Spreading Democracy? Why the U.S. must tell the truth, By EHSANI2
Spreading Democracy in the Middle East? Why the U.S. must tell the truth.
By EHSANI2
April 27, 2006
One of my major disappointments with the U.S. is its failure to articulate clearly the rationale behind their Middle East foreign policy. They should borrow a chapter from Usama Bin Laden’s book when it comes to transparency and open communication of intent and strategy. Mr. Bin Laden, as we all know, has made it very clear that he wants to lead the Islamic “umma” in taking full control of the region’s energy resources and then proceed to deal with the west from the position of strength that these energy reserves can guarantee. He effectively wants to rid the area of the tyrants and apostates that currently enjoy the west’s tender support. The dream of controlling the region’s vast energy resources is not restricted to Bin Laden’s Jihadists of course. Saddam Hussein had a similar itch. Iran’s Mullahs would surely not mind being in charge either.
As transparent as the struggle to control these priceless resources, the West and the U.S. in particular, have been ambiguous and not forthright with its people or with the Arab world when it comes to its strategic interests in the region. The U.S. has an enormous thirst for energy. Its economy and society will be crippled were its energy supplies to suffer a major disruption. Any U.S. President that allows this to happen may very well get thrown from office and be impeached. Successive U.S. administrations have tried to rely on the so-called tyrants and kings to help them ensure that the above group of players or others does not succeed in making this happen.
The other pillar of the U.S Middle East foreign policy of course concerns the state of Israel. As opaque as the U.S. has been when it comes to the issue of energy, its strategy when it comes to Israel has been extremely transparent. Successive U.S. administrations have made it very clear that Israel has and will continue to receive an unwavering level of their support. When it comes to issues relating to Israel, therefore, no U.S. President has dared to veer off this long held commitment. The Presidency of W. Bush has taken this support to another new level. If the blatant bias towards Israel was not enough, September 11th made the situation from the Arab world standpoint even worse. Security of the homeland has become the unparalleled top objective of this Administration and the American public at large.
The easiest decision to make was to go into Afghanistan, topple the Taliban and hunt their famous guest. The decision to go in Iraq may have been a little less straightforward but with the benefit of hindsight also seemed inevitable. Saddam was a proven interested party in the energy supplies that we discussed above. He was a long-term danger in that regard. The Gulf monarchs did not mind to see him go. Israel undoubtedly wanted the same. Its supporters in the U.S. administration helped nudge and convince the President that the removal of Saddam was key to the U.S. national security. What if he teamed up with Bin Laden and created a common front that would attack both Israel and America? In the end, no one wanted Saddam around (Syria and Iran included).
Rather than articulate the need to secure the long term security of the region’s oil fields, the need to cut off any possible future state-sponsoring of Jihadist movements and to ensure the security of the state of Israel when it comes to explaining the rationale behind America’s Middle East policy, this administration decided to use the “spread of democracy” as the stated objective. In my opinion, President Bush made the strategic error of failing to explain how the spread of democracy is the “means” and not the “end” when it came to conducting his Middle East policy. Bush may believe that promoting democracy is critical for international security. But I believe that he does not understand how difficult it is to promote and market in our region which lacks free institutions that can promote the ideas of freedom of speech, press, religion, conscience, etc. This audacious democracy objective is likely to take not years but decades to accomplish. Standing on that navy ship and proclaiming “Mission Accomplished” was not exactly smart. Bush should have stood on that ship and made the following speech:
We have an enormous strategic interest in the Middle East. We must make sure that the region’s critical energy resources do not fall into the wrong hands. Like it or not, our society and economy needs the free flow of these supplies in order for it to survive. We will therefore use all of our resources to make sure our economic security is never threatened. This will mean that we may need to have a physical military presence in the region for years to come. Our support for the state of Israel will not dissipate. This admitted policy bias towards Israel will mean that we will always have a credibility problem in the Arab world.
The people of this region have suffered from decades of a “realist” policy, which was based on coddling “friendly” dictators and refusing to support the aspirations of oppressed peoples to be free. In reality, these dictators have ignored the plight of their people for too long. By allowing their economies to decline and by suppressing freedom and democracy, they have turned the region into a breeding ground for terrorism. A new political course has to be charted. As usual, this is easier said than done. As democracy and freedom spreads, Islamists will most likely fill the void. Without the institutions needed to practice democracy, the transition from tyranny to democracy is not going to be an easy task. Hamas’s latest victory in the Palestinian territories is a case in point. But this is no reason to change course. In three years, the speed of the change in the Middle East has been breathtaking. Our foreign policy doctrine is now based on recognition of the dangers posed by non-democratic regimes. Regrettably, the region continues to be dominated by friendly and unfriendly tyrants. Going forward the U.S. must make sure that the democratic earthquake that US policy has helped to unleash prevails. There will be set-backs; there will be alliances that form against us; and jihadists wil insist that we are crusaders and nonbelievers. We must not let such criticism and impediements deter us. In the long run, only democracy and freedom offer the promise of a more prosperous and peaceful region.
posted by EHSANI2 @ 4/27/2006 05:59:00 PM
45 comments
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45 Comments:
From Rolling Hajreh:
"The sound of Ehsani's lastest single Siyaseh al Neoconiyeh has lost the magic of his first release, Huriyeh al Iqtisadiyeh."
To Mr. Ehsani
can you explain to me, as simple as you can, what you mean by an institution that will promote democracy,who is going to elect it or appoint it,where it is going to get its support from, and how is it going to change our society, the army officers or parties may throw it out, our society is cemented to their religion, how are you going to seperate them from it and its principles.
the american society is far from perfect a lot of time there is no rational in their thinkings,they are tilted toward Isreal who is behaving like they can do any evil thing and get away with it,this society where the houses are by far more expensive in the last few years and gas prices are skyrocketing, therefore the poors are much poorer and the rich are richer, the american system is far from desirable.
EHSANI2:
The article hinges on the false assumption that Bush and the neocons really want democracy in the Arab World. I don't recall Bush stating that his goal was to bring democracy to Iraq until no WMD's were found and the insurgency in Iraq picked up. In addition, Bush does not have the mental capacity to understand what democracy is.
Transceparency by the US would have meant that the US would have had to state that the war is for Israel's security and for enlarging US military presence in the Arab World. Saddam offered full capitulation to Bush but Bush refused. Saddam was willing to sell oil to the US, and the US refused. Clearly this illegal invasion of Iraq was to control the supply of oil and dismantel Iraq as a state and dismantle Arab nationalism and hence safe guard Israel's security and its American subsidised occupation and colonisation of Palestine.
ugarit;
you are absolutely right.
Now we hear from the rep of the US gov the truth about the US and the west intention in the midleast, destroy Arab nationalism and steal Arab resources and make and keep Israel the domonent force in our area ,now does anybody have any doubt about the intention of the US and the west and why Syrians have to stand together no matter what to deffend Syria then when the attack fails Syrians can argue about the road to economic development and politecal reform.
Gotta run to the office so my full comment will come later. but mr. ehsani2 seems to have read and believed too many college text books. and recently has watched and believed too much fox news.
in short, its all nice and sweet on paper but it couldnt be further from the truth in practical terms.
Ugarit - good comment
Ehsani2
Your article was good, but it takes much more to find a solution for the United States's problems in the Middle East today. If it was merely a communication problem, then Karen Hughes and Dina Habib would have been the saviors.
Balanced policies is the answer, my friend. When they learn that they have no option but to go back to Jimmy Carter, Jim Baker, and Bill clinton type of Mideast role.
Ehsani,
What, in your opinion, would be the state of Syria today if Aflaq and his pals had decided on the slogan of "Freedom, Unity, and CAPITALISM" when they founded the Baath Party decades ago?
Democracy to Bush means calling the shots. Bush has no respect for the real thing. In fact, he doesn't really understand the concepts of freedom and democracy.
Look at how he behaves in the West. Spanish Prime Minister Zapatero, the democratically elected head of government of a NATO partner, is persona non grata in the United States. Why? Because he doesn't agree with Bush's policies. Bush dragged his feet in congratulating Romano Prodi, because he may exercise the national desire to remove Italian troops from Iraq. Bush had democratically elected Hugo Chavez kidnapped and recognized the putschist government immediately.
This "Greater Middle East Initiative" arrived one morning in December 2001 out of the blue, while the torture and mistreatment at Abu Ghraib were ongoing. It's merely wndow dressing serving strategic interests. If you buy it, fine.
Eshani2 post has some severe logical and moral weaknesses by mixing control off oil resources and democracy in the “receiving end”. Are these concepts in the same “line”? History proves that in most cases not.
If USA (“we” as in the post is mentioned) has a strategic need and “right” to try to control the oil resources of Middle East, doesn’t it mean that China and India as big powers have the exactly same “strategic need and right”. “We” would most certainly answer: well, but we are democratic, they not. But even that only possible argument available is an extreme bad argument. How can a democratic country control another country’s raw materials? Basically only by military means or / and by direct ownership / monopoly to the natural resources. On the other hand how could a democratic country let another country to control its natural resources? It is perfectly obvious to everybody, except for “we”, that control and democracy are not commensurable.
If in Middle East would be free elections in oil producing nations, the result would with high probability be a rather anti-American government with strong religious “influence”. Not a secular western type democracy. It did not happen in Iraq even USA did everything possible to make it happen and it certainly would not happen in Saudi Arabia. In this case what would USA do? Is control of oil for it more important than democracy in the target country? History gives clear evidence that control for USA is more important than democracy in “wrong hands”.
If USA would in reality want peace and prosperity in Middle East, it could start by Palestine question. Simply by saying: 1967 borders make the basis of the two states – end of discussion. Then continue to the nuclear issue: Middle East will be nuclear free zone and it will include Israel. USA has promised already to defend Israel in all cases, so nuclear weapons are not needed by Israel. Only after these two political decisions USA would have enough moral authority that people in Middle East could trust to USA’s "new policy". If these two issues are not solved the tensions and strategic imbalance remain unchanged.
Given the ruthlessness, stupidity and utter incompetence of the Bush administration, the invasion of Iraq was indeed "inevitable".
More fun stuff from Siddiq, this time in an interview with Al-Seyassah (perhaps the natural platform for a proven liar):
Siddiq : Le rapport Brammertz causera un séisme d’une intensité dix fois supérieure à celui du 14 février 05
L'Orient-Le Jour
"Le témoin-clé dans l’affaire Rafic Hariri, le Syrien Mohammad Zouheir Siddiq, a révélé que l’assassinat du chef du PSP, Walid Joumblatt, était prévu bien avant celui de l’ancien PM, et que le retour à Beyrouth du chef du CPL, Michel Aoun, s’est fait par coordination avec les autorités syriennes à la suite d’une série d’entretiens secrets."
Why would he suddenly mention Aoun, on the eve of the resumption of the national dialogue where Aoun will be named as one of the candidates for the presidency? This attempt to smear Aoun will only increase the suspicions that Siddiq is a mere tool of the Hariri camp.
"Zouheir Siddiq a également affirmé que sa déposition n’est pas la seule à avoir mené à l’arrestation des quatre ex-généraux libanais, assurant que la publication du rapport Brammertz causera un séisme d’une intensité dix fois supérieure à celui du 14/02/05."
Now this is very revealing: how would he know that his testimony isn't the only one incriminating the four generals? I don't think that the investigators are supposed to tell him about the testimony of other witnesses. So how on earth would he know that?
"Et après avoir rappelé l’existence de la liste noire de 30 personnes que « les plus hauts cadres du régime syrien entendent assassiner » – une liste « en cours d’exécution jusqu’à maintenant ; lorsque l’occasion se présentera, ils n’hésiteront pas à tuer », a dit le témoin syrien."
As he spent his last months in a French prison, how would he be in a position to know that this supposed list is still "en cours d’exécution jusqu’à maintenant"?
And if he knew that "les plus hauts cadres du régime syrien" were responsible for the killings, why did he try to contact them, given that such a move would indeed put his life at risk? At least this is what he claimed in an earlier interview:
"The witness further said that before he went to the UN commission he tried to tell officials in Damascus about the involvement of Syrian and Lebanese officers in Hariri's assassination on two separate occasions, but was twice advised to be silent."
The Daily Star, April 25, 2006
Obviously Naji Boustany and Issam Kara, the lawyers of Hamdane, Azar and Hajj were right in their prediction:
« Mohammad Zouheir el-Siddik a déjà fait cinq ou six dépositions, chacune contredisant l’autre, et rien ne prouve qu’une septième ne verra pas bientôt le jour."
(Les avocats de Hamdane, Azar et Hajj appellent à une confrontation entre leurs clients et Siddik) L'Orient-Le Jour, 27 Avril 2006)
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there is a committee appointed by Bush, include james Baker,and other republicans and democrats, to evaluate the situation in Iraq,and send their recommendations to Bush, I say it again, the republicans will call for troops withdrawl,within six months,this will leave the security to the Iraqee troops,who will face invaders,then the Sunni officers will take over again.
SimoHurtta,
The use of the word “we” was referenced to President Bush’s mock speech. Please refer to “Bush should have stood on the ship and made the following speech” in the post and note how the word we is meant to be Bush speaking not me (an attempt at takhween?)
I also do not share your opinion that “control and democracy are not commensurable”. Are you saying that America should leave the region and the security of its natural resources if it wanted to prove that it is truly democratic? America still has forces stationed in democratic Japan and Germany. I would argue that thanks to America’s proven willingness to use its military might, the future Saddams of this world will think twice before they embark on foolish adventures similar to his Kuwait invasion. The fact of the matter is that the industrial world has outsourced its economic security to the U.S. military. Europe, China, India and Japan do not have to fear potential major disruption of Middle East energy supplies because they know that the U.S. will not let Iran’s Mullahs or the Usama Bin Ladens of this world take hold of these critical resources. Please understand that this is not a test of how democratic Bush is. This is about THE top economic security of the industrial world, so let us stop being naïve.
Ugarit,
Your comment received a lot of support so let me address it. You are correct to say that that America felt the need for a larger U.S. military presence in the Arab world. You are also correct in saying that Israel benefited from Saddam’s overthrow. However, having destroyed his Osirak facility in the early 1980’s, Saddam was never really a threat to Israel’s security. By paying the families of suicide bombers $25k, he sure succeeded in making Israel happy to see him gone. Did they also want to destroy him because he was a champion of Arab nationalism? If this man and state was the symbol and guardian of Arab nationalism, then God help the Arab nation.
Alex,
As I have posted here before, James Baker has recently been hand picked to be in charge of the Iraq issue. You seem to miss both President Carter and Clinton. Well, in three years Mrs. Clinton may well become the next U.S. President. Let us wait and see how great she is going to be for the Arab world.
George Ajjan,
What would be the state of Syria today if Aflaq and his pals had decided on the slogan of “Freedom, Unity, and capitalism” when they founded the Baath party?
As a start, Freedom and Capitalism sure have a more natural fit than Freedom and Socialism. There is no doubt, therefore, that Syria would have been freer and vastly more prosperous had it adopted capitalism as an economic model. However, the state would have lost its control. The type of socialism that the Baath party practices in Syria is a mean to keep an iron grip on its society. Bashar is fully aware that free market capitalism will be far superior to his catastrophic current system when it comes to increasing the standards of living of his country. But Bashar is also fully aware that adopting capitalism means losing control. This is one area where no compromise can be made. In sum, I wish Aflaq came back from France as a capitalist. I doubt, however, that his party would have been able to hold on to power for 43 years.
Majedkhaldoon,
You claim that American society “is far from perfect”. Who said that it was? No society is. I wish that Bush would change this blatant bias and to start to direct his energy on behalf of a two-state Israel/Palestine solution. As to your recent remark that the U.S. will pull its troops out of Iraq in the next six months, I think that you are wildly mistaken.
To all,
Let me conclude by saying that contrary to what many of you think, I am not oblivious to the massive discomfort that most of you have with America’s current foreign policy doctrine. To the Arab world, the America of today is akin to a bully with a ferocious will who fumbles in search of reasons to explain why he does what he feels like doing. The Bush doctrine has replaced “containment” and elevated preemptive wars of offense to the status of official policy. To prevent even a remote possibility from ever becoming a reality, preemption is thought to be the only solution. The core of this policy is militarist unilateralism, and yes it has the look of imperial-style Rome. Its scope is breathtaking. It will act when “it” determines that threats are emerging. It will ignore the costs of future deployments and war. Just like the Rome Empire, it will incite too many enemies. It is not surprising that this incredibly ambitious and activist policy is stoking suspicion and paranoia. But critics of American bravado must also address in earnest the question of what to do with organizations like Al Qaeda whose purposes can properly be called genocidal and to explain how, in the years to come, they and their purposes are to be dealt with.
Ehsani is correct, if Hillary Clinton, God forbid, becomes President of the US, I don't even want to imagine...
Even her husband will be remembered as a disgrace, as will the neo-cons, and the failure of George HW Bush to win a second term in the White House will go down in history as one of the worst calamities affecting the Middle East Peace Process.
For the record, I too wish Mr. Aflaq had come back with the word "Capitalism" at the end of the Baath mantra. It's never too late to get things right though. Lots of countries have experienced rapid growth and increased prosperity once they got wise to the benefits of free markets.
Ehsani2:
You're absolutely correct that Saddam's Arab nationalism was disgusting. As Arabs we must be ashamed and strive for much much better. That being said, it was Saddam who was the problem and not Arab nationalism. It would be like saying democracy sucks because of how the US behaves in the world.
Ehsani I beg you to stop assuming that Bush and the US wants democracy for all. The US still helps despots far worse than Saddam and it toppels democracies.
BTW, look at how hands off the US is with respect to Gulf Arab States. The reason being is that their only apparent nationalism is money. They're for sale.
Anyhow nationalism can lead to huge problems. Look at how the US behaves with its brand of nationalism.
Let's face it the Arabs will be screwed by whomever is in the white house.
We have to respect ourselves before others will respect us, but for goodness sake we need to be given the chance to respect ourselves. We are still be colonized. It must stop.
I did not say USA will withdraw in six months I said republicans will call ...talk...about withdrawal,now only democrats talk about withdrawal.
Usa can not withdraw suddenly, this is shameful defeat, to withdraw with honor and dignity, it must be gradual and takes 2 years.
two states solution is bad , they will fight each other in the future, what we need is equal rights to both jews and palastinians,in one state
some socialism is necessary, America is not capitalism center, social security system, medicare, medicaid , farm subsidy, are few out of many programs of socialism here,not to mention also army,and school programs, but the basic thing we need is freedom.
Eshani2 it is completely obvious that WE or Bush’s mock speech, as you describe it, reflects your own opinions. It is not based on Bush’s opinions or what Bush actually said - so it is your own opinion put in the “mouth of Bush”.
Spreading views that USA doesn’t allow Al Qaida to take over Syria, Iraq, Iran etc. are rather amusing. Al Qaida is small militant terrorist organization with little resources (as US foreign affairs ministry it self said yesterday). Iran has not been expansive and the “Mullahs” have been a better “democratic” option to Iranians as the US installed Shah. Should the “Mullahs” of America decide what is good for the world and “take care” of its resources. What extra right has USA to control anything outside it borders that for example EU, China and Russia do not have?
What comes to US “control” in Japan and Germany is a reminder of old wars and not relative to what should happen in future or a good example to be multiplied in new countries. For many good reasons. First Japanese and Germans are not completely happy to have those US bases in their countries. Secondly Japan and Germany pay USA huge amounts of keeping the bases there. This money they could use to develop their own defence. Thirdly Japan and Germany do not have huge raw material resources.
The fact of the matter is that the industrial world has outsourced its economic security to the U.S. military. This your comment is politely said nonsense. Europeans are rather unhappy with NATO and its development. Many in Europe prefer an EU army, not US dominated NATO, as solution for European defence. One should remember that EU is a bigger economical power than USA and has more people. The common American belief that EU is happy US is playing police in Middle East is not true. EU, China and Russia are extremely worried about the development and the increasing chaos USA is creating on our continent (=Eurasia) near our borders.
Back to the definition of control and democracy. Another democrat country controlling a democrat country’s raw materials is simply not possible if we speak about independent sovereign countries. Control of oil is not a question of military protection; it is a question of economical dominance. Let us assume that Iraq wants the best possible price and maximum amount of income of its oil (= nationalized oil company), which would be sensible for a nation in Iraq’s present situation. What if China would pay more for Iraqi oil than Americans? Would USA veto that deal? Control means CONTROL or it means nothing in this case.
Some points to those “free trade” dreams presented before. Believes that underdeveloped countries could jump to the next stage simply with “free trade” are bull shit. Only countries which have an enough big domestic production level on several areas and a capacity to export have a possibility to free trade and import. West-European countries industries developed behind trade barriers, trough regulated markets and state owned industries. Only during the last decades European countries have had the possibility to privatize the state owned monopolies and companies. This has been possible only when a certain level of development had been achieved and guaranties of real competition are profiled. Also the success story of China and India has actually not based on free trade it self. Both countries have opened their markets in a planed way when they have achieved a desired level.
Many prices of different commodities were regulated also in the west. Even today. On the other hand how the farming substitutes USA and EU give to their farmers and farming companies fit in the illusion of the power of free trade. One could wonder what is the actual difference, from the state's finances viewpoint, when the government gives substitutes for farmers or gives substitutes to the customers so, that they are able to buy bread and rice. What “free” trade is that when substituted agricultural products are imported to underdeveloped countries? It is perfectly obvious that it makes the local producers suffer.
Believing that USA makes its economical and military moves in the world for the best interests of the whole world is laughable and naive. Naturally USA does egoistically what is best for it self. What is good for USA (and Israel) is not necessary good for Syria, Iraq and the other Middle East’s countries. Or for EU.
SimorHurtta,
I enjoyed our discussion. Humans are genetically born to act in their self-interest. This is why socialism and communism do not work. Adam Smith realized this. Of course America does what is best for itself. Do you expect it to look after the interests of Syrians or Arabs first? Does Bashar act in his best interests or does he think about the American people first? As for free trade and markets, nothing will ever shake my 100 per cent coviction that pure capitalism is by far the most superior economic system. Again, I did enjoy the discussion.
ehsani2:
Humans are also genetically born to want to perform sexual intercourse with multiple partners. That does not mean it is wise to do so. Culture and civilization moderates that behavior. Capitalism should also be moderated to a civilized state. The EU appears to be much better at civilizing capitalism.
What does "100 per cent ... capitalism" mean? There is no such thing and neither is there 100 per cent socialism. Neither socialism nor capitalism have concrete definitions.
My friend Ugarit,
100 per capitalism means as little government interference and as much free markets as possible. Free markets only work best when they are allowed to. My convictions and beliefs are not merely academic but come from personal life experiences too. I spent an equal time of my life in both the EU and the U.S. Clearly you seem to prefer the former while I prefer the economic system of the latter. I guess we must respectfully agree to disagree. I do have a question for you. Have you read "the wealth of nations" by Adam Smith? In case you have not, I highly recommend it. I wish Syria one day practices at least some of what this book espouses.
ehsani2:
Thank you for the recommendation.
Eshani2 likewise I enjoyed the discussion. Still some points.
Conservative people often praise low governmental influence (= low taxes) and free trade as an ultimate solution. If a pure “100 percent” pure capitalism would be the best the most successful economies would be some African nations where there are no taxes and no guarding on borders. A good functioning industrial nation can not be born in a state of pure anarchy and or be ruled without regulation of the economical “playing field”.
Adam Smith wrote his work Wealth of Nations in “ancient” times, without the possibility of knowing what happened latter. His work had huge influence, but can be only seen as an ideological path opener, but not as the absolute “unchangeable” truth. It is the same as saying that Isaac Newton knew everything of physics.
By the way Anders Chydenius from Sweden published equal theories ("Den Nationalle Winsten") 11 years before Adam Smith.
Adam Smith Quote form the "Wealth of Nations":
‘The government of an exclusive company of merchants is, perhaps, the worst of all governments for any country whatever.’
‘...the rate of profit does not, like rent and wages, rise with the prosperity and fall with the declension of the society. On the contrary, it is always low in rich and high in poor countries, and it is always highest in the countries which are going fastest to ruin
The interest of the dealers . . . in any particular branch of trade or manufactures, is always in some respects different from, and even opposite to, that of the public... (They) have generally an interest to deceive and even to oppress the public, and accordingly have upon many occasions, both deceived and oppressed it’.
‘Our merchants frequently complain of the high wages of British labour as the cause of their manufactures being undersold in foreign markets; but they are silent about the high profits of stock. They complain about the extravagant gain of other people; but they say nothing of their own.’
SimoHurtta,
You are absolutely right that a good functioning industrial nation cannot be ruled without regulation. Indeed, strong and enforceable regulation is critical. Regulating a country’s banking system is a critical start. Its securities industry also needs a watchful regulatory agency that ensures the fair working of the market place. Monopolies have to be fought by strong anti-trust laws. All this is a prerequisite for capitalism and free markets to let the so-called invisible hand do its magic.
Ugarit,
You picked an excellent quote by A. Smith. High rates of profit cannot be high in a free market economy because open competition will ensure that such higher than usual rates of profit are arbitraged away. In a true free market economy where monopolies are discouraged, no company ought to be able to replicate what Mr. Makhlouf was able to accomplish in Syria with his cell phone venture. His rate of profit is disproportionately high precisely because free markets are not allowed to function. You and I may have decided to compete with him had Syria been governed by a capitalistic free market economy. But it is not, and without competition and free markets a handful of the country’s merchants have it all for themselves. This is the exact opposite of what free markets and capitalism is all about.
Why Europe should reject U.S. market capitalism
Why Europe Should Reject U.S. Market Capitalism
by William Pfaff
Paris -- The specter of Anglo-American market capitalism dominated France's student unrest in March and April, and motivated popular rejection in France a year ago of the proposed new European Union constitution.
The election that has just given Italy a fragile center- left coalition, and recent conflict in German industry, involved the same question: how to remodel national economies, or whether to remodel them at all.
Advocates of the new model capitalism, and the globalization project that goes with it, like to present it as an expression of historical necessity, rooted in classical economics and embodying irrefutable laws. It is progress itself, they say. Those who do not conform to the rules of modern market capitalism, and do not offer the human sacrifices of lost employment and diminished living standards that the market demands, will fall by the wayside of history.
This is simply untrue, although most of those who say it undoubtedly believe it.
The new American and British market capitalist model, which dictated deregulation of industry and privatization of state enterprises in the 1970s, and globalization of international markets in the 1990s, exists as a result of free political decisions and ideological choices that were anything but inevitable. History may one day describe them as having been perverse and socially destructive.
Two of the most important influences on the new capitalism were academic in origin, and the third, improbably, was an instance of romanticized egoism.
The first influence was monetarist economic theory. This in principle excluded social considerations from economic policy decision. Government economic policy was to be made chiefly in response to a single objectively determinable factor, the money supply. The effect of this new theory was to "dehumanize" economic policy, previously held to be closely related to political considerations, as was the case with the Keynesian tradition that monetarism challenged.
The second influence was primarily political, a reaction to 20th-century totalitarianism. Working in London in the 1930s, the Austrian political theorist and economist Friedrich von Hayek began as a critic of Keynes, but eventually widened his argument so as to assert as a matter of principle that state intervention in society, even in democratic political systems, amounted to a "Road to Serfdom" (the title of a book he published in 1944).
State intervention in economy and society threatened human liberty. The free market produced economic efficiency and human freedom. Hayek had a great influence on Margaret Thatcher.
The third influence was an eccentric one, important in the United States. It was the creation by a Russian-American novelist, Ayn Rand, of a "philosophy" of heroic egoism and pursuit of individual self-interest (against the mob and the weak) by superior persons. Her ideas responded to the longings of impressionable college students (including Alan Greenspan) and her views became something of a mid-century American cult, if not a sect.
This is what underlay the transformation of American corporate culture, and of the American business corporation from an institution with national identity, constrained to reconcile interests of owners, employees and community, into the modern global corporation, effectively controlled by its managers and mandated to the single objective of producing "value" for stockholders, while handsomely rewarded its executives.
This change transformed labor into an anonymous commodity and put both blue-collar and white-collar staff into competition with an effectively unlimited global labor supply, resulting in employment insecurity, reduced or static wages, diminished or eliminated benefits and pensions, and the destructive social pressures of falling living standards.
In the United States, the new model of corporate business has evolved toward a form of crony capitalism, in which business and government interests are often corruptly intermingled, the system resistant to reform because of the financial dependence of both major political parties on contributed money.
Frequently described by its supporters as a progressive step in the development of a new international economy, the political-economic system that has evolved in the United States has proved regressive in crucial respects, as well as inefficient and abusive of the public interest.
Europe, one would think, should be looking for social and economic evolution on its own terms. It is perfectly capable of doing so, as a modern industrial society that in aggregate terms is larger and wealthier than the United States, as well as less shackled by obsolescent ideology and entrenched special interests - its problems with union corporatism notwithstanding.
In the longer term, for Europeans to embark on this project, instead of conforming to the currently received wisdom concerning the globalized economy, would serve the international interest as well as that of the European Union. It might even prove a service to the United States, whose future is now jeopardized by economic error and excess, as well as unachievable global political and military ambitions.
© 2006 The International Herald Tribune
###
Ugarit,
William Pfaff is of course entitled to his opinion. I am sure the magic of living in the lovely city of Paris has made him a fan of European life. This does not make him right though. Note how he spends most of his article describing what is wrong with American capitalism but opts to spend very little to tell “how” Europe can be better. He opines that Europe “should be looking” for social and economic evolution on its own terms but he offers no specific plan as to what that social and economic system will actually look like.
He takes a stab at Ayn Rand, Hayek and Milton Friedman and blames them for America’s ills. I am sure that you will not be surprised to know that I hold these three thinkers in extreme high regard. In sum, I respectfully disagree with the article and its author’s philosophy.
The common misunderstanding of economical development in a country is that it is created by only by trade and production. Actually the level of economical development it is created buy the average purchasing power. Much of the GDP is created by the services the citizens sell and buy inside a country. Poor citizens can’t use services.
Henry Ford understood that by paying relative good salaries he could sell cars to his workers.
Paying low wages for many and a high dividend for few doesn’t create economical development. The development of the average buying power of the citizens is essential to the development. Ultra rich people can invest but their possibility to consume is limited. On the other hand who will invest if there are no or very few customers?
Let is take Iraq as an example. The higher price Iraq is able to get for its oil, the higher the proportion of that income stays inside Iraqi economy, the better Iraq is able the distribute that income relative evenly among its citizens, the better the countries economy will be.
Believing that if Iraq sells the drilling rights to foreign companies, which then pay a small share to Iraq in rents and taxes, use cheap outside Asian labour, buy most of services from US and European companies will make Iraq a rich and prosperous country, is complete bull shit.
Naturally we can guess which one of those two possible options is which USA (and Eshani2) favour and which Iraqis favour.
ehsani2:
In your opinion is the quality of life for an average citizen (not a business man and not a corporation) better in the EU than the USA? If so how? Is the reverse correct? I really want to hear your opinions.
SimoHurtta,
You are essentially advocating a society, which promotes a wealth and income redistribution policy. You want the government to legislate how much corporations should pay in dividends versus wages. In effect, you want a government entity to come up with the “right mix” and set out to reinforce it. Presumably, you also want to significantly increase the minimum wage and the top marginal tax rate on high earners. To put mildly, I completely disagree. Once you start on this slippery slope, where do you exactly stop? How much income redistribution is enough for you? I currently pay 39% in taxes. If America is as unfair to blue-collar workers, as you seem to think, what do you suggest I ought to pay? Confiscating wealth is not the solution to higher standards of living. The idea that a government must tax high earners and dividend recipients in favor of low-income earners is an exercise in socialism that has been proven to fail. Jimmy Carter had a high marginal tax rate approaching 70% when he was president. Since you are an economist, I encourage you to look at the results. Only when Reagan slashed that rate to 28%, did the U.S. economy get unshackled from the excessive burden of regulation and taxation. The results since then speak for themselves. As to the issue of foreign participation in industry, the vast majority of developing countries does not have the technology or know how that the foreign companies have. Without the foreign multinationals, a lot of these countries would not be able to make it.
Ugarit,
The U.S. unemployment rate is almost half of that in Europe. Its productivity as well as its actual and potential GDP is higher. As you may suspect, I do think that the U.S. is a far superior model.
ehsani2:
So three statistical points, unemployment, productivity and GDP are sufficient? Again you state things from a corporate perspective. That's disappointing. Do I need to re-illustrate what is important for many people who are not wealthy?
suply and demand ,the US is a beter place and we know that from the fact that everybody wants to come to the US encluding my nephew from Syria who preffered the Us to England ,he is finishing medical school ,I rest my case.about taxes taxes apply on income not wealth and taxes are meant to keep the midle class from becoming rich by saving and investing while the rich have their money in tax free investment.
2006 Quality of Life Index and the winner is France which also has the best health care in the world.
norman:
I would also prefer the US over the England. Who would'nt? :-)
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I'm not sure if the link below has accurate data. I'm not even sure if there is a standard way of measuring productivity. Nevertheless, here it is:
Productivity of the EU compared to the USA 2004. France is about 12% more "productive" than the US and you know the French work several hundred hours less per year than US workers.
Are stats for "productivity" per clocked hour of work? I'm pretty sure the US would not look too good, since US workers clock more hours than Europeans
Link to productivity graph
Ugarit,
There is no doubt than an unemployed person without health care insurance is going to have a very difficult time making ends meet in the U.S. Of course, Europe, Canada and even Cuba may suit this gentleman more than the U.S. the Cuban public health care system is supposedly great. A blue-collar worker may indeed be better off living there.
I love Paris and the fact that France has scored top honors in your link is great. Your own survey has admitted that America has been the winner for 21 straight years. It has supposedly dropped because of slightly weaker economic growth, which the country’s central bank wants happen to reduce overheating. It is also no longer number one because of the ongoing and increasing infringements of personal freedoms. I guess we thank Mr. Bin Laden for that. Let me conclude this discussion this way:
I do not believe that there is a perfect country or society on earth. Every country has its many advantages and disadvantages. Syria may rank very low on my economic check list but I absolutely love being there when I can. I also happen to love France and Europe. What is there not to like when you consider their history and culture? In the end, it boils down to this black and white issue:
Which country has the economic system that offers its citizens the highest probability of increasing their standards of living (regardless of the way you define it)? Which country has the economic system that offers opportunity and hope for most of its citizens? Which country allows its citizens the maximum freedom to innovate and learn? Which country has the highest quality academic institutions?
I think the answer is clear. But, is this country perfect? No. Are there other countries that do some things better? Undoubtedly.
As to your productivity question, please note that international comparisons of productivity are notoriously difficult due to differences in how hours worked and output are computed. Please refer to http://divisionoflabour.com/archives/001513.php for an example that might help explain.
My country Finland has been on the top of the list of the most successful economies (better than USA during the last years); even we are a European “welfare” state. We like our system and do not envy not having “Las Vegas and Disneyland”.
Let us take for example the health care section. USA uses 16 per cent of it GDP to healthcare, when European countries use 5 – 10 per cent. In the WHO raking lists USA is among the underdeveloped countries (place 35 if I remember correctly), when European (old EU) countries are in the top of the list. In Europe and Canada ALL citizens enjoy a relative good healthcare, in USA only those who have an insurance or enough cash.
What comes to comments of unemployment levels that is rather irrelevant, because the statistics in Europe and USA are made differently. It is almost impossible to see homeless people in Helsinki, not in major US cities.
I made my comments not to undermine USA’s system, but as an answer to your visions that the US model will pull the underdeveloped nations like Syria to the riches. It is simply not possible. The world is full of countries, which have low taxes, few laws to block businessmen etc. still they are no economical success stories. Economical development is much more complicated, than free trade, capitalism and Democracy, the normal US presidential mantra. It needs educated workforce, universities, infrastructure, a social security system etc. That all costs, and without taxes they are not created.
What comes to your naïve comments about the tax levels during Carter’s and Reagan’s time you can also watch the budget imbalance development during democrat and republican presidents. State debt is shifted tax. And now USA has enough future tax “reserve”. I really doubt that during Carter’s time the marginal tax was 70 per cent, if it was it was needed to pay the debts Nixon created.
I suppose that originally this discussion started from how Syria could be a wealthy country. Like normal the discussion turned by the US/Syrian rightwing “economists” how excellent USA is compared to other countries. I would like to know in more details how the USA’s “medicine” of free trade and USA loving government would lift Syria to riches. It did not make Latin American countries rich even USA had 200 years to that prove that “economical theory”. You can’t blame the people of those countries not becoming rich, if their natural resources are shifted in the pockets of multinational companies with little or no compensation.
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To that your productivity discussion.
The graph says GDP / employed worker. The figure is calculated dividing GDP with the amount of employed workers and then indexed to USA’s figure.
It means that the yearly working hours amount is not a valid explanation, because they do not exist in the equation. France is simply more productive than USA.
On the other hand I do not understand what is so brilliant and exemplary in USA’s long working days and short holidays. I would say that it is no good example to anybody.
Let us make an easy example U earns in 10 hours 100,000 dollars. E earns in 1100 hours 100,001 dollars. Which is better and who is more productive?
SimoHurtta,
Are you a Finnish citizen? Do you have any Middle Eastern background, if I may ask?
Yes you can ask. I am an original Christian Protestant Finn and born here. My wife is a Muslim (even she is rather secular), so I have some motive what is happening in the Middle East and in this war between cultures.
Many Europeans follow with great interest these US crusades and most of us do not like at all what is happening. These wars have an effect to all of us and make our world more dangerous. And it is not the terrorists who make it more dangerous. For example in Finland before this serie of wars begun, a slim majority was ready to think of joining NATO. Now the clear majority doen't allow it. We do not want to draged in US wars around the world. Afghanistan war was still understandable and there are Finnish soldiers, but Iraq war was absolutely wrong.
I believe in democracy, but not in US "exported democracy with guns". USA has not created a single democracy since WW2, but has managed to destroy several democracies and "blessed" the world with a row of juntas and dictators.
Great,
Thanks for answering my question. Long live Finland. My best friend is from Norway incidentally!
"I believe in democracy, but not in US "exported democracy with guns". USA has not created a single democracy since WW2, but has managed to destroy several democracies and "blessed" the world with a row of juntas and dictators."
In no particular order, Japan, S. Korea, Philipines, Israel (actually the limeys. but they stepped aside and let the USA pick up the load, so we should get the credit) Iraq, Poland, Czechoslovikia, Hungrary, Italy, Spain. There are others, but that short list is enough to demonstrate either your ignorance or that you are a liar.
In all those cases, the guns DO NOT bring democracy, they just keep the non-democratic at bay while the citizens secure their own freedom. That is the only possible way it can work.
If you think regime chanege and the War on Terror is wrong, then you don't need to be in NATO. That works out rather well, since NATO sure doesn't need Finland. BTW, Finland exists BECAUSE the USA held off the Soviets. No other reason.
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