Iraqi constitution must deliver oil to Sunnis, or it won't deliver stability
By Edward P. Joseph and Michael O'Hanlon
There are two big problems, however. First, the temporary constitution promulgated in early 2004 under Paul Bremer specifically assured Sunnis that Iraq's natural resources belong to "all the people of all the regions and governorates of Iraq," and further underscored that oil revenue would be distributed equally and fairly through the national budget. Effectively the Kurds are demanding all the autonomy protections afforded them by that interim document while trying to remove the key resource-distribution provision important to the Sunnis.
Second, if successful, this Kurdish action will establish a precedent that Shiites may seek to emulate in the south, where almost all the rest of Iraq's oil is found. The Sunnis would probably see such a constitution as a deal struck between Shiites who will eventually dominate Iraq's central institutions and Kurds who covet eventual separation - and one that deprived them of their fair share of Iraq's national resources as well.
....Without a fair deal ensuring that most Iraqi oil revenue is treated as a national resource, to be distributed proportionately to regions on a per-capita basis, it is hard to see how the Iraqi constitution can defuse Sunni Arab paranoias - and hard to see how it can serve the broader goal of creating a stable democratic Iraq.
Jim pointed out that the mainstream libertarian solution would be to put the wells under private ownership, and discard the idea of oil as property of the "people of Iraq."
The standard libertarian diagnosis here is, of course, that by putting the oil wealth in "public" hands you're really putting it in the hands of whichever gang manages to control the levers of state power, and that a compound change would obviate the problem entirely: 1) private ownership of all wells and fields, combined with 2) dropping the notion that oil fields found under the sands of Iraq somehow "belong to all Iraqis."
I know enough about Mutualism now, I think, to conclude that you'd reject the orthodox diagnosis as "vulgar libertarianism," but not enough to guess what you think WOULD work in such situations.
Well, golly, I'd kind of like to know myself. I delayed attempting an answer, because I had no clear idea of what the answer was. I should add, for the record, that I don't necessarily dismiss the "orthodox diagnosis" as vulgar libertarianism--not all of it, anyway. If "public hands" means "state hands," then the orthodox diagnosis is a pretty accurate statement of the problem. The question is whether society's ownership of a commons can be enforced by a non-state mechanism, through voluntary association and federation. And if "private ownership" can be stretched to include the idea of the commons as a legitimate form of property, or of worker homesteading of the formerly state-owned oil industry, then I'm fine with it. I don't much like the idea of auctioning it off at sweetheart prices to politically connected asset-strippers, though, on the Milton Friedman/Jeffrey Sachs model.
My initial inclination was to support homesteading of the industry by its workforce, combined with some kind of Geolib severance fee going to something like the Alaska Permanent Fund. Putin has been toying with the idea of such natural resource severance fees, as described in this Counterpunch interview with Michael Hudson. Of course, treating oil resources as a common raises all sorts of other puzzling questions, such as: how do you establish the territorial limits of the "community" to which common resources belong? If Iraq is just an artificial state cobbled together at Versailles from a grab bag of Ottoman provinces, why should some "Iraqi people" jointly own resources actually occupied by Kurds and Shia Arabs?
Well, I'm not much closer to figuring it out. But I turned my attention back to the issue after reading this article, (recommended by brian in the comment thread on an earlier post). I'm not sure how much it helps to resolve the overall problem, but it's about Iraq, and oil, and has a suitably Rothbardian flavor.
iraq , oil , iraqi constitution , iraq constitution