Why the model of Douglass North, John Wallis and Barry Weingast matters for future sustainable energy systems

This blog note is intended at underlying a general theorem of economic philosophy for growth that I discovered thanks to the lecture of Xavier Enselme at Sciences Po Lille (I owe also to Prof Enselme the discovery of Why Nations Fall by Acemoglu and Robinson, and many other things) while inputting my own knowledge on ISDS rules that matter here. The exciting dimension in Violence and social orders is that it recommends a society based both on a reliable social welfare system and in a capacity for adaptation based on Friedrich von Hayek’s theorems. While this seems like the alliance of “la carpe and le lapin” as we say in French, I believe this can work based on my own experience, which is certainly not the experience of many readers who can feel oppressed by the market if they are workers, or oppressed by the State if they are businesspeople, but from my position where I try to act as an arbitrator this model is excellent.

To sum up, the book distinguishes three orders, the natural order of depredation by hunter-gatherers, the limited access societies (hierarchical societies defined as the “natural state” that are an intermediary, like Babylon and the Austrian Hungary empire in the 1900s), and open access societies, a limited portion of the world lives today in such open access societies, that are defined by the combination of rules of equality and redistribution, of a fair and independent justice system and rule of law, and of competition on markets, without a corporate elite (he quotes Schumpeter). Progressive taxation of income, job loss insurance to better readaptation of workers to a changing market, citizen rights to everyone, development of roads and free basic education for everyone, respect of property rights by the elite to control violence and market openness. The last allows adaptation in case of an economic crash.

These points are essential today for the sustainable energy systems of the future that are nascent. We need all of these criteria. The Energy Charter Treaty with its ISDS clause allows for some kind of rule of law in international energy matters and provides a frame. The clauses of ISDS treaties, especially fair and equitable treatment, together with their strong enforcement by independent panels of arbitrators should be taken as a model for future economic arbitration intra-State. I have moderate enthusiasm with market access in some cases because this can be used for spying in case where the energy systems are linked with military activities for instance but fair and equitable treatment is a must (so for instance, in the market for depleted uranium, every company has to pay the same price, but if a company is favoured in other ways (gets public contracts that other companies don’t get) because it supports military activities (or funds a national park…), other companies not doing it do not have a right to complain – the only reason they can have to complain is if another company gets cheaper depleted uranium – this is fair and equitable treatment – the rest is market access). The European Community of Coal and Steel attempted to provide for workers a number of insurances that have contributed to the vitality of European coal and steel industries, certainly until the 1980s. The future is there and a similar system could be thought of.

In general ISDS rules should be translated to internal governance to better secure property rights without, necessarily, the need for the international panels that are a remnant of the period of growth that is over, when investors wanted security while going in developing countries (with some feeling of colonization even though I want to underline how I understand now why the companies were fighting the environmental regulations that governments tried to impose on them – I did not understand that at all while writing my Master’s Thesis at the College of Europe on ISDS clauses). National courts are filled with judges that look at “citizen rights” without always the central focus on property rights, judges believe in a series of positive rights and try to protect the environment with no actual knowledge of physics, spreading havoc and discontempt (especially in France and I won’t mention the new law that says companies can be blamed for “ecocide”… would judges get angry if we don’t give them new anticapitalist toys ?). We need an Euro-Atlantic reform of justice based on the above principles, both social welfare with progressive income taxation and job insurance (retirement is another kind of job insurance…) but no public insurance against sicknesses, and an expansion of the protection of property rights in national laws together with a radical reform of justice for these purposes, with the principles of fair and equitable treatment clauses in ISDS treaties as frame. I have shown with my peer reviewed articles how sicknesses can be in general prevented and healed easily, and cheaply. It is true there is tumultus on covid19 right now but don’t look at that. Salvia officinalis & microphylla heal it, I’m not the only one to have shown that, interesting articles were published in Russian news on this… This will also free forces as pharmaceutical industries can transform their production lines to make technical chemistry products with industrial and consumer uses instead, for instance, in addition to my proposals on the cleaning of alpha emitting nanoparticulates and their recycling in fast neutron subcritical cores.

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