Sunday, May 20, 2012

Cuban embargo and defending U.S. property rights

Cuban embargo and defending U.S. property rights

Libertarians hold that the fundamental reason for the existence of
governments is to protect life, liberty, and property. These are the
principles articulated by John Locke in the 17th Century, the principal
architect of liberal thought who deeply influenced our own Declaration
of Independence.

Within a democratic realm, citizens are expected to rely on our domestic
institutions for the protection of these rights. For instance, an
independent judiciary is essential for the resolution of property claims
and other matters. But what is a citizen to do when his property rights
are violated by a foreign totalitarian regime where no recourse to the
rule of law is available?

It would seem that, when a U.S. citizen's property is expropriated by a
foreign country, the property rights principle, so dear to libertarians,
would take center stage. And yet, paradoxically, libertarian thinkers
often argue against economic sanctions with nary a word about property

They argue that unilateral economic sanctions do not work, and that
individuals should be free to invest as they choose and undertake the
risk of their investments. Agreed, but that leaves open the question as
to how a government should protect its citizens' property rights when a
foreign government capriciously and arbitrarily changes the rules of the

U.S. economic sanctions against Cuba are a case in point. The sanctions
were first authorized in 1961 when President John F. Kennedy issued an
executive order in response to the Cuban government's expropriation
without compensation of American assets, an issue that remains unresolved.

It is valid to state that the sanctions have failed to change the course
or nature of the Cuban government, but the failure argument is
peculiarly offered in a form of isolated reverse logic. It is also valid
and necessary to point out that the alternative policy pursued by the
international community of engaging with the Cuban government has also
failed to change the nature of that regime.

Currently over 190 nations engage economically and politically with Cuba
while the United States remains alone in enforcing its economic
sanctions policy. If indeed U.S. policy is deemed as one case of failure
to change the nature of the Cuban government, there are 190 cases of
failure on the same grounds. By a preponderance of evidence (190 to 1)
the case can be made that engagement with that regime has been a dismal

Fifty years ago President Kennedy sent a reasonable message to the
international community that governments that choose to expropriate the
properties of U. S. citizens need to compensate them. Governments that
choose to simply steal the properties of U. S. citizens should expect
some form of retaliation from the U.S. government.

That message remains valid today as an expression of a government's duty
to protect the property rights of its citizenry in foreign countries
where the rule of law does not prevail. It is one thing to argue, as
those of us that value personal freedoms do, that investors should be
free to invest and accept all the risks of their decisions when the
rules of the game are known in advance and where the rule of law
prevails. It is a different situation when the rules are changed after
the fact, as the Cuban government did, and where no legal recourse is

Investors in communist countries cannot expect their government's
protection; they know in advance what they are getting into. The maxim
"investors beware" is fully in place. Karl Marx makes clear in The
Communist Manifesto that "the theory of the Communists may be summed up
in the single sentence: Abolition of private property."

Independently of their usefulness, the use of economic sanctions as a
foreign policy tool is neither new nor particularly American. Pericles'
decree banning the Megarians from the Athenian market and ports helped
incite the Peloponnesian War in 431 B. C.

Unintended and undesirable consequences are inherent in the use of
economic sanctions. Arguably they should not be used to compel a
democratic transformation or even to advance human rights or other
laudable goals. They seem, however, an appropriate in-kind response to
the economic aggression of another country, such as expropriations
without compensation.

What are the policy alternatives to protect the property rights of a
citizenry when negotiations fail?

José Azel is a senior scholar at the Institute for Cuban and
Cuban-American Studies, University of Miami and the author of the book,
Mañana in Cuba.

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