Thursday 6 October 2005

Just say "no" to the oil

I came across an article by Doug Casey in the October issue of Liberty.

Casey writes:

In any country, the level of prosperity is determined by things like the level of personal freedom, respect for property rights, integrity of civil institutions, and cultural attitudes in general. Contrary to popular opinion, a country's geography and resources have almost nothing to do with how wealthy it is. If anything, they tend to be counterproductive, acting more as inducements to theft and lethargy rather than enterprise and hard work.
I wrote along similar lines last month:
Owning lots of oil isn't necessarily a recipe for prosperity. Far more important is a culture that respects property rights and whose people admire and wish to emulate entrepreneurs. Sadly, that doesn't sound like Scotland, does it? Better to say, proudly, "It's Scotland's Adam Smith", rather than "It's Scotland's oil".
I want to consider the question of how a fiscally independent Scotland would structure its tax policy, a subject that may no longer be entirely hypothetical given that the traditionally unionist Scottish Conservatives and some media commenters are now openly advocating what's become known as "full fiscal freedom":
THE Scottish Tories are secretly exploring radical plans to give Holyrood control over a range of UK taxes, including stamp duty, excise duty and VAT, The Scotsman has learned.
Let's go back to those "resources" mentioned by Mr Casey.

I've never understood why so many people think that the UK government is entitled to tax North Sea oil but that a Scottish government wouldn't have the same right in the event of either complete national independence or under "full fiscal freedom" in a UK context. It's fairly straightforward really: the oil's in Scottish waters, even with the recent redrawing of the maritime boundary that only makes sense if you think that Dundee is in East Anglia. And if, under "full fiscal freedom", it wouldn't be "Scotland's Oil", whose would it be? Norway's?

But if we go back to Mr Casey's point, possession of "resources" could make a country worse off. So perhaps a radical Scottish government shouldn't want to lay claim to North Sea oil. Not only that, giving it to England, or Norway or even the Faeroe Islands could, under a Caseyian analysis, be considered a hostile act!

So who should get the oil? It's quite simple really. I contend that oil in the North Sea doesn't belong to any government - Scottish, English, British or Norwegian - and that no one has the right to tax it. The oil belongs to those who discovered it and mixed their labour with it. In other words, it's Shell's oil, and BP's oil, and Exxon's oil.

If the Tories want to be really radical they should announce that a fiscally independent Scotland would give the oil back to its rightful owners and finance what little state expenditure that they could justify (if any) with a low flat tax, preferably on sales rather than income. Such a policy would make Scotland the most prosperous place in the world.


David Farrer said...

Comments made on previous template:

Squander Two
> one quarter of the world's undiscovered oil and gas resources lies in the Arctic, according to the United States Geological Survey. 
What utter bollocks. If that's true, then the oil is no longer undiscovered, is it? 
> The United States is losing any claims it had to leadership of the international community. 
Gosh. I bet the Americans are dead worried.

17 October 2005, 22:23:26 GMT+01:00
– Like – Reply

On maritime boundaries, late news confirms that the divide is crucially important for economies. 
The New York Times reports on the scramble for territorial rights in a thawing Arctic. 
Fisheries and sea lanes are prizes. Moreover, "one quarter of the world's undiscovered oil and gas resources lies in the Arctic, according to the United States Geological Survey."

12 October 2005, 09:32:38 GMT+01:00
– Like – Reply

David Farrer
I’ve tried Google but can’t find the details! As far as I remember the boundary out from Berwick was altered a few years ago to extend English jurisdiction northwards to cover waters close to the Scottish landmass up to somewhere off Dundee. The purpose was to settle which courts would deal with fishing matters but the SNP were worried that the precedent could lead to the boundary being pushed even further to the north thus having implications for oil in the event of independence.

10 October 2005, 19:07:30 GMT+01:00
– Like – Reply

Interesting point that any government in Westminster has the power to deprive Scotland of its economic resources, by redrawing boundaries for example. The cards are heavily stacked against the Scottish economy - the Scottish Executive of course owes allegiance to its masters. 
Moreover, the effectiveness of public spending is being seriously questioned. The latest was yesterday.

10 October 2005, 09:57:55 GMT+01:00
– Like – Reply

"the recent redrawing of the maritime boundary": what's this? Tell me more, please.

10 October 2005, 02:15:38 GMT+01:00
– Like – Reply

The United States is losing any claims it had to leadership of the international community. Some press comment last week is here and here. 
And the protection of Scotland's resources? NATO's multilateralism will be key to the new world order agreed in September.

9 October 2005, 11:25:08 GMT+01:00
– Like – Reply

David Farrer said...

Sandy P
--The General Assembly of the UN met last month and resolved to find multilateral solutions to peace and collective security. So the UN's here to stay. -- 
Maybe, maybe not.  
There are plans for a league of democracies. 
And now the UN wants to control the net - 1 world government, anyone? 
No way, no how. UN out of the US!

9 October 2005, 05:36:03 GMT+01:00
– Like – Reply

A nation lives or dies by its ability to compete. It must therefore use all its resources to best effect. 
The protection of resources is something that may be addressed shortly by the United Nations, who resolved last month to create a Peacebuilding Commission. On this multilateralist theme, the Director of Policy at NATO envisaged a couple a years ago that the UN's bidding would be carried out by a security alliance of NATO and mini NATO's around the world.

8 October 2005, 11:49:00 GMT+01:00
– Like – Reply

to advocate a different point of view, might it not be in the benefit of the public to siphon off more of the resource-extraction revenue by laying claim to the oil if this could be used to strengthen civil institutions and provide new opportunities for entrepreneurs? Directing a larger sum of public revenue towards opening up new avenues of economic activity through widely available education, research and incubation might be worth more than "the example" of following strict economic principles in this case.

8 October 2005, 07:29:16 GMT+01:00
– Like – Reply

The General Assembly of the UN met last month and resolved to find multilateral solutions to peace and collective security. So the UN's here to stay.  
Resource conflicts will surely escalate, but we lack a global mechanism for protecting - say - Scotland's oil.

7 October 2005, 15:39:58 GMT+01:00
– Like – Reply

Friday Annan
The United Nations? Are you nuts?

7 October 2005, 14:15:18 GMT+01:00
– Like – Reply

A report was published last month on Britain's energy future. It recommends self-sufficiency in the UK for energy. Therefore if Scotland lays claim to its natural resources, we'll likely need to spend a fortune to defend them.

7 October 2005, 11:50:28 GMT+01:00
– Like – Reply

The control of natural resources is an intriguing problem still to be addressed satisfactorily by the United Nations. For example, see the political plot conjured up by writer Patrick Robinson.

6 October 2005, 19:45:51 GMT+01:00