This is not nationalisation: it is merely theft

April 24, 2012 12:00 pm

“THOMAS MORE: …And when the last law was down, and the Devil turned around on you–where would you hide, Roper, the laws all being flat? This country’s planted thick with laws from coast to coast – man’s laws, not God’s – and if you cut them down…d’you really think you could stand upright in the winds that would blow then?”

- from A Man For All Seasons, by Robert Bolt

Laws, in short, protect us from the unscrupulous. And although contract law, I admit, is not something which generally makes pulses race, its enforceability is an essential part of a civilised society. If I own something, I need to know that, unless I agree to its sale, it will still be mine in a year, in ten years or a hundred years. In other words: steal from me, and you will be punished.

Studying economics in my younger days, two reasons stood out as to why poor democracies often stay poor. The first was corruption: once corruption took hold in a country, it became a cancer that it was very difficult to get rid of, and it would mean that ultimately only venal politicians took and held power.

It was often linked with the second, and perhaps even more important reason, though. It was about avoiding kleptocracy, or rather, the preserving the simple, pedestrian mechanism of contract law. It was simple: if you bought something and later someone else could take it from you without redress, then you would have reservations about buying it in the first place.

And it is by this important principle that foreign investment in developing economies often fails to happen, setting back their development by decades. Investment dollars fail to arrive; new projects become scarce; growth is stunted.

And this is how it happens: last Monday, several senior Spanish staff of Argentine oil company YPF turned up to work, only to find themselves banned from the building. Not through company closure, but because the government had decided to appropriate the 51% of the company owned by Repsol.

Cristina Fernández and her now-deceased husband Nestor Kirchner, have run Argentina for the last decade. In the early days they were praised for taking the country from its disastrous debt crisis to a more stable, growing and increasingly important economy. Politically, they were not seen to be strongly of the left. However, in the two years following Kirchner’s death, the country has accelerated the move he started: towards the short-termist, populist tactics of its neighbouring, human-rights-challenged President, Hugo Chávez of Venezuela.

First came the sabre-rattling over the Falkland Islands – one of the few disputed territories in the world where the self-determination case is practically unarguable – a none-too-subtle diversion from an economy hitting the rocks. Then the raids on central bank reserves: just like Chávez. In February, the Economist stopped publishing economic indicators from the country, for the simple reason that it no longer believed them (or, as it delightfully put it: don’t lie to me, Argentina).

And last week’s endgame was also a direct lift from Chávez and his friend Evo Morales, President of Bolivia. Nationalise the oil companies, and present it as ending exploitation by those nasty neo-colonialists. Except this was real investment, made in good faith, which Argentina desperately needs: on top of everything, it also has a severe energy crisis.

But this is nationalisation, I hear you say: is this not what the Labour Party once did? Well, no. The difference is here, if you buy something at a fair price (or even an over-inflated price), it’s one thing. If you force a fire sale below the fair price, as Fernández is doing, it stops becoming nationalisation. It is merely theft.

Now, are foreign companies are always blameless in their actions in emerging markets? They are not. Was YPF was originally sold off too cheaply? Perhaps (looking at UK privatisations, it would not be the first time). But that, clearly, is not the point.

A deal was done: contracts were signed. Not only is there the moral imperative to honour a contract, there is a vital practical one: if you set the precedent, as a government, that laws only apply “when I say”, other countries – and more importantly, companies – will question your word. Foreign investment can go from a flood to a trickle overnight; Spain is already planning retaliatory action via the European Commission.

The same self-destructive course towards anti-Western politics, state-sponsored robbery and economic disaster was set by Venezuela some time ago. But we expected better of Argentina. And to those who think this “nationalisation” is showing a bright new, anti-Establishment, anti-Western model for us all to follow, as these articles did: wake up. The people who will ultimately suffer for all this populist foolishness are ordinary Argentines. As the Economist points out:

“For Argentina, it is a disaster…the effects of nationalisation will be felt far beyond energy. Spain is Argentina’s biggest foreign investor. After seeing YPF’s fate, Spanish banks, utilities and telecoms firms may also look for the exits. Ms Fernández has also endangered Argentina’s trade relations with Europe, one of its biggest export markets…yet the country still belongs to the G20 and can borrow from multilateral organisations, and its citizens can visit all of Europe without a visa…If the West revokes these privileges, Argentines might see the true cost of their president’s antics.”

And finally – again, like Chávez – Fernández is already trying to tinker with the constitution (in hard times and younger democracies, always a worrying sign); to remove presidential term limits and open the way for a permanent presidency.

It is probably not stretching the point too much to say that the Argentine opposition has a relatively short time to get its act together, before controls over critical media are tightened, as is already happening, and a democratic nemesis is made more difficult, as it largely is already in Venezuela. Because when governments start cutting away at, or riding roughshod over, the laws which protect their civilised way of life and their economic growth, you know that a country’s long-term decline lies not far off.

  • JoeDM

    Wow.   Reality kicks in on Labour List.

    Excellent article.
     

    • http://twitter.com/rob_marchant Rob Marchant

      Thanks Joe.

      • Brumanuensis

        Praise from the village idiot isn’t really praise.

        • http://twitter.com/rob_marchant Rob Marchant

          Not sure why it’s necessary to insult people in the comments.

          • AlanGiles

            You do it all the time yourself, RM, so I think you are on quite thin ice on that opne.

          • Brumanuensis

            I’ve yet to see Joe contribute anything of great value to this website. 

            However perhaps I was too harsh. 

    • Mr Chippy

      Unfortunately not objective reality.

  • http://www.facebook.com/profile.php?id=697126564 Paul Halsall

    ” contracts were signed”

    So what, if that was under IMF or corrupt pressure.
    Either you are a socialist, or you are not.  We at least, want to expropriate the expropiaters.Avanti populo!

    • http://twitter.com/rob_marchant Rob Marchant

      So, whatever contracts were signed were just to be ignored later, whenever the fancy took the government. How do we now attract foreign investors to Argentina, then, knowing that the government does not keep its word?

      For that matter, how do we stop the ones who are already there from leaving?

      • Chris Cook

        You are aware that Argentina defaulted on its debts?  Anyone who contracts -whether as a creditor or an investor – with a sovereign takes political risk: always has and always will.

        I have no sympathy for Repsol at all – they are a consenting adult.

        The problem is the completely dysfunctional nature of the ‘Anglo’ financial capital property rights for which you are beating the drum here in a way that surprises me on a Labour blog.But then I don’t think that State ownership is the answer either. We can’t solve 21st century problems with 20th century solutions. The irony is that we have to go back hundreds, if not thousands of years for the answers – and adapt them to a networked economy.

        • http://twitter.com/rob_marchant Rob Marchant

          Chris, for a start this is not a contract with a sovereign, it is a contract with a company. Yes there is always political risk, but obviously – as I’m sure you know – this results in the next buyer having a more expensive investment, as credit spreads increase. Eventually you get a market failure in terms of inward investment.

          By the way, it is not a question of “feeling sorry” for Repsol. Irrespective of any moral aspect, is what’s happened a positive thing for YPF, or for Argentina? It is clearly not.

          I’m not sure I understand what you mean by “dysfunctional nature of financial capital property rights”, either. What is the dysfunction you’re referring to?

          • Chris Cook

            @twitter-48635466:disqus 

            Repsol simply do not have the resources for the necessary massive development investment, and that is the main reason why the Argentinians were so unhappy that they took the action they did.

            The Chinese in particular will be all over YPF like a rash, and nationalisation be damned.

            ‘What is the dysfunction’?  

            Are you kidding me?

            Have you not noticed that the global financial system is completely – and IMHO terminally –  f…ed? 

            In my view this is the result of the toxic combination of compounding debt and absolute private property.

             ie the conflicted and dysfunctional property rights which comprise finance capital.

          • http://www.facebook.com/people/Mike-Homfray/510980099 Mike Homfray

            Rob believes in and worships globalised capitalism, Chris.
            Interestingly, attended a talk given by Dave Wetzel of the Labour Land Campaign recently – a lot of what he had to say chimed with some of your views, particularly the way that rentier capitalism operates

          • http://twitter.com/rob_marchant Rob Marchant

            “Rob believes in”…you have no idea what I believe in, Mike. You’ve never asked.

          • http://twitter.com/rob_marchant Rob Marchant

            Chris, I don’t know how you know that underinvestment was the primary reason. Most commentators think that a bit of populist sabre-rattling at big business was at least part of the factor. In any event, it’s difficult to see where the investment cash will come from now it’s nationalised. By the way, a number of people have pointed out that the underinvestment was down to draconian price controls by…the Argentine government. 

          • jaime taurosangastre candelas

            @ Chris Cook,

            with your ideas and expertise (painfully acquired in one case, I know), you may want to keep an eye on the beginning of a development on the eastern Pacific Rim for a renewable energy trading scheme between countries.  Currently, the Governments of Chile, Canada, Australia and New Zealand are in discussions, and there are apparently plans to bring in more countries along the eastern Pacific rim.

            The scheme is in 2 parts:

            (1) Research and development of industrial capabilities for renewables, focussing on each countries’ natural resources.  So Australia and New Zealand are looking at hydro schemes and solar, Chile at wind and solar and geothermal, and Canada at biomass and energy from wood.  Research will be shared.  There is also research on very long distance transmission of electricity.

            (2)  Longer term, an international production and distribution network all along the western coast of the Americas, and between Australia and New Zealand.  There would be a market for trading electricity.  It would be based on multiple technologies, and also for the Americas, span the seasons.  Winter in the north with higher demand could be fed by the south with summer sunshine and the summer winds, in the austral winter Canadian energy produced in their summer could offset the lack of sun in the south.  

            I think it is a clever scheme.  Seeing your name on this thread made me remember that you act as a consultant on some of these energy trading schemes.  Perhaps they may want to have your assistance?

          • Chris Cook

            @google-285908a073bfe41d26f162a0d9780abd:disqus 

            Sounds interesting. Thanks for the tip.

  • M Cannon

    Thank you for reminding us about the worrying aspects of Hugo Chavez.  Thank goodness London no longer has any special dealings with such a dodgy regime!

    • http://twitter.com/rob_marchant Rob Marchant

      Hmm, that depends…!

      • AlanGiles

        Depends on what….?

        Why not say what you mean openly.

        • http://twitter.com/rob_marchant Rob Marchant

          Depends on whether Ken Livingstone wins, obviously, whether or not we return to having a special deal with the Chávez regime, as we had until 2008.

          That clear enough for you?

          • AlanGiles

            Perfectly thank you. I knew of course what you meant it is just that I wanted you to have the courage of your convictions and actually write it properly, rather than hint and sneer like a latterday Nigel Dempster.

            Nasty piece of work you are Rm, no wonder you are an “ex manager”

          • http://twitter.com/rob_marchant Rob Marchant

            And a pleasure to speak to you, Alan, as ever.

            Well, now we’re all clear on who’s nice and who’s nasty, eh?

          • AlanGiles

            I don’t pretend to be nice Mr M, but your waspish little put-downs and obvious antipathy towards Labours London Mayoral candidate obviouslyu affords you a great deal of pleasure.

            These little articles of yours must make you feel still big and important.

          • aracataca

            You said Livingstone was going to lose
            and that it was ‘sad’ that Jenny Jones could not win.  This is a case of the pot calling the kettle black. You do little else than slag Labour off on here. I am against all disloyalty towards Ken whether it comes from the right or in your case from the ‘pretend left’.

          • AlanGiles

            “You said Livingstone was going to lose”

            How many more times are you going to repeat yourself like an old ;parrot.

            READ (if you are able to) what I actualkly wrote, and FYI I said it was “sad” and the big problem with Mayoral elections that only 2 candidates get  publicity –

            You have a habit of taking little bits and pieces of what people ACTUALLY say and then weave them together in your own dysfunctional head to rearrange it in  to what you HOPED they said.

            On this thread it is Marchant, not me, attacking Livingstone – you don’t seem to see that though.

            I “slag off” any MP or former MP regardless of party who behaves in a dishonest way, and I am getting that way about you with your LL posts about me – you see what you want to see, and you are too stupid to shut up, just keep digging away at nothing.

          • aracataca

            I don’t agree with Marchant slagging Ken off nor do I agree with you slagging Ken off. You’re 2 sides of the same coin in my book and your bogus little fight on here belies the fact that objectively you’re both singing from the same hymn sheet and want to keep Labour in opposition.Unlike you and Marchant I want Ken to win and desperately hope that he does.

          • AlanGiles

            Marchant and me in collusion?. “Singing from the same hymn sheet”

            Now I know you are off your  trolley. Go and amuse yourself playing your silly little games with somebody who will have more tolerance and patience with you than I have.

          • aracataca

            In that you both  want to damage Labour you are indeed singing the same hymn.

          • Brumanuensis

            Alan did not say that Aractaca, as he pointed out to you elsewhere. 

          • aracataca

            Sorry Brumanuensis the fact is he did. That’s my point. All I’m saying is let’s unite behind Ken and against the right.

          • http://twitter.com/rob_marchant Rob Marchant

            I’m not sure I did show any antipathy towards our mayoral candidate. I said whether we did another deal with Chávez depends on whether he is re-elected. Which it does.

          • Brumanuensis

            Oh come on. We all know your views on Livingstone. Don’t play cute.

          • http://twitter.com/rob_marchant Rob Marchant

            Oh. Which are?

          • Brumanuensis
          • aracataca

            Blogspots look pretty convincing Rob.

          • Brumanuensis

            Then why didn’t you just say
            so in the first place? 

  • Scott

    Why are foreign investors important?

    • GuyM

      Why indeed.. same as why are foreign buyers of governmental bonds so important?

      In fact why not just suggest Argentina kicks all foreign investment and non Argentene private companies out and goes it alone……

      Of course that would mean no external markets to sell into, no ability to purchase supplies they can’t produce themselves and no one able to rely upon any contract or agreement Argentina signs now or in the future.

      But who cares eh? Never let reality stand in the way of a good bit of socialist posteuring.

      • Jocelyn

        What a knob.

        • GuyM

          In depth response there Jocelyn.

          If you on the left don’t like private corporate investment or the bond markets, then the straightforward position to adopt is not to use them.

          As of yet though I haven’t seen many countries renounce foreign investment or selling bonds to international investors.

          It does seem a little hypocritical to slag off a system one the one hand, whilst continuing to keep using it on the other.

    • http://twitter.com/rob_marchant Rob Marchant

      Because otherwise Argentina needs to use only its own capital. It has none, hence the raid on central bank reserves.

  • http://www.facebook.com/matthew.blott Matthew Blott

    I’m getting  a bit tired of Kirchner’s populist grandstanding so it’s tempting agree with Rob Marchant but when it comes to national energy and resources coupled with previous decisions taken against the national interest then the usual rules sometimes need to be amended. Will Hutton, hardly a ranting leftie, takes the opposite view to Marchant and I’m inclined to agree with him. Here’s a much better take on it here …

    http://www.guardian.co.uk/commentisfree/2012/apr/22/will-hutton-argentina-oil-grab-justified 

    • http://twitter.com/rob_marchant Rob Marchant

      Well, it’s another point of view, but unfortunately not a very convincing one. I usually like Will Hutton, and he is right to identify that money drives US politics too much – but his solution, South American style kleptocracy, is plain daft.

      By the way, I’m not sure we should be judging the arguments by our opinion of who holds them (“hardly a ranting leftie”), but rather on the strength of the arguments themselves.

      • http://www.facebook.com/matthew.blott Matthew Blott

        I agree the strength of the arguments are most important. But we are still likely to pay more attention to someone who refrains from the shrill and doesn’t try to fit the facts to a conclusion they have already come to. Thus when I read John Pilger I know it’s going to be the Americans fault no matter what the subject is. Conversely, if I read Fraser Nelson, I know he will say we need to give rich people more money – I don’t need to look at the accompanying bar charts.

        As for Hutton’s article – it’s hardly a ringing endorsement of what Kirchner is doing. The important point he makes – and he has made this before – is that governments have an obligation to look after their key industries. Were you happy with the Cadbury takeover by Kraft?

        • http://twitter.com/rob_marchant Rob Marchant

          They can look after key industries, fine. But not by breaking the rules and helping destroy their prospects for foreign investment.

          • Brumanuensis

            So how have the Chinese got away with manipulating their currency all these years? Not to mention their toleration of frampant copyright infringement.

          • http://twitter.com/rob_marchant Rob Marchant

            By, er, not destroying 
            their prospects for foreign investment.

          • http://twitter.com/rob_marchant Rob Marchant

            By, er, not destroying 
            their prospects for foreign investment.

          • Brumanuensis

            Could you elaborate please? I would have thought currency manipulation and the rampant trampling over copyright were pretty unfriendly behaviours from the point of view of an investor. After all, on the latter point the US lodged a complaint at the WTO only 3 years ago.

            http://www.reuters.com/article/2009/03/20/us-china-usa-wto-idUSTRE52J3T920090320

          • http://twitter.com/rob_marchant Rob Marchant

            Tell that to all the companies desperate to invest in China. It has clearly had no effect whatsoever.

          • Brumanuensis

            This is bizarre. Essentially you’re conceding my point. If the incentive to invest is strong enough, companies will overlook just about anything. So no matter how Kirchner behaves, as long as there’s money to be made, the foreign investors will plough in, albeit a touch unwillingly.

          • http://twitter.com/rob_marchant Rob Marchant

            No, you’re missing the point entirely. China, in the main, respects contracts and has never to my knowledge “nationalised” any Western company. Argentina clearly does not respect contracts.

            If copyright is a big issue for your company, fine, don’t invest in China. But if you do, the company will still be there in ten years’ time, no-one will have stolen it.

          • Brumanuensis

            No, but they might have stolen your basis for making a profit. That’s just as iniquitous as seizing assets.

            I suspect if Kirchner was guilty of the same faults, you’d use it against her.  

          • Brumanuensis

            ??

          • Brumanuensis

            Ignore that. It was a keyboard misfire. 

          • Brumanuensis

            ??

      • http://www.facebook.com/matthew.blott Matthew Blott

        I agree the strength of the arguments are most important. But we are still likely to pay more attention to someone who refrains from the shrill and doesn’t try to fit the facts to a conclusion they have already come to. Thus when I read John Pilger I know it’s going to be the Americans fault no matter what the subject is. Conversely, if I read Fraser Nelson, I know he will say we need to give rich people more money – I don’t need to look at the accompanying bar charts.

        As for Hutton’s article – it’s hardly a ringing endorsement of what Kirchner is doing. The important point he makes – and he has made this before – is that governments have an obligation to look after their key industries. Were you happy with the Cadbury takeover by Kraft?

  • ianrobo

    when I saw the title of this I for one minute thought Rob was going to mention the privatisation of OUR NHS

    Alas no he is bemoaning a country protecting its assets instead of stripping them to foreign countries and money disappearing.

    there again guess Rob is quite comfortable with Virgin taking over large chunks of the NHS and how does he think they will make money from it ?

    Thats right start to charge and promote private patients. Well done Rob, what does it say on your membership card, when in fact did you last look ?

    • http://twitter.com/rob_marchant Rob Marchant

      Don’t guess my views – it’s lazy.

    • http://www.facebook.com/people/Mike-Homfray/510980099 Mike Homfray

      Ah, but this is Rob we are talking about, Ian – the Tories would and do agree with every word of his all too frequent posts. Maybe he will follow his mate Bozier? We can only hope !

      • GuyM

        I suspect the only people who’d agree with you Mike is the SWP.

        Can you tell us if you are or ever have been a member of SWP, Militant or the like?

        • Alexwilliamz

          What has a mediocre premiership QPR player got to do with Mike?

          • Brumanuensis

            Lay of SWP Alex. He’s a nifty little player when he puts his mind to it.

          • Alexwilliamz

            I always thought he was a right winger tho.

        • http://www.facebook.com/people/Mike-Homfray/510980099 Mike Homfray

          Never.

  • David MacDonald

    Gosh. I agree with every word.
     
    But I would go further. Without proper laws of property and contact there will be no investment and this little economic advancement. Why invest in your farm or business if, when you do so, “Mr Big” will come and steal it from you?
     
    This is essentially the reason why the former British colonies in Africa failed, post independence, and why the apparent economic progress in China and Russia will founder. India, on the other hand and in spite of endemic corruption, does have the foundations of a sensible legal system.

    • http://twitter.com/rob_marchant Rob Marchant

      Indeed. As I said in the piece, “the second, and perhaps even more important reason” is property rights, probably more so than corruption. You observe rightly that while Indian politics is hardly corruption-free, it’s thriving.

  • http://pulse.yahoo.com/_ZPXYLRVP4XOIGGDJWAL6HUO7U4 David

    The problem is that it’s not just legal but has been positively encouraged in the court of public opinion™ in Argentina, which once again demonstrates the weakness of such a position… something I wish all politicians would remember more often.

    • http://twitter.com/rob_marchant Rob Marchant

      Yes. To be fair, though, Argentina does have particular tradition of highly populist politics, more so than here.

      • AlanGiles

        It ill becomes one of New Labour’s cheerleaders to talk about “populist politics”.

        The Blair boys were forever trying to curry favour with Murdoch and the Daily Mail – even BBC radio listeners at breakfast time. I well recall Blunkett saying on “Today” some years ago “immigrant children are swamping our schools” which must  have been music to the ears of the listener putting aside his/her copy of that morning’s Daily Mail. That was when immigration per se was that weeks bete noir, then of course we had Uncle Jack stoking the fires of Islamaphobia, then when the biggest enemy within was “benefit scroungers”, some of the biggest scroungers in the business (Hutton, Purnell, Byrne) – even Auntie Hazel helped out  a little anecdote about “a family still in their pyjamas at noon watching TV” when she was “canvassing one weekday”  at the time of the Freud/Purnell outrage –  turned their fire on them. Another coconut to be knocked down by the right-wing of Labour, all grist to the mill.

        New Labour/Blairism was built on populist politics, taking advantage of each and every public outrage and making it cause of the week.

        Mr Marchant’s scribblings would sit well in the Daily Telegraph, but there is no need to add gross hypocrisy to your list of faults. (No doubt a “witty respknse” will come back anon from RM – you’ve already done the “flat earth” lone btw)

  • http://twitter.com/TomMillerUK Tom Miller

    Surely deciding whether something is theft is the prerogative of the population? I have a feeling that these policies would be endorsed in a forthcoming election.

    This article is basically shouting about someone being undemocratic, because they are carrying out the will of the population – a self-evidently perverse approach.

    On theft, was it theft for Attlee to appropriate hospitals, or Wilson the steel industry? Nonsense.

    You’re missing the whole point about laws and contracts. They are the policies of Governments and those who back them. As those who back laws come into conflict, so do proposed (and actual) laws themselves.

    Laws are political, they are contested, they conflict, and that’s why we vote.

    • http://twitter.com/rob_marchant Rob Marchant

      I think *you’re* missing the point, Tom. As per the article, the difference between nationalisation and theft is the price you offer.

      • http://www.facebook.com/people/Mike-Homfray/510980099 Mike Homfray

        I think all privatisations in this country should be renationalised without compensation. 

        • James3010

           those who do not remember their history are doomed to repeat it. It was tried and it was a disaster.

          • http://twitter.com/robertsjonathan Jonathan Roberts

            Ignore Mike, he swallowed a copy of the Communist Manifesto back in the 70s and every now and then some of it gets puked out.

          • jaime taurosangastre candelas

            covered with bile, normally.

          • http://www.facebook.com/people/Mike-Homfray/510980099 Mike Homfray

            and you should know…..

          • http://www.facebook.com/people/Mike-Homfray/510980099 Mike Homfray

            dear me, the Tory Blairite ultras are getting terribly bitchy lately….

          • JoeDM

             Are you Tom Sacold in disguise?

            What ever happened to Tom?   He used to be the resident Old Labour loonie leftie on Labour List.

          • ThePurpleBooker

            Tom is just wrong.

          • AlanGiles

            Have you finished “A Journey” yet Jon?

          • http://www.facebook.com/matthew.blott Matthew Blott

            LOL innit

          • treborc1

             What did you swallow Dear boy the Blair book of Thatcherite quotes

        • http://twitter.com/rob_marchant Rob Marchant

          Yes, that’d work.

        • http://www.facebook.com/people/Stephen-Collins/100000033820132 Stephen Collins

          Because we really need government run pubs, travel agents and car factories don’t we?

          Apparently, Mike doesn’t mind it when state owned companies shaft him, just private ones. Remember folks Profit=BAD! State Run Monopoly=Good!

          • Jimr

            Nor does private automatically mean better. There is a fundamental issue about interests of customers of privately run utilities and ‘state services’ coming second to the interests of sharehoders.

          • AlanGiles

            Did anyone see Panorama last night about the wonderful “service” provided by private care homes. Hitting an old lady with Alzheimers, aged 80?. Marvellous advertisement for those who think that private is best.

          • http://www.facebook.com/people/Stephen-Collins/100000033820132 Stephen Collins

            Did you ever hear about the abuse scandal of people like my Grandad at Withington Hospital’s Rowan Ward in the early part of the last decade? Marvellous advertisement for those who think the NHS is best.

          • treborc1

            That rubbish of course you will get good and bad in anything, but to say the NHS bad  well I hope you now have private.

          • GuyM

            Whereas the old service levels in British Rail and BT were ringing endorsements for privatising them.

            Plus given some of the stories coming out from my local NHS hospital about abusive nurses indicates that health care staff can be repulsive abusers of the frail and ill whether private or state providers.

            This mystical idea that public sector owrkers do it out of devotion to the public is a load of dung.

          • treborc1

             Do not worry they will learn from this, every dam time I see it I know what will be said, yes we have taken this on board and we will learn from this.

      • http://twitter.com/TomMillerUK Tom Miller

        I think it’s the difference between legality and illegality.

        What’s moral is  valid question, but a totally different one. This way of looking at it reduces the idea of theft to a euphemism for ‘something I disagree with’. It’s sophistry.

    • M Cannon

      No it is not the perogative of the population to decide whether something is theft or not.  Theft is theft.  The electorate or the government may purport to make a particular theft legal, but it is still a theft.

      • Brumanuensis

        ‘Legal theft’ is an oxymoron. Either theft is illegal or it’s not theft. 

      • Tigonprimus

        How does that definition of theft play as far as Koh-i-Noor diamond goes?

    • ThePurpleBooker

      Tom, you seem to be some 1970’s style socialist who believes that the people in Manchester Withington, voted for John Leech because the were turned off by Labour setting up hugely successful foundation hospitals in the NHS!
      Nationalisation in the instance, regarding the Falklands War taking the oil away from the Britons living there is theft and it is extremely loony left as well as anti-British for you to suggest otherwise.

      • Brumanuensis

        By ‘hugely successful’, do you mean ‘managed to sustain improvements made when they were NHS Trusts’?

        http://www.york.ac.uk/media/che/documents/papers/researchpapers/RP64_Foundation_Trusts.pdf

        A good report from my alma mater. 

      • Jocelyn

        You’re a strange little fellow, aren’t you?

      • treborc1

        My god It’s Blair.

        • Alexwilliamz

          Surely that should read: My Blair it’s god. you clearly meant this by your use of capitals.

      • AlanGiles

        And you seem to be still stuck in 1997 – “a new day has dawned – has it not?”

        This is not a day for cliche’s but I feel the hand of history on my shoulder……

        This is 2012 Booker – the days of Blair are dead and gone, however much that upsets you and Robert Marchant.

    • Chilbaldi

      nonsense.

      Law requries certainty in order to have the confidence of the people and to operate correctly. That’s why UK courts are for example the forum of choice for businesses all over the world.

      What the Argentines have done is pay 10p for a £1 sweetie. They have undermined confidence for all businesses operating in the country, whether they be foreign or domestic based.

      Tell me, if you were the CEO of a multinational company, would you be confident in operating in Argentina right now?

      Absolutely ridiculous to compare this in any way to the NHS.

      And the population temporarily wanting something, or being whipped up into a fenzy by public figures, is not a democratic mandate to do something.

      • Brumanuensis

        “Law requries certainty in order to have the confidence of the people and to operate correctly. That’s why UK courts are for example the forum of choice for businesses all over the world”.

        Nothing to do with the Empire then? Or the fact that most English-language jurisdictions owe their legal systems to the historical influence of the UK.

        On the multi-national point, I am still slightly amazed that people are using the example of a company
        that was about to flog off its stake to a state-owned entity – owned by a nominally
        communist country no less – as an example of dynamic capitalism in action. Did irony
        die suddenly in the last 24 hours?

        • Chilbaldi

           The English courts are used because:

          – the law is relatively simple and logical
          – the courts are not corrupt
          – there is legal certainty

          English language is a factor but not overly important. Business all over the world write English law into their contracts for these reasons.

          Ride roughshod over these principles, and you end up a ridiculous little backwater that nobody trusts or deals with.

          • Brumanuensis

            I’m sorry, but the primacy of English law is historically-sourced. If France had possessed an empire the size of ours, the Code Napoleon would occupy a similar role. As it is, it merely shaped most legal systems on the continent – a legacy of the Napoleonic Wars.

            As a lawyer, the comment ‘the law is relatively simple and logical’ had me in hysterics. Have you even tried figuring out how Equity works? Or the rules on easements over land? Or the slew of contradictory case law on eyewitness testimony? Not to mention the convolutions involved in identifying penalty clauses in contract law. 

            The American courts aren’t corrupt either. Nor are the German courts. I am unsure what you mean by legal certainty. In what context? In contract, the term is a principle, but not one unique to English law.

            Obviously the rule of law matters and I’m down-right certain that our legal system is cleaner than the Argentine one. However its global use is not principally down to its intellectual superiority over all other systems.   

                

               

          • Chilbaldi

            The Empire point is simply not accurate and is a typical lefty guilty trip about out Imperial past. This does not explain why Japanese, Brazilian, Russian, [insert non-empire or historically hostile country here] companies explicitly choose English law for international contracts.

            As a lawyer, you will know that American law is also used with regularity.

            Of course, the English Bar is a source of continued international expertise, and the country houses law firms that operate in every jurisdiction, but the principles stated above remain the overriding factors.

          • Brumanuensis

            Are you seriously trying to pretend that the wide-spread use of English law isn’t connected to the Empire? The strong parallels with India, Australia, the US, Canada and South Africa (among others) are just coincidence? A major source for the previous point? Niall Ferguson, hardly a bleeding-heart left-winger.

            As for Japan, Britain had extensive economic investments in Japan during the 19th century and the Meiji modernisation. British engineers built the first Japanese railways. Hardly surprising that influence didn’t transmit itself in other ways, especially in a country whose leadership was conciously rejecting its traditional past.  Brazil also had extensive economic relations with the UK, during this period. In more modern times, the position of London as a major financial centre has encouraged international firms to move there. For simplicity’s sake, and without an obvious need to rely on a foreign legal system, they use the English one. I fail to see how this proves our legal system is intrinsically superior. Especially as you haven’t explained what you mean by ‘legal certainty’ or ‘the law is relatively simple and logical’.

            Incidentally, I am curious as to how a period in our history where we brutally subjugated hundreds of millions of people, could not be the subject of a guilt trip?

          • Alexwilliamz

            Agreed. The japanese during their period of modernisation pretty much did a pick and mix of all things western, trying what were considered the leading nations approach to various components of their society. In an attempt to compete with western power they were unsure which bits were important and which not. Adopting English law for trade was one of those. I’d also suggest that the economic strength of the empire during the 19th century when the nation states were coming into being would have necessitated adopting British law for trading purposes. This may even ahve been imposed in many cases, ever heard of gunboat diplomacy.

          • Brumanuensis

            That’s a good point Alex.

      • http://twitter.com/TomMillerUK Tom Miller


        Tell me, if you were the CEO of a multinational company, would you be confident in operating in Argentina right now?”

        Market isn’t bearing up too badly?

        Europe, on the other hand…

    • Ben Singleton

      Well said Tom! I’d actually argue that the only real theft here is the historical theft of resources from countries like Argentina (and Venezuela and Bolivia). Oil is an obvious resource to nationalise. 

  • jaime taurosangastre candelas

    A good article Rob, and I agree with you on your categorisation of the difference between nationalisation and theft being the price paid.

    I do not normally read the Argentine newspapers, but much of the discussion is between those wanting to nationalise with no compensation (probably the majority), and those saying a fair price should be paid to protect Argentina’s reputation (ha! they have no good  reputation, but then Chileans have never liked the land-stealing Argentines) and the access to financial markets.

    It also seems that two things are happening:  (1) there is a Governmental secret plan to lower the YPF share price as much as possible by very fierce statements, so that whatever they do pay is based on a much lower capital valuation, and (2) the final valuation will be conducted by the National Valuation Court, which has received Government instructions to also include deductions for “environmental damage”, which could be a convenient method to reduce the valuation to nearly zero (or even below).

    The Madrid press is very voluble, with several calling for international investment by Spain to be directed to other South American countries to punish Argentina.

    Santiago is very amused, and in Chile we see the possibility of attracting additional investment at the expense of Argentina.  There have been calls for a trade delegation headed by the Minister for Trade to travel to Spain, and the Minister for Energy is having discussions with Australia, New Zealand and Canada about a Pacific Rim renewable energy super-holding company.  The one thing we have a lot of in Chile is wind, and the wind turbines on the Andes are increasing every year.  We have the perfect geography.

    There are also some cautious voices in Santiago.  ENAP (the state energy company) is reliant on gas from Argentina for the majority of consumption over the GasAndes pipeline, and people are calling for diversification and even the construction of a new port to be able to take the large gas tankers.

    • http://twitter.com/rob_marchant Rob Marchant

      Thanks Jaime, thoughtful as ever. Can’t say I’m hopeful of the total objectivity of any court in Argentina (remember what happened with courts in Venezuela, and even in Spain recently the courts have had problems) in deciding a price.

      I am sure that Chile will gain from this, because it is head and shoulders above Argentina in terms of the way it is perceived abroad by investors. Not everyone may have liked the Chicago Boys, but this is one area where I think they probably helped.

  • Brumanuensis

    What I find rather odd is that you don’t mention that Repsol was in talks to sell its share in YPF. The customer? Sinopec, the Chinese state oil company. So YPF was going to be nationalised anyway. It was just a question of whether the Chinese or the Argentines nationalised it. http://www.reuters.com/article/2012/04/18/us-sinopec-repsol-idUSBRE83H0AA20120418 

    Which raises the question: what sensible government would allow an important strategic resource to come under the control of a foreign government? Let alone the Chinese – whose previous investments in Africa generally involved shipping in Chinese workers and not hiring anyone from the local areas they were ‘investing’ in. 

    Equally, since reading Banerjee & Duflo’s excellent, ‘Poor Economics’, I’ve become more sceptical about a link between corruption and under-development. China and India are extraordinarily corrupt, yet that hasn’t held them back in the last 20 years. 19th Century America was hardly clean as a whistle – just look at President Grant’s time in office – and yet it was during that period that the US became the world’s largest economy. 

    Now, corruption isn’t a good thing and Kirchner has, as Will Hutton pointed out, been very high-handed in her approach. But it’s hard to feel sorry for Repsol. They bought YPF at a knock-down price and now their investment has gone sour. It’s also hard to see the point of mentioning Morales, given that the Bolivian nationalisation largely affected Petrobras, the Brazilian state oil company. So what we have here is foreign governments nationalising stuff that either belonged to or was about to belong to, other foreign governments. Hardly a series of dramatic attacks on private property.

    Finally, why have you chosen to head this article with a quote from a play glorifying a violent religious fanatic?

    • http://twitter.com/rob_marchant Rob Marchant

      Now the question of whether it’s strategically sensible for foreign companies to own your oil is an interesting one – quite possibly not. But that’s not the point.

      Re the selling of the stake, you’re being highly disingenuous. It’s one thing negotiating a fair market price for a stake between various potential buyers. It’s another walking in there and taking over the building, at a price which you dictate. The two are clearly entirely different.

      Re the corruption thing, as I highlight below and in the piece, I think it’s the less important of the two evils, depending on the degree.

      Finally, I don’t “feel sorry for Repsol”, as I say above. It’s not a question of feeling sorry, it’s a question of whether it’s good for Argentina – it’s patently not.

      Re my quote, because I like it. And it depends whose version you believe (Bolt’s or The Tudors/Hilary Mantel’s) as to whether you think he’s good or bad. Me, I just think it’s a great play.

      • Brumanuensis

        (working backwards)

        Re. More, it’s not really in dispute that he was a nasty piece of work. The man burned six people at the stake for heresy and gloated about one such execution in his diary afterwards (see Richard Marius’ excellent biography).

        On whether or not it’s ‘good’ for Argentina, given the abysmal record of Repsol in exploiting Argentina’s oil reserves – and the considerable success of Petrobras, ENAP and PDVSA (whether one likes Chavez or not) – it’s hard to see how nationalisation can make things worse. Oil is profitable at the moment and it’s not hard to imagine the new company turning a profit, however ineptly managed. It’s strange you mention Chavez in this context, because PDVSA has actually compensated ExxonMobil for the costs of nationalisation. Which would seem the ‘right’ way to go about it, following your argument. Given the success of numerous other state oil companies – Statoil in Norway, Saudi Aramco, etc. – I see no reason why this is an intrinsically bad decision.

        I mention who was going to buy it because it’s an important consideration. In spite of your attempt to do so, we can’t just ignore who the potential buyer was in this case. It changes the whole dynamics of the equation. A reader reading this article at face value would conclude that the Argentine government had nationalised a private company. In reality, Repsol was about to sell its share to a subsidiary of a foreign government. 

        I’m not actually disagreeing with you on the mechanics of the nationalisation. But this isn’t a case of government vs the private sector. This is a case of government vs government. I don’t agree that it’s a bad thing in itself to nationalise Repsol’s share. 

        • http://twitter.com/rob_marchant Rob Marchant

          Well, we’ll see when the give the final price. At the moment it’s looking cosy for Argentina and not exactly rosy for Repsol.

          • Brumanuensis

            And Sinopec.

  • http://www.facebook.com/people/Mike-Homfray/510980099 Mike Homfray

    How surprising that Rob Marchant opposes this. In ten years or so, when every government is doing the same owing to the collapse of the globalising dream, I hope he will remember this risible market-worshipping bilge

    • http://twitter.com/rob_marchant Rob Marchant

      So, let me get this right. In ten years, rather than being an even more globalised, interrelated world, we will have moved back to country tariffs and national silos. That’s your position, if I understand you correctly. 

      Now, can you name me any economist who agrees with you that that’s what will happen?

      • Chilbaldi

        beggars belief, doesn’t it Rob?

      • GuyM

        Mike is totally anti any form of globalisation and is anti-free trade as well.

        I presume he thinks we can make near everything we need in the UK, all the technology components, all raw materials, all food stuffs etc.

        Apparantly getting rid of flat screen tvs, fibre optic cabling, copper ore and bananas and the like would leave all of us Brits much happier.

        Bonkers as a descriptive hardly does his view justice.

        • AlanGiles

          Flat screen TV was actually developed in the 1950s  by Dr Denis Gabor (the man who invented the hologram) at Imperial College London in the 1950s. The fact that, as so often, the UK allowed other countries to gain momentum is a cause of regret but techincally it was “Made in England”

          • http://twitter.com/rob_marchant Rob Marchant

            I’m sure that flat screen TV would fit very well with your subscription to the Flat Earth Society, Alan…

          • Brumanuensis

            “Not sure why it’s necessary to insult people in the comments”

            -Rob Marchant

          • AlanGiles

            You have a remarkable ability to be pompous tendentious and puerile all at the same time. I  bet you were a hoot in the playground. I gave a fact because a lot of people are unaware of some of the technlogical advances we have made in this country (and before the great Blair came on the scene to inspire us all).

            Facts can be interesting because you never know when you might need them – after all, wasn’t it you who “forgot” that Harfold Wilson won three elections a couple of weeks ago, giving that honour top the Dear Leader himself.

            Perhaps instead of typing away your fatuous little comments to those of us who don’t enjoy your  scribblings you should get out and get yourself a job of some sort?

          • GuyM

            Interesting but not my point.

            Even if you started a flatscreen tv industry, all the raw materials for it are not located in the UK.

            You can fondly remember pre globalisatoin days if you want, as mike does, but those were the days before the level of technical development we have in the 21st century.

            As the technical product base becomes more and more advanced the theory of comparative advantage become more developed and the notion of protectionist national markets atttempting self sufficieny ever more unrealistic.

  • Peter Barnard

     
     Rob M,
     
    I haven’t had sight of the agreement between Argentina and Repsol and I doubt that you have.
     
     Given that oil production in Argentine has declined by 27 per cent since 2001, it doesn’t sound as if Repsol have actually invested a lot in exploration and production. Gas production has also been in decline since 2006.
     
    Does this decline constitute a material breach of the agreement and what remedy is there in the contract for a material breach by either side?
     
    I believe that Argentine had a “golden share” – under what circumstances could the rights attached to this “golden share” be triggered?
     
    Could it be – and I don’t know, but I don’t think you do, either – that Argentine was entirely in compliance with the terms of the agreement in taking the action that it has?
     
     
     

    • http://twitter.com/rob_marchant Rob Marchant

      I don’t know for sure, no, Peter, so it’s technically possible. But no commentator so far, not even in the specialist press, has suggested that might be the case. And I’m very sure that if it were, that Cristina Fernández would have been singing it from the rooftops,

      • Peter Barnard

        @ Rob M,

        What is written in the specialist press is not necessarily fact, Rob.

        For sure, I’m not going to rush to judgement on this.

        • http://twitter.com/rob_marchant Rob Marchant

          It is not, Peter, that’s true. But I’m struggling to find anyone in this debate who’s suggesting what you are.

          • Peter Barnard

            I’m not “suggesting” anything, Rob, just pointing out that none of us know what was in the agreement between Argentine and Repsol ; and, as I pointed out, given that oil production fell by 27 per cent 2001-2010, it is clear that Repsol, for one reason or another, did not enhance production – one would expect that increased production was a prime objectives of the agreement.

            Repsol could have been frustrated by Argentine in the performance of their obligations (failure to acquire title to land, for instance), the geo-petro data supplied to Repsol could have turned out not to be worth the paper that it was written on, or Repsol could have been incompetent.

            There’s a whole host of possibilities that you, me and all the rest of the commentators on this page – and other pages – don’t know. for that reason, I’ll suspend my judgement.

          • http://twitter.com/rob_marchant Rob Marchant

            As you are well at liberty to do. No-one can know for sure, I’m just saying the alternative scenarios look rather improbable. The most obvious reasons are the same as for Chávez and Morales – populist grandstanding and theft. 

            I’m not quite sure why you’d give such a benefit of the doubt to a government which demonstrably fiddles its statistics.

          • Peter Barnard

            I am looking at this case in isolation, Rob, and you have not established beyond reasonable doubt that it’s clear-cut, one way or the other, for the simple reason that you haven’t had sight of all the documentation.

            If you look at your article, you state “contracts were signed.” Well, tell us what was in the contracts, tell us how each party performed and discharged its duties over the life of the contract, and then come to a conclusion.

            Until then, it’s opportunistic and gratuitous speculation on your part.

          • http://twitter.com/rob_marchant Rob Marchant

            Peter, you can choose not to make a comment on *any* subject on the grounds that “we don’t know enough”. But you can also fail to make an opinion on something where quite sufficient information is available to make a reasonable judgement based on probable causes.

            You may feel it is gratuitous speculation, but in that case it is gratuitous speculation that pretty much everyone commenting (except yourself) has indulged in. On the other hand, those same people might feel your reluctance to form any opinion, in the face of quite a lot of evidence, could be seen as, well, rather hair-splitting.

  • http://twitter.com/keithmobrien Keith M. O’ Brien

    “Studying economics in my younger days, two reasons stood out as to why poor democracies often stay poor. The first was corruption… the second…contract law.”Em, what economics did you study exactly. 

    • http://twitter.com/rob_marchant Rob Marchant

      Erm, the kind that identifies market failures. With these things you cannot have properly working, undistorted markets.  What kind did you study?

  • http://twitter.com/tomilo Tom King

    I think Tom Miller has made some fantastic points below. 
    I think the worst thing about this article is that it is based on the assumption that ‘developing’ countries can only achieve growth, success and prosperity through support and investment from ‘developed’ countries in the West, with a complete ignorance of the solutions which Latin America is finding through regional co-operation and collaboration in order to achieve growth and economic stability. Rob mocks the idea of ‘neo-colonialism’ but his argument has strong tendencies in this direction, when a far better case could be made without this patronising condescension. 

    Through ensuring that the profits of the oil industry are not merely taken abroad by multi-national corporations, Venezuela and other countries in Latin America have been able to achieve staggering progress in social justice. Since 1999 Venezuela has eradicated illiteracy, lifted millions out of poverty, a basic healthcare system has been put in place and their levels of participation in higher education puts Britain shame with 83% of young Venezuelans going to university (almost twice as many as in Britain & the 5th highest number in the World) for free. Not only this but the number of Venezuelans recieving a state pension has increased by 398% and from 2010 to 2011 the minimum salary and pension was increased by 26.5%. The Government has ensured that the rewards of economic growth have benefited everyone in society. If that’s theft then I guess the Tories have a case against our redistributive tax system…

    The point about Chavez  ‘tinkering’ with the constitution is at best wilfully misleading. In Britain I cannot think of an elected office in Britain which has a term limit, so I’m baffled why Rob objects to Venezuela removing term limits for members of Parliament, regional governors etc. I’m sure Rob would also not object to the constitutional referendum which proposed bans on political donations from abroad (as we have in Britain), extending workers’ rights to the ‘informal economy’ and a ban on discrimination based on sexual orientation. These proposals were all rejected by the people, and especially considering the issue of sexual orientation the result should be unsurprising for a largely Catholic population.

    Venezuela has had 11 elections and referenda under Chavez, would Rob have preferred them to have 12?

    I’m not sure if we would react favourably to ethnic minority politicians being referred to as ‘eso mono’ (that monkey), but in Venezuela this occurs regularly in the name of press freedom. Just imagine if the Mail featured anti-semitic cartoons of Ed Miliband!! 

    The truth is that Latin America is enjoying unprecedented levels of democracy, human rights, press freedom, freedom of speech, and not only this but people are educated, literate, able to put food on the table and a roof over their head with access to healthcare. But in doing so they have to clearly stepped on the toes of multi-billion corporations and offended bloggers on Labourlist

    • http://twitter.com/rob_marchant Rob Marchant

      So your example of a Latin country with a flourishing economy is…? Certainly not Venezuela or Argentina, that’s for sure. 

      And as for human rights, you must be talking about Venezuela which is currently flagged by Amnesty and HRW as very poor in that area?

      Oh yes, I’m sure the term limits are nothing to do with ensuring a permanent premiership (as in Russia, where they want to do the same). How can you be so naive? Why do you think it is happening right now, if not to perpetuate Chávez in power for ever?

      • Anthony T

        Has Rob Marchant ever said anything you couldn’t imagine a Tory saying?

        • treborc1

           No

        • Chilbaldi

          Comments such as yours on this thread make me despair.

          • AlanGiles

            Why? Because it is true?. Doiwn the thread a bit Marchant is actually saying what the New Labour attitude really is: it is not the morality of a contract which matters, merely that breaking it is bad for business:

            in his own words:

            “the point is not so much the moral imperative of honouring a contract, its the practical imperative of not discouraging investment”

            That very neatly sums up the Blair era

        • http://www.facebook.com/people/Mike-Homfray/510980099 Mike Homfray

          Never, but then I think he is a Tory

      • Brumanuensis

         I’m no fan of Chavez’ poor human rights record, nor his depressing authoritarian streak, but
        your attitude is precisely why Chavez has been in power so long. 

        The reason for Chavez’ success is simple. The Venezuelan poverty rate halved between 1998 and 2008. A large number of Venezuelans feel that Chavez’ social programmes have made their lives better and vote for him accordingly. Of course, prosecuting Rosales was an abuse of power, not to mention the attacks on judicial independence, but until the opposition crafts a convicing rebuttal to Chavez’ charges that they will undo the popular elements of his legacy, they will not win a single election. 

        • http://twitter.com/rob_marchant Rob Marchant

          Well it’s an interesting, if rather flawed, analysis. There is some truth in things he has visibly achieved, if at an ultimately high economic cost for his country, which is now falling apart. Part of his success is about use of state media for his own electoral ends. Partly it is a lack of coherence in the opposition and the lack of a decent candidate people can unite behind, although that may happen this time. He also is playing the Berlusconi trick of trying to tie people who oppose him up in the not-very-objective courts.

          But, no, the reason for him staying in power is not the attitude of one Labour blogger. That’s patently daft.

          • Brumanuensis

            That’s not at all what I suggested. I meant attitudes like yours, as I’m sure you grasped.

            Given Venezuela’s meteoric growth prior to 2007, I would caution against writing off the economy. It’s far too oil-dependent and inflation is a serious brake on expansion, but estimated growth for 2011 was decent and the forecast for 2012 is, subject to caveats, not negligible. http://www.bloomberg.com/news/2011-12-31/venezuela-gdp-probably-grew-4-percent-in-2011-on-higher-federal-spending.html

            Besides, perception is all in politics. As long as the public think they’ll gain, they’ll stick.  

          • http://twitter.com/rob_marchant Rob Marchant

            No, still don’t understand yr point. How do attitudes like mine, presumably against Chávez, help keep him in power, exactly?

          • Brumanuensis

            Because they fail to appreciate why Chavez retains his popularity. It’s all very well pointing out the deficiencies of his economic policies – by no means an unfair set of arguments – but unless they are articulated in such a way as to reassure people that removing Chavez will not undo all of the positive social reforms undertaken since 1999, they will fall on deaf ears. 

            Dictatorships can last forever, as long as they keep enough people on their side. The Soviet Union didn’t collapse because Soviet citizens suddenly developed a longing for democracy, in itself. The system failed in all other respects and any popular tolerance vanished at the same time. 

            Ironically, the problem is similar to that in the UK, with people who just assume that as long as the government struggles to grow the economy, Labour will canter to victory at the next election. Of course, it’s not that simple. Labour has to offer people a reason to vote for them, other than ‘we’re not the Tories’. Equally, the opposition needs to spend less time emphasising how bad Chavez is – whilst not ignoring that aspect – and talking up what they plan to do to improve on his legacy.

          • http://twitter.com/rob_marchant Rob Marchant

            Well don’t think it’ll be necessary in the end. He’s spending all the money, the reserves are dwindling and the economy will eventually implode. 

            The only question is whether he will go before that happens or whether he will hang on till the bitter end, like Mugabe.

          • Brumanuensis

            Isn’t that a touch complacent?

          • http://twitter.com/rob_marchant Rob Marchant

            A rhetorical question, presumably.

          • Brumanuensis

            Actually no. Considering Mugabe hasn’t been forced out of office yet, doesn’t that rather work against your point?

          • http://twitter.com/rob_marchant Rob Marchant

            No.

  • Duncan Hall

    Yawn.

    If you expended anywhere near as much energy on attacking the forces of the right you might almost be useful.

    • http://twitter.com/rob_marchant Rob Marchant

      Thanks for your contribution to the debate.

    • http://twitter.com/rob_marchant Rob Marchant

      Thanks for your contribution to the debate.

      • http://www.facebook.com/people/Mike-Homfray/510980099 Mike Homfray

        Its a damned sight more constructive than yours…..

  • http://www.facebook.com/people/Stephen-Collins/100000033820132 Stephen Collins

    Well, what do you expect from a colonial relic like Argentina? First they stole the natives land, now they’re stealing other countries property.

    By the way all you 1970s folks, state owned is never owned by the people. When did any of you get a say in how British Rail, British Steel, BAE, BOAC, the British Coal Board or any other state run industry spent your tax money?

    Government should stick to defence, health, education and law making and nothing else.

    • Brumanuensis

      In what way is Repsol ‘[an]other countries [sic] property? I wasn’t aware that Repsol was owned by the Spanish government? 

  • Mr Chippy

    Rob how would you describe the privitisation of mineral and other resources in Russia by Yeltsin at what can be described as knock down prices.

    • http://twitter.com/rob_marchant Rob Marchant

      Privatisation at a knock-down price is rarely a good idea. But once done, it’s rather hard to unscramble the omelette.

  • UKAzeri

    Rob,
     
    “But that, clearly, is not the point.”.. but that is the point :)
    a contract signed under duress or unfair conditions is illegal under law, in other words it is void. The party that has been wronged requires compensation which sometimes is referred to as ‘fire sale’ .. There is no left/right argument.. as you correctly pointed out, this is down to contractual obligations. What we all must remember, is that if you BS a granny and load her with expensive energy bills that she doesnt need, you will have to pay her back  :)

    • http://twitter.com/rob_marchant Rob Marchant

      But as I point out above, the point is not so much the moral imperative of honouring a contract, its the practical imperative of not discouraging investment.

      • UKAzeri

        Morality has nothing to do with this. when you bribe someone ( ie becuase thats the primary reason for underpriced investment opportunity) and go into a contract with them, the contract is void and doesnt have to be adhered to. In many ways paying a low price during nationalisation rather than investigating corrupt officials and businessman is a win win scenario for all.

        I think what you are referring to is realpolitic rather than a principled position. In other words businesses have the capital, asset and human resources, not forgetting know-how and ultimatly dictate the terms etc. If they get spooked its bad for that particular economy. This could have an effect on many industries but not oil. Oil rules. The country with this resource dicates its terms to the oil companies, IMF etc Saudia Arabia and recently Burma are good examples.

        • http://twitter.com/rob_marchant Rob Marchant

          You may well be right about oil being a different case in terms of market power of the owner. The problem is that there are large,  multiple foreign investments in companies outside the relatively small proportion of the economy that is the oil sector. It is these who will suffer.

          • UKAzeri

            Where the West dithers China will not :)

      • Brumanuensis

        Fair enough, but you opened this piece by saying:
         
        “And although contract law, I admit, is not something which generally makes pulses race, its enforceability is an essential part of a civilised society. If I own something, I need to know that, unless I agree to its sale, it will still be mine in a year, in ten years or a hundred years. In other words: steal from me, and you will be punishedAnd although contract law, I admit, is not something which generally makes pulses race, its enforceability is an essential part of a civilised society. If I own something, I need to know that, unless I agree to its sale, it will still be mine in a year, in ten years or a hundred years. In other words: steal from me, and you will be punished”.

        Which is a strongly moral claim and anchors your criticism of Kirchner’s actions. So I think morality has played a sizeable role in your argument.

        • Brumanuensis

          Apologies, the quote seems to have doubled itself. My mistake.

  • derek

    Nationalising the Argentinian oil-fields will consist of Atlantic water rights, much like North Sea water rights.The USA can no longer ignore the America’s trading partners.  

    • jaime taurosangastre candelas

      Derek,

      why do you write such nonsense?  Argentina’s oil production is onshore, mostly in the Santa Cruz oilfield which is entirely inland, and the oil prospecting offshore is not far out to sea – maybe 30 miles from Comodoro Rivadaria.  That is why Argentina is so obsessed with the Falklands at the moment, because the Falklands have promise of oil in their territorial waters, and Argentina has very little.  The gas comes from Neuquen Province, in the Andes, in one of the parts of Argentina furthest from the sea.

      Perhaps if Argentina had not repeatedly bankrupted itself in the pursuit of lunatic policies in the last 100 years, they might have some money to go and explore their waters a little more.  Instead, they steal from those who bring money and expertise to them.

      Espero que el pueblo argentino se libró de sus gobernantes engañados.

      You will find, if you can mange to do some research, instead of throwing idiocies from your computer, that the USA and Argentina have no energy trade at all.  Argentina is not self-sufficient and only exports to neighbour countries.

      • derek

        I do believe Bolivia has called for the USA to recognise Argentina’s right to claim the falklands  islands. Territorial rights to commodities and interest aren’t unduly uncommon?

        • jaime taurosangastre candelas

          Derek,

          I suggest you do some research.  You will find that the Americans are incredibly unlikely to take any notice at all of Bolivia at the moment, after renouncing the war on drugs, encouraging additional coca growing as a state policy, expelling the American ambassador, and defaulting on several hundred million dollars of infrastructure programmes for which American companies have had their bills returned unpaid and their equipment confiscated. Bolivia has also recently asked the Chinese to invest in their country, as well as to provide military training and equipment to them. Both of those last things have made the Americans very concerned and wary of Bolivia.

          Your research may also reveal that Argentina has put Brazil under heavy pressure with access for cargo and dry goods transportation dependent on political support.  It may even reveal that both Peru and Chile have turned down Bolivia’s requests for access to the Pacific.  This goes back over 130 years when Bolivia caused a war while trying to nationalise mineral companies and then take the mines in the Antofagasta region by military force, but being Bolivian, they were incompetent.

          After the disaster of your thoughts about Ernesto Guevara, you really are a glutton for your South American history, are you not?  But I am not going to try to educate you.  You must do your own research and try to think about how foreign relations are influenced by both history as well as current events, which hopefully will stop you making a fool of yourself.

          • derek

            I don’t see where I’ve made a wrong assumption, Morales and Chavez has asked the USA to be more open and collective about latin America, although Chavez did duck out of the summit many claims were laid in front of the AMERICAN SECRETARY OF STATE. 
            http://www.pulsamerica.co.uk/2012/04/16/bolivia-this-week-50/

            I don’t think I can recall a time when the USA hasn’t been paranoid about latin America’s desire to do better, they certainly have had a negative view of Cuba for a long time, I think the trade blockade is older than you Jaime.

            I do believe that drug trading in Northern Southern America’s is and continues to be a very worrying situation, I also believe that the USA has not done enough to help solve the drug trading.

            If it’s just a case that you oppose Che Guevara and socialism outright, then that’s your choice but capitalism and the USA haven’t exactly helped the vast majority of latin America have they?

          • derek

            “Renationalisation is aligned in the minds of Fernández supporters with the renewed demand for sovereignty over the Falkland Islands in the South Atlantic claimed by Argentina as “Las Malvinas”.
            “The Malvinas are Argentine, so is YPF,” say posters around the country and a T-shirt that artists who support Fernández have started wearing on internet campaigns in favour of the takeover. “This ends five centuries of white Spanish domination,” said a supporter. Argentina was ruled by Spain until  its independence in 1816.”
            That seems to back my original post!!

  • Daniel Speight

    There is some form to this sort of nonsense, although not usually from anyone connected to the labour movement. I will just do a quick cut & paste from Wikipedia for those interested.

    In the mid 20th century, during the 1950s, the United Fruit Company convinced the administrations of U.S. presidents Harry Truman (1945–53) and Dwight Eisenhower (1953–61) that the popular government of Colonel Jacobo Árbenz Guzmán in Guatemala was secretly pro-Soviet, for having expropriated unused “fruit company lands” to landless peasants. In the Cold War (1945–91) context of the pro-active anti-Communism of the Senator McCarthy era of U.S. national politics (1947–57), said geopolitical consideration facilitated President Eisenhower’s ordering the CIA’s Guatemalan coup d’état (1954), which deposed the elected government of President–Colonel Jacobo Árbenz Guzmán, and installed the pro-business government of Colonel Carlos Castillo Armas (1954–57). The poet Pablo Neruda denounced foreign banana companies’ political dominance of Latin American countries with the poem La United Fruit Co.

    • http://twitter.com/rob_marchant Rob Marchant

      Could you perhaps explain the connection between the Cold War and the democratic (or at least, partially so) Latin American politics of the 21st Century? I’m not sure it’s immediately obvious to our readers.

      • Daniel Speight

         I am sorry Rob for making it difficult for you. More simply put, I imagine there were shrills for the United Fruit Company making the same points about contracts and nationalization as you are doing  for this Spanish oil company.

        • http://twitter.com/rob_marchant Rob Marchant

          Perhaps, but they are two different situations in two different times and I would not have made the case for the United Fruit Company. I make it now.

          “When the facts change, I change my mind. What do you do?” – John Maynard Keynes

          • Daniel Speight

            I would not have made the case for the United Fruit Company.

            Would you not Rob? Their argument would have been exactly the same. Who you shrill for and why you do it is just a matter of degree and has no place in our labour movement.

          • http://twitter.com/rob_marchant Rob Marchant

            Daniel, if you would stop using emotive words like “shrill” (which is not a verb, by the way) and making unsubstantiated judgements on who should and should not be in our movement, your debating style would improve immeasurably.

          • Daniel Speight

             if you would stop using emotive words like “shrill” (which is not a verb, by the way)

            Oh, but I found it works quite well as a verb Rob. It sort of sums up the uber-Blairite posts for me.

            Maybe your movement and mine aren’t the same. I called it the labour movement and its definition is in the name. If it were called the employers movement, or the capitalist movement, or such like, there would be place for a post like the one you wrote above.

            I hope in the 50s and 60s there was no similar support for the United Fruit Company in the labour movement to the support you are giving this oil company now.

          • http://twitter.com/rob_marchant Rob Marchant

            We all have a right to post here, Daniel.

            Some of us welcome debate and the exchange of views from all angles; some wish only to hear views that fit with their own definition of “Labour”.
            You merely have to decide to which category you belong.

          • Daniel Speight

            I talk about the ‘labour movement’, Rob wants to supply his own definition to ‘Labour’, which is his right. I wonder if he considers his ‘Labour’ a part of ‘labour movement’. Somehow I doubt it.

            He accuses me, correctly of turning ‘shrill’ into a verb, but seems to want the word ‘Labour’ to mean whatever he fancies at the time. It seems that ‘Labour’ doesn’t mean ‘labour’ anymore, but then again we knew the Blairites have long believed this.

  • Brumanuensis

    From the FT, on how serious the consequences will be for Argentina: http://www.ft.com/cms/s/1702af96-8957-11e1-bed0-00144feab49a,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2F1702af96-8957-11e1-bed0-00144feab49a.html&_i_referer=http%3A%2F%2Fhotair.com%2Farchives%2F2012%2F04%2F18%2Fobama-admin-caught-flat-footed-by-argentina-nationalization-of-spanish-oil-company%2F#axzz1t2zGoEVw

    “Senior officials, including José Manuel Barroso, the European Commission president, expressed deep disappointment and aides insisted that “all possible options” were being studied. The bloc’s foreign ministers will discuss the issue at a meeting on Monday.

    But EU officials and trade analysts believe the bloc’s options may be limited, despite the growing clamour from the continent’s corporate sector and some politicians to defend one of its companies against a hostile foreign government.

    World Trade Organisation rules do not cover investment disputes, closing off one possible avenue. Other possibilities, such as raising tariffs on Argentinian goods, could backfire, according to Fredrik Erixon, director of the European Centre for International Political Economy think-tank”.

    • http://twitter.com/rob_marchant Rob Marchant

      Doesn’t exactly translate to investors lining up to invest in Argentina, does it?

    • http://twitter.com/rob_marchant Rob Marchant

      Doesn’t exactly translate to investors lining up to invest in Argentina, does it?

      • Brumanuensis

        “Not only is there the moral imperative to honour a contract, there is a vital practical one: if you set the precedent, as a government, that laws only apply “when I say”, other countries – and more importantly, companies – will question your word. Foreign investment can go from a flood to a trickle overnight; Spain is already planning retaliatory action via the European Commission”.

        And I was supplying evidence that retailiatory action was likely to have limited effects.  

  • MonkeyBot5000

    I find it hard to take anyone seriously when they insist on using “populist” as a perjorative term. Everytime you do, you’re letting everyone know that you think the public are idiots and can’t be trusted to make decisions for themselves.

    Before you complain about companies having their property taken away, shouldn’t we ask how they came by that property in the first place? Especially when the property we are talking about is the oil/gas deposits of a nation.

    If a dictator makes trade deals or takes out loans, the people of that country have no moral obligation to honour those deals once the dictator is gone.

    • Brumanuensis

      I think insinuating Carlos Menem was a dictator is unfair. I think the Repsol deal, like most Latin American privatisations, was a bent deal, but that doesn’t mean normal process should be ignored in reacquiring it.

  • RogerMcC

    Possibly the most ridiculous post I’ve ever read on Labour List.

    Modern corporations exist only because of the quite extraordinary privileges bourgeois states give to their owners – just imagine how much less predatory they’d be if we removed limited liability for instance. 

    And this is all the more true of energy companies which in almost every case began as effectively state capitalist enterprises anyway.

    If anyone should feel shame it is Labour and other European socialist parties who here as in the default crisis of a decade ago are being shown the way by dodgy Peronist populists. 

    And you could at least get the name right – Cristina Fernandez de Kirchner – Spanish speakers often drop the last surname but in her case she uses her full name in tribute to her late husband (just as Evita and Isabel Peron did).  

    • http://twitter.com/rob_marchant Rob Marchant

      “Bourgeois” – how quaint. I thought people stopped using that in the 80s, outside of Marxism Today.

      On the surname issue, I think you have rather overreached. It is standard practice in the UK media, including the BBC, to use either variant of her name, and I am following that standard practice.

    • http://twitter.com/rob_marchant Rob Marchant

      “Bourgeois” – how quaint. I thought people stopped using that in the 80s, outside of Marxism Today.

      On the surname issue, I think you have rather overreached. It is standard practice in the UK media, including the BBC, to use either variant of her name, and I am following that standard practice.

      • RogerMcC

        Funny how all these old Marxist categories have been revived by the crisis  of your beloved capitalist system and how significant numbers of people across Europe are now voting for parties that are not shy of using them.

        What is truly quaint is how you and your class cling to all those neoliberal nostrums you learned in the nineties even though it is tragically clear how catastrophically you and they have failed us. 

        Seriously – your biggest concern is the property rights of the owners of state assets  that were given away by the notoriously corrupt Menem government in their fire sale in the 1990s?

        Unbelievable. 

        • Jaime Taurosangastre Candelas

          No even vaguely Marxist party has been voted into power in a democratic fashion, even after 150 years.

          Marxism, and its’ more thuggish and village idiot variety of socialism have been repeatedly rejected at the ballot box the world over.  The evidence really is empirical, across cultures, decades, and various flavours.  Where it has got in, it is almost invariably at the point of a gun.  In the tiny number of circumstances where it was voted in, the economic and social consequences created by the fantasy mathematics were so dire that it never got another look in.

          Thankfully the modern Labour Party is not remotely socialist, and seeks electability.  Maybe you don’t like that, and should perhaps divert your energies to setting up your own perfect socialist party?

          • RogerMcC

            You clearly know no history at all. 

            The great majority of the seats in Russia’s first and last democratic election for seventy years (the Constituent Assembly of 1918)  were won by Marxist parties – Bolsheviks, Mensheviks and Left and Right Social Revolutionaries. 

            Communists were an important element in the Popular Front governments elected in 1930s France and Spain. 

            One can argue the toss but at least in Czechoslovakia the communist takeover in 1948 seems to have been achieved by democratic means (although they would certainly have fixed the election if they didn’t think they could win it).

            Communists have been in positions of power in postwar France and Italy as ministers or as part of parliamentary coalitions. 

            And some of us will never forget the Allende government freely elected in 1970 and bloodily overthrown in 1973.

            I could produce other examples but you clearly are not interested in any information that conflicts with your centrist world view. 
             

          • jaime taurosangastre candelas

            Those elections all have significant “faults”:

            In Russia, the election of 1918 was not conducted under universal suffrage (as indeed many European countries did not have it either), and disenfranchised about 90% of all people who did not have at least “artisan” status.  In addition, the electorate was mostly urban as rural votes were deemed too difficult to gather.  There were also only a choice of communist or allied parties.  The democracy of the Duma elected was so distasteful for the Marxists that they dissolved the Duma after 13 hours of sitting, and that was it, democracy died in Russia and has not yet made a re-appearance in nearly a century.

            You fundamentally misinterpret Allende’s government if you believe it to be either Marxist or Communist:  4 of the 15 Ministers were avowed Bolivarians, which is as close as fools in South America allow themselves to come to Marxism or Communism, but the majority including Allende were standard left wing social democrats.

            Your other examples do not include “Governments”.

            I stand by my original point.  You are clearly not interested in any information that conflicts with your rose-tinted Marxist view of reality.

          • RogerMcC

            And what distinguishes real Marxists from pseudo-left fantasists is that we don’t consider it our job to set up a ‘perfect socialist party’ – the working class generates its own political institutions and its our role to participate in them and compete democratically with people like yourselves.

            I am not even that left and have been accused multiple times here of being a Blairite as I also accept that electability is the #1 priority. 

            The kind of reactionary patronising tosh being purveyed here does however get my goat.

            Look around you: capitalism has failed and with it the not ignoble idea that somehow it can be compromised with to produce a fairer and better society.

    • Jaime Taurosangastre Candelas

      It is you, and others of equivalent lack of cultural awareness, who have the name wrong.  Her birth, marriage certificates and passport have her proper name, which does not include “Kirchner”.  She appends it to her proper name and drops her mother’s family name in order to gain a political advantage.

      • RogerMcC

        So by your logic Margaret Thatcher’s real name is Roberts?
        Judging by your own name you know better than I do that Spanish-American women typically have two surnames and usually do not drop the original name when they marry. 

        The Guardian and the BBC for instance gives CFK her full name in article titles and the first time she is mentioned but then will use Fernandez in subsequent mentions.  

        The New York Times OTOH usually calls her Mrs Kirchner. 

        Le Monde AFAICS also generally calls her Cristina Kirchner. 

        It is thus not just common courtesy but clearer to give the woman her full name at least once before simplifying it to Fernandez.  

        • jaime taurosangastre candelas

          Cristina Elisabet Fernández Wilhelm is her proper name, the one she was born under, and the one she will die under.  She has never changed it, nor is there any easily achievable legal mechanism for her to change it.  Any alternative usage has the legal status of a “nickname”, which she and others may choose to use, and in her case she does for political advantage.

          Hispanic culture is often accused of being male centred, but the reality is far more complex.  We honour both our fathers and mothers.  Everyone – male or female – carries both of their families’ names from the day we draw our first breath to the day we look God in the eye and account for our lives.  It is a matter of pride.

          What media organisations choose to do is up to them, but has no status at all.  What her adoption of her dead husband’s father’s name tells hispanics is that she is mercenary and would rather have his glory than recall her mother’s family.  Clearly, there are votes in it, if not loyalty.

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