Societal Emergencies & Property Rights

Prior to the start of the Second World War, my grandfather ran a successful newsagent shop. Most of his profits came from selling sweets (‘candies’ for those in North America) to fill the voracious English appetite for tooth-rotting pleasures. Along came the war, and rationing. With a desperate need to feed the population in the face of the sinking of merchant ships in the Atlantic, sweets were just not a priority and the supply rapidly dwindled. My grandfather gave up his shop and became a printer for the newspaper industry. At no time did he think of claiming damages from the government for his “lost hypothetical future profits”. There was a war to fight and everyone had to make sacrifices, including him. Additionally, it was accepted that the sovereign government had the right to make such choices for the good of the country.

As I write this the government of my country, Canada, is debating yet another corporate and investor rights treaty (they call if a “trade” treaty, but its really about giving away the power of the citizenry) that will see it voluntarily seed its sovereignty to faceless review boards of corporate-friendly lawyers and technocrats[i]. We have had free trade for decades, with very low levels of tariffs between countries under the World Trade Organization, and previous General Agreement on Trade and Tariffs. The latest agreements are put forward as removing “non-tariff barriers” and protecting foreign investors

The whole area of government regulations fall under the purview of non-tariff barriers, and the mechanisms for “harmonizing” them remove decisions from parliamentary review. This process also provides a backdoor way for interested parties to have regulations altered to their favor, well away from any form of democratic review. An example is that of copyright and patent laws where changes have tended to be to the favor of corporations and investors, as the time period for their monopoly rights is extended. Corporations and investors also demand supranational courts through which they can claim damages for lost hypothetical future profits from governments for policy decisions made in the best interests of the country. Such claims could be pursued through the local courts, but that would open up such claims to the judgment of a jury of citizens rather than a board of corporate-friendly lawyers. In effect, foreign corporations and investors are removing themselves from the due process of local law that the citizens of a country are subject to. They are placing themselves above the local citizenry.

We have come a long way from the days of my grandfather’s newsagent shop. The hamstringing of democratic, and domestic legal, processes with respect to corporations and investors is part of a wider trend that has been termed the New Constitutionalism[ii], through which more and more decisions are removed from domestic legal oversight, open discussion, and democratic decision-making. Independent central banks that serve the financial industry, investor rights treaties, regulatory harmonization, the European Monetary Union, and balanced budget amendments are all part of this wider trend to favor corporate and investor interests. The rights of corporations and investors are increasingly buffered from the oversight and decision-making of those that represent the majority of domestic citizens. A ceding of sovereignty and democratic oversight that is unprecedented in peacetime and little discussed in the media and most of academia.

The removal of constraints upon the ownership of private property, and the conversion of vast stretches of communal property and rights into private ownership, has been a relatively recent phenomenon in human history[iii]. In recent decades, the neo-liberalist trend has pushed for even stronger rights and a lessening of obligations (such as taxes), changing the legal balance between property owner and democratic governments that represent the general citizenry. The primacy of property rights is at the core of neo-liberal ideology, with theorists treating it as the basis of a free society with limited government. Such theoretical frameworks that comprehend “economic reform in terms of more or less government is fallacious. When it comes to property rights, the relevant questions are who to protect, and how, not whether the government should regulate”[iv]. Property rights require government intervention to both create, and to protect, them. They are cultural and political artifacts, not independent economic structures. This becomes very apparent in the creation of new rights, such as intellectual property rights or rights to pollute, and the extension of current rights. It is not a question of big or small government, but who benefits from government activities and policies. Since the introduction of mass democracy, this question has been a core question across much of government policy making.

This entrenchment of property and corporate rights comes at a time when aggressive government actions will be required to reduce greenhouse gas emissions as the climate, and general ecological, emergency becomes apparent. Whether it be through escalating carbon taxes, or direct controls such as individual carbon allowances, governments will greatly impinge on the actions and worth of private property. The rights of fossil fuel companies to exploit their reserves; the viability of the international tourism and travel industries; businesses relying on long-distance supply chains; owner’s rights to utilize their own cars, yachts and personal jets. Such actions would require a major challenge to the neo-liberal ideology and power relationships that underlie the New Constitutionalism and the primacy of property rights in general. With such strong inertial forces, the required actions may not be taken until the climate emergency is overwhelmingly apparent and possibly irreversible.

This is the conundrum that faces the industrialized societies, the inertial forces may continue to block meaningful change. This has been the case for the past quarter of a century. This logjam between the interests of the citizenry in general for meaningful climate action, and the interests of corporate owners and executives in particular to maintain the value and sanctity of their property, threatens a much greater social dislocation. By the time action is taken, its’ required scale may require significant social upheaval at a point where the political and economic elite have lost much of their legitimacy in the face of the citizenry.

The 2008 financial crisis, which threatened both the financial and political viability of major segments of the corporate world, showed that previously sacrosanct ideological tenets can be thrown overboard when required. Trillions upon trillions of dollars of new money could be printed to bailout the financiers with little asked in return, and corporations could have government bailouts. The problem with climate change is that it is more a ‘creeping emergency’ that will not be fully apparent until it is perhaps too late. At the same time, the economic and political interests threatened by the required government actions have moved aggressively to invalidate the need for such actions. A wide range of tactics have been utilized, from outright climate denial to the eco-technical visions of carbon emissions being sucked from the air and growth becoming ecologically neutral through dematerialization.

This is the future that the Canadian government is advancing towards as it pushes through yet another ‘free trade’ deal that will embolden corporate and investor interests to challenge government regulations. A government truly acting in the best interests of its citizenry would be leading a society-wide discussion on the socially healthy balance between the rights of the general citizenry and the rights of corporations and investors. Instead, they needlessly negotiate away those rights and celebrate about it. Prior to their election win in 1993, the Liberals promised to renegotiate the North American Free Trade Agreement (NAFTA); one of the first such agreements to enshrine corporate and investor rights. After gaining a large majority, they reneged on that promise[v]. P.M. Trudeau seems to be carrying on with that tradition, passing a corporate and investor rights treaty that was birthed by his Conservative predecessor.

A regime cannot exist for long without some level of legitimacy and an acceptance of its right to govern by the majority. If the societal inertia is finally broken by the climate the current regime may be rapidly swept away. The more enlightened and forward-looking business leaders may want to consider that it is better to make concessions in the current business-friendly environment than push for yet more rights that may be rapidly swept away in the not too-distant future. When an understanding of the true scale of the climate emergency becomes dominant among society, there may be little acceptance for those seen as delaying the inevitable actions for their own selfish interests.

References

[i] Stewart Trew (2017), Yes, Ceta is a gold-standard trade deal – for North America’s corporations, The Guardian. Accessible at https://www.theguardian.com/commentisfree/2017/feb/13/ceta-north-america-canada-european-union-trade-eu-ttip

[ii] Stephen Gill & Claire Cutler (2014), New Constitutionalism and World Order, Cambridge University Press

[iii] Anthony H. Hall (2010), Earth Into Property, McGill-Queen’s University Press

[iv] Joel M. Ngugi (2004), Re-Examining the Role of Private Property in Market Democracies: Problematic Ideological Issues Raised by Land Registration, Michigan Journal of International Law Volume 25, Issue 2. Accessible at http://repository.law.umich.edu/cgi/viewcontent.cgi?article=1258&context=mjil

[v] Storer H. Rowley (1993), Canada Will Implement Nafta Unchanged, Chicago Tribune. Accessible at http://articles.chicagotribune.com/1993-12-03/news/9312040001_1_nafta-prime-minister-jean-chretien-unilateral-declaration

 

 

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One Response to Societal Emergencies & Property Rights

  1. Roger,

    We would like to see you write an article on these two different species of UNICORNS that you mention:

    "eco-technical visions of carbon emissions being sucked from the air (1) and growth becoming ecologically neutral through dematerialization (2).

    Michaeal

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