Friday, March 28, 2003

Power to the Producer

Instapundit contemplates Lou Dolinar's proposal for Iraq's oil. Dolinar writes:

Our government should announce -- soon -- that the new postwar Iraqi administration will "personalize" the nation's oil revenues by establishing an Iraqi national investment trust -- The Iraqi People's Freedom Trust -- that will receive a major share -- say, 50% -- of all future Iraqi oil earnings.

The rest can go to central government and federal regional governments on some per capita basis.

I think Dolinar's proposal is a terrible idea. Iraq's oil is not the property of all Iraqis---it's the property of those who harvest it. Apply Dolinar's proposal to an industry like farming, with 50% of the profits going to the Iraqi people and the other 50% going to the government, and I think it's easy to see just how defective such a proposal would be.

I say Iraq’s nationalized industries, including its oil production facilities, should be privatized by auction to the highest bidder, and all auction proceeds should go to the Iraqi treasury. No distinction should be made between Iraqi and international bidders, and under Iraqi law, foreign ownership rights should be enforced with the same strength as domestic ownership rights.

Iraq has lived under bloody socialism for too many years. The antidote is not more socialism, but freedom and individual rights, including property rights. Instead of "power to the people," Iraq needs "power to the producer."

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