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Just Prices in World Markets: Proposals De Lege Ferenda

Published online by Cambridge University Press:  28 March 2017

Oscar Schachter
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A conspicuous feature of current demands for a more equitable economic order is the idea of “just prices” or more broadly a just relationship of prices. Although the conception of a just price goes back to medieval philosophy, it has not acquired a generally accepted meaning in either economic or juridical thought and it certainly cannot be regarded as a technical term of art in international economic relations. Yet there is no doubt that the concept of the just price (as well as the closely related notion of a just relationship of prices) expresses political demands that are of considerable importance in the development of new international legal and institutional arrangements. It is particularly interesting to note that the concept which has long played a leading role in the grievances of the poor countries has recently received emphasis in the statements of spokesmen for the industrialized countries faced with the soaring prices of oil and minerals. The idea of linking justice to prices may seem to some to be a vain effort to mingle ethical and economic factors (possibly with overtones of medieval metaphysics) but the political realities cannot be wished away and the demands for fairness and equity in international pricing will have to be faced.

Type
Editorial Comments
Information
American Journal of International Law , Volume 69 , Issue 1 , January 1975 , pp. 101 - 109
Copyright
Copyright © American Society of International Law 1975

References

1 See UN Gen. Ass. Res. 3201 (S-VI) para. 4j and Res. 3202 (S-VI) para. Id (May 1974); 68 AJIL 798 (1974); 13 ILM 715 (1974). Numerous references to the problem of just prices and equitable price relationships were made at the 6th Special Session of the UN General Assembly on Raw Materials and Development. See, for example, statements of President Boumediene of Algeria, UN Doc. A/PV 2208, at 31–32, 37, J. Amouzegar of Iran, UN Doc. A/PV 2209, at 103–10, M. Jobert of France, ibid., 36–42; M. Perez-Guerrero of Venezuela A/PV 2213, at 80 et seq.; M. Stevens of Sierra-Leone, A/PV 2212, at 6.

2 Statements at 6th Special Session UN General Assembly of Secretary Kissinger, UN Doc. A/PV 2214, at 22–26; Mr. Scheel, Federal Republic of Germany, A/PV 2209, at 56–57; Ennals, United Kingdom A/PV 2209, at 117.

3 Albertus Magnus and Thomas Aquinas were the leading proponents of this position. See Roover, R. de Ancient and Medieval Economic Thought, 4 Int. Encyc. Social Sciences 433 (1968)Google Scholar. For detailed study see Baldwin, J. W. The Medieval Theories of the Just Price (1959)Google Scholar.

4 See, for example, statements at the 6th Special Session of UN General Assembly by representatives of Liberia, A/PV 2209, at 13–15; Sierra Leone, A/PV 2212, at 6; Peru, A/PV 2213; Saudi Arabia, A/PV 2217, at 31.

5 See, Economides, Should the rich countries help the poor? in G. Ranis (ed) The Gap Between Rich and Poor Nations 183–200 (Int. Economic Association, 1972)Google Scholar.

6 For statements at UN General Assembly 6th Special Session, see Algeria, A/PV 2208, at 18–20; Iraq, A/PV 2217, at 16; Zambia, A/PV 2211, at 101–02. In UNCTAD, see note by Secretary-General, Mr. Corea, to Board of Trade and Development, August 1974 TD/B(XIV)/Misc. 3.

7 See Haberler, G. A Survey of International Trade Theory, ch. 4 (1961)Google Scholar; Ibid., Terms of Trade and Economic Development in Economic Development for Latin America 275–97 (Ellis and Wallich, ed. 1961).

8 Many economists doubt that there has in fact been a downward trend in the terms on which primary products exchange with manufactures. For example, see Atallah, M. K. The Long-Term Movement of the Terms of trade Between Agricultural and Industrial Products (1958: Rotterdam, Netherlands Economics Institute)Google Scholar.

9 Reports of the UN Secretary-General on evolution of basic commodity prices since 1950 UN Doc. A/9544, April 2, 1974 and Doc. A/9544, Add. 1, April 4, 1974.

10 UN Gen. Ass. Res. 3202 (S-VI) notes that the countries which are most seriously affected by high prices are the least developed, the land-locked, and those with low per capita income. A list of criteria of needs is set forth in Part X of the resolution.

11 See Programme of Action in Gen. Ass. Res. 3202 (S-VI), Part I on raw materials and primary commodities.

12 See, for example, statements at UN General Assembly 6th Special Session by representatives of Kenya A/PV 2224, at 8–10 and Thailand A/PV 2220, at 47–50.

13 See statements cited supra n. 6 by representatives of Algeria, Iraq, and Zambia.

14 For a sophisticated discussion of this issue, see Mikesell, Raymond F. Foreign Investment in Petroleum and Mineral Industries 435–36 (1971)Google Scholar.

15 See statements by Algeria, Iran, and Venezuela, supra n. 1.

16 Ibid. Also Indonesia A/PV 2214, at 49–50.

17 See statement of J. Amouzegar of Iran, supra n. 1. See also report of OECD’s Long-Term Energy Assessment summarized in OECD 70 Observer 7 and 8 (1974).

18 UN Doc. UNCTAD/OSG/52/Add.l April 4, 1974 entitled “The Impact of Recent and Prospective Price Changes on the Trade of Developing Countries.”

19 See statements by representatives of New Zealand A/PV 2211, at 56, Kenya A/PV 2224, at 8–10.

20 See President Gerald Ford’s address to the UN General Assembly, Sept. 18, 1974 in A/PV 2234. See also statements at UN General Assembly 6th Special Session by Secretary H. Kissinger, supra n. 2., Representatives of Hungary, A/PV 2213, at 27, Italy A/PV 2218, United Kingdom A/PV 2209, at 117.

21 See statement of J. Amouzegar of Iran, supra n. 1. See also Levy, Walter J. World Oil Cooperation or International Chaos, 52 Foreign Affairs 690 (1974)Google Scholar.

22 Charter for an International Trade Organization, signed at Havana on 24 March 1948: United Nations Conference on Trade and Employment, Final Act and Related Documents (E/Conf. 2/78).

23 Report of UNCTAD Committee of Experts on Restrictive Business Practices in Relation to the Trade and Development of Developing Countries (UN Doc. TD/B/C. 2/119, April 26, 1973).

24 See Gardner, R. N. The Hard Road to World Order, 52 Foreign Affairs 566 (1974)Google Scholar. See also statements at 6th Special Session UN General Assembly by Philippines, A/PV 2221, at 66 and by Italy, A/PV 2218, at 23–26.

25 See 2 Proceedings of United Nations Conference on Trade and Development (UNCTAD) (1973), The Development of International Commodity Policy, UN Doc. TD/113, March 3, 1972.

26 See report by Secretary-General of UNCTAD to the 6th Special Session of the General Assembly, UN Doc. TD/B/488.

27 See UNCTAD studies on the indexation of prices in TD/B/503, Aug. 6, 1974; TD/B/503/Suppl. 1, July 30, 1974; TD/B/503/Suppl. 1/Add. 1, July 5, 1974. The comments made in the text on indexation are based principally on these studies. See also M. Perez-Guerrero (Venezuela) supra n. 1.

28 A somewhat related scheme of the International Monetary Fund provides for compensatory financing for short falls in exports but this is in the form of short term repayable loans.

29 A proposal to this effect was made by the Foreign Minister of France, M. Jobert supra n. 1.

30 Ibid.

31 The threat of inflation and particularly high oil prices and the danger of world depression were strongly stressed by President Ford in his address to the World Energy Conference in which he called for a “global strategy” of international cooperation in regard to energy and resources. N.Y. Times, Sept. 24, 1974, at 12.