Russia's North-Pole Land Grab
Russia is trying to claim what once was owned by nobody and used only by indigenous hunters. Might there be a better way to satisfy everyone's interests?
June 1, 2007
Fred Foldvary, Ph.D.

Who should own the North Pole? There are international agreements on Antarctica and the Arctic, which says that no country may claim land in the polar areas. Now that is about to change. Russia's president Vladimir Putin has announced that the Russian Federation will claim and take control of over 460,000 square miles of Arctic land, including the North Pole. The president justifies this claim from the claimed finding by Russian scientists who conducted an expedition there that an underwater shelf called the Lomonosov Ridge begins in Russian territory and extends to the North Pole.

Mikhail Lomonosov (1711 - 1765) was a Russian scientist who was born in the Russian far north. In 1948, the Russians discovered the ridge in the Arctic Ocean and named it after Lomonosov. In 2001 the Russian Federation submitted a claim to the United Nations for the ridge. Russia now claims to have scientific evidence backing its claim.

Under UNCLOS, the United Nations Convention on the Law of the Sea, a country can claim seabed territory beyond its 200-mile territorial limit if it can prove that the claimed ocean floor is geologically linked to its continental shelf within ten years of ratifying the treaty. Russia ratified UNCLOS in 1997, so it must establish the claim by this year.

The countries which border the north pole region are Russia, Norway, Denmark (which owns Greenland), Canada, and the United States. Canada asserts sovereignty over the arctic area adjacent to its territory, and Danish and Canadian governments have enlisted scientists to find out if the Lomonosov Ridge might be an extension of Greenland or North America rather than Russia. Norway and the USA might also make claims, although the USA has not yet signed onto UNCLOS.

Global warming looms as a potential global catastrophe, but those who control the northernmost natural resources will benefit. The melting of the polar ice will make the north polar resources more accessible. If Russia's land grab goes through, the Russian government would obtain 10 billion tons of oil and gas, on top of their already huge reserves. Russia would become the world's greatest provider of oil and gas. With the global economy still dependent on oil and gas, Russia would geographically and economically be sitting at the top of the world.

This Russian resource dominance would have a good side for the U.S. and Europe, as Russia would not be as vulnerable to a disruption of oil due to war or an attack by terrorists. But the same end could be better accomplished by an international ownership of the northern resources.

At the core of this issue is the moral question of who properly owns the natural resources of the planet. The two options are homesteading allodialism and geoism. In the homesteading allodial philosophy, the first person to occupy a plot of land, or the current occupant if there are no first-owner heirs, can claim it as his absolute sovereign ownership. In the geoist philosophy, those who first occupy land or the current occupants are entitled to complete possession, but the natural rent of the natural resources of the land properly belongs to humanity in equal shares.

The anarchist allodial position is that only individuals, not governments, may claim land, and so the claim by Russia is illegitimate. The geoist position would let individuals claim possession of unoccupied land, but the title holders would have to pay natural rent of the land to an organization that represents humanity and which would distribute the rent to humanity in equal shares.

The north pole region is not unoccupied, as the Eskimos, including the Inuit of North America and Greenland, and the Yupik of the Russian far east, live in that region. If any nation has a claim to the North Pole area, it is the aboriginal Eskimos. But although they may properly claim to own the living and hunting areas, it is absurd for them to claim the oil and gas. It is no less absurd, morally, for the Russians to claim these resources. No human being made the oil and gas, and to open it up to a land rush and have the first person to poke a stick in the ground claim to own the oil is likewise morally absurd. The geoist position is the only one that is morally coherent.

The best way to apply the geoist principle is from the ground up, with small local communities electing representatives to successively higher level councils up to a global council which would collect the economic rent from oil and gas extraction, the revenues left after subtracting all normal costs, including exploration and normal returns on capital goods. That rent would then be distributed down the council chain to the people in equal per-capita amounts.

However, what is most likely to happen is the land grab by Russia, followed by grabs from the other countries with Arctic territory, and some agreement to divide the territory among the countries. Russia will be the biggest winner, and it will thus secure itself as a global economic power.

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Fred Foldvary, Ph.D.

FRED E. FOLDVARY, Ph.D., is an economist and has been writing weekly editorials for since 1997. Foldvary's commentaries are well respected for their currency, sound logic, wit, and consistent devotion to human freedom. He received his B.A. in economics from the University of California at Berkeley, and his M.A. and Ph.D. in economics from George Mason University. He has taught economics at Virginia Tech, John F. Kennedy University, Santa Clara University, and currently teaches at San Jose State University.

Foldvary is the author of The Soul of LibertyPublic Goods and Private Communities, and Dictionary of Free Market Economics. He edited and contributed to Beyond Neoclassical Economics and, with Dan Klein, The Half-Life of Policy Rationales. Foldvary's areas of research include public finance, governance, ethical philosophy, and land economics.

Foldvary is notably known for going on record in the American Journal of Economics and Sociology in 1997 to predict the exact timing of the 2008 economic depression—eleven years before the event occurred. He was able to do so due to his extensive knowledge of the real-estate cycle.