American protectionism and Asian responses

On October 10, 2018, a senior Chinese diplomat in India underscored the need for New Delhi and Beijing to work jointly in order to counter the policy of trade protectionism being promoted by US President Donald Trump.

It would be pertinent to point out that US had imposed tariffs estimated at $200 billion in September 2018, Beijing imposed tariffs on $60 billion of US imports as a retaliatory measure, and US threatened to impose further tariffs. Interestingly, US trade deficit vis-à-vis China reached $34.1 billion for the month of September (in August 2018, it was $31 billion). Critics of Trump point to this increasing trade deficit vis-à-vis China as a reiteration of the fact that Trump’s economic policies are not working.

Ji Rong, spokesperson of the Chinese Embassy in India, said that tariffs will be detrimental for both India and China and, given the fact that both are engines of economic growth, it is important for both to work together.

The Chinese diplomat’s statement came at an interesting time. Continue reading

Economic Liberalism and (Re)Building Europe after WWII.

It is important to understand that economic recovery and growth in Europe after World War II is not as tied to Keynesianism, unfunded welfarism, and corporatism as is sometimes assumed.

The Glorious Thirty Years of European recovery from world war and subsequent growth were not due to ‘Keynesianism’ etc. The Thirty Years ended because the influence of liberal policies had weakened and the costs of other policies had accumulated to create an obviously dysfunctional system. Left-wingers (and communitarian-corporatist conservatives) who think ‘market fundamentalists’ overthrew a well functioning social and economic settlement which was behind all the economic growth and associated institution building (post-war national recovery and European Union construction) are in error. It is a major error to ignore the influence of Austrian School liberals (see the discussion by a leading current practitioner of Austrian economics, Peter Boettke) and the related Ordoliberalismus of the Freiburg School.

My remarks on what the major terms and schools in this paragraph refer to have become uncontrollably long, so they are relegated to the bottom of the post. I hope readers will have the patience to reach them.

The key points are that the German post-war Economic Miracle came from Ordo-liberal policies, while economic growth in France after Charles de Gaulle came to power for the second time in 1958 comes from the policies of Jacques Rueff, a civil servant, judge, and economist who participated in the 1938 Walter Lippmann Colloquium in Paris, a decisive event in the revival of liberal economic thinking attended by Hayek and many other notable liberal thinkers.

Such ideas have had a lot more influence in France than lazy propagators of clichés about statist France and liberal America understand. Of course, if we look at the French and American economies we can see notable ways in which the US economy is more liberal, but that should not obscure the reality that France has had good economic times and that these have come about because liberal economic policies were applied, even where, as under de Gaulle, the political narrative of the government was not liberal. The France of 1958 and after was able to stabilise institutionally after a real danger of the collapse of constitutional democracy and have a good economic period because of neoliberal economic ideas.

Some on the left think the relative revival of market liberalism in the 1970s can be rooted in the Chilean Coup of September 1973, after which economic policy was to some degree influenced by Chilean economists with doctorates from the University of Chicago. This revival of market liberalism is known as neoliberalism, a potentially useful term which came out of the Lippmann Colloquium (see below) that has unfortunately collapsed into an empty term of abuse for any kind of market thinking in government policy, wherein even the most modest accommodation of economic rationality is labelled ‘neoliberal’ and therefore extreme, authoritarian, and based on the narrow greed of the rich. It is sometimes accompanied by attempts to read enlightenment liberals as somehow ‘really’ left-liberal, social democratic, or even socialist.

The reality is that neoliberal ideas were first obviously influential on Continue reading

NATO, Kendrick Lamar, and the answer to free riding

Edwin’s post giving one cheer to NATO brings up the old rift between European and American libertarians on foreign policy and military alliances. As usual, it’s excellent and thought-provoking. Here’s what he got out of me:

International relations splits the classical liberal/libertarian movement for a few reasons. First, consensus-building on both sides of the pond is different, and this contributes strongly to the divide over foreign policy. American libertarians lean isolationist because it aligns closer to the American left and libertarians are desperate to have some sort of common ground with American leftists. In Europe, leftists are much less liberal than American leftists (they’re socialists and communists, whereas in the States leftists are more like Millian liberals), and therefore European libertarians try to find different common ground with leftist factions. Exporting the Revolution just doesn’t do it for Europe’s libertarians.

Edwin (and Barry) have done a good job convincing me that trans-Atlantic military ties are worth the effort. But we’re still stuck at a point where the US pays too much and the Europeans do too little. Trans-Atlantic ties are deep militarily, culturally, and economically. Tariff rates between the United States and Western Europe are miniscule, and the massive military exercise put on by NATO’s heavyweights highlights well the intricate defense connections between both sides of the pond. Night clubs in Paris, London, Warsaw, and Los Angeles all play the same Kendrick Lamar songs, too.

Politically, though, the Western world is not connected enough. Sure, there are plenty of international organizations that bureaucrats on both sides of the pond are able to work in, but bureaucracy is only one aspect of getting more politically intertwined with each other (and it’s a damn poor method, too).

In 1966 economists Mancur Olson and Richard Zeckhauser wrote an article for the RAND Corporation showing that there were two ways to make NATO a more equitable military alliance: 1) greater unification or 2) sharing costs on a percentage basis. The article, titled “An Economic Theory of Alliances,” has been influential. Yet almost all of the focus since it was published over 50 years ago has been on door number 2, sharing costs on a percentage basis. Thus, you have Obama and Trump bemoaning the inability of Europe’s NATO members to meet their percentage threshold that had been agreed upon with a handshake at some sort of bureaucratic summit. You have Bush II and Clinton gently reminding Europe’s NATO members of the need to contribute more to defense spending. You have Nixon and Carter prodding Europe’s NATO members to meet an agreed-upon 3-4 percent threshold. For half a century policymakers on both sides of the Atlantic have tried to make NATO more equitable by sharing costs on a percentage basis, and it has never panned out. Ever. Sure, there have been some exceptions in some years, but that’s not okay.

What has largely been lost in the Olson & Zeckhauser article is the “greater unification” approach, probably because this is the much tougher path to take towards equitable relations. The two economists spell out what they mean by “greater unification”: replacing the alliance with a union, or federation. I’m all for this option. It would make things much more equitable and, if the Europeans simply joined the American federation, it would give hundreds of millions of people more individual freedom thanks to the compound republic the Americans have built. Edwin, along with most other European libertarians/classical liberals, acknowledges that Europe is free-riding, but are Europe’s liberals willing to cede some aspects of their country’s sovereignty in order to make the alliance more equitable? Are they ready to vote alongside Americans for an executive? Are they ready to send Senators and Representatives to Washington? Or are they just pandering to their American libertarian friends, and telling them what they want to hear so they’ll shut the hell up about being ripped off?

Liberalism, Democracy, and Polarization

Is polarization a threat to democracy and what is the liberal position on this?

As I pointed out in Degrees of Freedom, most liberals have a preference for democracy. Modern-day democracy – with universal suffrage, a representative parliament, and elected officials – has been developed over the course of the twentieth century. The idea has its roots in antiquity, the Italian city states of the Renaissance, and several forms for shared political decision-making in Scandinavia, Switzerland, the Netherlands, and England. Democracy is not a liberal “invention,” but the term ‘liberal democracy’ has taken firm root. This is true because modern democracy is based on liberal ideas, such as the principle of “one man, one vote,” protection of the classical rights of man, peaceful change of political leadership, and other rules that characterize the constitutional state.

Remarkably, the majority of liberals embraced the idea of democracy only late in the nineteenth century. They also saw dangers of majority decision making to individual liberty, as Alexis de Tocqueville famously pointed out in Democracy in America. Still, to liberals democracy is better than alternatives, such as autocracy or absolute monarchy. This is not unlike Sir Winston Churchill’s quip “it has been said that democracy is the worst form of government, except all the others that have been tried.” Yet there is a bit more to it for liberals. It is has proven to be a method that provides a decent, if imperfect, guarantee for the protection of individual freedom and the peaceful change of government.

Of course there is ample room for discussion inside and beyond academia about numerous different issues, such as the proper rules of democracy, different forms of democracy, the role of constitutions in democracy, whether referenda are a threat or a useful addition to representative democratic government, the roles of parties, party systems, and political leaders, et cetera. These are not the topic here.

In the context of the election of President Trump, but also before that, both inside and outside the US, there is a wide debate on the alleged polarization in society. By this is meant the hardening of standpoints of (often) two large opposing groups in society, who do not want to cooperate to solve the issues of the day, but instead do everything they can to oppose the other side. Consensus seeking is a swear word for those polarized groups, and a sign of weakness.

There appears less consensus on a number of issues now than in the past. Yet this is a questionable assumption. In the US it has been going on for a long time now, certainly in the ethical and immaterial area, think about abortion, the role of the church in society, or freedom of speech of radical groups. Yet most (Western) societies have been polarized in the past along other lines, like the socialist-liberal divide, the liberalization of societies in the 1960s and 1970s, or more recent debates about Islam and integration. Current commentators claim something radically different is going on today. But I doubt it, it seems just a lack of historical awareness on their side. I can’t wait for some decent academic research into this, including historical comparisons.

As a side note: a different but far more problematic example of polarization is gerrymandering (changing the borders of legislative districts to favour a certain party). This has been going on for decades and can be seen as using legal procedures to rob people not of their actual voting rights, but of their meaningful voting rights. Curiously, this does not figure prominently in the current debates…

The (classical) liberal position on polarization is simple. Fighting for, or opposing a certain viewpoint, is just a matter of individual right to free speech. This also includes using law and legislation, existing procedures, et cetera. The most important thing is that in the act of polarizing there cannot be a threat to another person’s individual liberty, including the classical rights to life, free speech, and free association, among others. Of course, not all is black and white, but on the whole, if these rules are respected I fail to see how polarization is threat to democracy, or why polarization cannot be aligned with liberalism.

One Cheer for NATO

The largest military NATO exercise since the end of the Cold War will start shortly in Norway. About 50.000 troops and 10.000 vehicles from all 29 NATO countries plus Sweden and Finland will commence ‘Trident Juncture 2018’ on October 25.

Before the actual exercise starts, there are already logistical tests. As the news release of NATO explains:

Over the next few days, 70 Foxhound, Husky and Landover vehicles will make the 2,000km journey from the Hook of Holland harbour through northern Europe to Norway. The UK convoy’s move through the Netherlands, Germany, Denmark and Sweden will test how efficiently soldiers and equipment can move between European countries. It will also test customs, border regulations and infrastructure’s ability to cope with rapid and heavy troop movements.

“Military mobility is vital, especially to reinforce in a crisis. That’s exactly why we exercise it,” said NATO spokesperson Oana Lungescu. “Over the past few years, NATO has made real progress in improving our ability to deploy troops quickly across Europe. We are overcoming legal hurdles and cutting red tape, including by working closely with the European Union. Looking ahead, we aim to further reduce border-crossing times (clearances within five days by the end of 2019), identify alternative supply routes, and exercise even more to practice military mobility.”

The exercise itself has an article 5 or collective defense scenario, training NATO’s crisis response ability. It will last about two weeks. “NATO is a defensive Alliance. We’re not looking for a fight, but we are committed to defense and deterrence. That’s what this exercise is all about: training to defend, and providing a deterrent effect, ready to respond to any threat from any direction at any time,” commanding officer Admiral Foggo underlined.

I think this exercise, with all NATO members, on this scale, in these uncertain times, deserves one cheer. It shows that the Alliance is still able and willing to get together, to show it is the most powerful military alliance on earth, and that it realizes it needs a lot of training to remain so.

There are still two cheers lacking. The second cheer is lacking because the partnership is still unbalanced. Despite increases in the defense budgets in some of the European NATO members (The Netherlands included), the main burden (also in relative numbers) still falls on the Americans. That is simply wrong. And it is also dangerous, because in current times, for example also with cyber warfare becoming ever more important, any shortage of budget is putting (future) lives at risk. The third cheer is lacking because anti-NATO rhetoric (on both sides of the Atlantic) will sow the seeds of doubt about the use and future of NATO. That is also simply wrong and dangerous. Whether it is Russia, or other powers, the West cannot afford to leave any current or future authoritarian ruler in any doubt about the military ties across the Atlantic, all the way to the Russian border. It is in the best interest of all NATO members, the US included.

Tokyo’s holistic approach to Africa needs to be applauded

A Ministerial meeting attended by representatives from 52 African nations was held ahead of the 7th Tokyo International Conference for African Development (TICAD) to be held in Yokohama in August 2019.

TICAD (which is co-hosted by the Government of Japan, The UNDP, World Bank Group and African Union Commission) was launched over two decades ago, in 1993, with the main objective being to bring back global interest in Africa (a number of key geopolitical developments, such as the end of the Cold War, had resulted in the global community shifting its focus away from Africa).

In the past two decades, TICAD forum has played a key role in Africa’s development. In recent years, the government of Japan has contributed to Africa’s development in a number of important areas. In the phase between 2008-2013, for example, the Government of Japan built a number of elementary and middle schools, upgraded healthcare and medical facilities, and also provided drinking water to rural villages.

During the last TICAD event, in 2016, held at Nairobi (Kenya), Japanese PM Shinzo Abe had committed $30 billion in assistance over a period of three years for key areas such as infrastructure and health care.

Beijing would be closely observing the recent meeting for a number of reasons. Continue reading

Christine Blasey Ford trivializes rape; the Left’s Orwellian doublespeak

I listened to NPR this Sunday morning. (I make myself do it every day or nearly so.) The commentators sounded as if they believe that but for a small sliver of testimony lacking, it would have been definitely proven that Justice Kavanaugh was a rapist at seventeen. There was no hint of recognition that Ms Ford is a proven public liar. (I distinguish carefully between hazy, confused, or artificial memory on the one hand, and lies, which are deliberate conscious constructions, on the other.) Ms Ford lied about being claustrophobic and she lied about her fear of flying.

She should not have been believed at all because a person who tells untruths about yesterday cannot be treated seriously about what she said happened thirty-five years ago. These lies are treated by the media as insignificant inaccuracies and Justice’s Kavanaugh’s six previous FBI investigations as unimportant. We should have been spared the whole undignified circus except for the mendacity, the bad faith of the Dems, beginning with Sen. Feinstein. By the way, Feinstein used to be my model of an honest elected liberal. Finished; I don’t have such a model anymore.

We will soon know if I am wrong. As I have said before, if Ms Ford is telling the truth, she won’t let the outrage of Kavanaugh’s confirmation go unpunished. She will use the million-dollar war chest she was gifted, her notoriety, and her good team of lying attorneys to sue Mr Kavanaugh. I am told there is no statute of limitation for attempted rape where the imaginary event took place. If she does not sue, what are we supposed to think, that the rape wasn’t that bad after all?

I don’t rejoice much in the ultimate victory. Much damage has been done, including a degree of legitimation of the idea that the presumption of innocence is not actually central to civilization. And the rage of the fascist hordes we saw displayed in the Capitol is not going to dissipate. Those people are going away sincerely convinced that not only did a rapist get away with it (as usual!), but that he is going to be the deciding vote on the elimination of women “reproductive rights.” In fact, Roe and Wade is nowhere high on the Republican agenda. In fact, the Supreme Court does not reach out for cases; a relevant case would have to come up. In fact, in the unlikely case Roe and Wade were reversed, the issue would go back to the individual states where it belongs, constitutionally speaking.

It’s hard to tell whether those people are genuine imbeciles, or fooling themselves, or simply lying. Incidentally, note the Orwellian language we have come to accept: “Reproductive Rights” refers to the right to terminate a pregnancy surgically, like my driver’s license gives me the right to not drive! (In case you are wondering, I am for keeping abortion legal by virtue of the ethical principle that we must accept big evils to avoid even bigger evils.)

Of course, predictably, I will be accused of making light of gang rape. No, Ms, YOU are trivializing the violent crime of rape. Even if we took Ms Ford’s words for granted, at 15, after “one beer,” a 17-year old boy groped her through her clothes but fortunately she happened to be wearing a one piece bathing suit! In the meantime, thousands of women suffer real rape in war zones and American feminists keep shamefully silent. The probable idea here is that if you are a woman violently raped by soldiers who are black or brown skinned, it does not really count as rape.

I hope the next partial elections, a month away, turns from a referendum on Mr Trump to one on the Democratic Party’s new fascism.

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