Expropriation Essay ⋆ Business Essay Examples ⋆ EssayEmpire

Expropriation is a broad term. In Canada, it is analogous to the principle of eminent domain: A government or body empowered by that government expropriates property when it takes it from a private owner without consent and without consent being required; it does this as directed or allowed by an applicable law, it is not punitive, it compensates the owner, and the owner has the right to seek additional compensation if he or she feels entitled to it, which may include expenses beyond the value of the property incurred by the act of expropriation. In much of the world, however, the word is associated with communism’s call for the seizure of land and industry by the socialist state, a politically motivated seizure that seeks to improve or restore social justice and the common good.

In the communist sense, expropriation is related to communist land reform, wherein there is little or no private property, and everything is owned collectively by the people and administered by the state (and those it empowers). Because communism cannot be introduced in a vacuum—that is, some other system exists wherever it is adopted—this circumstance can only be created by taking private property from its owners by one means or another, whether through purchase (as in small-scale communes) or expropriation. Sometimes this expropriation leads to redistribution—a sort of Robin Hood approach, presuming we consider the owners to be “the rich”—while in other cases the land is used for collective farms and the like. Quite often there is no compensation.

One historical example of that style of expropriation is the 1917 Decree on Land issued by the Second Congress of Soviets in the aftermath of the October Revolution. This decree, written by Vladimir Lenin, declared that the peasants had seized the lands of the nobility and the church, along with all associated livestock, buildings, et cetera, and that such lands would be put at the disposal of the volost land committees. Leon Trotsky, Lenin’s second in command and the founder of the Red Army, was adamant that there would be no compensation for such expropriation; it is worth pointing out that Russia did not have a long history of private property, and so most lands were held by the nobles or the church. As the Soviets further organized in their early years, this decree and others were superseded by the 1922 Land Code, which collated and refined Soviet land law and the regulation of those land committees.

Expropriation is one of the risks involved when businesses buy or invest in land and other properties in other countries. During times of upheaval or revolution, foreign-held lands and buildings may be expropriated with only a token amount of money given as compensation; this may sometimes be politically motivated, especially in countries where the population is unhappy with foreign business activities on their soil. It may merely be politically convenient, since seizing foreign lands poses less risk of alienating a potential constituency than seizing domestic lands would, and revolutions do need to come by their funding somehow. Treaties between nations often prohibit these expropriations or require proper and fair compensation (generally without the means of appeal offered in Canadian expropriation); while revolutionaries staging a coup may not feel they are obligated to uphold older treaties, it is often in their interest to do so, to encourage foreign powers to treat the revolution as a domestic matter that does not require their intervention.

There are other times when a business or its lands may be expropriated with just cause, when a foreign business is operating without consideration for local concerns, and other attempts at redress have failed.

Bibliography:

Gregory S. Alexander, The Global Debate Over Constitutional Property: Lessons for American Takings Jurisprudence (University of Chicago Press, 2006);
Eduardo Engel, Optimal Resources Extraction Contracts Under Threat of Expropriation (Economic Growth Center, Yale, 2008);
Faccio and D. Stolin, “Expropriation Versus Proportional Sharing in Corporate Acquisitions,” Journal of Business (v.79/3, 2006);
Orlando Figes, A People’s Tragedy (Pimlico, 1997);
Giannetti and A. Simonov, “Which Investors Fear Expropriation? Evidence from Investors’ Portfolio Choices,” Journal of Finance (v.61/3, 2006);
Kaj Hobér, Investment Arbitration in Eastern Europe: In Search of a Definition of Expropriation (JurisNet, 2007);
Richard Pipes, Property and Freedom (Alfred A. Knopf, 1999);
Sevelka, “Expropriation Claims for Increased Development Costs and Loss of Profit,” Appraisal Journal (v.73/4, 2005).

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