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Mutualist Blog: Free Market Anti-Capitalism

To dissolve, submerge, and cause to disappear the political or governmental system in the economic system by reducing, simplifying, decentralizing and suppressing, one after another, all the wheels of this great machine, which is called the Government or the State. --Proudhon, General Idea of the Revolution

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Thursday, October 13, 2005

Iraqi Oil

Some time ago, in late August, Jim Henley asked me for an opinion on the status of the oil industry under the new Iraqi regime. Under the proposed new constitution, all existing oil wells are the common patrimony of the "Iraqi people," but those developed in the future will belong to the governments of the regions developing them (which happen to be almost entirely Kurdish or Shia). So the Sunnis will be muscled out of any future development of the oil industry. Here's how a CSM article described the problem:

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.

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Blogger Kevin Carson said...

I like your OSG site. If you think the proprietary software community has its panties in a bunch over Linus Torvalds, wait till you see the reaction when proprietary government has to deal with open source competition.

Speaking of Stephen Pearl Andrews, I look forward to seeing the second half of Science of Society online. Any chance of that happening any time soon? I have vague plans to get a CD burner and put together a mutualist library CD-Rom with textfiles of Proudhon, Warren, Andrews, Spooner, Tucker, etc., and SOS would be a key text to include.

October 14, 2005 8:57 AM  
Blogger Ouranosaurus said...

I remember some months back when you were talking about Georgist-style local taxes or penalties against polluters, and I raised a couple of questions about how that would work, especially in an anarchist society. I've been talked around on that issue; I'd now love to see that kind of policy, whether applied first by government or by the community. (I wrote a bit about a local issue that could benefit from this here.)

But resource ownership is a much thornier issue. Specifically, there's the problem that left-anarchists and other socialists bring up about whether a free market society would inevitably decline back into exploitative capitalism.

Adam Smith's maxim that government is a conspiracy of the rich against the poor is certainly appropriate here. In a mutualist/anarchist society, most people would live within a broad band of middle/working class income levels, the lower rungs brought up and the higher ones brought down by the levelling forces of cooperativism and the increase in worker power. But if the workers themselves are the ones who have an overabundance of power, in one concentrated location, there's a powerful incentive to abuse that power. Even a cooperative or syndicate of workers could effectively decide to pull up the drawbridge, pay themselves very well in the local currency, and live like blue collar kings. No sharing with those outside. Even very nice, moral people can convince themselves that they deserve to live better than others, who may simply have not been lucky enough to work at an oil well, or a nickel mine, or what have you.

The real danger would be in the later years, if the first group of workers decided to hire outside freelancers to work at an expanded operation, thus creating a class structure.

The oil well problem is one of the two or three major problems with anarchist theory today, and it's good to see someone is thinking about it.

October 14, 2005 9:29 AM  
Blogger Unknown said...

Frankly, I think you're getting close at this part:
"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?"
Exactly. If the Sunnis aren't actually occupying the oil fields, there's no reason why they should have control over them.
Just because historically, the sunnis have had disproportionate power in the artificially zoned region by virtue of being "sunni", doesn't mean that that situation should continue.
To the extent that the Sunnis have a right to the oil, well, hell, so do Iranians.
The whole earth belongs to all of us in usufruct - other than distributing all rent (including oil profits) equally over the whole earth, the only other option is some sort of mutualization of property. Which will leave the sunnis pretty much in a small patch of farmland in the middle of the 'nation' of Iraq.

October 14, 2005 9:52 AM  
Blogger Kevin Carson said...


That's a nice article on pollution tax.

Your critique of resource-privileged regions is a lot like the Georgist critique of mutualist occupancy-based ownership of resources like mines, but a level higher. One solution might be Bill G.'s proposal of federated communities exercising social ownership of such resources at a bioregional level. An anarcho-geolib, I suppose, would organize it as a federation of voluntary local mutual defense associations, with resource rent distributed to individuals as a Citizen's Dividend through whatever voluntary association they designated.

On the degeneration of co-ops, the problems might be solved in their fundamental bylaws by making member-ownership a condition of employment and making ownership shares non-marketable.


From a political standpoint, that presents a problem insofar as one ethnic group suffers a major loss in wealth as a result of breaking up the Iraqi state. I share the Geolibs' concern that defining common ownership at too local a level privileges the people lucky enough to be born on top of valuable stuff. What the practical solution is, as I said, I'm not sure.


Your energy system sounds great. A lot of stuff that is dismissed as "uneconomical" if organized as an industry for its own sake, like biomass, is economical if only organized as a secondary industry using the byproducts of primary industries. For example, a farmer might economically process his own animal and food waste into fuel on site, and reduce his fuel needs by that amount; likewise, heat exhaust from a small factory might be useful for colocated housing. The problem is the mentality that thinks any form of energy production requires a stand-alone facility like a giant wind-farm, rather than people simply making creative use of their own waste at the point of production.

And please, Please, PLEASE send me a copy of your Andrews' SOS file!

October 14, 2005 5:46 PM  
Blogger b-psycho said...

Y'know, it's the height of irony that in a confrontation between oil workers effectively operating abandoned property & a heavily government-favored corporation, we refer to the 1st party as "against privatization" instead of the latter...

October 14, 2005 7:47 PM  

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