Expropriation is the
confiscation of
private property with the express purpose
of establishing
social
equality.
Unlike
eminent domain, expropriation
takes place beyond the
common law legal
systems and refers to socially-motivated confiscations of any
property rather than to taking away the
real
estate. The term appears as
"expropriation of expropriators
(ruling classes)" in
marxist theory, or as slogan "
Loot the
looters!", very popular during Russian
October Revolution
The term often refers to
nationalization campaigns by
communist states, such as
dekulakization and
collectivization in the USSR .
It may
also refer to robberies by revolutionaries to fund their political
activities, such as robberies by Joseph
Stalin and Kamo in Russian Empire
.
Socialism
Trotsky
The traditional interpretation of Marxism holds that all
large-scale industries and private properties should be
expropriated and held by the state.
Leon
Trotsky even absolutely rejected any payment to the private
owners. Trotsky was very adamant on the issue of not compensating
private owners.
Trotsky has written
Expropriation and foreign investment
Expropriation is one of the
political
risks involved with
foreign direct investment (FDI).
It is characterized by
confiscation of
the foreign asset, and a
pittance
payment. This payment is sometimes a formality, and may not
represent an acceptable reparation, because the transaction is not
one to which the owners, as forced sellers, have freely consented.
Moreover, adding to the complaints of the owners, the competition
of any other buyers is excluded. Finally, the expropriated business
is quite frequently a successful and established one, rather than
one that is still highly risky or even failing. Such expropriation
thus deprives the owners of their reasonable expectations of
reliable returns from such a proven business. Individuals who have
had their foreign property expropriated may have trouble seeking
recourse in their domestic courts due to the
Act of State Doctrine. A
bilateral investment treaty
(BIT) seeks to, among other things, redress this problem by
providing a remedy to the owner of the expropriated property,
against the state in question, by way of international
arbitration. An arbitration award may often be
enforced in a jurisdiction where the state in question has
assets.
Conversely, acts of expropriation may be warranted for a variety of
reasons, peculiar to the local governmental entity. Sometimes, for
instance, the expropriated business owners pay little or no
attention to the host country's assertion that royalty payments are
too small relative to the resources being extracted from the host
country. Some host country political complaints may relate to the
treatment of its nationals as employees of the business. At other
times, the host government may judge that strategic decisions about
the business entity are simply wrong-headed and ill-advised, as
applied to the host country, however right they may seem to the
owners. Such judgments may also occur when the business entity
fails to include the host country's interests and concerns,
legitimate or not, as matters of ordinary consultation and
effective participation in the operational plans of the business
entity.
As a result of both direct and indirect expropriation, a just
compensation must be paid. US Secretary of State
Cordell Hull defined just compensation in 1938
as "prompt, adequate and effective."
Canada
Expropriation in Canada is the act of a public
authority (such as federal, provincial, municipal governments or
other bodies empowered by statute) taking property without the
consent of an owner through a statutory or common law process. This
process involves the payment of compensation to the owner by the
authority and the owner having the right to claim additional
compensation to be determined by the courts or an administrative
board. Compensation is intended to make the owner whole, in light
of the loss suffered. The term is equivalent to the power of
eminent domain in the U.S..
References
- Orlando
Figes. A People's Tragedy: Russian Revolution. 1996,
ISBN 0-7126-7327-X.
- Richard
Pipes Property and Freedom, Vintage Books, A division
of Random House, Inc., New York, 1999, ISBN 0-375-70447-7, page
214.
- Edvard
Radzinsky Stalin: The First In-depth Biography Based on
Explosive New Documents from Russia's Secret Archives, Anchor,
(1997) ISBN 0-385-47954-9, pages 256-259
- see overview in: http://www.rslawyers.com/pdf/initial.pdf
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