Recent Developments in Jurisprudence and Legislation (1994)

by Norman S. Kinsella on September 12, 2014

One of my earliest published articles (and delivered speeches). From 1994. HTML from Word version below; PDF. When I was a young lawyer at large law firms, I took every chance I could to publish, get my name out there, etc. (see New Publisher, Co-Editor for my Legal Treatise, and how I got started with legal publishing).

 

 

Recent Developments in Jurisprudence and Legislation

by

Robert O. Thomas & N. Stephan Kinsella

Jackson & Walker, L.L.P.

Houston, Texas

41 LSU Mineral Law Institute Ch. 6 (1994) [click to continue…]

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This is an article I published in the Philadelphia Lawyer, p. 20 (Fall 1997) (PDF), about the now-defunct Multilateral Agreement on Investment, or MAI. At the time I was in favor of it and somewhat naively optimistic that a fairly universal pro-private property rights agreement might be adopted. Sigh.

For more background on related matters, see my book International Investment, Political Risk, and Dispute Resolution: A Practitioner’s Guide (Oxford University Press, 2005) and my Online Appendix XVII, “Online Resources”.

The Re-emerging International Framework for Protection of Investment

By Stephan Kinsella1

(version submitted to The Philadelphia Lawyer, September 1997 issue)

We’ll take and take until not even the nails in their shoes are left.  We will take American investments penny by penny until nothing is left.

                                                                                                 —Fidel Castro, 19602 

Less than seventy-five years after it officially began, the contest between capitalism and socialism is over: capitalism has won.

                                                                                        —Robert Heilbroner, 19893 

American entrepreneurs are, by and large, used to operating within a relatively fixed and predictable background of overarching state and federal laws.  If something goes wrong with a business transaction—e.g., one party breaches a contract or intentionally defrauds or harms another—the wronged party that he can very likely resolve the matter in some court, according to some applicable law, whether federal or state.

Similarly, if an investor’s property rights are damaged or otherwise taken by the government, the investor can obtain redress, typically in the form of compensation, in court.  In the West, though protection of property rights is far from perfect, it is largely taken for granted that the government is constitutionally prohibited from taking one’s property (including investments) without due process and just compensation.  Thus, trade and investment flourish in western countries, since both contractual and property rights and protected.

International trade, and investment in foreign countries (known as foreign direct investment), require protection as well.  With respect to foreign trade—for example, trade between an American company and a foreign company—the parties cannot simply assume that they are both subject to jurisdiction in the courts of the same nation.  Despite this seeming difficulty, however, foreign trade has been able to thrive since disputes can be settled, and contracts enforced, even between parties of different nations.  This has long been possible with the international Law Merchant, in which disputes between merchants of different countries are settled in neutral, largely private arbitration proceedings.

Today, for example, private arbitration is frequently conducted in accordance with the rules of the International Centre for the Settlement of Investment Disputes (ICSID), the International Chamber of Commerce (ICC), or the American Arbitration Association (AAA).  In addition, dispute resolution and other aspects of foreign trade are buttressed to some extent by the foreign trade framework established by multilateral agreements such as the General Agreement on Tariffs and Trade (GATT), and its successor, the World Trade Organization (WTO).  Thus, private parties have been and continue to be able to rely on and enforce the contracts necessary for foreign trade.

Foreign direct investment is another matter.  Companies investing in other countries are not able to rely on private measures such as arbitration agreements to ensure that the host state (the state hosting foreign investment) does not interfere with investments.  States have sovereignty over property within their territory, and thus foreign investment is always subject to the threat of expropriation by the host state.  Investing in foreign regimes is thus said to be subject to “political risk,” especially in those states with a history of hostility to capitalism and property rights, such as the former communist states and other developing economies. [click to continue…]

  1.  LL.M., University of London; J.D., M.S., B.S., Louisiana State University.  The author is a member of the Intellectual Property Department and International Law Practice Group of Schnader Harrison Segal &amp; Lewis in Philadelphia, and co-author <i>Protecting Foreign Investment Under International Law: Legal Aspects of Political Risk</i> (Dobbs Ferry, New York: Oceana Publications, 1997).  Email: nskinsella@shsl.com; http://www.shsl.com.  The views expressed herein are those of the author alone, and should not be attributed to any other person or entity.   []
  2.  New York Times, 21 August 1960, § 3(F), p. 1, quoted in Eric N. Baklanoff, Expropriation of U.S. Investment in Cuba, Mexico, and Chile 112 (1975). []
  3.  Robert Heilbroner, “The Triumph of Capitalism,” The New Yorker, Jan. 23, 1989, p. 98.  The superiority of capitalism over socialism had been rigorously proved back in 1920 by the great Austrian economist Ludwig von Mises.  See Ludwig von Mises, Economic Calculation in the Socialist Commonwealth (1990) (1920); see also Ludwig von Mises, Socialism: An Economic and Sociological Analysis (J. Kahane trans., 3d rev’d ed. 1981) (1922).  Mises’s ideas were initially thought to have been refuted by socialist economists, in what is known as the “socialist calculation debate.”  The false conclusion that the socialists won the debate by disproving Mises’s claims was perpetuated in the following decades by economists such as Heilbroner.  See, e.g., Robert Heilbroner, Between Capitalism and Socialism (1970), pp. 88-93, in which Heilbroner claimed that Mises was wrong, that socialist economic calculation was possible, and that the “superior performance” of socialism would “soon reveal the outmoded inadequacy of a free enterprise economy.”  Despite decades of unjust and unfortunate neglect, Mises has finally been vindicated by the universally acknowledged failure of socialism as a viable economic system.  See Gertrude E. Schroeder, “The Dismal Fate of Soviet-Type Economies: Mises Was Right,” Cato J., v. 11, no. 1 (Spring/Summer 1991), p. 13; “Labor Party leader flips on policy,” Philadelphia Inquirer, Apr. 8, 1997, p. A2 (describing the British Labor Party’s endorsement of privatization of state-owned enterprises and recent elimination of a Marxist clause in its constitution advocating common ownership of the means of production).  Even Heilbroner now admits: “It turns out, of course, that Mises was right.”  Robert Heilbroner, “After Communism,” The New Yorker, Sept. 10, 1990, p. 91, 92.  See also Mark Skousen, “‘Just because socialism has lost does not meant that capitalism has won’: Interview with Robert L. Heilbroner,” Forbes, May 27, 1991, p. 130.  For further discussion of the socialist calculation debate, see Murray N. Rothbard, “The End of Socialism and the Calculation Debate Revisited,” 5 Rev. Austrian Econ. 51 (1991); Don Lavoie, Rivalry and Central Planning: The Socialist Calculation Debate Reconsidered (1985); David Ramsay Steele, From Marx to Mises: Post-Capitalist Society and the Challenge of Economic Calculation (1992). []

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Comments on Draft Law on Stimulation of Foreign Investments in Romania (1997)

February 27, 2013

This a text version of my Comments on Draft Law on Stimulation of Foreign Investments in Romania, prepared for ABA/CEELI (Spring 1997) *** M E M O R A N D U M   March 25, 1997     TO:                 Mr. John C. Knechtle Director, Legal Assessments, ABA/CEELI   FROM:           N. Stephan Kinsella [current contact info as of 04/2002: www.KinsellaLaw.com]   […]

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Louisiana Civil Law Dictionary Review

November 13, 2012

My recent book, Louisiana Civil Law Dictionary(Quid Pro Books, 2011), co-authored with an  Austro-libertarian legal scholar friend, Gregory Rome, was recently reviewed at the iPhoneJD blog: November 13, 2012 Review: Louisiana Civil Law Dictionary — ebook of civil law words and phrases I’ve reviewed several legal dictionary apps for the iPhone and iPad — Black’s Law Dictionary, Barron’s […]

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New Publisher, Co-Editor for my Legal Treatise, and how I got started with legal publishing

September 27, 2011

As most of my libertarian friends and readers know, I’ve published for a number of years books and articles in the area of political and legal theory. I’ve also engaged over the years in more practical legal writing, from law review articles to authored and edited books (I maintain a separate website, KinsellaLaw.com, for my […]

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My new book: Louisiana Civil Law Dictionary

July 21, 2011

From the site of my publisher, Quid Pro Books, information about the release this month of my new book, Louisiana Civil Law Dictionary (with Gregory Rome; Quid Pro Books 2011). It’s available now at Amazon in paper and kindle formats, and in hardback later this month. Also available in other ebook formats. (Additional information at […]

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Kinsella Legal Treatises to be Published by West/Thomson Reuters

May 23, 2011

I have for years edited or co-edited three legal treatises, first for Oceana Publications, then for Oxford University Press, and now, for West/Thomson Reuters. These are: Trademark Practice and Forms (Oceana/Oxford, 2001-2011; West/Thomson Reuters 2011-present) World Online Business Law (Oceana/Oxford 2003-2011; West/Thomson Reuters 2011-present) Digest of Commercial Laws of the World (Oceana/Oxford 1998-2011; West/Thomson Reuters […]

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Past, Present and Future: Survival Stories of Lawyers

December 6, 2010

This was a Texas Lawyer piece from early 2009 concerning an interesting development at the beginning of my legal career in 1991-92, as a result of the last recession. Wait, make that three recessions ago. This explains how I ended up getting an LL.M. in London. Past, Present and Future: Survival Stories of Lawyers By […]

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Saúl Litvinoff, R.I.P.

January 6, 2010

LSU Law Professor Saúl Litvinoff passed away yesterday. As noted in the LSU Law Center press release about this, Litvinoff was a true giant in the field of civil law scholarship. Professor Emeritus and Boyd Professor of Law Saúl Litvinoff, whose impact on the legal traditions of Louisiana spanned more than 43 years, died earlier […]

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Radical Patent Reform Is Not on the Way

October 1, 2009

My article “Radical Patent Reform Is Not on the Way” was published today (Oct. 1, 2009) in Mises Daily. *** Hardly a day passes when we do not hear of one patent abuse or another.[1] Ridiculous patents are issued or filed and companies are enjoined from selling their products. Judgments are issued, and settlements reached, […]

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