image: Wikimedia commons (link).
Where do natural resources come from?
What is the source of the soil of the earth, the rushing rivers, the majestic forests, the sunshine that enables all life on our planet, the minerals in the earth which feed the soil and allow plants to grow, or even the very air we breathe?
These resources are described as natural resources because they are the gifts of nature. In the ancient myths and sacred traditions given to all the cultures around the globe, these resources are universally understood to be the gifts of the gods, given to men and women for their benefit.
Previous posts such as this one and this one have cited as an example the well-known myth surrounding the gifts of the god Poseidon and the goddess Athena to the people of the Attic Peninsula in Greece, and to the city of Athens in particular, as evidence that the ancient myths portray natural resources as gifts of the gods to the people of a land (this particular myth is even cited by Plato).
It should come as no great surprise, then, to note the strong parallels between the rise of literalist christianity, with its attendant destruction of original or indigenous sacred tradition beginning in the Mediterranean and in western Europe (and spreading elsewhere in subsequent centuries), and the rise of feudalism, with its seizure of land, forests, and other natural resources for the benefit of a small "aristocracy" (or oligopoly), and the denial of the benefits of the riches given by nature (or the gods) to the rest of the men and women of those lands.
As Professor Michael P. Hudson has explained in many books and essays, the rise of classical economics in the eighteenth and nineteenth centuries sought to undo the egregious injustices of feudalism and the economic structures by which the gifts of nature, intended for the benefit of all the men and women of a nation, were fenced-off for the benefit of a few well-connected families at the expense of everyone else.
The privatization of these gifts of nature deprives the people of the nation -- and, as Professor Hudson points out, these two words ("privatize" and "deprive") share the same root, along with the word "privilege" -- they all come from the Latin word privare which means "to restrict" or "to deny access" (see Hudson, J is for Junk Economics, 181).
What did the classical economists see as constituting the public domain, which should not be privatized or restricted or given as a benefit for just a few at the expense of all the men and women of a country? Michael Hudson explains:
Public assets (land, water, mineral rights, airwaves and other public infrastructure). As natural monopolies, they are best administered in the long-term interest via government or a community, not monopolized by rentiers as the ultimate takeover objective of finance capital. [J is for Junk Economics, 60]
Because these gifts of nature are extraordinary valuable, and enormously lucrative if captured by an individual, family, small group of families, or other subset of the overall population, the public domain is highly coveted by those who would rather that the benefits of these gifts of the gods (or gifts of nature, if you prefer) accrue only to themselves. As Michael Hudson explains elsewhere in the same volume:
Privatization is a program of stripping the public domain. Debt-strapped countries are obliged to rely on neoliberal planning by the International Monetary Fund (IMF) and World Bank. As a precondition for obtaining the credit needed to service their foreign debts and avoid currency destabilization, governments are obliged to sell the "crown jewels" of their public domain -- mineral rights, public land, forests and buildings, and enterprises long held in the public sector as natural monopolies such as communications, utilities and transportation. [Ibid, 34]
Some of the wealthiest individuals in the world made their fortunes by gaining access to the economic rents they were able to extract from the privatization of the categories of natural resources listed in the above paragraph. That is why those who wanted to engage in "rent-seeking" behavior sponsored a major backlash against the classical economists of the eighteenth and nineteenth centuries (because the classical economists were first and foremost opposed to exactly that type of rent-seeking or rentier arrangements [pronounced ron-tee-ay, since it is a French word], because the classical economists recognized rent-seeking as the essence of the feudalism that the classical economists opposed).
In order to justify rent-seeking behavior, including especially the privatization of the natural resources given by nature (or the gods) to all the men and women of a country (see again the story of Athena and Poseidon, among countless other examples from ancient myth), proponents and beneficiaries of such rent-seeking pushed forward new schools of economics which taught that rent-seeking was actually beneficial instead of harmful. Modern neoliberal economics is a descendent of these rentier-friendly economic schools of thought -- and, indeed, a descendent therefore of the principles of feudalism which the classical economists of the eighteenth and nineteenth centuries opposed so vehemently.
Professor Hudson explains that, "Claiming to be more efficient than public management, rent seekers use spurious junk economics to depict government bureaucracy as always an evil to be eliminated, so as to justify privatizing the public domain" (Ibid, 60). These arguments are very familiar to us in the present day, because they have been repeated so assiduously by the proponents of neoliberal austerity and the privatization of the public domain.
But, as Professor Hudson also explains, one of the most important reasons not to privatize the gifts of nature (or the gifts of the gods) is that privatization (especially in the era of modern finance) tends to emphasize short-term gains through "asset-stripping," with little or no consideration for the long-term interest of society (see for instance arguments on page 229 and elsewhere in the same volume).
The privatization of the gifts of nature given in the public domain is particularly harmful in developing nations, because those individuals or families who get private control of those resources generally sell them off to outside industries (foreign companies, from developed nations, which will then use them as raw material in their high-value finished products), instead of enabling the creation of domestic industry to add value to those natural resources and turn them into finished products. This chokes off the development of high-value production and industry in the country to which nature (or the gods) gave those gifts, leaving the majority of the population in poverty, in many cases.
This is a pattern repeated around the world with depressing consistency. Professor Hudson explains that the deceptive terminology of the proponents of what he calls "junk economics," which is parroted by the media, helps to brainwash the general public (particularly in developed nations, where they are benefiting from the injustices of this exploitive system) into accepting their economic theories. Speaking of the University of Chicago economic school, which during the twentieth century became one of the bastions of neoliberal economics opposed to the classical anti-rentier economics of the eighteenth and nineteenth centuries, Professor Hudson says:
The Chicago School's monetarism is the perspective of rentiers, financial speculators and traders, not nations seeking to develop their industry and agriculture. [Ibid, 276].
The non-stop repetition of neoliberal doctrine, backed up by the levers of economic coercion mentioned earlier (the World Bank and the IMF and the neoliberal austerity they force on nations that come to them for credit -- ie, for loans), is usually enough to accomplish the privatization of the public domain and natural resources which the outsiders covet from any nation. However, in some cases, even these formidable tools don't quite do the job -- and so the next step, Professor Hudson explains, is typically a coup d'etat.
He writes:
And when economic theory fails to persuade governments to submit voluntarily to smash-and-grab privatization programs, the objective is achieved at gunpoint, as in Chile under General Pinochet or Ukraine under President Petro Poroshenko and Prime Minister Arseniy Yatsenyuk. [Ibid, 277].
This weekend, in Bolivia, the world witnessed yet another textbook example of the exact pattern which Professor Hudson describes in the quotations above, in his 2017 book J is for Junk Economics, and which he has been describing at least since the publication of his 1972 book Super-Imperialism.
The president of Bolivia, Evo Morales, has consistently resisted demands for the privatization of the nation's tremendous natural resources, including oil and natural gas but most especially the enormous deposits of lithium, highly coveted in recent years for the manufacture of batteries for mobile electronic devices such as smartphones and tablets and laptops, but especially for the batteries which power hybrid and electronic automobiles (this 2018 article in Wired explains that the battery in a Tesla Model S contains about 12 kilograms of lithium).
This 2017 article in The Economist shows the region known as the "lithium triangle" which encompasses the junction of Bolivia, Chile and Argentina and contains what was then thought to be about 54% of the world's total supply of lithium. If you want to read that article and do not subscribe to The Economist, you can simply register in order to be able to read five articles a month for free (I personally would not recommend a paid subscription because The Economist is a mouthpiece for neoliberal economics -- as you can see in the article linked above, in which the author criticizes Bolivia for opposing the privatization of its lithium resources, while praising Argentina and Chile for privatizing their own reserves, to the benefit of just a few families in those countries and to the benefit of outside or foreign corporations, not to the benefit of the majority of the men and women in those countries).
Because Bolivia's lithium has thus far not been developed to any significant degree, the size of its reserves are not fully known, but may be the largest in the world. The government of Evo Morales recently (around November 4 or just prior to that date) canceled a joint lithium-mining project with a German multinational mining corporation, declaring that he wanted to foster Bolivian battery production (see article here).
In other words, the elected government of the country chose not to privatize a natural resource given to the people of that country. One week later, Evo Morales was deposed in a coup -- although media in the developed nations that benefit from the extraction of resources such as lithium for their own smartphones and electric vehicles have carefully avoided calling it a coup at all. The removal of an elected leader at the "suggestion" of the military over the past weekend has already dropped out of the news cycle, with not a single story about Bolivia making it to the entire long landing page (digital "front page") of the New York Times today (Thursday the 14th), just four days later.
If you want to read some of the chilling details of this coup d'etat, you must go to "alternative" media sources, such as this article by Jeb Sprague in The Grayzone, published on November 13, and explaining that "at least six of the key coup plotters are alumni of the infamous School of the Americas" at Fort Benning, Georgia, indicating likely involvement by elements within the united states. Indeed, the president and secretary of state have already publicly endorsed self-declared successor Jeanine Anez as the new leader of Bolivia, despite the fact that under the constitution of Bolivia, there is a clear line of succession specified after the president, consisting of the leader of the upper house of the legislature, the leader of the lower house of the legislature, and then the deputy leader of the upper house of the legislature -- but this succession was ignored.
You may also want to read this article, also published in The Grayzone, for information about this shocking coup which you will not find discussed in the mainstream news sources in the united states, which have already largely dropped coverage, as well as this insightful article discussing the "four steps" of Hybrid War and how Venezuela has thus far resisted the fourth step in that pattern.
On the day following the coup, an article in the Wall Street Journal published the Reuters photo below, showing Jeanine Anez speaking with a military leader behind a prominently-displayed crucifix and open Bible. The article's author wrote:
Mr. Morales, as Bolivia's first president of indigenous descent, retains wide support among the nation's Quechua and Aymara Indian groups. On Wednesday, thousands of supporters from El Alto, a working-class city with a large population of Aymara Indians, marched to the nearby capital of La Paz.
[. . .]
Differences between the former leader and the caretaker president were already apparent Tuesday night. A deeply religious Roman Catholic, Ms. Anez triumphantly lugged a huge Bible into the presidential palace. Mr. Morales had clashed with the church and used the building for traditional Aymara Indian ceremonies.
image: Reuters (WSJ article here).
There can be little doubt that this coup d'etat is about the struggle between two different visions of the use of the gifts of nature (or the gods) to a nation. Those who want to privatize those resources typically do not need to resort to an overt coup -- but if privatization is staunchly resisted, they clearly will resort to such extreme measures.
Those who are trying to paper-over this removal of an elected president by naked force and declare it to be a triumph of "democracy" show the world very clearly which side of that divide they are on. Those of us who purchase devices using lithium batteries -- or cars powered by lithium batteries -- should demand that companies which make products with lithium not source that lithium from nations that resort to coups d'etat to make that lithium available to foreign corporations, as well as express outrage at what has taken place, and outrage at media misrepresentation of the seriousness of the situation.
And those of us with an interest in understanding how we got to this point in history should take the time to look more deeply into the history of economic thought that Professor Michael Hudson has laid out in his numerous books and articles, as well as into the connection of these economic issues to the deeper question of the proper relationship to the gifts given by nature (or the gods) in the form of natural resources, including the air, the sunshine, the rivers, the forests, the oceans, the soil, and the mineral riches beneath the earth.