Ain't Nationalisation Great?

No, really, Bolivia shows why

A story from Bolivia:

Most nights, under cover of darkness, Sandra* ventures underground into the Huanuni tin mine, about 40 miles (60km) south of the city of Oruro, in Bolivia. She walks for around nine hours collecting about 35kg of rocks containing the mineral before heading back the way she came, hiding from anyone who might be patrolling the tunnels.

She sells what she collects through unofficial channels and typically makes 1,800 to 3,000 Bolivianos (£200 to £330) a week.

Umm, well, £300 a week in Bolivia is good money actually. And “the mineral” is cassiterite, the only economically important ore of tin. But, OK. The Guardian is telling us that life around Bolivian tin mines is shit. OK.

And here’s the thing. Bolivia used to be the world’s leading tin producer. Then in the 1950s the local government nationalised it all (Jimmy Goldsmith’s first bride was the daughter of the bloke that had owned the industry. She died, tragically, very young).

So, you know, nationalisation of the industry hasn’t, perhaps, worked all that well? Not if some Indio lady is now scavenging in the mines for a few kg of ore a day? It’s possible to go more than a bit further in fact. If someone scavenging at night for a few scraps of ore can make £300 a week then those mines are, well, sorta, they’re economic. If not, you know, nationalised.

But let’s just, umm, move on. Bolivia, more recently, found out that it had vast amounts of natural gas. Which neighbouring countries would love to buy. So, it was developed, the money started to roll in and then - nationalisation. Which hasn’t worked out that well as Bolivia hasn’t become rich as a result.

Now, we all know our Bond, James Bond. First time is happenstance, second is coincidence and third is enemy action. As it happens Bolivia has a third natural resource which, currently, is in high demand. Lithium. Those salt flats up at 12,000 feet and so on. One of the great deposits of easily extractable lithium they are. So, why aren’t they being extracted?

Because the government has insisted that they’re a great natural resource. Therefore, rather than greedy capitalists extracting and shipping out those batteries should be made up at 12,000 feet. Even, in fact, the cars that use the batteries.

The result is obvious - the lithium isn’t being extracted, the batteries aren’t being made and nor are the cars. Because idiot fuckwits are in charge of what happens to Bolivia’s natural resources of course.

At which point. Actual instructions on what you do if you’ve a natural resource. Allow whoever to extract it then tax the snot out of them. No, do not try to extract it yourself. Nor try to insist that it must be used at home to thereby boost local industry building. If that makes economic sense then people will do it anyway. If it doesn’t make economic sense then you don’t want them to and they won’t either. You also don’t want to be insisting upon it yourself - doesn’t make economic sense, see?

Or, if you really want the basics, don’t allow government to try and actually do anything even if we might allow them a slice of the revenue as tax. Sound advice that.