European Union

From the Comments: Greece, the Euro zone, and Russian prowess

Brandon Christensen Comments, Current Events , , , , , , , ,

Dr Amburgey writes:

I just returned yesterday from a week in Athens for an academic conference. There seemed to be a big socio-economic divide in voting intentions. The unemployed and menial workers were definite No votes. The Yes votes were physicians and a few academics. Personally I think they should bag the euro and go back to the drachma.

Brandon: how long do you think it will be before Putin is making deals in Athens? Might be nice to have a friend in the EU when sanctions come up again. Port privileges for the Russian navy would be very conveniently located as well.

Jacques has a good, thoughtful response (“Leaving the Euro zone does not require leaving the European Union”) that I wholeheartedly agree with (and that I’ve blogged about here and here), and it appears Dr Amburgey is in agreement with us (though does he think Greece should stay in the EU?). Contra Dr Foldvary, I do not think there is any need for Greece to leave the EU. If anything, the EU should be adding more states, though not expanding its geographic space.

Regarding Russia, I simply don’t know. Russia – along with Turkey, Iran, and China – is a society that is very hard to understand let alone predict (I would add India/Pakistan to this list, but the states of the Indian subcontinent are traditional post-colonial states and are therefore much easier to predict; the other four were never conquered or carved up by imperial cartographers). The whole Crimea debacle still has me smarting. Nevertheless I’ll add my thoughts to the conversation.

I don’t think Athens will grow closer to Moscow. There are two major reasons:

  1. Greece fears Russia, which is why Athens has remained in NATO for so long.
  2. Most Greeks – even the ‘No’ voters in this recent referendum – don’t want to leave the EU; Greeks overwhelmingly want to be a part of ‘Europe’.

There are couple of minor reasons, too, though I don’t know how minor they are. 1) Greece is not Ukraine. 2) Russia’s economy is in shambles. Greeks have a higher standard of living than do Russians.

On the flip side, the Greeks are always thinking about the Turks. If an opportunity presents itself (though I cannot think of any arising), Athens may start to edge closer to Russia (a traditional enemy of Turkey) if it thinks Ankara is getting antsy about its former province. This is pretty extreme, though. Also, Russia’s economy may be in shambles, but it seems like Moscow always has plenty of money for military expenditures, and rent stemming from a Russian port in the Mediterranean Sea might be too tasty to resist for a country saddled with so much debt.

At this point I don’t think Greece has much clout in European politics, so I don’t see Moscow viewing Athens as a reliable friend in Brussels.

Around the Web: Greece Edition

Brandon Christensen Comments, Links , , , , , , , , , ,
  1. Tyler Cowen has been owning this debate.
  2. Unfortunately, Greek citizens have been too fed up with the rest of the world to listen.
  3. (Perhaps libertarians and their arguments were just late to the party.)
  4. This is still the best concise sociological analysis of Greece and the EU I’ve come across.

It’s worth noting here that the overwhelming majority of ‘No’ voters – the ones who just rejected the EU after their elected, far Left leader walked out of talks days before said talks were scheduled to end – don’t want to leave the EU. Confused? See the Cowen link.

Matthew and I had a dialogue on Greece awhile back here at NOL that might be of interest.

Dear Greeks:

Jacques Delacroix Current Events , , , , ,

I hear you can’t pay your debts again. I am a little sorry but you brought it on yourselves. A few reminders.

Your country is a democracy. The way you got into this pickle is through the stupid, self-indulgent policies of those you elected. You did it again in your last election by bringing to power a bragging leftist party in the old Stalinist mold. What did you think they would do: Frighten the European Union, The International Monetary Fund (Number one stockholder the US), Germany, the world, into submission, into erasing your debt? Think!

The reason Germany is your principal creditor is that one of your previous governments begged Germany for help and it agreed to help. The Germans did not cram loan after loan down your throat; you asked. The big sillies thought you would be honorable and pay up as agreed. Do you care about your future reputation, your honor, your children’s future ability to walk in the world with their heads up? Here is a basic rule of politeness which is also a moral rule: When somebody gives you a hand, you don’t bite it viciously.

There are several reasons your government can’t pay its debts. One reason is that your political class is corrupt trough and through. Another is that you are reluctant to pay taxes the way normal people do in the European Union. Too many Greeks want to work and pretend-work for the government instead of doing real work. And your government still owns stuff no government anywhere should ever own because governments always make a mess of running them, resorts, among others.

Another reason why your government can’t pay its bills is that your country is genuinely poor for a European country. There too, you have a lot of explaining to do. For one thing, you have been living above your means for a long time, pretending you were more or less like Danes, or Germans. Well, the truth is that you are not, not even close; Danes and Germans are very productive; you are not. So, you should not have ever expected to work short weeks and to take long summer vacations, like Danes and Germans. Such privileges do not come automatically with membership in the Union, you know. You should look over the border on the despised neighbors, the Turks, instead. They don’t pretend to themselves that they are already rich; they go to work early and they close their shops late. Many of them work six days a weeks. Over the past ten years, the growth rates of their economy has left yours in the dust. Coincidence?

And you only make yourself even more scorned with your treatment of others. The real horrors that Nazi Germany inflicted on Greece more than 70 years ago are not much of an excuse anymore. A previous government of yours, an elected government, accepted reparations a long time ago. And, by the way, in 1945, Germany was much more devastated than Greece, and still in 1948. See where the Germans are now, and where you are? Any comment?

And do you ever wonder why the Estonians, in the stultifying Soviet prison for fitly years, never ask for new loans to pay back older loans? And how long anyway did you expect German workers to work until age 69 so your public servants could continue to retire at 63? Are you out of your minds?

One last thing: You are not exactly Classical Greece. Stop wrapping yourselves in Aristotle’s toga. Really study Socrates. He chose to die than cheat even a little. Neither he nor Aristotle was a whiner. That’s why they are still remembered and honored.

In the end, I wish you well. Everyone can unlearn bad habits and learn basic rationality, even late in life. I hope you soon leave that club where you don’t belong. I hope further that you can make your way back. Begin by getting up at 6 every morning. Also, learn the obvious: socialism does not work well for rich countries; it’s miserable for poor countries.

From the Comments: Types of Federalisms, Good and Bad

Brandon Christensen Comments , , , , , , , , ,

Adrián‘s response to responses by me and Michelangelo on his initial response to a comment by Michelangelo that I highlighted in a post of mine (whew!) deserves a closer look:

Guys, thanks for your comments, and apologies for the delay in responding!

1. I share your love for idle speculation. I’d say my fundamental difference with you lies elsewhere: you grew up/are very familiar with a country where federalism has worked pretty well (with notable exceptions, such as slavery and the Jim Crow laws), while I came from another where federal institutions are full of perverse incentives. So, whenever somebody proposes a federal arrangement, I immediately perceive the costs, while you’re more open to the potential benefits.

2. That said, I think an useful way for thinking about federal structures is to analyze the incentives faced by subnational governments. (a) Some subnational governments are accountable to domestic audiences, and thus they seek a federal structure where subnational governments retain considerable autonomy, including autonomy over taxation. This is the kind of federation that fosters tax competition and experimentation, with the US and the EU as good examples. (b) In other contexts, subnational governments are not fully accountable to domestic audiences (even with elections) and thus they devise federal institutions as mechanisms for extracting and distributing rents among themselves, and they use these rents to perpetuate themselves in power. Rather than keeping authority over taxation, they purposefully delegate their tax authority in the federal government to collect taxes for themselves. In other words, the federal government acts as a enforcer of a cartel: it establishes the same tax rate everywhere, collects the money, and distributes it between the states according to some highly politicized formula. This is the kind of federalism that predominates in Latin America: Argentina, Mexico, and to a lesser extent Brazil.

In sum, my point is that creating a federation among governments that are not responsive to voters will lead to the second type of federation. I don’t see the Middle East creating a fully functional federal system unless governments in the region become fully responsive to voters, which will require much more than competitive elections.

3. Michelangelo: I agree with 95% of what you say about Turkey and Israel, especially the EU part, and I obviously believe that it is a good thing these countries trade more and develop better relationship with each other. That said, the main reason why I don’t see these countries forming a federation is a more fundamental one: (a) that neither Turkish nor Israeli politicians have anything to win by creating a federal arrangement, and (b) given Turkey’s enormous size with respect to Israel, this problem is especially important from the Israeli point of view.

There is more on federalism at NOL here. Check out Adrián’s posts here, and Michelangelo’s are here.

From the Footnotes: Ignorance of Islam and of the Decentralization of Power

Brandon Christensen Books, Politics, Religion , , , , , , , , , , , ,

There are widespread calls for an Islamic reformation such as Christianity experienced in the sixteenth century, but the Reformation cleaved Christianity into two major traditions and many splintered sects; each grew independently of the others, eroding any hope of a Christian center that could rein in extremes. After its early division into Sunni and Shi’a, Islam has come to suffer enough from this segmentation without a modern reformation. Indeed, Islam is a democratic religion, so thoroughly decentralized that even muftis are elected. Many Muslims are interested not in further schisms but rather in reconciliation among the competing doctrines and their extremist messengers, ultimately reducing the violence carried out against each other and other civilizations. As Gilles Kepel argues, though the rise of militant Islamism has been spectacular, its hyperviolence has proved to be a liability rather than an asset. (243)

This is from Parag Khanna’s 2008 book The Second World: Empires and Influence in the New Global Order. This footnote is in most respects a microcosm of the book as a whole: it’s on the cusp of providing theoretical insight into how the world works but just can’t seem to shake a certain type of dogma associated with the technocratic Left (I think he has done a better job of shaking this dogma post-2008).

This footnote is also in most respects why I’ll never be a Leftist again, even as a sleek, trade-friendly technocrat.

This footnote says to me that Khanna is arguing for a hands-off approach to Islam on the part of the West. Khanna is saying that Islam does not need a Christianity-style reformation. So far, so good. Khanna and I are in agreement. Then he goes off his rocker, though, by arguing that Christianity (and by implication European society) became a net loser because there was no Christian center to temper extremists.

What?

Correct me if I am wrong, but doesn’t Christian Europe have higher standards of living/tolerance/pluralist values today than anywhere else in the Old World? And isn’t Christian Europe the one place in the Old World where it is awfully hard to find Christian religious extremists? Wouldn’t you have a better argument if you stated that is was the lack of a Christian center which has been responsible for the dramatic increase in standards of living/tolerance/pluralist values in the West?

Maybe Khanna is thinking of medieval Europe, with its devastating series of religiously-inspired wars, but somehow I don’t think this is the case.

The Muslim world is decentralized culturally (like Europe) and is trying to decentralize politically (again, like Europe). The political decentralization is being hastened by trade liberalization and global economic integration. This same decentralization is being resisted by the international order (including, especially, Russia and China) due to nefarious but understandable interests of state but also to the severe lack of understanding that Western intellectuals like Khanna have of social organization. A center of cultural or political or economic power does not guarantee a waning of extremes. In fact, in some cases (in most?) such a center of power actually contributes to extremes.

Khanna was so blinded (and, again, I think he’s changed his tune post-2008) by technocratic Left-wing theory that he could not see what he was arguing: that a decentralized Christianity gave rise to Europe as we know it, therefore the West should step back so that the Muslim religion can build a monolithic consensus in order to combat “extremes.” Am I mischaracterizing Khanna’s footnote? Am I knocking down a straw man?

Khanna’s latest stuff has been much better than what I found in his 2008 book. He still doesn’t go far enough, though. He needs to undertake Brandon-style libertarianism in order to really be a bad ass: let the process of decentralization happen, but (but) recognize new states where it is smart and safe to do so (Kurdistan? The Islamic State? Baluchistan?) and then integrate them into the imperfect but important international order that the West has slowly been building for the last hundred years or so.

Khanna’s incoherence on geopolitical matters is not limited to interesting footnotes. Check out what he wrote in the introduction (again, this is from 2008):

Many believe that the emerging world order is polycentric: China will remain primarily a regional power, Japan will assert itself more nationalistically, the EU will lack influence beyond its immediate region, India will rise to rival China, Russia will resurge, and an Islamic Caliphate will congeal as a geopolitical force. (xviii)

This is basically what has happened so far, and it largely falls in line of where I would bet my money (but not place my dreams) on future events (the Muslim world excepted; see above). Khanna has none of it though:

All these views ignore a much deeper reality: The United States, the European Union, and China already possess most of the total power in the world. (xviii)

I think this argument, if anything, reveals Khanna’s (and, by implication, the technocratic Left’s) authoritarian impulses and desires. The United States is the world’s sole hegemon, and it will be for a long, long time. The EU is a basketcase and China’s GDP (PPP) per capita stands at Intl$ 11,907 in 2013, just below the Dominican Republic, Serbia, the world average, and Iraq. Khanna’s inclusion of the EU – with the social democratic values that technocratic Leftists mistakenly believe Europe harbors – and China – an ode to both the condescending identity politics of the same technocratic Left and its fixation with centrally-planned but privately-run enterprises (“corporatism”) – in the troika of world powers illustrates nicely the weaknesses of the Left.

Khanna’s dogma gets him in more trouble (still on the same introductory page):

Russia, Japan, and India cannot assert themselves globally, militarily or otherwise […] In fact, they are being gradually outmaneuvered by the United States, the EU, and China in their own regions. (xviii)

Don’t cry for Khanna. Last time I checked, he was on the board of several prominent think tanks.

Khanna’s best chapter is on the Middle East (it starts with a useful map on p. 168 and ends on p. 253). His treatment of post-Soviet Europe is laughable (“Ukraine: From Border to Bridge”) and his treatment of China (“Asia”) is overly laudable. India gets just three dismissive pages.

Would I recommend reading it?

Yeah, sure. I like the concept of “second world” that Khanna tries (but fails) to convey. I like the way he thinks and his post-2008 work is especially good. There are a lot of facts that aren’t really facts in the book though, and he applies those facts to theories that I think are weak at explaining how the world works. Then again, when has reading a book ever hurt you?

Complex interdependence turned around

Edwin van de Haar Current Events, Economics, Liberty , , , , , ,

An interesting analysis in one of the Dutch quality papers today. The analysis was about Russia’s power politics, and especially how it used all kinds of formal and informal tactics in different areas, for example traditional diplomatic canals, covert military action, media, energy politics, espionage, et cetera. Special attention was drawn to the economic aspect. Not so much the economic sanctions, which are mainly making life more expensive for the Russian population, are a nuisance to the people in power, yet lack any pacifying effect.

More interesting was the point that the entanglement between the Russian en European economies actually allows the Russian leaders to be more belligerent, and to make use of the Ukraine crisis to prolong the life of their rule. This is due to the fear of Western governments to lose Russian investments, gas supplies and capital. President Putin and his followers know this too well, and are therefore prepared to take more risks in the Ukraine crisis. Sure there are other factors important as well, yet this economic factor is significant in their power game.

For liberal theory in international relations this is complex interdependence turned around. In 1978 Robert Keohane and Joseph Nye published their influential book Power and Interdependence, which focused on the importance of the multiple ways societies and countries are interconnected. Although a lot can, and has been, said about their analysis, as well as the broader discussion following the book, many liberals read the book as a confirmation of their belief in the pacifying effects of economic interdependence. However, this was not the actual position of Keohane and Nye, who emphasized that interdependence would not necessarily lead to international cooperation, nor did they assume any other automatic benign effects (see page 249 of the second edition, 1989).

If anything, the current situation in the crisis between Russia, Ukraine and the West shows the truth of these careful theoretical remarks. The political effect of economic ties is not automatically benign or peace enhancing.

On Conspiracies and Immigration Reform

Michelangelo Landgrave Current Events, Law, Politics , , , , , , , ,

Late last month I asked a simple question, what does the Obama administration hope to accomplish in regards to immigration? I answered that its goal was not to reform the United States immigration system unilaterally, but to use executive action to force Congress into acting.

My prediction turned out to be correct. The administration had initially planned to announce executive actions meant to provide relief from deportation for many of the country’s illegal alien population and to make legal migration easier after the Labor Day weekend. ‘Had’ is the key word here. In its latest series of press conferences the administration has pushed back the announcement till year’s end.

Why did the administration push back its announcement? Partly because the administration doesn’t really want to issue executive actions – it merely wants to use the threat of executive action. Some opponents of the current administration, including libertarians, envision the executive branch as having unlimited powers but the truth is that the administration has all too real limits to its powers. Members of the President’s own party lobbied for the postponement in fear that a radical change in immigration policy will cause them to lose their upcoming elections.

The state is not a monolithic beast with a single mind. Rather it is composed of several competing factions who are nonetheless united in their shared goal of maintaining a functioning order. The state is usually seen as the antithesis of the market, but I think this a wrong way to think. The state is itself a product of spontaneous order and better thought of as an example of how human cooperation can do great harm.

What this means is that the Obama administration must first secure its hold over its own party before it can duke it with other factions within the state apparatus.

It also means that conspiracy theories, of the like discussed in the comments section of my last post, are unlikely. It is true that ‘open borders’ could be used to rob the United States of its sovereignty in favor of creating a larger transnational state in its favor. However it is unclear why Obama and his allies, as individuals, should wish to see the creation of a new state unless they were assured they would be leaders in it. The creation of a new state is no small feat and usually requires a long time horizon.

Monarchs of the past could afford to undergo the long process because they were assured that even if they themselves did not live to see their creations their children would. Obama has no such assurance; in a few years he will vacate the White House and go into retirement. As a matter of tradition Obama, as most US Presidents have, will leave electoral politics. He may lend his support to some charitable cause, but he will never again be active in day to day politics. His incentives are as such to maintain the United States as strong as possible to preserve his legacy.

Who then does have the incentive to see the creation of a new state? Presumably it would have to be a faction in the current state apparatus that has some power but has been relegated to a position where they cannot expect to rise any further. In times of old this would be a Duke who, although strong, could not expect to see himself made King under the current regime because of one reason or another.

Which faction could fit the bill today? The Democrats? No. As noted above, current Democrats would not be assured of their involvement in a new state and would not risk their current power given their short time horizon. The Republicans? No. The Republican Party is believed by many to be destined to become a permanent minority party at the national level, but for the foreseeable future it still has enough sway to win a healthy amount of seats in Congress and could very well win the Presidency under a charismatic candidate. Even if the Republican Party is destined to become a minority party, why would it want a stronger state replace the US? It anything it should want the south and western mountain states to secede so that it could continue to influence national politics, albeit in a new nation. What about Hawaii? The far flung state owes its political union with the US to an overthrow of its indigenous monarchy. It may harbor some desire to regain its independence, but it is unclear why it would want to see the US by a larger state still. If anything the rebellious factions in the US should desire to break up, not increase, the current state.

By no means should I be seen as saying that conspiracies cannot be in play. I simply do not see the necessary incentives for a conspiracy to arise that would wish to see the United States replaced by a transnational state.

Let us compare this with the European Union, a new state in the process of being formed from the remnants of the previously separate European countries. As many observers have noted previously, it is hard not to notice that the European Union is effectively a new German Reich. Germany was unable to secure an empire on the continent using arms, but it has been immensely successful in winning its empire through commerce. German politicians and their bureaucrat allies have a clear incentive to see the continued rise of the EU, but even here there are rival factions who oppose them. One wonders if euroskepticism in the United Kingdom is truly because the British people oppose the EU or because Germany and its allies, and not the UK, will be the center of power in the new state?

From the Comments: On the Impossibility of Secession Within the European Union

Brandon Christensen Comments, Current Events, Law, Politics , , , , , , , , ,

Dr Stocker brings my musings on secession and the European Union back to reality:

Some good historical analysis here, but I’m not so sure about the conclusion. I certainly support a right for regions to secede, but not all EU member states recognise such a right. Spain is the obvious example, since while it gives a high degree of autonomy to regions, including enhanced autonomy for Catalonia and the Basque country, it does not recognise any right to secede except through a law passed by the Cortes (parliament of Spain), which is extremely adverse to allowing any procedure for secession.

Greece has been extremely adverse to secession by Kosovo from Serbia, and does not recognise Kosovo, on the basis that a majority vote within a region-aspirant nation is not enough to justify secession under international law, if opposed by the nation from which the secession is taking place. I suspect there are some other countries with similar barriers to secession.

They’d do well to recognise that right, but the EU can’t force this kind of change on existing member states since unanimous consent would be required for the necessary treaty changes, and even without that barrier, the idea of the EU forcing countries to accept a right to secede and then define when and how that right to secede, which could create conflict with counties like the UK which do recognise the possibility of secession by referendum within the relevant region-aspirant nation, as in the current Scottish vote.

The time might come in the future when all EU countries might recognise a right to secede and then recognising that right could be a requirement for membership. However, it is not Putin’s Russia that would be concerned. Recent events in Ukraine show Putin’s agents fomenting violent secessionism in Crimea etc and a rigged referendum in Crimea. Of course Putin’s meddling is not the same a secessionism exercised peacefully and through fair voting, but such differences are likely to be overlooked by many in light of the still unfinished Ukraine crisis.

My response can be found here. Longtime reader A. Herkenhoff chimes in as well.

The European Union Needs More States, Not More Territory

Brandon Christensen Current Events, History , , , , , , , , , , , ,

The recent uproar over the upcoming vote on the potential secession of Scotland from Great Britain illustrates well the European Union’s foreign policy weaknesses. The EU’s potential to increase the number of states within its borders without having to expand its geographic space is an overlooked avenue to reaching a bolder, more sophisticated foreign policy.

Regional aspirations for more political autonomy have been voiced since the time of the creation of Germany and Italy in the late 19th century, but wars, nationalism, economic concerns, and fear of wars (along with the presence of the American military, of course) have largely kept these aspirations on the fringe of domestic political debates in Europe.

Steven Erlanger’s 2012 piece in the New York Times explains well why this is changing and what is currently happening in the European Union:

The great paradox of the European Union, which is built on the concept of shared sovereignty, is that it lowers the stakes for regions to push for independence.

Erlanger also goes on to quote a scholar at the European Council on Foreign Relations:

‘The whole development of European integration has lowered the stakes for separation, because the entities that emerge know they don’t have to be fully autonomous and free-standing,’ said Mark Leonard, the director of the European Council on Foreign Relations. ‘They know they’ll have access to a market of 500 million people and some of the protections of the E.U.’

The European Union has essentially taken the place of the nation-state as the chief entity in charge of standardizing trading policies in Europe. This political setup is a great opportunity for regions that have been absorbed into larger nation-states to assert more fiscal and political independence because of these regions’ new interdependence with a larger part of the European economy. The confederation has provided an opportunity for smaller states to emerge while at the same time providing these small state polities with a range of options and allies that are often missing from small states’ repertoires. The best of both worlds has a chance to flower: local governance and total participation in world trade.

This is better understood with a quick historical sketch of 19th and 20th century Europe in mind.

In the last decades of the 19th century the large nation-states of central Europe – Germany and Italy – had just been formed after centuries of being composed of hundreds of small polities. These small polities were parochial, and many of these polities’ elite factions had erected protectionist barriers around their small territories. These newly established nation-states were flanked on their eastern borders by cosmopolitan-but-despotic empires operating from Vienna, Moscow and Istanbul, and to the south were small Muslim polities haphazardly connected to the Ottoman Empire and economically dependent on Mediterranean piracy and Saharan trade routes. To the north and west: oceans and the seafaring, imperial regimes of Great Britain, the Netherlands, and France.

A map of Europe in 1800 AD. Look at how many polities are in what is now Germany and Italy. Thanks goes to euratlas.com

The formation of these larger nation-states were undertaken, generally speaking, in order to unify territories considered to be connected under various broad cultural domains into a cohesive political units and mercantile trading blocs.

After Germany and Italy achieved political unification, programs geared towards creating economic spheres of influence within the territory of the new nation-states began to be implemented. The creation of nation-states in central Europe had the contradictory result of opening up free trade zones within the territories of nation-states while simultaneously erecting new trading barriers that targeted individuals and factions not connected with the new nation-states. Free trade won in the domestic arena of these new states, but it also lost out internationally.

The political unification of these nation-states did not go down well with a myriad of factions. The reasons for resistance were varied, but suffice it to say that there was an intense backlash against the centralization of power and the nationalization of everyday life in the new nation-states of central Europe.

To counter regional resistance, proponents of political centralization argued that political union halted the wars that had wracked Europe for centuries (the economic benefits of freer trade were touted as well, but this argument did not have the same clout as it does today). However, this intellectual argument was framed in nationalistic terms, so when it trickled down into the public sphere of European life what emerged was a solid case against regional fracture that involved one part peace and one part national chauvinism.

The end result of this was the destruction of Europe through two large-scale, horrific wars.

The European Union has succeeded where the nation-states of Germany and Italy failed: by creating a massive free trade zone that eliminates protectionism (as the German and Italian nation-states did), and the necessity of cultural chauvinism (“nationalism”)  to maintain legitimacy (which the German and Italian nation-states could not do), the European Union has provided Europe with an incredible opportunity to build a lasting peace.

Adopting a requirement for member states  to incorporate a constitutional option that allows for referendums on secession would be a bold move that would not only bring a higher level of sophistication to EU foreign policy, but also fluster Moscow without edging closer to its borders (think about the example this would set in Russia’s own self-styled federation).

From the Comments: Open Borders and Substantial Increases in GDP

Brandon Christensen Comments, Politics , , , , , ,

Dr Delacroix gives us a great review of the most recent literature on the relationship between open borders and substantial increases in GDP (50%-150%):

A Long Comment on The Big Thing (open borders)

Thank you, Rick, for causing me to read this very good paper (and thanks to Brandon for making it easily available). I did not find the 150% increase in GDP you promised . That’s OK because it helps me point to one weakness of this paper that should be relevant to any discussion of emigration/immigration focused on policies. The author seems to have been unable to extract from the others articles on which his is based any coherent time dimension. A temporal dimension seems to be lacking. When discussing public policy it ‘s always necessary to consider: “In the short run, in the long run.” An increase of world joint GDP of 150% in fifty years thanks to relaxed immigration seems plausible; the same rise by next year is out of the question, of course.

On several issues, the author comes close to confusing “absence of evidence” with “evidence of absence.” This may be fine for a scholarly article in the discipline of economics. Difficulty to measure or to act upon should not constrain blog discussion however. Five things.

1 “Begin with the country of origin. The departure of some people such as the skilled or talented from a poor country might reduce the productivity of others in that country.”

“might”?

Qualitative differences between those who emigrate and the population of origin may be very large: This is “cream of the crop” vs “bottom of the barrel” issue. This should be obvious with respect to easily measured age and health status for example. The young and stalwart go first. It may be as true with respect to difficult to measure but obviously existing qualities such as the propensity to take economic risks, for example. Thus, I would be surprised if current Mexican illegal immigrants to the US where not economically more desirable immigrants than their own siblings of the same sex who stayed put. I mean more desirable from my viewpoint, someone who is already inside a country of destination. The risks the illegals took to move act like a beneficial sift in this respect, it seems to me.

Periodically African immigrants drown off Lampedusa in the Mediterranean just for a chance to set foot in the EU where medial jobs expect them. They all have close relatives living in the same economic circumstance at home who did not join them.*

The author calls these considerations a kind of externalities and mentions that they are difficult to measure. Difficult to measure does not mean non-existent; it does not even mean small, as he implies. Passion is also difficult to measure, and so is the wrath of a woman scorned. Neither is small in any sense of the word. Stuff that you do not enter into the equation does not show up in the results except in an unclear, residual sort of way. Those who should be in charge of measuring them, the government bureaucracies of countries of origin, are often inept, corrupt, uninterested or discouraged from doing so by government that prefer slogans to facts. Yet, that’s no reason to write these thing off from our thinking.

2 Author asks sensibly:

“Is productivity mostly about who you are, or where you are?”

Productivity clearly has a lot to do with where you are. (Take a man’s shovel in Sonora, teach him how to drive a backhoe in Brooklyn….) I don’t know what the proportions are between it and the answer to the “who” question but I think it would be absurd to set the “who” at zero. Even national origin may matter on the average: If you absolutely must choose between an unknown Englishman and an unknown Frenchman for a cook, which would you chose?

3 Author is too quick to dismiss the argument of impoverishment caused by emigrants’ departure in their countries of origin. He even uses a logically flawed argument, I think:

“But if human capital externalities from health workers were a first order determinant of basic health conditions, African countries experiencing the largest outflows of doctors and nurses would have systematically worse health conditions than other parts of Africa. In fact, those countries have systematically better health conditions (Clemens, 2007).”

Or, is it more likely that: African countries possessing quality health personnel training programs enjoy superior health conditions as a result (I am thinking vaccinations) and some of the health personnel they train are employable in rich countries.

By the way, this raises the general problem of losing at – least temporarily – the benefits associated with the cost of rearing labor. When a Filipina arrives in the US at 19, ready to work in a hospital, the fact is that I contributed nothing to the cost of bringing her up to that point. Someone else has, in the Philippines, most likely. It’s possible that on the average, the home remittances of such immigrant workers more than covers the cost of rearing and training them. I don’t know if it’s true, or how often. I would like to find out.

Author’s savant discussion of externalities seems (seems) to conclude that even if there is a loss to the country of origin, not much can be done. Of course, something can be done: Let the country of destination pay fees to someone or something in the country of origin that supported the cost of training the immigrant worker; in other words, re-imburse at low cost the expense incurred in creating an unearned benefit in the country of destination.

4 Policy makers in Europe are much exercised over the “lifeboat effect.” Even if immigrants’ arrival results in superior economic growth, even if it solves long term problems, as in Social Security, a sudden influx of large numbers may quickly overwhelm destination societies. It may markedly lower their standards of living. (Think of elementary school classes suddenly crowded with children who don’t know the teachers’ language.) I did not find that this article deals with this matter except between the lines, in an implied manner.

[Wholly theoretical Figure 1 does not help me with this although I am attracted to its curves.]

5 Author does his job as an economist well. He writes about the economics of emigration/immigration and he reports on solid research within the constraints of the discipline of economics discourse. But here are also political consequences of immigration we are free to discuss on this blog. (That’s what blogs are for, I think.) This is especially true for a libertarian blog because it poses squarely the problem of national boundaries, of the respect they are owed or not, of their convenience or inconvenience vis-a-vis libertarian aspirations.

Political consequences of immigration loom large in the imaginations of many people in the countries of destination. The manifestations of their concern are not all vacuous or ignorant, or hysterical. The 8 million Swiss -including many immigrants – may have good reason to wonder how many people they can absorb who think that separation of church and state is not only a bad idea but a major sin. Many French people of old French origin are openly racist. Among those responsible French people who are not racist at all, it’s common to worry about the short-term consequences of the legitimate burden high fertility immigrants place on their already sinking welfare system. (The high fertility is documented; it’s not a rumor.) Many American conservatives are worried about Mexican immigrants’ high propensity to vote Democratic. In the end, it’s possible to imagine a scenario where, in combination with other factors,** Mexican immigration helps turn the United States become a one-party state for all intents and purposes. Incidentally, I like Mexicans and I think they make first-rate immigrants. See my co-author articled with Nikiforov on my – Facts Matter – blog.

Sometimes, author handles humor a little too lightly: “Mayda (2006) finds that it is the wealthier, better educated, and less nationalist individuals in rich destination countries who have more favorable attitudes toward immigration.” Sure thing, I am thinking! They want a steady supply of maids and gardeners.

* As some readers already know ad nauseam, I am an immigrant myself. I had four siblings brought up in pretty much the same micro and macro environments as I. They all shared my mediocre level of educational attainment (high school or less). Three of my siblings never tried to move to a richer country as I did; another tried and failed. The difficulties inherent in emigration must select in favor of the desperate, the brave, and of the sociopathic. (Ask me for a good recent book on the latter.)

** The Republican Party’s current striking political incompetence (small p) looms large on my mind as I write this

A Reverse Crimea in the West: Kaliningrad

Jacques Delacroix Current Events, History , , , , , , , , ,

Look at the Kaliningrad Oblast. It used to be Prussian Koenisberg, an important detail: Many Germans still feel for it, like Russians for Crimea. This is one part of Europe toward which the Germans might loose a little of their current prudent cool and cooperate.

Find Kaliningrad on the map.

Source: BBC
Source: InKaliningrad.com

It’s a small Russian exclave on the Baltic. It’s entirely sandwiched between two NATO members that are also members of the European Union, Lithuania and Poland. It must have some military value because it’s the headquarter of the Russian Baltic Fleet.

Kaliningrad has no direct land links to the rest of Russia. Sea links are along the shores of unfriendly to very unfriendly countries. I don’t see why it would be difficult to apply an on-and-off siege to that territory. I don’t mean that the West or the US should actually attempt to starve its about one million people. I am thinking cutting off the water intermittently, for example. Perhaps a few US warships could cruise off Kaliningrad with all guns carefully covered. We should be able to cause enough unpleasantness there to stampede part of the civilian population. We might just let Russian sailors there lead lonely and even more drunken lives than they do now.

After the gobbling up of Crimea, making it difficult for Russia to staff its isolated western outpost would be a worthwhile goal. Even giving high Kremlin officials a few bad nights of sleep would be better than nothing. Letting bullies get away with anything is always a bad idea. It’s like asking for more bullying in the future.

I don’t know why no one is talking about it, not the Obama administration, not the Republican opposition, not the supine press.

Are we that pathetic or merely ignorant?

Around the Web

Brandon Christensen Links , , , , , , , , , , , , , , , ,

This is the 69th installment of ‘Around the Web’. Giggity!

  1. guaranteed income vs. open borders; Economist Kevin Grier weighs the options
  2. How poverty taxes the brain; A sexy-sounding female gives us the low-down
  3. The origins of Northwest European ‘guilt culture’; Evolutionary anthropologists are so, soooo cute
  4. The ‘thoughtful libertarian’ subreddit; Finally!
  5. Is Christmas efficient? Only an economist (Tyler Cowen) could ask such a thing
  6. God, Hayek and the Conceit of Reason; Concise essay by Jonathan Neumann in Standpoint
  7. Milton Friedman’s 1997 musings on a common currency in the European Union: The Euro: From monetary policy to political disunity

The Iranian Nuclear Deal: An Agreement for All

Brandon Christensen Current Events, History, Politics , , , , , , , , , ,

[Editor’s note: the following is a short essay by Payam Ghorbanian. Payam was born in Tehran, Iran. He got his bachelor of science in Engineering from Zanjan University in Zanjan, Iran. He has been participating in liberal political activities and he was involved with some think tanks in Iran. He is doing research in the field of international relations and Iran’s foreign policy as an independent activist. He is now living in San Jose, California.

I cannot endorse this essay, but I am excited to post it because of its potential as a conduit for intercultural dialogue and exchange. I have left his essay largely intact, but did break up some of his longer paragraphs for clarity’s sake. Thanks to Payam for taking the time to write this.]

On November 24, Iran and the P5+1 group have reached to a historical deal on Tehran’s nuclear program at talks in Geneva, Switzerland. We might have difficulty to understand this process, the process which turns out the agreement to be real, so we must particularly take a look around to the real position of this group of countries plus Iran. It’s one of the Iranian’s attitude and way of thinking to say what they wanted to get and what they really ended up to.

In Iran, Hassan Rouhani was elected as a president on Jun 15, 2013. He is also known as one of the three people who talked to McFarlane in the Iran-Contra affair in 1985 about buying weapons during war between Iran & Iraq. During campaign for presidency, he said an extremely hopeful statement about nuclear program. He said: “It is good for nuclear centrifuges to operate, but it is also important that the country operates as well and the wheels of industry are turning.”

After he got elected, he put his faith in the right person and chose Mr. Mohammad Javad Zarif to be the minister of foreign affairs with the complete authority in action. Mr. Zarif was the permanent representative of Iran to the United Nations from 2002 to 2007. He is really familiar with the international policy regulations and the United States’ policy. Therefore, he was chosen to precede Iran’s nuclear negotiations and it was decided that the entire process would be carried out solely within his team.

It was one of the toughest situations for Iranian policy even though the middle class, especially the people who are living in the large cities, are incredibly united and hopeful for solving this nuclear issue; however, the extremists criticized any approach to any kind of agreement. For several years people of Iran have been feeling how sanctions can really cripple their destiny, economy, and their society structure. As a result of these effects, the rates of unemployment, bankruptcy, addiction, divorce, and prostitution have increased without any official and governmental justification. Therefore, we can consider the November 24th, 2013 as a distinguished and remarkable day in Iran’s modern history.

With the above introduction, let’s go through the text of the agreement for some details. It has been said:

“ … from the existing uranium enriched to 20%, retain half as working stock of 20% oxide for fabrication of fuel for the TRR. Dilute the remaining 20% UF6 to no more than 5%. No reconversion line…Iran announces that it will not enrich uranium over 5% for the duration of the 6 months.”

Although Mr. Zarif announced that according to the agreement, enriching uranium under the 5% is now acceptable and claimed it as a big win for Iran, the majority of the people in Iran really do not care about this subject. They expect the removal of all sanctions and this was the reason that they were following the negotiations and they remained awake up until the agreement came out, which at that time was really late at local time in Iran.

After all these trials and tribulations, now you can find out how hope for the future can make our nation more united. The people clearly understand that it is not the end of the negotiations and it is just the start of long way and they are looking forward to the next 6 month. For the people, it is not just about nuclear program; it is more about their life and their children’s future. President Rouhani is now in the right place and with the supports of Iranians. We hope his social policy would be more flexible as well and we can see more freedom in the society.

We are not going to discuss here the Europe United’s policy during this long term negotiation with Iran. They always want to reserve the important positions for themselves; however, they usually get to every negotiation which others have already accepted. For the people of Iran, the Europeans are best known as those trying to prolong every issue.

On the other hand The Europeans always push the solution to the curb and then try to get back to the first step and ultimately get to the agreement and to take one step further. With flopping back and forth, the conclusion usually would never come out. People of Iran had been disappointed of this kind of policy. From Iranian’s point of view, France should be responsible for the last unsuccessful talks on November 9th. Unfortunately they are unreliable partner for this region.

After all these, it is now time to shift our focus to the president Obama’s foreign policy about Middle East during the last year. Not that far ago, Syria used chemical weapons and crossed the red line, which was mentioned by president Obama before. Moreover, United Nation confirmed that there was no doubt of such use of chemical weapon from Syrians regime. However, instead of taking military action, president Obama decided to follow Russians in this crisis and he still tries to solve this issue through the UN. As a fact, it is clear that in order to go through the UN path to solve this crisis, United States has to deal with Russians and Chinese, since they have the authority to block international actions through the Security Council.

It is a fact that the Syrian’s people have been killed during the last three years. However, it seems that this fact is going to be ignored and denied. On the other side, Obama’s policy in this case would let the conservative countries like Qatar or Saudi Arabia to take part in this eternal disaster.  They can easily get rid of their extremist religious groups by allowing them to attend in this catastrophic war in Syria. Also due to the fact of this important unsolved problem in Syria, the pressure of human rights activities and other internal problems in their countries would be neglected. With this aspect of Syria’s crisis and also the failing of Arab spring, having an agreement with Iran is essential for Obama’s policy to get through these consecutive unsuccessful affairs. However, Israel’s prime minister tries to call this agreement as a historical mistake.

Great Britain has recently announced that they are concerned about total failure in Iran because of sanctions. After Great Britain evacuated all embassy staff from Iran in November 2011, now it seems that they are going to open relations with Iran following the election of President Rouhani. Undoubtedly they know the Middle East region much better than anyone else. They know this failure can affect Afghanistan, Iraq and the entire Middle East region. As a result, Britain has consecutively tried to help Iran and U.S. to approach to the final steps of negotiations.

On the other side, China is known as fatal mistake in economic partnership for Iranians during the last 10 years. Chinese took advantage of unjust situation of Iran and also destroyed industries in Iran are caused by importing cheap Chinese products. They have initially accepted the UN sanctions and have blocked about 50 billion dollars of Iran’s money in their banks; however, they ultimately should be happy of this agreement which definitely will moderate oil price and open up the gate of Iran’s market for Chinese investments.

Clearly with their foreign policy being so close to Iran, it is just a pose for Chinese in order to help them to precede their policy in southeast Asia using Iran’s threat for pushing away Chinese threat. Couple weeks ago they extended “air defense identification zones” which it seems will be accepted by United States. There is a common trend for all nations which can be written in this way that you are not going to consider as a powerful country if you just want to please yourself.

Finally, Russia should be indeed considered as the biggest winner of this agreement as well as the Middle East situation. Moreover, with the intent of being leader of the entire world, they forced other countries to accept their decisions on Syria’s crisis and by having this virtual confidence, now they really have plans to ruin all aspects of the free world. On September 12th, President Putin decisively took an issue with president Obama. His article was about United States people and he mentioned: “It is extremely dangerous to encourage people to see themselves as exceptional.”

However, president Obama decided to ignore this article and show respect to the new Russia. I believe working with Russia about Syria’s crisis and choosing non-interventionism for Ukraine crises would be one of the Obama’s failures in the U.S. foreign policy. Now this agreement would help Russia and obviously president Putin to take the rein of power more and more. At the end if Russia and China find out that there are not any obstacles around, they will never ever conceal their ambitious points.

Secession Within the US?

Brandon Christensen Law , , , , ,

“Yeah, why not?” would be my answer to this question.

Apparently, it’s a question being asked more and more lately in some states. I wouldn’t mind seeing a federal republic with twice or even three times as many states as we have now.

Conceptually, this would be no different from secession within the EU or any other federal or confederal arrangement.

Can anybody answer my answer (which is actually a question)? That is to say: what are some objections you can think of to more decentralization of power within the US?

Towards World Peace: Free Trade Edition

Brandon Christensen Liberty , , , , , ,

Evgeniy’s most recent piece ends with a question that I think goes unasked way too often. He writes:

Мне вот интересно, как борются с предрассудками среди населения в других странах?

[I’ve been wondering how to fight prejudice in the population in other countries?]

My own answer is probably a little predictable, but the surest way to combat foreign prejudices is through free trade. Nothing will ever eliminate social prejudices, at least not in our lifetimes, and this is especially true in regards to all things foreign.

If humanity were to ever adopt the central tenants of libertarianism, namely that the individual is the most important social unit, then I think prejudices of the kinds that cause our societies strife (racial, ethnic, religious, etc.) would cease to exist. In fact, I am so sure of libertarianism’s ability to eliminate the bad -isms of the world that I have decided to devote a portion of my otherwise exciting, prosperous and non-conformist life to this blog in order to further the case for liberty.

The best way for me to argue free trade’s case for combating prejudice in foreign affairs is by bringing up the European Union. After World War 2, the US and Great Britain had to find a way to make the French and the Germans play nice so that yet another major war could be averted. They found their answer in free trade: French and German statecraft began to focus on how to operate within a bound-together framework, rather than on how to outmaneuver the other. The French and German people, as we all know, have known nothing but peace since free trade between them has been implemented.

Free trade doesn’t have to be this abstract idea, either. Every time a Russian citizen watches a Pixar film, he is becoming less prejudiced against Americans. Every time an American citizen takes a shot of vodka from the motherland (giving toasts as he does so), he is becoming less prejudiced against Russians. Without free trade, these two consumer goods – movies and vodka – would have a hard time reaching foreign customers who desire them.