Iraqi Oil Does Not Belong to the Iraqi People
By David Holcberg (Island Waves, Texas A&M, April 17, 2003)
George W. Bush keeps saying that the oil in Iraq "belongs to the Iraqi people." He is wrong.
Would the president say that the oil in America "belongs to the American people"? Of course not--it doesn't. If a man--American or foreign--develops or buys an oil well in America, it belongs to him--not to the American people.
Every underground resource properly belongs to those who extract it, be it gold, copper or diamonds. Accordingly, the men or companies who produce oil, by virtue of producing it, by bringing it to the surface and turning it into a value, acquire property over it. A barren piece of desert is worthless. A developed piece of desert producing oil is worth a lot--and is the property of the men who developed it.
So who owns the oil in Iraq?
The undiscovered, undrilled oil sitting under undeveloped land belongs to no one--not until it is extracted.
The wells already in operation also belong to no one, since Hussein has been their illegal owner for decades--and now he is gone. Under these circumstances, no individual(s) can properly lay claim to the wells.
The American government, on the other hand, could morally lay claim to the oil in Iraq, or at least part of it, as reimbursement for war costs. But since Americans are unlikely to do so--lest the French accuse them of having gone to war for oil--my suggestion is that the new government in Iraq give title of property to whoever builds new wells and auction the operating wells to the highest bidders--be they Iraqis or not. This implementation of property rights based on individual rights would go a long way to help Iraqis' achieve the freedom they never knew and are only beginning to glimpse.