Franklin Obeng-Odoom, author of Oiling the Urban Economy, discusses his recently published book and the implications of transnational oil and property rights.
On November 10, 2014, the (in)famous divorce case between oil tycoon Harold Hamm and his former wife Sue Ann Hamm was determined by Judge Haralson in the District Court of Oklahoma County in the USA.
The facts of the case are set out in the judgement: an 80-page report brilliantly summarised for Reuters by the journalist, Joshua Schneyer. At the heart of the case was the issue about just how much had to be given to Sue for her actual work as opposed to how location and other factors unrelated to effort contributed to the fortune. More broadly, the issues to be determined hinged on just how much of real estate or land values can be attributed to the skill and industry of property and land owners and therefore how much of these should they retain as deserving reward. For many investors in real estate, these questions, particularly the notion of ‘rent’, do not arise: what is important is that ‘their property’ accumulates value, that rent (for both housing and land) is rising, and that they can invest more to reap the fortune of real estate. But when it comes to real estate and property in oil economies, these questions cannot be brushed aside for they touch on every aspect of society, economy, and environment, even on our values and morality as a people.
In the end, Sue got only 6 percent of the couple’s $18 billion wealth, the judge ruling that most of that wealth had nothing to do with the wife’s marital skill but rather ‘the vast majority of the increase was attributable to market factors outside of Harold Hamm’s control’ (Schneyer). If the case generated interest, then the ruling has triggered even more interest and set tongues lashing out at what is deemed unfair. Feminists are asking how a 26-year old marriage can end with the man taking the lion’s share: a sweet 94 per cent. It is equally valid, however, to ask whether it would be fair to split the oil wealth in three: 50 to Sue; 50 to Harold; and 0 to society. It is tempting to view this case only as a divorce case in which the issues pertain only to an unfair, androcentric legal system.
However, placed in a broader context, this case raises important issues not only with the particular oil company of the Hamms but also with transnational oil companies. At the minimum, it shows what the market can do when it is allowed into the family and permitted to distribute resources that belong to society and to which society makes much contribution. But, the case also leads to harder questions. If 94:6 is unfair to one individual, what about the unequal distribution of oil benefits between a few transnational oil companies and the millions of people in Africa for whom there is a recurrent scramble for their oil? How should we feel about distribution issues between business interests and the people of Angola, Nigeria, and Sudan? These are only a few of the old oil-producing countries but there are also new ones: Sierra Leone, Liberia, and Uganda where similar questions apply but about whom little is heard because they are poor and often cannot afford the legal services to get them even 6 percent. These local peoples who can literally sniff oil typically get less and less of the resource either in crude or refined form or in terms of direct and indirect compensation.
In 21st century Africa, this question of distribution is not the same old oil story. There are important differences. New oil discoveries are not in sparsely populated villages, but close to or in densely populated urban centres. Africa now has ‘oil cities’ in which oil destroys but it also builds, raising questions about property rights and property relations for property destroyed; built, transformed, and exchanged, the resulting jobs created and destroyed and the ramifications for society, economy, and environment. Significantly, Africa has made great progress on corruption and governance indices. Today, the press in Ghana is freer than that in Australia, the UK, and USA. More so, the press freedom in Ghana has been improving since 2013 whereas for Australia, the UK, and USA, it has been worsening — according to the World Press Freedom Index 2014. So, it is too restrictive to focus only on ‘bad governance’, opaque deals and corrupt leaders as the source of all the experiences of oil. As the Hamm case shows, the market is as guilty, if not guiltier. Therefore, we need to understand oil cities not in symptomatic (corruption, greed, dictators, and such like), but in systemic terms. Yet, it is the former, rather than the latter, that most books on oil in Africa discuss.
In Oiling the Urban Economy, I part company with such books. While the book is cast in property rights analysis, it is also different from existing work in property in terms of how I think about property and its relations. As I have consistently argued: it is one thing being interested in property; another thinking like a property economist. In this book, I share the interest of those who talk about real estate and land, but not their mainstream thinking often informed by business, finance, and mainstream economics. I draw on an established tradition in property and political economy that is informed by original institutional thinking to confront the idea that property must only be a vehicle for profit. Specifically, I conceptualise the book around the ideas of Henry George and Karl Marx, their recent incantations and revisions by David Harvey and Hossein Mahadvy and contextualisation by Chibuzo Nwoke. Those who write on Georgism and Marxism may think that it is theoretical fallacy to mix up these two paradigms, because they collide, in the normal course of debate. Yet, that is precisely why they are needed to highlight the contradictions, turbulence, and conflict inherent in oil discussions, especially when they involve property, and when the discussion is much deeper to entail thinking like a property economist.
With Marx and George providing me feet of iron, I jump unto their shoulders to do what was not within their intellectual and political temperament and certainly not of pressing interest to them during their days. Yet, even as I panic on the shoulders of these giants, I gain much more stability and a stronger vision to see much farther than I would, had I consigned myself to some popular concepts held by mainstream economic pundits only interested in zero sum gains and atomistic analysis divorced from broader political economic context. In adopting this more radical basis and vision, I place ‘property’ in its broader social, economic, environmental, and political contexts and view it diachronically and synchronically. I relate property in one city to the entire urban system, and its regions internally in one country and externally in other African countries. Then, I scale up the analysis to view the question of relationship between and among countries: in the West and in the East. Marxists like to focus on workers and capitalists; Georgist on landlords and landlordism. I focus on all these and more (e.g., colonists). So, the book is not merely as a study of one oil city in Africa. It is a book about concepts and contests, theory and praxis; and context and content. It has major research and policy implications that penetrate right into the heart of oil property and property relations.
Since writing the book, I have been lucky to be invited to be part of many scholarly committees established to welcome new papers on oil. So, I have gotten the chance to be able to reflect on the book in the light of new research. While I see the new work on oil as equally valid, in my opinion, none of the studies I have seen about oil would lead me to change my conclusions in Oiling the Urban Economy. The book continues to be unchallenged in its uniqueness and contribution. Part of the reason why Oiling the Urban Economy enjoys this standing is that the best writers on oil in Africa are not urbanists and the best urbanists do not write about oil. As a teacher in property economics, I see that the best property economists do not engage critical political economic analysis, explaining why most property economists are unlikely to write a book like Oiling the Urban Economy.
I am not suggesting that there is no work at all on natural resources and cities: that will be claiming too much. There is some brilliant work about mining and urbanisation in Africa by my very senior colleague, Deborah Bryceson who recently co-edited the book, Mining and African Urbanisation: Population, Settlement and Welfare Trajectories which was deservedly published by Routledge. That the book appeared in a different series to International Real Estate is, perhaps, less interesting than the different focus of the two books: hers on non-fossilised natural resource, mine on fossil. The two groups of natural resources are entangled in radically different, even if sometimes related, political economic dynamics. In turn, these complexities and peculiarities mould and are moulded by cities quite differently and hence generate different global responses. Nevertheless, my book is part of critical global scholarship on how to understand our current oil-thirsty world, appreciate its ramifications for different property relations in terms of the generation and distribution of benefits and dangers, in order to study existing and imagined possibilities that can transform the world in which we live.
The first book in the Routledge International Real Estate Series, I hope that Oiling the Urban Economy will stimulate enough interest among colleagues in property economics, in planning, architecture, in short, in the built environment. Further, I hope that the book will generate much interest in such social science disciplines as political economy, geography, development studies, political science, sociology, and anthropology. The analysis in the book is such that it will be appealing whether potential readers are in a discipline, not in a discipline, or cross several disciplines either as researchers, students, or teachers; practitioners, policy makers, or activists. For some, this book will challenge what you know, for others I endorse what you have always believed but have never seen demonstrated systematically and for many others the book will provide a critique of the thesis you know, confront the antithesis you despise, and offer a fresh synthesis.
Franklin Obeng-Odoom is the Chancellor’s Postdoctoral Research Fellow at School of Built Environment, University of Technology, Sydney (UTS). He is a World Social Science Fellow and Editor of African Review of Economics and Finance. He is also the author of Oiling the Urban Economy: Land, Labour, Capital, and the State in Sekondi-Takoradi, Ghana and Governance for Pro-Poor Urban Development: Lessons from Ghana (Routledge, 2013). He teaches urban economics and property and political economy at UTS and can be contacted at Franklin.Obeng-Odoom@uts.edu.au. More about him can be found on his personal website, www.obeng-odoom.com