The realkommerz of global trade makes it difficult to avoid enriching dictatorships and tyrants
Amanda Lucidon/US Govt)
Some years ago a British friend of mine commanded the UN forces in Kosovo. I asked him what his mission was. “To instil respect for the rule of law!” he barked. And how far did he get with that in his year there? “At least one quarter of one per cent,” he returned with a grin. “Merely another four centuries to go.”
A similar air of unreality pervades Leif Wenar’s Blood Oil, a good-hearted programme for weaning the West off reliance on oil and other resources sold by dictators, tyrants and hereditary monarchs, in the process turning these benighted nations into models of democracy and fair wealth distribution. However, unlike my friend the soldier’s appreciation of Balkan brigandage, Professor Wenar appears not to recognise the realkommerz of global resource trade.
Wenar is Professor of Philosophy and Law at King’s College London. He argues that the norms of international trade rely on an imperfectly upgraded version of the Westphalian rules which ended the Thirty Years War in 1648. These rules recognised absolute national sovereignty and the legal doctrine of effectiveness: that within a country’s borders, might makes right. This means that the default position in international trade recognises the right of whoever rules in any particular country to sell that country’s resources on the international market and spend the proceeds as they wish.
This leads to the uncomfortable realisation that the oil in your tank may come from Equatorial Guinea, further enriching its president, the murderous kleptocrat Teodoro Obiang Nguema Mbasogo. Or that your smartphone only works because of the tantalum capacitors derived from coltan ore mined by oppressed villagers in the anarchic Democratic Republic of Congo. Wenar often returns in the course of his dialectic to these two particularly appalling examples. Equatorial Guinea actually accounted for only 0.3 per cent of global crude oil production in 2015, though of course that doesn’t excuse the president. The DRC, on the other hand, produced nearly a fifth of the world’s newly-mined coltan in 2013. Here are two particularly horrible examples of the Resource Curse, where strategic resources from undeveloped countries enrich only corrupt elites who then spend their money on luxuries and properties in the West, where they know they will be safe.
Wenar extends his condemnation to many more “resource-cursed” countries, including Saudi Arabia and Qatar, some of whose citizens fund global jihad via IS and al-Qaeda. But while these countries are ruled by hereditary despots, they do spend much of their wealth on their own populations, including (absurdly) subsidising petrol prices. And while the fact may disturb decent Western liberals, Saudi Arabia and Qatar are genuine strategic allies of the West.
In international trade, the law of effectiveness means that once a commodity has been sold, even by a really beastly government, it belongs entirely to the purchaser and is legally the same as a commodity which has been ethically sourced. The only exceptions are where, usually for strategic reasons, the US and/or the UN applies sanctions to particular producers: Iran for instance, or Sudan.
To force the issue, Wenar poses some hypothetical situations. Suppose the state of New York declares “might makes right” for goods in New Jersey, encouraging anyone who can seize goods in the Garden State to sell them with full legal title in New York. Not only would this be immoral, it would encourage “crime kings, syndicates, turf wars, fraud and grand theft — similar to what we see on a larger scale in resource-disordered countries today”. (Devotees of The Sopranos may feel this situation already exists in New Jersey.)
In the West, though, we live between our history and our principles. The doctrine of effectiveness has been superseded in many areas of our lives by more humane imperatives. The shining example is the abolition of slavery, begun 200 years ago by British Christians and enforced over 60 years by the Royal Navy. And in many other areas of human rights we would not tolerate imported cruelty. If, today, a gay man condemned to death in Iran were to escape to Europe or America, he would be safe: there would be no question of Iran’s oppressive laws being effective here.
What Wenar describes as “counter-power” — the extension of human rights and intolerance of oppression in all its forms — has already changed the way we in the West interact with the less-developed world. But to deal with effectiveness and the resource curse, he proposes a more radical policy. Each major importing nation should pass a Clean Trade Act which would require resource producers to be free, democratic and economically distributive. When (as seems inevitable) the despots simply sell their oil to the Chinese or another unsentimental power, the enlightened Western nations would set up Clean Trade Trusts, funded by import duties on (say) Chinese manufactures. The money would be held in trust against the day the downtrodden and resource-cursed inhabitants were liberated.
One does not need to be unduly cynical to see that this won’t work. The Chinese, or the Indians, or whoever else is not quite up to our standards of probity, would find ways to retaliate — possibly rather violently. And competition among the coalition of the decent would also skew the system. As my first boss, the late Jan Nasmyth, used to say: “It is in the nature of oil to flow.” A more promising solution than Clean Trade Acts would be for every Western country to join the US in fracking for oil so that we no longer need rely on the resource-cursed.
I do not denigrate this book, which is readable, intelligent and thought-provoking. For a work of practical philosophy it is written in a lively style, and it is not, in the main, naive. Wenar relies as much on the Sermon on the Mount and St Augustine as on Marx and Engels. He understands the huge benefits that oil and global markets have brought to the human race. He wishes, as we all do, that these benefits could be extended to those not fortunate enough to live in the OECD. He outlines with power and clarity the ethical challenges we live with, and, if he does not to my mind provide a practical solution, he has left me in no doubt that we have to find one.