What Libertarians get wrong about sanctions and Cuba

For some strange reason, many of my Libertarian friends tend to have a blind spot when it comes to Cuba and its corrupt and repressive dictatorship. They are admirably staunch supporters of liberty, the rule of law, and property rights, but those virtues seem to go out the window when the topic of Cuba arises. For a group that is so passionately supportive of individual freedoms and a level playing field for all, they seem to have no issues doing business with a Cuban dictatorship that has obtained and retained power by denying the Cuban people individual freedoms and a level playing field.

Dr. Jose Azel delves deeper into this Libertarian blind spot:

Economic Sanctions and Property Rights

Libertarians would all agree that the fundamental reason for the existence of governments it is to protect our life, liberty, and property. These are the principles articulated by John Locke (1632-1704).  Locke, who deeply influenced our own Declaration of Independence, is regarded as the principal architect of liberal thought in the historical European use of the term.

Within a democratic realm, citizens are expected to rely on domestic institutions for the protection of these rights. For instance, an independent judiciary is essential for the resolution of property claims and other matters. But what is a citizen to do when his property rights are violated by a foreign totalitarian regime where no recourse to the rule of law is available?

It would seem that, when a U.S. citizen’s property is expropriated by a foreign government, the property rights principle, so dear to libertarians, would take center stage.  And yet, libertarian think- tanks such as the Cato Institute and politicians such as U.S. Representative Rand Paul take a different view.

They argue that unilateral economic sanctions do not work, and that individuals should be free to invest as they choose and undertake the risk of their investments. Agreed, but that leaves open the question as to how a government should protect its citizen’s property rights when a foreign government capriciously and arbitrarily changes the rules of the game.

U.S. economic sanctions against Cuba are a case in point. The sanctions were first authorized in 1961 when President John F. Kennedy issued an executive order in response to the Cuban government’s expropriation without compensation of American assets-an issue that remains unresolved.

It is valid to state that the sanctions have failed to change the course or nature of the Cuban government, but the failure argument is peculiarly offered in a form of isolated reverse logic.  It is also necessary to point out that the alternative policy, pursed by the international community, of engaging with the Cuban government has also failed to change the nature of that regime.

Currently over 190 nations engage economically and politically with Cuba while the United States remains alone in enforcing  its economic sanctions policy. If U.S. policy is deemed as one case of failure to change the nature of the Cuban government, there are 190 cases of failure on the same grounds. By a preponderance of evidence (190 to 1) the case can be made that engagement with that regime has been a dismal failure.

Fifty six years ago President John F. Kennedy sent a reasonable message to the international community that governments that choose to expropriate the properties of U. S. citizens need to compensate them. Governments that choose to simply steal the properties of U. S. citizens should expect some form of retaliation from the U.S. government.  That message remains valid today as an expression of a government’s duty to protect the property rights of its citizenry in foreign milieus where the rule of law does not prevail.

It is one thing to argue, as those of us that value personal freedoms do, that investors should be free to invest and accept all the risks of their decisions when the rules of the game are known in advance and where the rule of law prevails. It is a different situation when the rules are changed after the fact, as the Cuban government did, and where no legal recourse is available.

Investors in communist regimes cannot expect their government’s protection; they know in advance what they are getting into, investors beware. After all, Karl Marx makes it clear in chapter two of The Communist Manifesto that “…the theory of the Communists may be summed up in the single sentence: Abolition of private property.”

Independently of their usefulness, the use of economic sanctions as a foreign policy tool is neither new nor particularly American. Pericles’ decree banning the Megarians from the Athenian market and ports helped incite the Peloponnesian War in 431 B. C.

Unintended and undesirable consequences are inherent in the use of economic sanctions. Arguably they should not be used to compel a democratic transformation or even to advance human rights or other laudable goals. They seem, however, an appropriate, measured, and in-kind response to the economic aggression of another country such as expropriations without compensation. What are the policy alternatives to protect the property rights of a citizenry?