1. Conventional economics is more radical than Marxism Chris Dillow, Stumbling & Mumbling
  2. What is “conservatism” in the US these days? Daniel McCarthy, Claremont Review of Books
  3. The cultural contradictions of American education Kay Hymowitz, National Affairs
  4. Political bargaining in a federation: Buchanan meets Coase (pdf) Mark Gradstein, CEPR

Ukraine, Russia, the West and a Coasean Bargain?

Economist Tyler Cowen worries about the events in Ukraine:

For Russia, matters in Ukraine are close to an existential crisis, as Ukraine is intimately tied up with Russia’s sense of itself as presiding over a mini-empire of sorts.  Nor could an autocratic Russia tolerate a free and prosperous Ukraine, developing along the lines of Poland.  America cares about Ukraine less, and cares more about Syria and Iran, or at least cares about saving face in those latter venues.  Therefore there is a Coasean deal to be had between America and Russia, where Russia gets to partition part of Ukraine, create a buffer against Europeanization and democratization, keep the larger Ukraine unit weak, and also keep its Black Sea fleet.  In turn Russia would do something less than totally sabotage all American plans for Syria and Iran.  (Of course that is Coasean for the leaders, and not necessarily for the citizenries.)

The thing is…China.  What kind of signal would such a Coasean deal of partition send to China?

That is what I worry about.

I argee that there is a Coasean bargain to be had between the US and Russia in this case, but it’s not the one Dr Cowen sees. Let’s assume that the US does have more interest in the Middle East than it does in Russia’s backyard, but even with this assumption I don’t think it follows that the West will give up Ukraine for Syria and Iran.

The West has been down in the doldrums lately, it’s true, but there is still plenty of fight left in it and plenty of resources with which to do the fighting.

Really quickly: I know I’ve mentioned this before, but making two states out of one (“partitioning Ukraine”) will be a good deal for almost everybody involved (the minorities in Russian Ukraine will not fare so well). As it stands today, Ukraine is simply too big to be governed effectively. This is a problem with many, if not most, post-colonial states in Asia, Africa and Europe.

International recognition is something that would be observed by almost all sides (minorities in Russian Ukraine will not like it), which is one of the requirements I’ve pointed out that needs to be completed before secession (or partition) is undertaken in postcolonial states.

The other major requirement is that the new states are part of regional or international trading unions of some sort. The more the better, but any is a start. Russian Ukraine will be good to go, as it would be in Russia’s orbit, and the West could easily ensure that the Ukrainian Ukraine gets more attention than it now currently has. This is where the West should dig in its heels and fight: After partition. Ukrainian Ukraine will need to be drawn into the West’s economic orbit rather than offered up as a sacrificial lamb, and this definitely doable. This is the Coasean bargain, not Ukraine for Iran and Syria.

The China angle Dr Cowen brings up is also an interesting one. Beijing is authoritarian not stupid. Here is what conservative military leaders in Beijing probably see:

Ukraine might get no love from the EU or the US, but it is much weaker than Japan or South Korea or even Taiwan. So China could not take any of these states militarily without high costs, while Russia could conceivably take all of Ukraine without significant military losses (the political damage would be too much for Moscow, so it won’t happen; but it is a possible scenario).