Bolivia Socializes Its Natural Gas Industry
It has long been expected since Morales' election, notes the Washington Post:
Bolivian President Evo Morales seized control of the country's natural gas industry Monday, sending soldiers to occupy fields that he contends private companies have plundered for years.
Morales said that unless foreign energy firms agreed to give Bolivia's state oil company oversight of production and a majority of their revenue generated in Bolivia, the government would evict them from the fields.
"The time has come, the awaited day, a historic day in which Bolivia retakes absolute control of our natural resources," Morales said during a televised speech from a gas field near the country's southern border. "The looting by foreign companies has ended."
Bolivia is a very poor country, rich in natural resources but lacking in property rights institutions. Since the poor vastly outnumber the rich--70 percent of the population live below the poverty level--last year's presidential election was simply Bolivia's version of Mencken's advanced auction of stolen goods.
But Morales' populism isn't exactly going to promote private capital flows into his country, something that is necessary for material progress and individual liberty to take root there. If he's successful, he'll bring to Bolivia what Huey Long brought to Louisiana or what Juan Peron brought to Argentina: the entrenchment of more muscular redistributive government that makes property less secure, scares away the productive, and ensures that poverty remains dominant for decades.
Let's just say this isn't the model followed by those countries that have developed advanced, wealth-producing economies over the last 40 years.
The U.S. Congress may pass a resolution condemning this episode, which would be ironic. After all, oil producers in the U.S. also agree to to give the feds oversight of their production, while they pay more in taxes than they earn in profits (according to a recent Tax Foundation study). Morales may simply be establishing practices that have become common in the northern hemisphere.