Venezuela Seizes Foreign Oil Projects

get ready for the shit to hit the fan.....:yoiks:

http://news.yahoo.com/s/ap/20070227/ap_on_re_la_am_ca/venezuela_oil_nationalization

CARACAS, Venezuela - President Hugo Chavez ordered by decree on Monday the takeover of oil projects run by foreign oil companies in Venezuela's Orinoco River region.

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Chavez had previously announced the government's intention to take a majority stake by May 1 in four heavy oil-upgrading projects run by British Petroleum PLC, Exxon Mobil Corp., Chevron Corp., ConocoPhillips Co., Total SA and Statoil ASA.

He said Monday that has decreed a law to proceed with the nationalizations that will see state oil company Petroleos de Venezuela SA, or PDVSA, taking at least a 60 percent stake in the projects

Despite the bullshit headline, this is a perfectly legal nationalization of the oil industry, done with full compensation to those whose assets are being nationalized. No shit. No fan. We have a similar process here, it is called 'eminent domain'

"Eminent domain (U.S.), compulsory purchase (United Kingdom, New Zealand, Ireland), resumption/compulsory acquisition (Australia) or expropriation (Canada, South Africa) in common law legal systems is the inherent power of the state to seize for a supposedly public reason, a citizen's private property. expropriate private property, or rights in private property, without the owner's consent, either for its own use or by delegation of the taking power to third parties who will devote it to "public uses", the most common examples being public utilities, highways, or railroads."
http://en.wikipedia.org/wiki/Eminent_domain

and apply it to Toyota's plants. Evil foreign bastards, putting gm out of business. Better make sure we seize any foreign investment in the mining industry. Seize the evil communist lenovo plants.

Are they paying for the profit loss. Most companies tie up capitol expecting more than their money back.

First world countries that are based on socialist systems in Europe do not take assets.

It's a sovereign country purchasing rights to its own resources for the betterment of the people.

BIG difference...

right or not, it is not a transaction in a "normal" marketplace.

How did OUR oil get under their country anyway???



:sarcasm: <---- for the irony challenged....

As long as this is done within a democratic framework, and as long as there is fair compensation, what exactly is the problem?

Eminent domain is used all the time here to take assets, and yes the european social democracies have in the past nationalized industries. For example British Airways was a nationalized industry until that asshole thatcher sold it off.

If Toyota was a huge corrupting influence in our political process, using the great wealth it was extracting through its monopoly on automobile manufacturing and sales in our country to control our political system, I certainly think that an orderly nationalization of Toyota's assets here would be in order.

I remember he said he'd pay them the fair market value to purchase all the outstanding shares of Venezuela's phone monopoly. Is it a different protocol with oil infrastructure/resoruces?

That is why the headline is sensationalist bullshit. It gives the impression that this is an unjust taking. It isn't.

Check into the difference.

There is a long history of nationalizations (and privatizations) in Europe. The biggest disaster in this regard I can think of is one of the latter (UK rail system). At least learn the history before you make such statements.

"First world" perhaps says all we need to know. Generally, countries that are not "first world" are those where the "first world" interests seized everything long ago, and even after the official end of colonialism got to own the key assets and run the businesses to their benefit. If such countries now jump off the imperial consensus, tough.

The US example is absurd only because the US has advocated its own ownership models everywhere in the world, even invading countries for daring to think otherwise, so yeah there would be a rather spectacular hypocrisy if there were a takeover of the Toyota plants. Doesn't mean you might not see it happen after the dollar crash, depending on what regime comes to power here. (The justification will be that hell, those foreigners are the ones who dumped our dollar and left us in a depression.)

Companies possess no inherent right to future profit. It's too bad if they tie up their capital expecting more than their money back, but a state backed by democratic will has the right to pursue a policy that may involve nationalization. If the affected companies get compensation, they should say thank you for the earlier opportunities and get out. More likely they're going to wage war on the Venezuelan people for choosing their own interests rather than the companies'. I think this time, the people actually win.

anything of substance to either America or Venezuela. In fact, they've all caused nothing but trouble for America and Venezuela in their greedy pursuit of more power and money.

Personally, I don't even think that those particular corporations' owners should be compensated as well as Venezuela is compensating them for the nationalization.

Viva Chavez...

Hugo rocks!

They took over our government, and like a mafia takeover, proceeded to loot all the assets until nothing was left except a mountain of debt. Where is my share?

What they do with their own mineral and oil resources is not our concern. If ExxonMobil doesn't think its 10.50 billion dollar quarterly earnings is big enough, find somebody else's shoulder to cry on.

:sarcasm:

and in its modern interpretation

But, but, he knws we are WAY< WAAAAYYYY overextended

hopefully the people of Venezuela can continue to collectivize their society and put an end to exploitation.

Hasta la victoria siempre! Viva la revolucion! Comrades, come rally! To the final victory! Un pueblo unido jamas sera vencido!

Cheney is going apeshit over this, I promise you!

the administration is going nuts over this. yes the title sucks but that is what the Right Wing Yahoo News has given us. More propaganda. I am a Democratic Socialist so I think this is great news for Venezuela.

Can't do nuthin about RW Yahoo news. I suspect Hugo is going to stimulate the Venezuelan economy. Show what social democracy can do! We shall see.

has been growing since he took control.

I think they can turn Venezuela into a really big and prosperous nation.

He'd better be darned sure that Venezuela will never need another dime in foreign investment.

In the long run nationalizations can be very harmful.

just ask Allende.

However, Cuba has done pretty well for itself. Also, Venezuela does have very good relations with Russia, Iran and other countries, which will go a LONG way in making this an easier process.

he is nationalizing the "commanding heights" of the economy. These things can be run by the state while smaller scale business can be private. Norway has nationalized oil company and hospitals, Costa Rica has nationalized companies, and so do many other progressive states.

Of course, these economies are dubbed social democracies, but the rightwingers would have you think they're well on their way to Stalinism or Maoism.

but Chavez has also been talking about nationalizing things like stores, which would suggest more than just the regular nationalization that you see in those countries.

Nevertheless, there is a real double standard, Norway can nationalize to their heart's delight, but as soon as a Latin American leader tries the same thing, all hell breaks loose.

has nationalized oil, hospitals, colleges, health insurance, day care, and local owned electric and water. Sweden has one of the most socialist income distributions in the world...but yes the US attacks Latin America for wanting the socialist gains these ocuntries possess. Why? Because Latin Americans are supposed to be our slaves damn it! The right wing parties in Sweden and Norway have been in full swing trying to scrape away at their socialist gains.

the US trying to embargo Norway like they do Cuba? LOL

with these countries will at best only partially alleviate the loss of investment associated with their decisions. Perhaps the most important consequence will be the decline of educated people implementing projects in the country. They should have just put into place a royalty system with a price adjustment mechanism.

but it doesn't have to happen. With the USSR as a trading partner, Cuba did very well for itself for 30+ years (and is still doing pretty well today).

to the countries investing in them and the investment would certainly be smaller in magnitude.

I question you statement about Cuba doing quite well. On most standard of living indices Cuba does very poorly.

They would lose influence to the businesses who want to exploit them. No big loss there.

Cuba has a world-class medical system with universal access, universal housing, literacy rates that exceed the US', etc.... Cuba is doing more than well for itself in spite of the catastrophe of the USSR's fall.

countries with cash will be interested. And aside from that:


Venezuela doesn't "want the companies to go ... We just want them to be (minority) partners."

Private companies pumping oil elsewhere in Venezuela submitted to state-controlled joint ventures last year, and few resisted because they were reluctant to abandon Venezuela, which has the largest oil deposits outside of the Middle East.

While there is still interest in the oil because of high margins, future projects are less likely to be developed then in the absence of such actions.

Tsk, tsk. Next they'll be thinking that they deserve a share of the pie and denying Exxon's and BP's CEO's their golden parachutes. Ingrates.

Is this your point?

and yes..if we owned our own education, health and vital resources and threw corporate cash out of our elections, we would be a much more progressive and free nation.

Norway possesses the second highest GDP per-capita and second highest PPP per-capita in the world, and the highest position in the World on the UNDP Human Development Index (HDI) for the fifth consecutive year. The Norwegian economy has a combination of free market activity and government intervention. The government controls key areas, such as the vital petroleum sector, segments of telecommunications, the airline industry, health insurance, hospitals, banking and the electricity production. The control mechanisms over the petroleum resources is a combination of state ownership in major operators in the Norwegian fields (Statoil approx. 70% in 2005, Norsk Hydro 43% in 2004) while specific taxes on oil-profits for all operators are set to 78%, finally the government controls licensing of exploration and production of fields. The country is richly endowed with natural resources: petroleum, hydropower, fish, forests, and minerals. Norway has obtained one of the highest standards of living in the world, partly from petroleum production. Norway also has a very high employment ratio.

who despises their health care system. They pay very high taxes for poor service and two health care systems have developed: a private system for the rich and the inefficient government system for everyone else.

that's why they are rated best healthcare in the world.

I didn't say he was indicative of the entire system.

The Norwegian government has announced cancellation of debt worth $80 million owed by five developing nations. On Oct. 2 it relieved Egypt, Ecuador, Peru, Jamaica and Sierra Leone of interest payments on debts incurred for purchases over 25 years ago of ships built in Norway. Government spokespersons indicated that debt cancellation would not affect developmental aid from Norway. In a first for creditor nations, Norway based its action on a reappraisal of the original decision to lend money. The impetus to sell ships came from a need to prop up a dying shipbuilding industry, not from consideration of benefits for poor nations. Action Africa sees Norway’s action as significant for African nations. Co-Executive Director Ann-Louise Colgan, quoted on AllAfrica.com, said Norway’s “willingness to accept responsibility for illegitimate lending set an important precedent that other international creditors must heed. can no longer turn a blind eye to their own historically unfair and corrupt lending practices.”

It encourages irresponsible behavior among indebted nations, also known as the moral hazard. Corrupt leaders have no incentive to use funds wisely if they now the debt will be forgiven at a later date. Then they just borrow some more. Look at studies that correlate GDP with borrowing and debt forgiveness and you will see a statistically significant correlation between negative GDP growth and increased borrowing and forgiveness. Furthermore, it punishes those nations that attempt to achieve fiscal responsibility. What incentive do they have to repay loans if they see other nations running being essentially rewarded for their behavior?

on cases where it was a fair loan. Many tiimes though, these countries economies are decimated and other countries give them predatory loans as their only option. Norway openly admits they did this and ripped these countries off so they are absolving them of that debt to rectify that. I see that as a good thing and shows that they have a concience.Now if France gave Canada a loan for example, and Canada said they were willing to pay it and the loan was fair...but they just don't pay it...I would side with you.

for poor nations is to avoid debt forgiveness and foreign aid as well. Fair loans are ok but debt forgiveness and foreign aid has not been proven to help these countries economically. What is needed is rule of law, low tariff barriers and trade barriers, and a commitment to individual freedom and free trade, among other things. Concerning your health care ratings, I would be interested to see a study. For example, what kinds of things were rated and what kinds of questions, if any, were asked. I ask because I have seen "studies" that only rate the number of people who are covered, which is a poor indicator of quality if you ask me.

with this approach is that the government is not in power to pay back the debt in the first place. Interest payments can also cripple a countries economy. There is also an equity consideration here. Should people (who in many cases receive no benefit from government loans) be required to pay back these loans through high taxes if a country ever "gets it together"?

I also agree that for a nation to develop it is critical to maintain a well defined and efficient set of property rights. With out this corruption will reduce, if not eliminate the ability for aid to reach those who need it. Aid is beneficial but the focus should be on giving people the tools necessary to stand on their own. In particular this means developing strong education and job training systems, and working to maintain and improve the health of the population.

http://news.bbc.co.uk/2/hi/programmes/newsnight/6362783.stm


“Vulture fund” companies buy up the debt of poor countries at cheap prices, and then demand payments much higher than the original amount of the debt, often taking poor countries to court when they cannot afford to repay. Investigative journalist Greg Palast reports on one company trying to collect $40 million from the government of Zambia after buying its debt for $4 million.

http://www.democracynow.org/article.pl?sid=07/02/15/1528209

In 1999, a 'vulture fund' called Donegal International bought a debt owed by Zambia, originally worth $15 million and then valued at about $30 million, for a knock-down price of $3.3 million. Now it has sued Zambia for the full amount, plus interest and costs – a staggering total of over $55 million! On 15th February 2007, a London court rejected the size of Donegal's claim, but said that under law it is still entitled to something from Zambia.
The exact total is to be determined, but may be as much as $20 million. This would be half of the amount Zambia is due to save from debt relief this year: but it desperately requires all its money to invest in essential social services and infrastructure development.

http://transafricaforum.org/StoptheDebtVultures.html

I have never read such" irresponsible behavior " or opinion from a talking head, get your facts straight.

who forgive their debts and them turn around and loan them more money. This wretched cycle of debt forgiveness coupled with foreign aid has never brought a country out of poverty. This happens through free trade, secure property rights, and the rule of law.

"free trade," ?????" secure property rights"???? , and the rule of law. (exxon rules)
Love to hear those Reaganistic talking points again.

The system is not as simplistic as your talking points.

The more aid they received the poorer the country became and the more they borrowed. When are people going to start holding the corrupt leaders of these nations accountable and quit blaming everyone else?

I know, how about bringing back debtors prison? That will fix their minds with the moral clarity of paying every damn cent they owe.

I have no problem with this but the IMF and the World Bank lend money to nations that can't get private loans. They can't get these loans because the are huge credit risks. I sense that some of you think I am saying "fuck these countries" but this is not the case. On the contrary I think such policies are extremely harmful to them and are worsening their conditions. I hope one day it will stop and they will be allowed to pull themselves up.

consists of what has been stolen from private citizens.

in a fashion that generates wealth. With the exception of initial transfers of capital, looking at it is stolen is not the way to approach the issue. The issue should be approached by whether the market (used in the broadest sense of the word) is effective in accomplishing the desired goal. Therefore a more appropriate way to look at the corporation would be in terms of things such as wealth-adjusted equality measures and general wealth generation.

society including those who promote equality to a much greater extent then America does. The major difference between America and countries who promote a greater sense of equality are the institutions in place and the incentives that these institutions give individuals. Culture (not just of the wealthy and middle class) also plays a role in the outcomes but over time many of the cultural issues would subside.

taken to its logical conclusion. When you allow people to have private property, you allow them to consolidate it and subsequently deprive others.

The difference between "private citizens" and "corporations" is just a matter of time.

Capitalism inevitably consolidates wealth in the hands of the bourgeoisie. Capitalism and private property must therefore be abolished.

ownership -- did you not read the article?

but your supposed to use the title of the article and that was the title of the article.

taking a 60 percent stake in it.

so I view government seizure of any percentage of private property as tyranny. I hate the fact that our Constitution has an eminent domain clause. From the natural rights tradition, no citizen has the right to forcibly take another's property by force, therefore, this right cannot be transferred to government.

Even they generally admit that eminent domain is a social requirement. In the simplest case, rerouting the bridge can be impossible, and the lone holdout can therefore name his price.

Here: http://www.reason.com/news/show/29069.html

Have a nice day.

I just don't like it and in the case of Venezuela, Chavez's actions constitute legalized theft.

There is no theft. It is a legal taking.

it's taking back what belongs to the people. Owning property equals exploitation, deprivation and inequity. Private property is the basis of all the ills in our society.

The solution is to abolish this terrible system.

Sharecropper: How come I have to give you half my crops when I do 100% of the work growing them?
Landowner: Because I own the land.
Sharecropper: Why do you get to own the land?
Landowner: Because my granddaddy fought Indians for this land?
Sharecropper: Hey! Can I fight you for it?

What you are defending is a class of warlords who would like to turn everybody else into slaves or serfs. There are a lot of things which, as the Grateful Dead used to sing that "are not made by the hands of men." I don't think that anybody is entitled to private ownership rights in any of those things--it's exactly the same as slavery, where we used to justify ownership of other people. For things that are made by the hands of men, that's a different story.

Private property rights ensure efficient use of resources and a rule of law that protects property rights is absolutely necessary for a successful economy.

Society should own capital. Anybody using capital should and must compensate society for use of that capital in the form of a "useage fee" or, in other words, a tax. You can use capital to start your own firm, expand it, or even sell it to others, but nobody should have a right to own capital, only a privilege to access capital.

When private individuals own capital they employ it to its most efficient uses. Without private ownership you have no entrepreneurship and the economy stagnates. Just compare the real advancement of the US to the Soviet economy and look who went further.

The fallacy of many in grasping any notion of socialized ownership of capital is that they invariably reference the old model of a state monopoly in a particular market. (The Soviet Union) You should be free to purchase capital such as land, buildings, equipment, etc. to start your firm and should even be free to take out loans or receive grants to facilitate your business. You should be able to employ that capital however is necessary except that you should pay taxes for the privilege, not the right, to that capital. Otherwise, you automatically forfeit that access, and society can repossess your capital and give it to someone who is willing to employ that capital and pay the useage fees to start a new firm.

What most people fail to grasp is that they cannot separate the notion of a free market mechanism from the notion of an absolute right to own capital or the notion of society owning capital. Whether or not capital is owned by a few people or owned by many is different from whether a free market mechanism for the distribution of goods and services exists.

If capital is a privilege then someone gives that to me, which means someone owned it before I did. Sorry, but government does not "give" anyone the right to capital because government doesn't possess it in the first place. Capital is unowned or non-existent until someone creates it. Individuals are the most efficient owners of capital because they assume the risk and operate by the profit motive. The owner has the incentive to employ the capital efficiently or else he looses his investment. When government owns something it does not operate by the profit motive and is thus inefficient. The tax you speak of is also inefficient. On the margins, taxes prevent someone from owning capital they otherwise could have purchased in the market. Taxes distort markets, reduce output, and encourage wasteful rent-seeking as people look for ways around the taxes.

Ever. That's a form of slavery. Owning your own means of production is fine, as is collective ownership at whatever level.

If capital is a privilege then someone gives that to me, which means someone owned it before I did. Sorry, but government does not "give" anyone the right to capital because government doesn't possess it in the first place.

An institution such as government rules the land on which it is sovereign, and that institution's power is derived from people directly. Any institution established by people for the specific purpose of ensuring the well-being of the population necessarily claims the power of regulation over all that falls within its jurisdiction including the land and the resources it may provide.

Capital is unowned or non-existent until someone creates it. Individuals are the most efficient owners of capital because they assume the risk and operate by the profit motive.

Again, I disagree. Capital can be anything from iron ore to stainless steel, from unused land to farmland. While I may get more utility from stainless steel than rocks with high concentrations of iron in it 1000 feet inside a mountain, the simple fact is if I am to make a profit off any of it, then I cannot do so in a vacuum. I exist in as much as I am a neighbor of others in society. As such, anything I do means society is impacted by what I do. Society has as much right to see it is not harmed as I have the right to employ the capital for profit. There has to be a balance between societal needs and individual drive.

I can bring the iron ore from out of the earth, refine it, turn it into steel, and sell it for a profit, but the useage fee for accessing that which society owns would come in the form of something such as the income tax. The tax would generate the revenue to see that I am not exploiting workers or polluting the environment that all exist in. In other words, the tax ensures that society has an ability to defend itself against possible excesses by me, but the tax revenue can also go to not only establishing or capitalizing the start-up of new firms but also to expand trade and commerce in general.

When government owns something it does not operate by the profit motive and is thus inefficient.

I agree, this is why I condemn the Soviet Model. In the Soviet Union, it's true that the government owned all capital. That's not what I have an issue with. What I have an issue with is 2-fold: 1) No democratic mechanism for governance and 2) No functioning free market pricing mechanism.

The latter is the issue that caused the economy to lag so far behind and to a lesser extent the first reason. The simple fact is a government structure simply cannot, nor will it ever, be able to process the amount of information necessary to govern any economy such that it achieves what is known as Pareto Efficiency. The result is waste of resources.

This is why I would argue that with nations transitioning from command economies such as the Soviet Union to market socialism, then several things need to happen.

1. The state monopoly in a particular market should be broken up into several smaller or even regional firms as with Ma Bell in the 1980s.

2. Each of the pieces should be turned over to the workers collectively, essentially worker co-ops. The workers can decide on their own how to set levels of production, management structure, pricing, etc.

3. Each of these new co-op firms should be free to bring their goods to market and sell in an open market at whatever price the firm feels is competitive. These firms would then compete, and a functioning price mechanism emerges.

4. The tax revenue generated from the tax on the profits each firm generated can be used to regulate these firms, capitalize the start-up of new firms in the market (such as more worker co-ops as per market socialism as well as private firms), and expand trade in general for the benefit of all.

The tax you speak of is also inefficient. On the margins, taxes prevent someone from owning capital they otherwise could have purchased in the market.

That's why I'm against regressive sales taxes or an up-front licensing fee. What I'm talking about is an income tax as the "useage fee" or the "licensing fee," such as Clear Channel Communications paying a licensing fee for use of public radio airwaves, which are owned by society and administered by the government, hence the term "public."

Taxes distort markets, reduce output, and encourage wasteful rent-seeking as people look for ways around the taxes.

That depends on how they're implemented. If we taxed production, instituted sales taxes, of course. The income tax's only purpose is to raise revenue, not benefit special interests, but it should not be a regressive tax while raising revenue. In general, I believe a progressive income tax is good provided that in real terms it isn't taxing the poor and small businesses more heavily than firms more capable of paying a higher bracket. In light of the Laffer Curve, the tax rates should be set such that maximum utility can be derived from the income tax. If I set a tax rate to 0 percent, then necessarily I get no income. If I set the tax rate to 100 percent, then eventually I still end up with no income because it necessarily alters behavior, which implies that somewhere in between the two extremes is a tax structure by which we can gain the most utility to do the aforementioned things I said previously with expansion of trade, start-up of firms, etc.

I'm not arguing the current tax code is efficient. By any measure, it is regressive. Do you realize how many billions of dollars are spent each year on tax accountants and lawyers just to find and claim special interest tax credits and maintain compliance with the labyrinthian tax code? It's ridiculous. The original income tax was a single flat rate aimed only at the rich. It was simple and easy with which to comply, and one of the earliest applications of the tax revenue was to regulate large firms of the era like US Steel or the railroad barons, but because of special interest lobbying over the last several decades, loopholes, tax credits, etc. were written into the code, and now we have what we see today.

While I'm not arguing for implementing market socialism across all the economy, I believe limited implementation of it is possible and necessary in some markets.

Please explain how this can be done. How do you (uniquely) maximize utility across a group of people?

That's not the generally defining characteristic of our tax code, especially when capital gains tax and taxes on dividends are invariably lower than what most people pay in payroll taxes, and the vast majority of Americans derive their income from payroll income, not capital gains.

What I'm arguing for is a progressive tax code. Nominally speaking, the current tax brackets appear to be progressive. In practice, they're anything but progressive. I want to establish a tax bracket specifically targeting those who make beyond 500,000/year and another for those making beyond 1,500,000 a year, and I want to repeal Bush's capital gains tax cuts entirely.

How do you compare the gain and loss in people's utilities in a manner that maximizes them in a way that is presumably unique?

If we're talking about social programs, this program I suggest to organize workers, the war in Iraq/Afghanistan, the national debt, etc., naturally we're all going to come to a different idea of what is sufficient in terms of a progressive payroll income tax, capital gains tax structure, etc. to sustain these programs, the war, and pay down the debt at the same time.

"I don't think the practical tax rate should be higher than X percentage points." The Laffer Curve, at least in this context, suggests the answer is not 0 percent or 100 percent, but it doesn't suggest what the answer in the middle should be. Some people think 90 percent is the answer for X. Others may think 60 percent is the answer for X, and still more may think 50 percent is the answer, since it is equidistant from 0 and 100. I'm speaking, of course, of the highest tax bracket. We're not talking about taxing the working poor at 60 or 90 percent of their payroll income. If we assumed capital gains is taxed the same as payroll, then naturally the percentage point there would be the same as X, but I doubt the business world would willingly want to pay 50, 60, etc. percentage points out of the income they derive from trading shares on the stock market to the income tax.

As it stands, the current maximal payroll tax bracket is set at 35% for the people at the top and a maximum of 15% for capital gains. I guess the question here is whether you believe a working class person making 35,000/year should qualify for the 25% tax bracket, while somebody in the top 1 percent who derives most of his money from capital gains has his capital gains taxed at 15%. (As far as I can tell, nearly everybody in the top 1 percent derives the bulk of his income through capital gains)

How does someone tell if $100 is worth more to me then it is to you? Once that has been decided how much money would have to be given to me for someone to say that it is the same as giving you $100. If you have an issue with using money in this comparison the result could be achieved using any type of good. My conjecture is it is impossible to make these distinctions in a precise or even somewhat precise manner utility theory.

"the rate at which it raises sufficient revenue but does not depress or negatively impact trade and commerce anymore than is necessary."

The first thing that comes to mind is what happens to the incentives for "firms" to adequately maintain capital. When firms rent capital there is a major moral hazard issue occurring. Another issue is that many forms of capital are firm specific. How do you rent out capital that can only be employed by one firm? What happens if they only choose to use the capital for a short time?

In some cases, it may be preferable for the state to directly intervene, such as with the health care industry or power and so forth.

Tell me, what happens now when a firm fails to adequately maintain or upgrade capital in the face of competition? The income tax essentially serves as the agreement with society that whatever it is that you do in business affects society. As a result, society can exercise the authority to defend itself against your possible abuses by taxing a portion of your profits and using that revenue to regulate you and promote trade and the well-being of everybody else.

By taxation of income instead of a tax on capital or a tax on production, this avoids the problems of firm-specific capital that cannot be used by anyone else when we talk of taxes on capital.

What I'm essentially arguing for is the establishment of a national "public bank" fueled by government revenues derived from taxes. The national bank disburses funds to community branches. The national branch is relegated to simply disbursing funds to community branches in accordance to population size.

The community branches would disburse funds into the community for the specific purpose of organizing workers into worker cooperatives, expand existing cooperatives, and promote trade and commerce in general. Pre-existing firms, if they wish, can also choose to sell out to the public bank at fair market value, and the firms would then be reorganized and relaunched as worker co-ops. The point of this is that over time more and more workers will be absorbed into the co-op sector, and they would enjoy the fruits of their own labor. This means workers would now have a choice between the private sector and a new co-op sector.

These banks would operate according to the will of each respective community. This means their books must be open to the communities, and their budgetary meetings should be held in public so that input from the community can be gained. A budgetary meeting held for shareholders in a corporation operates in roughly the same fashion. The only difference is the shareholders are those who live in the community.

For large ventures or projects that may require the input of multiple communities, I have been debating the notion of setting up regional branches on top of community branches for region-wide projects like infrastructure investments like power plants or a new railroad line connecting two major cities.

The first thing that comes to mind is what happens to the incentives for "firms" to adequately maintain capital. When firms rent capital there is a major moral hazard issue occurring. Another issue is that many forms of capital are firm specific. How do you rent out capital that can only be employed by one firm? What happens if they only choose to use the capital for a short time? (We haven't even started to discuss the role of intellectual property.)

Thanks, but no thanks.

No one has the right to own another person. Other people are not capital. Individuals have the natural right to their life, liberty, and property and no one can take that from them.

between owning someone and owning their labor? Not much, at best.

Individuals do NOT have the right to property, that is a lie, societies define rights. So yes, we WILL take property away from you and that is FULLY justified.

Could you at least drag your argument into this century?

So if someone owns a house, that is a bad thing in your eyes? I shouldn't own my car, or the clothes on my back? Really, you've lost me. Enlighten please.

Only so many people can be landowners, thus forcing a really big majority of people into becoming automatic serfs, with no rights to exist whatsoever, because every place is somebody's private fiefdom. Owning things that were "made by the hands of men" is fine. No one should have the right to own land, water, or natural resources.

Historically, look at situations where land was owned in common, that is, the state owned the land. The land was destroyed. This is illustrated in the tragedy of the commons. When individuals own their own land they have an incentive to preserve it because it is how they profit. I cannot stress it enough, collectively owned resources are depleted much faster than privately owned resources. If an individual does not own his own land, then why should he build a house on it? At any moment the state could take it for a public use. Property rights are a natural right. In a state of nature I have the right to own property, hence, no one can take that right from me, or you for that matter.

You say you own it and kill anybody who disagrees. This is akin to claiming the right to own slaves.

Stealing property is what some people with bigger guns have been doing for centuries. When done on a large scale it's called colonialism.

After a thief sells his booty to a fence, how many subsequent peaceful transactions does it take to make the original theft legitimate? The first "owner" of the piece of land I live on acquired it by sticking a gun into the faces of some Duwamish natives. That every transaction since then has been peaceful and legal doesn't alter that fact in the slightest.

An economy can't function in that way. Stealing from the natives was wrong and I deplore anyone who says otherwise but how is that to be corrected?

--ought to be publicly owned. Private individuals could then lease use rights.

If everyone else has a right to the land then I fail to see how one can lease the right to it. If a large group of individuals want to get together and buy a large piece of land or a business that is great. It is called a publicly traded company. But in that case, the individuals will all have an incentive to employ the resources as efficiently as possible in order to make a profit. If they are not successful then they incur a loss and have to restructure their methods or loose the property, at which point someone else with a more entrepreneurial and industrious spirit will take over. Think about how well privately owned land is taken care of versus publicly owned. Compare your home (or apartment) to government housing. Compare the trash in your yard to the trash on the side of the highway.

I must say, I have to get up at 6:30 so I'm going to hit the sack. I have enjoyed the debate on my first day at DU and I hope you guys will continue to allow a libertarian to reside amongst you. I think the debate can be beneficial to a lot of us. However, if I am kicked off please do one thing and sign the Free Kareem petition. Abdelkareem is an Egyptian blogger who was sentenced to four years in prison last week for supposedly insulting Islam and Hosni Mubarak. This is a terrible injustice that we may still be able to correct.

great points. I can't agree more.

government http://www.projectcensored.org/publications/2004/12.html and stuff like that. So perhaps they feel justified in trying to get control of their country's resources? I don't know, but I suspect in their place we'd feel the same way they do.

When will we learn that the best foreign policy is one of strategic independence and free trade with other nations. Undermining and overthrowing governments has never worked for us and it never will.

Why do you keep calling it that?

Or was it sort of foisted upon them?

If someone took your house, paying you for it, and then telling you that you could still use the bathroom, would that be okay with you?

And this is not 'somebody's house', it is control over the extraction and distribution of Venezuela's oil resources.

I guess that's good for the impoverished Venezuelan people. I'm so glad he's looking out for them. :eyes:

So they would have you believe...

American conservatives, for example like, that Bush stood up to the big bad UN. In Canada, both Albertains and Qubecois like it when their respective provincial governments stand up to the federal government. I could go on.

Were they legitimate?

Thats great! Good for them..ShrubCo is going to throw a fucking fit!! Hahaha

I am such a socialist..I dont think we should have to pay for Water, Electricity, Gas or any type of energy necessity. If something is going to benefit everyone as a whole, why do we have to get raped by companies to use it? Some people can not afford to heat there homes..

and the best way to solve the problem would be to increase the price rather then making easier to squander.

Or any of the utilities for that matter, as long as the private entities are fairly compensated.

Implemented fairly, it could be a huge boon for the consumer. However, Chavez doesn't need to nationalize everything. I think a mixture of state-owned and private enterprise would be healthy for the economy and not scare away potential foreign investors.