Capitalism, Peace and the Middle East
This article was published in the Daily Illini on February 20th, 2006
What creates peace? What can override the historical human instinct to kill another person because their skin, religion or flag is different? A more powerful instinct: greed.
The annual Economic Freedom of the World study by Columbia professor Erik Gartzke and the Fraser Institute shows an overwhelming correlation between capitalism and peace (www.freetheworld.com).
Gartzke found that nations with a low level of economic freedom are 14 times more likely to be in a violent military conflict than nations with a high level.
There are many reasons why capitalism, and not self-righteous alternatives, can produce international peace.
When countries are economically interdependent upon each other via globalization it increases the cost of causing war. If China attacked the United States it would destroy trade not only with the U.S., but also with our allies. China is dependent on us to be a robust market for their exports and we are dependent on them to supply cheap imports. We are further bound by our financial markets, investments, currencies and debt.
It is ironic that many pacifists disdain corporate influence on government policy. It is that influence that would compel Chinese firms to stop its government from attacking the U.S. for fear of losing profits. Self-serving Chinese entrepreneurs will never allow a war with the U.S. Our interests coincide.
Wars used to begin over land. Land used to be the source of wealth for kings and empires. War has always been fought for wealth.
The difference today is that wealth is no longer created from farmland. Rather, abundance is created through the productivity and efficiency of intellectual, physical and financial capital. These things are not attained through war; in fact, they are destroyed.
Capitalism created new channels for human aggression, a new battlefield. War between international corporations has replaced war between countries. Wars of efficiency and CEOs have supplanted wars of bullets and generals. We cannot change the human instinct of greed, but we can change the incentives greed responds to. Capitalism is doing that. It is fundamentally redirecting the pursuits of greed to be non-violent.
The study further states that the top one-fifth of economically free nations have an average per-person income of $25,062, compared to $2,409 for the one-fifth least economically free. Similarly, unemployment is 5.2 percent compared to 13 percent, life expectancy is 77.7 years compared to 52.5 and children's participation in the labor force is 0.1 percent compared to 22.6 percent - all measures favoring free market countries.
Many Islamist attackers are poor and without access to education. Economically comfortable citizens are less likely to turn to violence as an outlet for their frustrations. Further, comfortable citizens are more likely to have access to education, also making them less likely to turn to violence.
The study attempts to tear down the theory that the spread of democracy creates international peace. "When measures of both economic freedom and democracy are included in a statistical study, economic freedom is about 50 times more effective than democracy in diminishing violent conflict."
He further shows that unstable democracies, such as those in Iraq and Afghanistan, are just as likely to engage in war as any other form of government.
The human desire to vote is forceful, but nothing is more powerful than the human need to gain. President Bush has naively focused resources on expanding democracy in the Middle East, but he should focus on spreading the instincts of the capitalist.
After World War II, learning from their prior blunders, the U.S. bombarded Japan and Germany with economic aid and entrepreneurial spirit. Today, the problems of the Middle East call for a modern Marshall Plan to lift the discouraged Islamic people into hope and capitalism.
The Great Peace will not come about because humans suddenly decide to become nice, as the far left wishes us to believe. Ironically, it will come from raw human greed and the unique ability of capitalism to safely channel that craving.
We will conquer the Middle East. But bombs barely penetrate a society's culture - fundamental change must come from capitalism.
Billy Joe Mills is a senior in LAS, and his mom still does his laundry and sends him frozen meals so he won't starve to death. His column appears on Mondays. He can be reached at opinions@dailyillini.com.
What creates peace? What can override the historical human instinct to kill another person because their skin, religion or flag is different? A more powerful instinct: greed.
The annual Economic Freedom of the World study by Columbia professor Erik Gartzke and the Fraser Institute shows an overwhelming correlation between capitalism and peace (www.freetheworld.com).
Gartzke found that nations with a low level of economic freedom are 14 times more likely to be in a violent military conflict than nations with a high level.
There are many reasons why capitalism, and not self-righteous alternatives, can produce international peace.
When countries are economically interdependent upon each other via globalization it increases the cost of causing war. If China attacked the United States it would destroy trade not only with the U.S., but also with our allies. China is dependent on us to be a robust market for their exports and we are dependent on them to supply cheap imports. We are further bound by our financial markets, investments, currencies and debt.
It is ironic that many pacifists disdain corporate influence on government policy. It is that influence that would compel Chinese firms to stop its government from attacking the U.S. for fear of losing profits. Self-serving Chinese entrepreneurs will never allow a war with the U.S. Our interests coincide.
Wars used to begin over land. Land used to be the source of wealth for kings and empires. War has always been fought for wealth.
The difference today is that wealth is no longer created from farmland. Rather, abundance is created through the productivity and efficiency of intellectual, physical and financial capital. These things are not attained through war; in fact, they are destroyed.
Capitalism created new channels for human aggression, a new battlefield. War between international corporations has replaced war between countries. Wars of efficiency and CEOs have supplanted wars of bullets and generals. We cannot change the human instinct of greed, but we can change the incentives greed responds to. Capitalism is doing that. It is fundamentally redirecting the pursuits of greed to be non-violent.
The study further states that the top one-fifth of economically free nations have an average per-person income of $25,062, compared to $2,409 for the one-fifth least economically free. Similarly, unemployment is 5.2 percent compared to 13 percent, life expectancy is 77.7 years compared to 52.5 and children's participation in the labor force is 0.1 percent compared to 22.6 percent - all measures favoring free market countries.
Many Islamist attackers are poor and without access to education. Economically comfortable citizens are less likely to turn to violence as an outlet for their frustrations. Further, comfortable citizens are more likely to have access to education, also making them less likely to turn to violence.
The study attempts to tear down the theory that the spread of democracy creates international peace. "When measures of both economic freedom and democracy are included in a statistical study, economic freedom is about 50 times more effective than democracy in diminishing violent conflict."
He further shows that unstable democracies, such as those in Iraq and Afghanistan, are just as likely to engage in war as any other form of government.
The human desire to vote is forceful, but nothing is more powerful than the human need to gain. President Bush has naively focused resources on expanding democracy in the Middle East, but he should focus on spreading the instincts of the capitalist.
After World War II, learning from their prior blunders, the U.S. bombarded Japan and Germany with economic aid and entrepreneurial spirit. Today, the problems of the Middle East call for a modern Marshall Plan to lift the discouraged Islamic people into hope and capitalism.
The Great Peace will not come about because humans suddenly decide to become nice, as the far left wishes us to believe. Ironically, it will come from raw human greed and the unique ability of capitalism to safely channel that craving.
We will conquer the Middle East. But bombs barely penetrate a society's culture - fundamental change must come from capitalism.
Billy Joe Mills is a senior in LAS, and his mom still does his laundry and sends him frozen meals so he won't starve to death. His column appears on Mondays. He can be reached at opinions@dailyillini.com.
posted by Billy Joe Mills at 12:56 AM
12 Comments:
Two questions:
First of all, when you say "average" income, do you mean the mean income or the median income? If they're using the mean income, it is much less meaningful in both cases, because people with very high or very low incomes can skew the value.
Second of all, do you have the value of the median income divided by the relative cost of living of the two types of countries? Simply giving a value for the income is insufficient, since a $7000/mo paycheck means a lot more in Central Illinois than it does in New York City, for example.
One other thing that I might mention--the United States and the Soviet Union had a standoff and a relative peace (except for three proxy wars) during the period of 1946-91. This was not due to economic interdependence, but due instead to a military stalemate.
I think that it is premature to consider that a peaceful cooexistance between the US and China is assured because of the trade.
What actually happens if the US and China break off trade relations? The US cost of living goes up because people cannot buy cheap goods at Wal-Mart, and China sells its goods to someone else with money. This is why the late-1970s boycott of Russian grain didn't work--the Soviets sold it to other countries.
True economic interdependence really only occurs when one nation has an item that it cannot get elsewhere, like the oil in the Dutch East Indes that the Japanese needed in 1941 for its war in China. This is as likely to start a war as it is to prevent one, as it did when they were no longer allowed to purchase it, leading to their attacks on the American, British and Dutch colonies in the Pacific.
Tom
interesting...thanks much, I was just curious. I am still kind of new to the blogging world and I am always interested to learn the routes in which news travels.
I think the graph is especially enlightening--if they don't print it in the DI, I think you should quit. Censorship is not okay!
Great column Billy
Tom,
Thank you much for the read. Statistically speaking, you are absolutely correct. The facts would be more meaningful if they were median income and if they showed purchasing power parity. However, I didn't have access to the data to manipulate them in order to make those calculations. What is reported in my column is simply taken from the academic report. However, those stats were not integral to the central point of the essay. They were simply used as a side point to relate to the anecdotal explanation often attributed to Islamist terrorism.
I disagree with your other points. The Cold War was an uneasy peace and we would certainly prefer one that did not rely upon MAD. Further, even while you make this claim you parenthetically mention the three proxy wars, as though they were minor. They were not minor and they illustrate how that peace was not a peace at all.
Your analysis of US-China relations assumes that China's economic dependence on us is not as great as our dependence on them. They will not be able to sell as many goods elsewhere if they cut themselves off from the US. Exporters can find no equivalent substitute for eager American credit cards.
I would modify your statement to say, "True economic interdependence only occurs when one nation has an item that it cannot get elsewhere at a cheaper price."
Anyways, thanks for the read and the post Tom, I hope to see more from you in the future.
You're welcome, Billy Joe. You've got real potential as a columnist. Your arguments are reasoned and you've got a good grasp of history and economics. I am looking forward to meeting you in person soon.
One thing I find amusing is that the populist types (extreme followers of Pat Buchanan) who claim to be worried about the American worker call constantly for the ending of trade with China. I wonder if they are really prepared for the sudden rise in cost of living for the lower middle class when everything that they buy at Wal-Mart suddenly doubles in value.
I find that almost nobody thinks things through to their logical conclusion. Economics, in particulr is so interdependent that *any* change has repercussions across the board.
I'm a big fan of a Professor by the name of Walter Williams that teaches at George Mason out east. I've never met him in person, but I read his blog constantly. If you haven't yet done so, I highly recommend him--he's absolutely wonderful.
Tom
Billy Joe Mills has written on these pages that capitalism will bring peace to the Middle East. But the only non-hypothetical example he offers as support is the Marshall Plan. It is nonsensical to suggest that the Marshall Plan was an attempt to export capitalism to Europe, where modern capitalism originated. Even if we accept this bizarre historical revision, the Marshall Plan is a poor example of a capitalist aid program, since unlike, say, World Bank loans, it consisted largely of massive grants to Europe from the U.S. federal treasury.
It's just as nonsensical to talk of exporting capitalism to the Middle East, which is already a capitalist region (hint: we're "addicted" to their oil). And if you insist that shoveling a sizable fraction of our GDP into OPEC's pockets for decades hasn't turned them on to your favorite brand of capitalism, how much money will?
But does capitalism bring peace? History says no. Capitalism didn't bring peace to the United States during the U.S. Civil War. It didn't bring peace to Europe during World War I and II. It didn't bring peace to Yugoslavia and Bosnia after the fall of the Berlin wall. And it's not bringing peace to Iraq now.
It would be wonderful if there were a simple way to bring peace to the Middle East, but there isn't. I know where the U.S. can start, though. We can refrain from waging war in the Middle East. That would start with getting troops out of Iraq and insisting on a diplomatic solution to our political differences with Iran. It may seem incredibly obvious, but war is not peace, no matter what outcomes we use to rationalize it.
Joe Futrelle
University Employee
After reading the above post, I realize that Billy is a complete idiot. Thanks for shedding light on the issue Joe.
Joe,
Your comments are confusing and I don't think you actually understand what you are saying.
The Marshall Plan was not an attempt to export capitalism, but it was an attempt to ensure that capitalism dug its roots deeper into European society. You're entirely wrong to suggest it had nothing to do with capitalism, since afterall one of the main motivations for the Plan was to hold back Communist (the opposite of Capitalism) expansion into Europe. Even today Europe is not very free market oriented, as they have many welfare states. Simply stating that Capitalism was invented in Europe has absolutely nothing to do with the whether the Marshall Plan was meant to stabilize and enhance Capitalism after WWII.
Is it nonsensical to talk about exporting capitalism to the Middle East? Noooooooooo. First, not every country in the Middle East, specifically the ones we have invaded, have Capitalism. Second, the ones that you claim do, simply because they export oil, are NOT capitalists. They are countries like Saudi Arabi and the UAE that are controlled by rich royal families. OPEC is the symbolism of anti-free market behavior, as they are international colluders.
Then you state, "But does capitalism bring peace? History says no." You then proceed to list a few weak examples. Somehow you feel that listing 3 historical examples, which honestly don't make much sense to begin with, somehow overcome the DATA that I cited in my original article. Those poor examples are simply not a credible response to the overwhelming data that was produced by Gartzke.
I see from your web site that you are a "pacifist." This would be an admirable position in a fairy tale...Sometimes diplomacy doesn't work too well when crazed leaders in Iran are building nukes, sorry buddy.
Nice try, your letter to the editor sounds good, but is devoid of serious refutations.
Best,
Billy Joe Mills
The tone of your comments is condescending--hardly necessary.
I have no idea what you mean by "capitalism". It's not really accurate to say that Europe is "not very free market oriented," at a time when Europe has been fighting cases against the US in the WTO over the US's protectionist policies. Along with Europe, most of the world is complaining now that the US is not capitalist enough, because of our massive farm subsidies.
The oil industry in the middle east is a capitalist industry--the monarchy that owns oil production in Saudi Arabia, for instance, isn't producing oil at a loss--it's investing a huge amount of wealth in infrastructure to produce more wealth and exploiting millions of workers who get wages instead of a share of the wealth. The capitalist system is defined by this division between the owning and working classes. The Saudi monarchy is not really a "public" institution--it's a single, private, profit-interested organization which cannot be voted out of office or challenged by the Saudi public. That's sort of like if the entire US economy was controlled by Coca-Cola or Wal-Mart.
How are the first and second world wars "weak" examples of the fact that capitalism does not bring peace? These are the most destructive wars that have ever been fought, and they were fought between capitalist countries.
"Sometimes diplomacy does not work when crazed leaders ... are building nukes," --exactly. Which is why I oppose the US's [crazed, IMO] leaders building more nukes, which is precisely what we're planning on doing ("bunker buster"=tactical nuclear weapons). Given that we're the only country that has used a nuclear weapon, and we used it against civilians, I think that the US is extremely dangerous and our nuclear ambitions must be stopped, in the interest of preventing more killing.
The Iran situation is also extremely dangerous. But the reason Iran is so powerful right now is all the oil money has been compounded by the political situation we've created in Iraq which has strengthened the majority Shiites who are allied with Iran. That's why I not only opposed the Iraq war--which numerous critics warned out would turn out this way--but also support transitioning away from oil to sustainable local energy production as rapidly as possible. I agree with Dubya and David Brooks ont this latter point: our "addiction to oil" is indeed a national security problem.
First of all, Joe, the EU is very hypocritical in their opposition to U.S. protectionist policies. They are the ones who will not let us sell genetically modified foods in their markets, which seems to me to be an outrageous violation of free trade practices.
After reading your posts, I understand that you prefer a centrally planned economy, and you probably think you are the perfect guy to run this. However, your insane talk about the U.S. being dangerous because of our nukes completely invalidates any rational thought that may have crept into your posts.
Leave the university, get a real job, and report back in five years. Then we will see whether or not your head is still in the clouds.
Joey,
Normally I would never frame my comments in a condescending way, I only did so because of the equally condescending letter that you wrote about me in the DI.
I cite your examples as weak, not because they are small wars, but because they are particular examples. So, to review, you are providing a few questionable examples while I am providing an entire database of empirical evidence (which can be found at the website linked to). That is not a persuasive way to respond to an argument...sorry.
Capitalism is the existence of free markets. You said, "The capitalist system is defined by this division between the owning and working classes." But, that is the by-product of capitalism that Marx (someone you probably know a lot about) emphasized, not the definition of it.
Your letter to the editor was reasonable sounding, and I now realize that you must have disguised your real views about capitalism and the U.S. so that people would take you more seriously in the DI.
Throughout history the answers have rarely lied at the extremes.
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