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POV: Man’s Rights; The Nature of Government
by Ayn Rand | 1963
The Immigration Debate
by The Editors | April 17, 2017
Charlie Hebdo Two Years Later: Will America Continue to Protect Free Speech?
by Steve Simpson | January 07, 2017
Free Speech Is a Right, Not a Political Weapon
by Steve Simpson | December 06, 2016
One Small Step for Dictatorship: The Significance of Donald Trump’s Election
by Onkar Ghate | November 17, 2016
Overturning Citizens United Would Be a Disaster for Free Speech
by Steve Simpson | September 06, 2016
New Book: Defending Free Speech
by The Editors | July 26, 2016
Defending Free Speech
by Steve Simpson | July 02, 2016
How U.S. Attorneys General Are Like Chinese Censors
by Steve Simpson | July 01, 2016
Standing up for Free Speech
by The Editors | June 17, 2016
Is the First Amendment Enough?
by Steve Simpson | March 22, 2016
Free Speech Under Siege
by Steve Simpson | March 25, 2015
Freedom of Speech or Tyranny of Silence?
by The Editors | January 21, 2015
Free Speech and the Battle for Western Culture
by Yaron Brook | January 21, 2015
Freedom of Speech: We Will Not Cower
by Onkar Ghate | January 07, 2015
Gutting the First Amendment
by Steve Simpson | July 17, 2014
The Myth about Ayn Rand and Social Security
by Onkar Ghate | June 19, 2014
The Campaign Finance Monster That Refuses to Die
by Steve Simpson | June 11, 2014
The “End the Debt Draft” Campaign
by Don Watkins | March 18, 2014
End the debt draft
by Don Watkins | March 13, 2014
Abortion Rights Are Pro-life
by Leonard Peikoff | January 23, 2013
A Liberal Ayn Rand?
by Onkar Ghate | November 02, 2012
Ryan, Rand and Rights
by Don Watkins | August 17, 2012
Repairing Lochner’s Reputation: An Adventure In Historical Revisionism
by Tom Bowden | Fall 2011
Why Should Business Leaders Care about Intellectual Property? — Ayn Rand’s Radical Argument
by Adam Mossoff | November 30, 2010
Elena Kagan: Could She Defend the Constitution’s Purpose?
by Tom Bowden | July 20, 2010
Capitalism: Who Needs It — Ayn Rand and the American System
by Yaron Brook | June 09, 2010
Were the Founding Fathers Media Socialists?
by Don Watkins | March 01, 2010
Justice Holmes and the Empty Constitution
by Tom Bowden | Summer 2009
Nationalization Is Theft
by Tom Bowden | November 07, 2008
Supreme Disappointments
by Tom Bowden | November 03, 2008
Deep-Six the Law of the Sea
by Tom Bowden | November 20, 2007
After Ten Years, States Still Resist Assisted Suicide
by Tom Bowden | November 02, 2007
No Right to “Free” Health Care
by Onkar Ghate | June 11, 2007
The Rise and Fall of Property Rights in America
by Adam Mossoff | May 16, 2007
Free Speech and the Danish Cartoons, a Panel Discussion
by Yaron Brook | April 11, 2006
The Fear to Speak Comes to America’s Shores
by Onkar Ghate | April 04, 2006
The Twilight of Freedom of Speech
by Onkar Ghate | February 21, 2006
The Cartoon Jihad: Free Speech in the Balance
by Christian Beenfeldt | February 10, 2006
The Faith-Based Attack on Rational Government
by Tom Bowden | June 27, 2005
Supreme Court Should Uphold Rights, Not Majority Sentiment in Ten Commandments Cases
by Tom Bowden | February 23, 2005
Campaign Finance Reform Attacks Victims of Corruption
by Onkar Ghate | December 26, 2003
Thought Control
by Onkar Ghate | April 22, 2003
A Supreme Court Overview
by Tom Bowden | January 01, 2000
Blacklists Are Not Censorship
by Tom Bowden | March 23, 1999
Health Care Is Not a Right
by Leonard Peikoff | December 11, 1993
The Age of Mediocrity
by Ayn Rand | April 26, 1981
Censorship: Local and Express
by Ayn Rand | October 21, 1973
A Nation’s Unity
by Ayn Rand | October 22, 1972
Of Living Death
by Ayn Rand | December 08, 1968
The Wreckage of the Consensus
by Ayn Rand | April 16, 1967
Racism
by Ayn Rand | September 1963

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Nationalization Is Theft

by Tom Bowden | November 07, 2008

For years, the Canadian operator of a huge Venezuelan gold project known as Las Cristinas has been seeking an environmental permit to start digging. Well, Crystallex International Corporation can stop waiting — the mine is being nationalized as part of dictator Hugo Chavez’s long-running program of socialist takeovers. “This mine will be seized and managed by a state administration” with help from the Russians, said Mining Minister Rodolfo Sanz.

It’s not surprising that a brute like Chavez would want to grab the 16.9 million ounces of gold estimated to lie buried in the Las Cristinas reserve. But what’s more puzzling is why — when gold mines, oil rigs and refineries worth billions of dollars are nationalized by regimes such as Venezuela and Russia — the ousted companies can muster no moral indignation, only tight-lipped damage appraisal.

The reason, in a nutshell, is that resources like gold and petroleum in their natural state are universally regarded as public property that cannot be extracted by private companies except with government permission, revocable at will. “Venezuela will not accept that foreign organizations tell them what to do with their own resources,” said a local journalist recently.

But unexploited natural resources are unowned, not publicly owned. Ownership — the legal right to use and dispose of material resources — cannot exist until someone actually brings those resources under human control. A dictator cannot, by decree, bring hidden gold or oil deposits to the surface. Only the knowledge and effort of entrepreneurs, engineers and drillers can transform that hidden potential into actual wealth. Ownership is the law’s recognition that those particular producers deserve the legal right — as against every person on earth who didn’t tap that potential — to control the wealth they created.

Consider that Arabs wandered for centuries across desert sands that concealed vast petroleum deposits, but it was Western investors who actually made Middle Eastern petroleum valuable. These companies searched for many years in a vast wilderness, moving in frustration from one dry hole to another, risking utter failure and financial ruin. Eventually, by virtue of their ingenuity, courage and perseverance, world markets were flooded with oil that Middle Eastern governments should have deemed private property — 100 percent private.

Instead, those governments muscled in, claiming public ownership based on nothing but their sovereignty over the geographical areas where oil deposits happened to reside. First through royalties, then by extorted royalty increases, and finally by outright nationalization, the descendants of nomads whose meager possessions fit on a camel’s back could now build palaces, buy airplanes and fund terrorism from the seemingly endless profits generated by Western technology and ingenuity.

But all this was a perversion of sovereignty. After all, why are states entrusted with exclusive power to use force within their borders? There’s only one legitimate reason: to protect individual rights, including property rights. Just as a bodyguard’s task is protecting clients from physical attacks, a government’s function is safeguarding people and property against criminals and foreign invaders.

Sovereignty exists to protect private property, not to destroy it. A bodyguard who claimed to own his client’s house, cars and jewelry would be immediately fired. Yet governments that claim to own all natural resources within their borders get a free pass, as if ownership could be conjured from the barrel of a gun.

Today, nationalization is endorsed not only by third world thugs but by the United Nations, which — with America’s full agreement — declared in 1962 that the “sovereign right of every State to dispose of its wealth and natural resources” is “recognized as overriding purely individual or private interests.” Even the victims agree. Said one CEO: “We do not see the issue of nationalization as a violation of the law but as a right of a government.”

This is why power-grasping dictators like Venezuela’s Hugo Chavez and Russia’s Vladimir Putin can claim moral authority to treat foreign investors the way they treat their own citizens — as cattle to be herded, milked or slaughtered for society’s sake. Thus when ExxonMobil recently dared to dispute the pittance Venezuela offered in payment for seized assets, Chavez denounced “those bandits of ExxonMobil,” absurdly declaring they “will never rob us again.”

Nationalization, stripped of all rationalization, is naked theft. A blow for justice will be struck by the first public figure to denounce it as such. In the meantime, companies like Crystallex will continue to be bullied by dictators who know exactly how much they can get away with.

About The Author

Tom Bowden

Analyst and Outreach Liaison, Ayn Rand Institute