Pushing the Perimeter of Private Property: A Marxist Perspective on the Expansion of Free Trade Agreements and the Concept of Indirect Expropriation.

Li Eriksdotter Andersson


This paper focuses on the successive expansion of the area of “free trade” during the last decades, an expansion with not only spatial, but ideological implications. The paper is particularly concerned with the concept of “indirect expropriation”, which has become a core issue of modern free trade agreements such as the ones negotiated right now between EU and the US (TTIP) and EU and Canada (CETA).
The concept of indirect expropriation has its roots in the early 19th century, but was formally introduced into international trade treaties through the US BITs program (1980). This occurred at the same time as the GATT Uruguay round of negotiations between 1986 and 1994 significantly expanded the agenda of “free trade” in general, to include far more than the elimination of tariffs. Or, as Patomäki and Teivainen (2004) put it: “The successive expansion of the area of ‘free trade’ has constituted a movement from the classical international trade of material goods . . . to far-reaching liberalisation and deregulation and, subsequently, neoliberal re-regulation of the economy.”
While expropriation in its traditional sense is understood as a direct action, i.e. a seizing of private property, indirect expropriation is deemed to occur “when there is an interference by the state in the use, enjoyment, or benefits derived from a property even when the property is not seized and the legal title of the property is not affected” (as held by the Tribunal in the Tippets v. Iran case). This widening of the concept has led to cases such as Vattenfall v. Germany, where the company sued the state for €3,7 billion, when Germany decided on phasing out its nuclear power, thereby “indirectly expropriating” the expected profits of Vattenfall. Hence, by invoking indirect expropriation one could argue that the companies in turn perform an indirect expropriation of the states tax founds themselves.
This paper discusses the inscription of this concept into modern trade agreements as a means of consolidating an understanding of representational government and private property in line with Lockean economic theories. Property for Locke is a fundamental right, and nobody therefore has the right to destroy or take a way the property of another, which applies to the state as well. This is to be contrasted with a Marxist view, where laws created with the objective to protect property rights induces lawlessness for those dispossessed. A dispossession interlaced with another concept of expropriation: primitive accumulation, i.e. the transition where “self-earned private property ... is supplanted by capitalistic private property, which rests on exploitation of the nominally free labor of others” (Marx, Capital vol. 1).
In order to ensure a constant increase in the accumulation of surplus value, Rosa Luxemburg once stated (1913), capital relies on bringing non-capitalist spaces in to the capitalist social relations of production in an outward expansionary dynamic. The concept of indirect expropriation is one way of creating such a new space, pushing forward the borders of capital and capitalism, alongside with our understanding of private property, government and lawfulness as such.

Indirect Expropriation - Private Property - limits to capital - law - ideology - neoliberalism - Marx - Luxemburg - Locke - Free Trade Agreements