Property Rights and the Resource Curse

Because of a major flaw in the system of international trade, consumers buy stolen goods every day. Consumers may buy stolen goods when they buy gasoline and magazines, clothing and cosmetics, cell phones and laptops, perfume and jewelry. The raw materials used to make many of these goods have been taken—sometimes by stealth, sometimes by force—from some of the poorest people in the world. These goods flow through the system of global commerce under cover of a rule that is little more than a cloak for larceny. The plainest criticism of global commerce today is not that it violates some abstract distributive standard, but that it violates property rights. The international commercial system breaks the first rule of capitalism in transporting stolen goods, and does so on an enormous scale. The priority in reforming global commerce is not to replace “free trade” with “fair trade.” The priority is to create trade where now there is theft. Ending the global traffic in stolen goods will require no new theories or novel international agencies. The principles of lawful trade are well understood, and global commerce has already created powerful institutions to enforce property rights. What is required is to use these institutions to bring all international resource sales into the system of enforced market rules. This article sets out a framework for doing this.