A Liberal Theory of Natural Resource Property Rights A dissertation presented by Joseph Mordechai Mazor to The Committee on Political Economy and Government in partial fulfillment of the requirements for the degree of Doctor of Philosophy in the subject of Political Economy and Government Harvard University Cambridge, Massachusetts May 2009 Copyright © 2009 by Joseph Mordechai Mazor All rights reserved. Dissertation Advisor: Professor Dennis Thompson Joseph Mordechai Mazor A Liberal Theory of Natural Resource Property Rights Abstract A variety of contemporary political disagreements, including debates over fossil fuel ownership in the Arctic, carbon emission standards, indigenous land rights, and the use of eminent domain, raise pressing questions of justice. Yet existing theories of natural resource property rights are underdeveloped and thus ill-equipped to answer these questions. I develop a liberal theory of natural resource property rights which is founded on the equality of natural resource claims, which advocates for equal division of natural resources, and which considers how the principle of equal division can be justly implemented. I begin by defending the equality of natural resource claims. I argue that people should be seen as having equal claims to the pristine natural resources that remain after all those who contributed to the value of these resources have been appropriately compensated. And since the value of these remaining natural resources is not generated by anyone’s labor, I contend that libertarians ought to endorse equal claims to these resources. I argue that liberal egalitarians have good reasons to endorse equality of natural resource claims as well. I then consider how equal claims to natural resources should be respected. I develop criteria for evaluating conceptions of equal claims and use these criteria to dismiss Collective Ownership, First Possession Appropriation, Common Access, and iii Harmless Appropriation conceptions. Instead, I defend an Equal Division conception which grants each person an equal amount of natural resources. Finally, I consider how the principle of equal division should work in practice. I engage with the problems of heterogeneity, unexpected change, future people and multiple nation-states. I propose a system of leases of varying lengths with the rents to be distributed equally. Furthermore, I draw the following conclusions: 1) Certain decisions regarding non-separable resources such as the air should be made collectively. 2) We have obligations to each other to conserve for future people. 3) Natural resources are uniquely subject to international redistribution because they are both individually and nationally undeserved. 4) Preventing the appropriation of the Arctic seabed by particular nations is feasible step towards achieving a more just global distribution of natural resource property rights. iv Contents Volume One Acknowledgements .................................................................................. x Introduction: Liberalism and the Problem of Natural Resources ..... 1 I.1 A Liberal Theoretical Approach ..................................................... 5 I.2 Why Liberalism? ............................................................................ 7 I.3 Natural Resources in Liberal Thought ........................................... 9 I.3.1 Social Contractarians ............................................................ 10 I.3.2 Classical Liberals .................................................................. 16 I.3.3 Contemporary Liberal Supporters of Equal Claims .............. 19 I.3.4 Contemporary Liberal Opponents of Equal Claims .............. 22 I.4 Lessons, Lacunae, and Unresolved Controversies ......................... 23 I.4.1 Natural Resources and their Value ....................................... 24 I.4.2 The Libertarian Argument .................................................... 25 I.4.3 The Liberal Egalitarian Argument ........................................ 25 I.4.4 Rejecting Alternatives to Equal Division .............................. 26 I.4.5 Defending Equal Division in a Simple World ....................... 27 I.4.6 Heterogeneity ......................................................................... 28 I.4.7 Unexpected Change ............................................................... 29 I.4.8 Future People ......................................................................... 30 I.4.9 Multiple Nation-States ........................................................... 31 I.4.10 From Theory to Practice ...................................................... 32 I.5 Non-Liberal Thinkers and Natural Resources ................................. 33 Conclusion ............................................................................................ 37 Chapter One: Natural Resources and their Value ............................... 39 1.1 Natural Resources Defined ............................................................. 40 1.2 Do Natural Objects Lack Value? .................................................... 43 1.2.1 The Marginal Product Theory of Value ................................ 44 1.2.2 The Role of Development Labor ........................................... 46 1.2.3 The Role of Discoverers and Inventors ................................. 49 1.3 The Contribution Determination Problem ...................................... 53 1.4 Equal Claims to Purely Natural Resources ..................................... 65 Conclusion ............................................................................................ 69 v Chapter Two: The Libertarian Argument ........................................... 72 2.1 Problematic Libertarian Equal Claims Foundations ....................... 74 2.1.1 The Theological Claim .......................................................... 74 2.1.2 Right to Substantive Self-Preservation .................................. 76 2.1.3 The Initial Liberty Argument ................................................ 78 2.2 A New Libertarian Argument ......................................................... 85 2.2.1 Labor’s Role .......................................................................... 88 2.2.2 Purely Natural Resources as Labor-Free ............................... 96 2.2.3 A Presumption of Equality of Resource Claims .................... 97 2.2.4 Refuting the No-Initial-Claims Position ................................ 99 2.2.5 Combining the Premises ........................................................ 108 Conclusion ............................................................................................ 109 Chapter Three: The Liberal Egalitarian Argument ........................... 111 3.1 Purely Natural Resources and Social Cooperation ......................... 112 3.2 Natural Resources as a Subset of Undeserved Resources .............. 116 3.3 The Case for Treating Natural Resources Separately .................... 119 3.3.1 Not Generated by Social Cooperation .................................. 120 3.3.2 Fewer Constraints in Claim Distribution .............................. 121 3.3.3 Responding to Objections to Separation ............................... 128 3.4 The Arguments for the Equal Claims View ................................... 131 Conclusion ............................................................................................ 137 Chapter Four: Rejecting Alternatives to Equal Division ................... 140 4.1 Two Preliminary Clarifications ..................................................... 141 4.2 Criteria for Evaluating Equal Claims Conceptions ........................ 142 4.2.1 Distributional Equality .......................................................... 143 4.2.2 Dynamic Equality ................................................................. 148 4.2.3 Efficiency .............................................................................. 149 4.3 The Problems with Collective Ownership ..................................... 152 4.3.1 Joint Ownership .................................................................... 153 4.3.2 Democratic Ownership ......................................................... 156 4.4 The Problems with First Possession Appropriation ....................... 162 4.5 The Problems with Common Access ............................................. 172 4.6 The Problems with Harmless Appropriation ................................. 177 4.6.1 Locke’s Strong Proviso ........................................................ 178 4.6.2 Nozick’s Weak Proviso ........................................................ 187 Conclusion ........................................................................................... 192 vi Chapter Five: Equal Division in a Simple World ............................... 194 5.1 Equal Division and Lockean Theories .......................................... 196 5.2 A Simplified World ....................................................................... 200 5.3 What Kind of Equal Division? ...................................................... 202 5.4 The Right Standard for Equality of Shares ................................... 211 5.4.1 The Pure Incremental Benefitist Approach? ........................ 212 5.4.2 A Resourcist Equal Division as the Ideal? ........................... 215 5.4.3 A Justified Incremental Benefitist Equal Division ............... 216 5.4.4 The Pragmatic Argument for Equalizing Amounts .............. 218 5.5 What Constitutes Ownership? ......................................................