As the Institute for Liberty was getting ready to launch LostOpportunities.org, and was discussing this project with a number of friends and allies, the question arose, "Wait, didn't IFL oppose ratification of the Law of the Sea Treaty in a letter to the Senate last spring?"
The answer, of course, is "yes". We did sign that letter -- as did many of our allies in the conservative and libertarian movements. But following a series of conversations with people in academia (including colleagues from IFL President Andrew Langer's days as an international relations student), business leaders, and national security professionals, IFL did something that many people and organizations in the arena of politics and policy are rightfully reluctant to do: it began to rethink its position, especially within the context of the work the organization was already doing.
IFL starts as an organization focused on American exceptionalism, and applying the principles of the American founding to the public policy problems of today. We take a deep and abiding interest in private property rights, for instance, and two of our current projects focus on that core virtue of liberty. We also have an emphasis on free trade, and how trade serves as the basis of global prosperity, and have done extensive work on national security issues.
Keeping those three things in mind, it is no great mystery that an organization might see how each of those elements informs an issue like the Law of the Sea Treaty. Having come to his beliefs about liberty through ardent anti-communism, Andrew started with the proposition that America cannot lose ground to nations like Russia and China. That to do so denigrates the very nature of American exceptionalism -- and that in areas where we have ceded access to natural resources to these other nations, we have lost far too much ground already.
This raises an additional spectre of national security-the access to rare minerals essential to military hardware. There has been a great deal of debate and discussion over how wrong-headed it would be to rely on foreign governments for ammunition for the US military. Similarly, if we allow China and Russia to essentially "corner the market" on the rare minerals that sophisticated pieces of military equipment need, we'd be caught behind the eight-ball if a national crisis arose.
With IFL starting to rethink its position on the subject, this reanalysis brought us into a second area. IFl President Andrew Langer served on a working group on international property rights from 2002-2004, an effort organized by Americans for Tax Reform. That group built on the research by Peruvian economist and political scientist, Dr. Hernando DeSoto, who theorized about why states with strong property rights protections are economically prosperous and politically stable. Langer also was at the Competitive Enterprise Institute as that organization was building its Free Market Environmental scholarship, as well as its seminal "Center for Private Conservation" -- an effort to demonstrate how the degradation of commonly-held resources could be reversed by applying the principles of private property rights.
Property rights, strongly protected, allow for people to invest in what they own (or, in some cases, lease). Without those protections, self-investment becomes a risky proposition at best. We saw this with the International Property Rights Working Group, and what happened in post-war Iraq. Because there was no strong commitment to private property rights, for instance, there was no way to convince major power companies to rebuild the nation's electric generation and transmission infrastructure (if you don't know who to actually bill, you can't recoup your investment. Likewise, if the government is going to nationalize your industry, you similarly cannot recoup your investment).
Such reliance allows for "investment-backed expectations" to take hold, an important principle in property rights litigation in the United States. If a project has a greater risk of being undermined by some other entity or government, then there is no reason to create those expectations, and therefore no reason to invest. And the more expensive project, the greater the investment, and thus the more risk-averse an entity is liable to be -- especially if the rights to a particular parcel are in doubt.
This is why we see US Corporations reluctant to pursue a free-for-all approach when it comes to undersea mining. Not only are they unsure about their rights, but they cannot secure the underlying investment since the rights are in doubt.
Some people believe that were we to ratify LOST, US companies would be caught in the mire of an international bureaucracy, but if anything, the burden currently exists for American companies, who are currently caught between a rock and a hard place. They have no seat at the table to gain concrete rights to mine undersea parcels since the US hasn't ratified LOST, while at the same time they cannot get the financing necessary to undertake mining operations in the commons areas because those rights are not secure.
DeSoto talks about the importance of "clearing title" in his research. He writes quite favorably about the settlement of the American West, in which territory acquired by the United States was parceled out by the federal government, who in turn, cleared title to the to those parcels in order to secure settlement. And while the state governments could have done this themselves when they transformed from territories to states, they decided to send that title clearing and parceling responsibility to the federal government.
Had they not, chaos would have ensued, and the West would not have been settled.
That is, in essence, what the Law of the Sea Treaty does. It puts the responsibility for clearing title and parceling out the commons in the hands of the International Seabed Authority, allowing for a strong framework of property rights to give interested parties the certainty to make their investments.
The use of property rights to inform public policy problems isn't limited to land. Building on the work of the Competitive Enterprise Institute and other libertarian organizations, IFL has been involved in the effort to apply private property rights to species conservation and replenishment. The work of former CEI Scholar Michael D'Alessi on oceanic fishery conservation has led to the creation of the Catch Shares program, which IFL has worked on in its "FairestCatch.org" initiative. In that effort, federal agencies are responsible for working with fishing councils to create private property rights in oceanic fish stocks-essentially parceling out the fish that can be caught and clearing title to those fish.
That effort has been supported by current CEI scholars, Montana's PERC, and libertarian environmentalists throughout the nation.
In the end, IFL weighted these thoughts against the original criticism that we entertained, and found those criticisms wanting. While no treaty is ever perfect, America gains considerably more than it loses by ratifying LOST-while at the same time, we can do so in order to protect the conservative, libertarian, and free-market principles we hold dear.