Many of you already know that two of NOL‘s Senior Editors are associated with Econ Journal Watch, thus making its publication a family affair. Fred is on the editorial board and Warren is its math reader. Here are some of the highlights I found worth noting in the latest issue:
Eli Heckscher’s Ideological Migration Toward Market Liberalism: Benny Carlson explores the intellectual evolution of a great Swedish economist.
Symposium: Classical Liberalism in Econ, by Country: Authors from around the world tell us about their country’s culture of political economy, in particular the vitality of liberalism in the original political sense, historically and currently, with special attention to professional economics as practiced in academia, think tanks, and intellectual networks.
“[S]overeignty is a constitutional idea of the rights and duties of the governments and citizens or subjects of particular states.”
To me, a constitution is like a contract. It’s close to set in stone and it lays out these rights and duties. But the idea of sovereignty Jackson is pointing toward in that quote would be better understood as laying out a sort of meta-prize; it’s a delineation of the commons that potential groups within that area may compete over or cooperate in. To be fair, a constitution is a similar sort of commons (especially when that constitution includes the right to collect tax and lead armies). The question of how to govern the commons is *the* question on the domestic side.
On the international end of things, anarcho-capitalism calls for muddying the borders of these commons. This has obvious costs and benefits: it makes the emergence of a productive polycentric order easier, but it also opens access to what would have been relatively closed commons. I think the missing piece in the world governance question, whether from a classical liberal, minarchist, or anarchist perspective is the question of how a polycentric order would emerge and function (e.g. standards associations, norms of arbitration/dispute resolution, etc.).
Sean McFate, a political scientist at National Defense University in Washington, DC, has a fascinating article in Aeon about the reemergence of mercenary and quasi-mercenary security firms throughout the world. The whole article is fulfilling throughout, especially if you’re a well-read anarchist or a history buff, but I wanted to highlight this tangent:
With the fall of the South African apartheid regime, unemployed soldiers from special forces units such as the 32nd Battalion and the Koevoet (‘crowbar’ in Afrikaans) special police formed the first modern private military company, appropriately named Executive Outcomes. Unlike WatchGuard, Executive Outcomes was not a military enterpriser but a true mercenary firm, waging war for the highest bidder. It operated in Angola, Mozambique, Uganda and Kenya. It offered to help stop the genocide in Rwanda in 1994, but Kofi Annan – then head of UN peacekeeping – refused, claiming ‘the world may not be ready to privatise peace’. Annan’s was an expensive ideology, given the fact that 800,000 people died. By 1998, the company closed its doors, but the mercenary market for force surged.
Two aspects are important here, one said and one unsaid. First, the unsaid. If this mercenary outfit was “waging war for the highest bidder,” why did it offer to go in to Rwanda to stop the bloodshed? I think scholars assume the worst when it comes to stateless actors and warfare. Why has Anheuser-Busch begun shipping free cans of water into Flint, MI?Why does Wal-Mart donate billions of dollars to charity? When it comes to reputation, costs may sometimes not make sense to outside observers who don’t have a sufficient understanding of benefits. Why on earth would a corporation built solely to wage war for the highest bidder be interested in offering its services to a country that would not be able to afford its services? To ask the question is to answer it, of course, but understanding incentives using a costs-benefits framework requires more effort than you might suspect.
There is simply no logical coherence to the idea that, in a world where stateless mercenary firms are the prominent form of security, violence and lawlessness will reign supreme; nor is there any evidence whatsoever to suggest that “[m]ore mercenaries means more war, as they are incentivised to start and expand wars for profit, and turn to criminality between contracts.” Indeed, as McFate notes in his excellent article, the market for security is already becoming freer and while he ends his piece on a depressing note, lamenting this indisputable fact of the present-day world, I couldn’t help but remember the now-famous graph on battle death trends produced by political scientist Jay Ulfelder (using data from the Uppsala Conflict Data Program [UCDP]), which illustrates nicely the overall decline in deaths due to warfare violence around the world:
Now, two graphs showing that deaths from warfare have been in decline for half a century does not necessarily mean that a freer market in security services has led directly to this overwhelmingly good news. I am confident in claiming, though, that the freeing up of security services markets, combined with the steady presence of a few, still-powerful nationalized armies has led to a reduction in war-related deaths (and violent conflict in general). Both graphs illustrate well what happens when there are too many nationalized armies vying for power and prestige. (It is worth noting here that the main goal of diplomats and policymakers everywhere, no matter their ideological orientation or citizenship status, is still to avoid another world war.)
Second, the said. Annan’s refusal to decriminalize mercenary activities led directly to the 800,000 Rwandan deaths. How is this moral failing any better than when a mercenary firm breaks its contract and ends up killing a few dozen more people than it was supposed to? Again, the graphs are useful here: When conflict is nationalized, everybody suffers; when it is privatized, atrocities happen but not on the same scale we have seen with nationalized conflicts. It’s not even close. Annan’s short-sightedness reminds me of economist Scott Sumner’s 2012 summary of Hillary Clinton’s view of the War on Drugs:
[…] in response to a final question on drugs (from a Latin American reporter), she said drug legalization would do no good because drug dealers are really bad people, and they would simply do other crimes. No discussion of how America’s murder rate fell in half after alcohol was legalized in 1933.
Like drug use, the privatization of security services causes many people, well-educated or otherwise, to bristle at the notion without quite thinking through its logical implications. While ugly, mercenary firms are far more efficient and effective at quelling “bush wars” than are nationalized armies and, in turn, mercenary outfits are far less capable of sowing the type of destruction that nationalized armies routinely carry out.
I don’t think that a world with a few nationalized armies and an abundance of mercenary firms is necessarily the best option going forward, though. It is, however, a better option than most scholars and analysts give it credit for. In fact, it’s the best option at the moment, and while the status quo may sometimes be ugly, remember the graphs. Privatization of security services has contributed, at least in part, to a more peaceful and less violent world.
In order to move forward from this status quo it is best not lament the way things are going, but to acknowledge that things are the way they are for a reason, and then look for avenues to alter the status quo without falling back on a blanket policy like nationalizing security services again. The horrors of the World Wars should still be fresh in our minds, and the horrors of those wars were enabled and encouraged by nationalized security forces.
The best way to move forward is by looking at where these “bush wars” are taking place and begin thinking about ways to incorporate these regions into the global order (such as it is). This policy represents a departure from traditional post-war thinking about international relations, but it doesn’t make it radical or unfeasible. Indeed, there is a long tradition of republican thinking in Western thought pertaining to international relations. The West needs to start recognizing the legitimacy of secessionist sentiments in the post-colonial world, even if it means friction with Russia and China.
Washington and Brussels will have to endure charges of hypocrisy when it comes to ignoring the lobbying efforts of places like Tibet and Dagestan, but Biafra should have become a member state of the United Nations long ago. Baluchistan should have access independent of Pakistan and Iran to the IMF and World Bank. Two or three soccer teams from the region known as Kurdistan could easily be present in all major FIFA tournaments. Examples abound throughout the world. The West should also be open to recognizing arguments made by Russia and China for the independence of regions. There is no good reason why Western diplomats should ignore Moscow’s recognition of places like South Ossetia and Donetsk; doing so only hardens Russia’s stance on recognizing secession in parts of the world where its influence is limited or non-existent and forces the West into bed with unsavory post-socialist regimes.
The West needs to start being more inclusive when it comes to its own federal and republican institutions, too. Morocco, for example, should have had its 1987 application to join the European Union taken seriously (same goes for Turkey). The US federation needs to be actively courting polities like Puerto Rico, Coahuila, Alberta, and Micronesia to join the union. Both the EU and US are contracts designed to dampen violent conflict by fostering diplomatic, economic, and cultural intercourse between provincial polities. The reasoning behind exclusionary policies simply doesn’t answer why these republican, supranational organizations should not be actively recruiting neighboring or geopolitically useful administrative units into their representative systems.
Without this change in mindset the status quo will continue, which again if we remember the graphs is not all that bad, but something worse may happen: There could be a reversion to the blanket nationalization of security services that we saw during World Wars I and II.
That’s the main question being asked by Federico Boffa, Amedeo Piolatto, and Giacomo A. M. Ponzetto, all economists. I cruised through the whole paper (pdf) and have some superficial thoughts. One snippet:
Western California is more liberal, even among Republican voters and politicians; Eastern California considerably more conservative […] At a first glance, such a political divide might suggest that a break up of coastal and inland California would be optimal on preference-matching grounds […]
[H]owever [this is a] superficial assessment. [Eastern California] contain[s] a large Hispanic population that overwhelmingly prefers the Democratic party. This group is much less educated, less politically knowledgeable, and less likely to vote than Republican supporters in the region, who are on average older, whiter, and wealthier. At the same time, the left-wing Hispanic working class in the Valley shares the political leanings of highly educated liberals on the coast. This ideological alignment goes beyond mere partisanship and includes shared preferences over policies.
As a consequence, our model suggests that the political integration of California is welfare maximizing. For relatively uneducated inland minorities to have a government corresponding to their preferences, it is essential that they share a state with ideologically aligned liberal elites in the Bay area. Right-wing Californians, instead, are sufficiently educated and influential to have a voice in state-wide politics, despite being in the minority: California had a Republican governor for twenty-one of the past thirty years.
[This lesson] applies more broadly. Disadvantaged ethnic minorities— which are less educated and often politically underrepresented— should belong whenever possible to the same polity as better educated and higher-status voters having similar political preferences. Only then are politicians effectively held accountable to both groups. (29-30)
California is “welfare maximizing”? Somebody help me out here. Isn’t it also possible that poor Hispanics and rich liberals form a voting bloc in California as it is because of how the GOP is patched together? If California split into an East/West, current coalitions would be shattered and it doesn’t follow that rich liberals and poor Hispanics would share the same voting preferences in the new arrangement. It doesn’t follow that rich conservatives and poor Hispanics in a hypothetical East would be at odds, either.
The biggest weakness in the paper, if you can call it that, is that the authors are focused on the fiscal aspects of federalism rather than the diplomatic, cultural, and political aspects. Federalism binds people together and forces them to at least try to come to an agreement about some issues. That’s a big deal, though it’s obviously not sexy.
The paper is focused on the EU and the US. There are lots of interesting insights into the European Union but the US angle is kinda boring (I’m sure is vice-versa for readers living and working in Europe). (h/t Mark Koyama)
One has captured the rent associated with being a state in the post-World War II world order. This means that one of these polities gets to build embassies in other states. It gets to participate in congresses. It gets to fly its flag at the United Nations and has access to the World Bank, military hardware markets (“for defense”), and FIFA tournaments.
Rent capture isn’t all good, of course. There are still costs. When Saudi Arabia beheads people, for example, it gets condemned internationally. Its reputation suffers. It has to repair relationships and launch rigorous public relations campaigns. Saudi Arabia has to do these things because if it looks intransigent to enough of its fellow states, there might be official repercussions for its actions. Saudi Arabia can’t just go around killing and looting and raping at will. It has to formalize its killing, looting, and raping through the international order by coming up with a national interest. (A national interest is also important for shoring up domestic support for such activities.)
But incorporating Islamic State into the international order is unfathomable. It’s an immoral action rewarding an immoral pseudo-polity. Besides, the sovereignty of the states of Iraq and Syria would be violated and their borders destroyed. It’s better to just keep bombing the region Islamic State claims to govern and arming the factions that claim to be its enemies. That’s been our policy towards the post-colonial world since 1945 and, while imperfect, it’s been working out well so far…