am not sure that the populace should necessarily have to pay for their excess should they somehow free themselves.
Posted by: anomdebus at May 14, 2008 3:12:30 PM
It's a conundrum. But do you advocate lowering the bar of freedom of all in hopes of raising the bar for those oppressed, i.e. embargoes and punishing our citizens who do business?
I come down as a no. I advocate more freedom for everyone, even though we are a good bit ahead and others a good deal behind.
The alternatives haven't worked out well in the examples cited, e.g. Cuba and Iraq. Compare to Vietnam.
http://www.heritage.org/index/country.cfm?id=Vietnam
Here are the rank of total imports to the U.S. compared to rank of the Heritage foundations Index of Economic Freedom (IEF)
Imports IEF
Canada 1 7
China 2 126
Mexico 3 44
Japan 4 17
Germany 5 23
United Kingdom 6 10
Saudi Arabia 7 60
Korea, South 8 41
Venezuela 9 148
France 10 48
Nigeria 11 105
Taiwan 12 25
Italy 13 64
Malaysia 14 51
Ireland 15 3
There is a non to slightly positive correlation between economic freedom index and rank of imports in top 15 countries. The top 15 importers account for ~75% of imports.
We know invasions and embargoes aren't so hot for either country. Trade is definitely good for us, land of the presumably freer consumers. The real question is, does trade, over time, increase or decrease the freedoms of people.
Crude/Total IEF Slope (1995-2008)
UK 2.5 0.279
Canada 1 0.899
Mexico 1 0.615
Venezuela 0.56 -0.99
Nigeria 0.36 0.201
Saudi 0.29 -0.585
This gets sketchy, but I divided the rank of crude imports by the rank for total imports to get a rough ration of how much of the trade comes from crude (a higher number means less of trade results from crude). I also plotted the time course of the economic freedom indicator and got the slope of the line. You can see a rough positive correlation between the ratio of crude to total imports (ranks) versus slope of a trend line of the economic freedom (EF) indicator. UK was already high EF, so the slope is probably reaching diminishing returns. There may be something to a loss of freedom related to crude oil imports.
So, are we funding dictators? It seems the extreme of the problem is the case of oil wells. We do a lot of business with oil-producing countries. Also, which as recently happened in Venezuela, they can be nationalized. It is easy for a government to monopolize the wells because they are fixed location. The people can't provide competition for the product.
I think the problem is that these countries export oil, not the fact that they export it to us. Therefore, we may as well buy it. If we don't, they are likely to be just as oppressed (e.g. Cuba), but with little material wealth to show for it.
What about tax credits for people who do business with smaller foreign suppliers in these countries?
Posted by: Andrew at May 14, 2008 3:16:40 PM
Hmmm, data looks awful. Besides, it was seat of the pants. Do your own digging. I used these websites.
http://www.heritage.org/research/features/index/search.cfm
http://www.censusbureau.biz/foreign-trade/statistics/country/index.html
http://www.eia.doe.gov/pub/oil_gas/petroleum/data_publications/company_level_imports/current/import.html
Posted by: Andrew at May 14, 2008 3:18:57 PM
Since when does Cato publish closet collectivists who can't spell? ("Oppresed"?) I'm disappointed.
Debatable assumptions underlying the argument:
That the inhabitants of a certain region have some sort of collective property right in the natural resources thereof;
That a government must be somehow "authorized" by said people to dispose of those resources;
That "dictatorial" regimes have no such authorization.
I'd like him to back up a few miles and justify these assumptions before I worry about his main rant.
Posted by: Tim of Angle at May 14, 2008 12:45:30 PM
Coming from someone who I assume is a libertarian, this is utterly shocking. On the second and third assumptions, do you claim that a dictator has a right to the natural resources of a country? If you do, then aren't you the closet collectivist? If you don't think the dictator has that right, then the second two assumptions hold.
On the first assumption, some of the land that was taken and exploited for natural resources were privately owned. If the dictator takes privately owned land, that is theft by definition. If the land was publicly owned, then it was taken from the taxpayers, and is equivalent to directly stealing tax money. Unless you think that's OK, then the first assumption stands as well.
I'm surprised by the reactions of people who otherwise call themselves libertarians. You would think that believers in freedom would like the idea of stopping theft and coercion by governments in third world countries. I guess not....
Posted by: brian at May 14, 2008 4:15:04 PM
Leif proposes that property and person rights be enforced via trade agreements. Nothing unlibertarian about that.
Otherwise, what rights should be guaranteed in trade agreements? WTO demands banking and investment rights. It demands open markets, the right to trade.
Leif is also struggling with the libertarian problem of global government being too small relative to national governments being too big. You see, for a libertarian to demand small government implies there must be a stronger institution to enforce the smallness.
If Leif is taking the libertarian position that global institutions are too weak to hold off jackass dictators, then I am inclined to agree with him. I liked the essay, I liked his approach to the solution.
Posted by: Matt at May 14, 2008 4:38:52 PM
"I'm surprised by the reactions of people who otherwise call themselves libertarians. You would think that believers in freedom would like the idea of stopping theft and coercion by governments in third world countries. I guess not...."
Of course we like the idea. But how to go about it and at what cost? We (here I use the collective we, as in, not me, but a lot of us) thought all the liberated Iraqis would pelt our troops with peace flowers. Not true. We thought the dictator was the keystone to the oppressive regime. Not true.
We've been liberating Cuba by not buying their stolen property some 60 years. The fact is, the resources aren't 100% stolen from 100% of the people. And restricting our own citizens free trade is problematic.
Posted by: Andrew at May 14, 2008 4:41:32 PM
Btw, I think part of my discomfort to start has to do with the hazy way in which property is discovered and privatized. It is romantic to imagine carving out a life from essentially barren earth and there may in fact be places here and there that are untainted by collective redistribution, but I don't believe it is the norm. For the developed world, at least you can say that most property owners bought the title using money obtained through work.
At this point, I believe private ownership is inevitable and therefore the best way forward. Perhaps, theoretically, you could have a scheme by which there is no private property as we know it, yet still allows investment and return; all property being virtual.
Sorry, this is unfinished, but it is a big topic and can't spend too much time on it.
Posted by: anomdebus at May 14, 2008 5:33:00 PM
brian: You would not register surprise if you recognized just how large a percentage of libertarians are simply people who don't want to pay taxes and do want to own guns, those being the only significant restrictions on their own freedoms that they will experience in their lives. Witness how frequently they decry injustices against themselves and how rarely they decry injustices against others.
Posted by: Mark at May 14, 2008 5:49:26 PM
ideogenetic: "Proudhon said so" is not a compelling argument.
In fact, many of the rest of us would reply "Property is inseparable from society" - and I bet we could make a better case for it than "Hayek said so", though that'd still be better than "Proudhon said so", given the frailty of Proudhon's theories at every level.
brian: Why do you assume Tim of Angle is a libertarian? Because he used the term "collectivism"? But surely any individualist and indeed many non-libertarian conservatives or classical liberals can also us the term, as he did, as an implicit pejorative.
Maybe he doesn't sound like a libertarian because he isn't making a libertarian argument at all - and maybe that's because he isn't one?
(I cannot speak for him, so, hey, maybe he self-identifies as a libertarian and somehow thinks he can reconcile what he said with that position. Maybe he even can, somehow. But it's probably best to not simply assume he's a libertarian and contradicting libertarian principles, on no particular evidence, yes?)
Posted by: Sigivald at May 14, 2008 6:08:19 PM
In the short run Wenar's recommendation will increase violence in those under developed countries. Because of the uncertainty about the strength of the dictators in power. Once people in those countries perceive that the money that was funding not just the eccentricities of the dictator's family but also the military's budget, there will be incentives to overthrow the dictator. This will last until another government either dictatorial or democratic settles in power. Will the cycle begin again, then?
I suggest that a better policy though with gradual (marginal) rather than abrupt results could be just asking for including in labels the country of origin of the components of our products. Wait and see how consumers punish both the american middlemen and overseas dictators.
Posted by: Pedro Romero at May 14, 2008 7:14:43 PM
Sigivald: brian: Why do you assume Tim of Angle is a libertarian? Because he used the term "collectivism"? But surely any individualist and indeed many non-libertarian conservatives or classical liberals can also us the term, as he did, as an implicit pejorative.
Yes, that's why I asssumed so (and note that I was very careful to state that I was assuming that). It seems to me that a person who uses "collectivism" pejoratively opposes collectivism, and such a person cannot consistently oppose attempts to eliminate collectivist institutions and leaders such as those found in third world dictatorships.
Maybe you're right in saying that he's a classical liberal or a conservative, but in either case my point still holds.
Posted by: brian at May 14, 2008 7:23:12 PM
I don't like the way the statement frames nationalized property as "stolen" in only the cases where the regime is dictatorial. Democratic governments are just as much stealing when they arbitrarily nationalize resources, whether the average voter agrees to this or not. Why should the say of a voter in Alabama have any legitimizing effect on a government in Washington's decision to seize oil resources in Alaska, for example? Why should the decision of the majority of voters agreeing to theft of property from a minority be viewed any differently than the decision of a military junta agreeing to theft of property from a minorty? Democracy is preferred over dictatorship because it is less likely to resort to theft and war and genocide, not because a representative government magically makes theft and war and genocide okay.
Posted by: scarp at May 14, 2008 7:35:51 PM
My basic problem with this analysis is that there is no 'legitimate' owner per se of these resources to purchase them from. Who owns the stuff? "The people" of "the country" within whose borders lies the land under which the stuff is? But why? By virtue of having been born within those borders? Who drew those borders? Which "people" exactly, and in which proportion? Even if they do nothing whatsoever to help harvest those resources?
In such cases it is not a choice between stealing or not-stealing, it is a choice between paying the local chieftain for the resources, or not paying him and not getting the resources. One might suggest abstaining out of principle, so that we can at least say we're not helping to enrich the chieftain & solidify his illegitimate power, except the reality often is: someone will buy the stuff from him. And then extract the arbitrage by re-selling it to us anyway.
Perhaps there are cases where a widespread, organized boycott a la South Africa might be effective, but in practice it will mostly be difficult if not impossible to convince enough states to go along to have an effect. France's dealings with the Saddam Hussein regime was instructive here.
Posted by: Sonic Charmer at May 14, 2008 7:55:56 PM
So, if we were talking about 3 individuals, one who happens to own land with resources, another who steals it, another who buys it, Wenar is basically making a property rights (Lockian) argument. But in awarding the property to the rightful owner, a collective group, the people, he is making a Georgian argument. But only if we consider the oppressed nation as "society" and exclude everyone else. So it's a Georgian nationalist line of argument.
And, what scarp said regarding democratic theft. And, what Bernard Yomtov asked regarding the clearcutness of property rights.
Posted by: Eric H at May 14, 2008 10:50:32 PM
What if somebody buys something using stolen money? Are they the true owner? What if somebody buys something using taxes? Are they the true owner? What is the difference between taxation and theft?
Posted by: Russell Nelson at May 15, 2008 2:27:03 AM
Wenar is certainly on to something, and a lot of what I see in the comments are mere dismissals of an inconvenient fact.
Being an anarchist, I'm not big on any laws to solve these problems. But if we're going to use the state to advance justice (good luck with that) I'd rather see corporate charters dissolved for complicity with criminal regimes. Who are you going to distribute the proceeds of the lawsuit to? These people have no property rights as we understand them, so they will not be compensated for the theft. Rather, let's attack the true cause of this exploitation: the corporate form, which allows for the mobilization of trafficking in goods of dubious origin on a scale no smuggler could ever achieve. Incorporation is a privilege, and we don't have to extend it to entities that help foreign thugs oppress.
And let's remember that, while there are plenty of thieving thugs in the world, it is largely U.S. trade and foreign policy that helps them maintain power and stabilize their export markets. The WTO, through their managed trade agreements that favor corporate interests, undermine the ability of native peoples to control their own economies. Free trade is better, of course, but we can all agree that we don't have that now. This is all to corroborate Wenar's point that the underlying rules governing the market determine how it will allocate resources and wealth - rules like property rights, legal systems, government prerogatives, etc.
Markets are just a tool, an impersonal phenomenon; they can be used for many different ends, depending on how you set the ground rules. Look at China. The WTO manipulates these rules to ensure certain market outcomes, and its supporters are complicit in the crimes of its members.
Posted by: Jeremy at May 15, 2008 9:53:35 AM
Yes, it is a Georgist line of argument to assign land rights to the collective “people”. It is not, however, necessarily nationalist. The nationalist aspect arises out of the limits and borders put on each of the planet's rival sociopolitcal experiments. Nationalism is at a root level in conflict with Georgism. Land resources can’t just be owned by our people, but it is practically foolish to expect dictators to be willing to share their booty if we give some of ours to them.
All land titles are founded on arguments of the same strength as “because Proudhon said so”. But the magical thinking has worked out pretty well for allocation via markets once those bogus titles have been enforced.
Posted by: foxmarks at May 15, 2008 12:11:07 PM
Jeremy, yes, let's look at China. During the period in which U.S. trade and foreign policy was entirely absent as a measure of support for their regime, the communists' miserable subjects starved to death in the tens of millions. Your historically ignorant projection of blame for the world's dictatorships on the relatively powerless but economically successful business entities that survive in spite of the machinations of the state are reminiscent of the same kind of hateful and indirectly power-worshipping philosophies of the national socialists of last century.
Recommending the cudgel of state power to crush free associations for problems they didn't cause... some "anarchist"! Good luck with that, indeed.
Posted by: scarp at May 18, 2008 12:04:05 PM
