Somaliland’s elections

Somaliland just held elections recently. Political scientist Scott Pegg was there as an international observer. I reprint his report with his permission:

I was in Somaliland as an international election observer for their parliamentary and local council elections on May 31st. The blog I did with Michael Walls has lots of cool photos in it if you want to see low-tech democracy in action in an extremely poor country in the Horn of Africa: https://defactostates.ut.ee/blog/observing-somaliland%E2%80%99s-2021-parliamentary-and-local-council-elections.

So, the biggest problem by far with Somaliland elections is that there is almost no policy or ideological differences between the candidates (everyone wants them to be recognized, everyone wants to promote livestock exports, etc.). Candidates will loudly proclaim how they fundamentally differ from their opponents but then when you ask them something like “give me three key issues you disagree about,” they start mumbling and deflecting. Unfortunately, much of their politics is clan-based (and often sub-clan based). When I was there for the 2017 presidential elections, a seasoned political observer who is a friend of mine gave me this incredible breakdown of “we’ve got this clan, that sub-clan and the other sub-clan, they’ve got this clan, that sub-clan and the other sub-clan and the only unknown variables are this clan and that sub-clan.” It was exactly like John King pulling up different electoral maps on CNN, just without the maps and the technology. Based on his analysis, I asked if I could get posted to either Burco (where I was sent in both 2017 and 2021) or Boroma because they were what he correctly predicted were the equivalents of “swing states” in their election. So that’s the depressing part.

The inspiring part is that there are several minor issues or problems, but the elections themselves are incredibly peaceful, festive, free, fair and orderly. The single biggest problem I saw this time was an unsealed ballot box. The polling station staff knew it was a serious problem and had already called the regional electoral headquarters to ask for additional seals to be brought out. Yet, the box is sitting in the middle of the room in full view of all voters and all observers and no one is tampering with it in any way. I initially thought the polling station I saw close was closing early and leaving a few dozen voters in line locked out of the process. Then, I soon discover that it is a 20 minute break for evening prayer time, after which they resume voting and stay open 90 minutes late to accommodate everyone who was in line before the polls close. They weren’t supposed to do that, it was technically wrong, but it wasn’t anything that was done with any kind of fraud or malicious intent and all the voters were totally cool with it. The one area where they totally violate international norms is on the secrecy of the ballot. Voters can vote in secret but large numbers of them just don’t care if people know who they are voting for and walk into the polling station loudly proclaiming I want to vote for X or Y candidate. The election staff either shows them how to do this or does it for them and then shows the ballot to all observers so they can see the voter’s intent was carried out. Alternatively, some voters vote in secret but then go up to the political party observers and say something like can you verify that I actually voted for X and Y candidates, which they then do honestly and scrupulously. They have assorted small problems or mistakes, but absolutely zero fraud, systemic irregularities or malevolent intent. Watching the process on election day is truly inspiring and I wish more Americans who are so jaded and cynical about our democracy could see it.

For more on Somaliland at NOL, start here. You can check out Scott Pegg’s excellent scholarship here.

Monetary Tales from the Farthest Shore

The second bank by the sea

My music playlist has nearly stagnated for years and, depending on your age, maybe yours has too. Evidence suggests that (partly) because of mind shenanigans, our musical palette does not quite expand past the age of 30. I think that something similar goes for gaming. I am still fond of those (pc) games from my late teen – early adult years and stay happily ignorant about the newer ones. Those single player games immersed you through substance over eye-candies. Some in-game scenes remain pure gold after all these years. Like that dialogue, when one of my younger siblings was delving in a fictional setting resembling the Caribbean during the Golden Age of Piracy. (Escape from Monkey Island. I preferred RPGs. Nowadays, only books – like this one.)

At some point, the protagonist, a witty swashbuckler, visited the Second Bank of an island called Lucre. “What happened to the First Bank of Lucre?”, he inquired. “Nothing”, said the bank teller, “It was our public relations department’s idea. They felt that being called the ‘First’ bank didn’t project an image of experience”. At the time I thought it as just a funny anachronism. Later, I recognized a jab to brand marketing practices and the corporate-speak more generally. But it was also the scheme of a “fledgling” first banking institution versus a “trustworthy” second one that almost held a real-world analogy. 

Some kind of a theory

There is a rich discussion on the origins of money, its form and the proper control of it, as well as a few historical cases of either state or private currencies thriving – or failing. Hard. In the thick of it, we talk about two positions. From the one hand, the “economics textbook” approach proposes that money emerged in the realm of private economic relations, to minimize transaction costs and facilitate trade. (Francisco d’Anconia would approve.) Here be a decentralized, bottom-up acceptance of the medium of exchange. This view sits well with the classical liberal dichotomy between the civil and state spheres, which can be expanded to envision a very limited role for the state in monetary affairs. From the other hand, the “anthropological – historical” position articulates that trust on money comes mostly from the sovereign’s guarantee, marked by the sign of God and/ or Emperor. This top-down explanation is more receptive to the state control of money, rhyming with the monetary power as a prerogative of the ruler and an expression of sovereignty. 

Beginning with some important judicial decisions in the second half of 19th century, the official assertion of state power over money came in the 20th century. Per the Permanent Court of International Justice, in 1929, “it is indeed a generally accepted principle that a state is entitled to regulate its own currency”. You know, the norm of modern national monetary monopolies. There was a time though, when things were more colorful and less unambiguous. From the 13th century onward to the Golden Age of Piracy and beyond, it was only normal for different monies of various issuers to flow from one territory to the other. Reputable currencies required not only a resilient authority backing them, but also a nod by society and custom. This kind-of-synthesis of the two positions outlined above rung especially true in the case of the young Greek state in 1830s – 1840s. (For this section I draw from the comprehensive “History of the Greek State 1830 – 1920”, by George B. Dertilis [the 2017 Crete University Press edition, in Greek. An extended version, under a different title, is forthcoming in English in 2021/22]. Btw, on Mar. 25 we celebrate 200 years from the Declaration of the Greek Revolution versus the Ottoman rule, an [underrated?] event with connotations of nationalism and liberal constitutionalism.)

Over there at the (Balkan) shore

As the new state needed to break free from all the institutions of Ottoman Empire, its hastily assembled first Bank of Issue sought to introduce a new national currency (the Phoenix). The impoverished, ravaged and cut off from international debt markets nascent state reflected bad upon the Bank. The government tried to force public’s trust via legislation. By decree, payments from/ to the state coffers would include a mandatory percentage of the new banknotes (later the percentage was set at 100%). Revenue from state natural resources – present and future – would back the currency. The administrative magic did not do it. The public actively tried to avoid the Phoenix banknotes, in favor of traditional silver/ gold coins. Bank and currency failed to crowd out the foreign monies and ultimately went out of business. A few years later, the overall environment had improved somewhat and a more vigorous state established the second Bank of Issue. Another new national currency, the Drachma, was already circulating in – copper – coins along with the foreign ones. 

The second Bank received an exclusive charter of issue and undertook the task to roll-out the Drachma banknotes (silver/ gold coins would follow) and, in doing so, integrate the fragmented Greek countryside to a more cohesive national economy. Up until then, the local markets had operated as loosely hierarchical oligopolies. At the bottom of the chain, each small village or group of villages was dependent on a merchant-money lender who held monopsonistic power over the (tiny scale) agricultural production and, at the same time, monopolistic power in cash and credit. These rural businessmen depended on the respective merchant-money lender of the nearest town for brokerage. Next in line was the merchant-money lender of the nearest city, usually with access to international trade routes. You get the picture. These informal networks contained competition among neighboring lesser merchant-money lenders and promoted trade through a complex web of transactions (involving forward contracts, insurance premiums and bills of exchange, among others). (The official site for the anniversary features a fancy piece about the first attempts to establish a national bank as well. It includes a few names and dates, while noticing the “exploitative” networks and the “primitive” credit system .I find its lack of nuance disturbing somewhat misleading.)

Becoming one with the forces

The Bank opted to tap and complement the existing disjointed market forces, in order to gently nudge them. It channeled its primary tool, lending in banknotes, to the local money markets, firstly, to a limited number of large merchant-money lenders, later to the middle ones. (According to the Bank’s ledgers, these clients usually chose respectable job titles, such as “Banker” or “Broker”. Others, a bit blunter, went by the Greek equivalent of “Usurer”.) This lending – apart from being short-term, relatively safe and profitable – enabled the Bank to gradually assume a leading position, without the need to deep dive at the specifics of each end-user of the market. The soft, indirect entry in the century-old customary networks lowered the cost of money and contributed to the integration of the national economy. The transition was not always smooth, with the occasional episode (people switching from banknotes to metallic coins, the Bank returning the favor by aggressively cutting back lending, the government setting compulsory percentages etc  – you know the drill), but still, the stakeholders’ incentives aligned. Society at large recognized Bank and currency, with the system reaching a workable equilibrium

The merchant-money lender of old was finally phased-out by regular bank lending in the next decades. Further underpinned by a cozy relationship with the state (always a valuable client, usually a partner, sometimes even an opponent), the Bank acted as a quasi-central banking institution until 1928, when the charter was transferred to the newly found Bank of Greece. The Drachma continued as official legal tender (albeit with numerous conversions) until the end of 2001.

Nightcap

  1. Hayek (Streeck, Hazony) and world federation and colonialism Eric Schliesser, Digressions & Impressions
  2. The new secessionism Jason Sorens, Modern Age
  3. Winning the court, losing the constitution John Grove, Law & Liberty
  4. The quest for German national identity Anna Corsten, JHIBlog

The collapse of socialism and the sovereignty gap

When socialism collapsed in the late 1980s-early 1990s, many debates and contentions were settled, but the issue of sovereignty has only grown in importance thanks in large part to more economic integration. The European attempt at federation, undertaken after the fall of socialism, has not gone well precisely because it cannot close the Westphalian sovereignty gap. The bloodshed in the non-liberal world has largely been a product of the inability of states to fragment, an inability which is encouraged by notions of Westphalian sovereignty and institutionalized by IGOs such as the United Nations or World Bank.

If states wish to break away, but are prohibited from doing so by enormous costs (such as violent aggression from the state it wishes to break away from, or hostility from illiberal states that can use IGOs as mediums to act on those hostilities), then a federation which welcomes states into its union, and which is strong enough to deter aggression, would be a welcome, liberal development.

This is from my forthcoming article in the Independent Review. Here’s a sneak peak (pdf) at the whole thing. I’m guest editing a symposium on the subject at Cosmos + Taxis, in case any of you want to write a response, or add to the conversation…

Nightcap

  1. On the “Muslim Game of Thrones” series Atif Baloch, DW
  2. Why secession, separatism, and disunion are the most American of values Rebecca Onion, Slate
  3. A history of America’s exceptional idea Jonathan Leaf, Modern Age
  4. Populism is a feature of globalization, not a bug Angelos Chryssogelos, Noema

Nightcap

  1. More death: Croatian literature Angela Woodward, LARB
  2. Immigrants as scapegoats Chris Dillow, Stumbling & Mumbling
  3. On the number and size of nations Alesina & Spolaore, NBER
  4. Lots of respectable people embraced eugenics Alan Judd, Spectator

Nightcap

  1. The Arabs: divided by a common language Patrick Ryan, Commonweal
  2. The Committee to Implement Annexation Michael Koplow, Ottomans & Zionists
  3. ABC News (US) reporting on secession in “Cascadia” Ivan Periera, ABC
  4. The grim reality of the cruel seas Claude Berube, War on the Rocks

RCH: The secession of Texas from Mexico

My latest at RealClearHistory deals with Texas and its secession from Mexico. An excerpt:

There are other similarities, too, starting with the fact that Texas was not the only state in Mexico to try and secede from Mexico City. The self-declared republics of Rio Grande, Zacatecas, and Yucután also asserted their independence from Mexico, though Texas was the only state to actually succeed in its rebellion. Unlike the 13 North American states attempting to secede from the British Empire, the Mexican provinces did not band together to form a united front against a common enemy.

Texas itself was the northern part of a larger state called Coahuila y Tejas. When Mexico originally seceded from Spain, Coahuila y Tejas joined the new republic as its poorest, most sparsely populated member state. In addition to economic and demographic problems, Coahuila y Tejas shared a border with the Comanche and Apache Indians, who in the 1820s were still powerful players in regional geopolitics. Life in Coahuila y Tejas was nasty, brutal, and short.

Please, read the rest.

Nightcap

  1. The Chinese governance system: impressive strengths and appalling flaws Pradnab Bardhan, 3 Quarks Daily
  2. Time to make good on the US-Philippine alliance Poling & Sayers, War on the Rocks
  3. Secession and international alliances go together Edwin van de Haar, NOL
  4. Maps and legends John Holbo, Crooked Timber

RCH: Five facts about Emancipation Proclamation

That’s the subject of my weekend column over at RealClearHistory. An excerpt:

4. The Confederacy was, for all intents and purposes, an independent country. When Lincoln issued the Emancipation Proclamation, the Confederacy had long since declared independence from the United States and set up a federal government of its own. Montgomery, Ala. acted as its capital city until 1861, when the Confederacy’s government moved to Richmond, Va. Lincoln viewed Richmond’s diplomacy with the British and French as the most dangerous element of the Confederacy’s secession. If Richmond could somehow manage to get a world power on its side, the consequences for the future of the republic would be dire. For London and Paris, the calculations were a bit different. If either one joined the side of the Confederacy, the other would officially join the north and a global war could ensue. The Confederacy lobbied especially hard for the British to fight on their side, but there was one issue London’s hawks, the factions that wanted a war with Washington, couldn’t get past.

Please, read the rest.

My son is being born right about now (I scheduled this post). I hope everything goes well (it’s a c-section). Wish me luck!

Nightcap

  1. Cultural Marxism and the New Right Neuffer & Paul, Eurozine
  2. Black soldiers in European wars, 18th century edition Elena Schneider, Age of Revolutions
  3. A forgotten Indian hero TR Vivek, Pragati
  4. The treason prosecution of Jefferson Davis Will Baude, Volokh Conspiracy

Nightcap

  1. Cameroon, Nigeria, and Ambazonia Adewale Maja-Pearce, London Review of Books
  2. Upholding the Jihadist’s Veto Rose & Mchangama, Quillette
  3. Russia’s Syria problem keeps getting worse Robert Hamilton, American Interest
  4. Monuments and Indian massacres (Denver edition) Karen Brady, Not Even Past

RCH, and a warm welcome

My topic over at RealClearHistory today is the Mexican-American War. I lay out a general background on all the players, hoping that a primer will do readers there some good. An excerpt:

Texas. In 1821, the newly-established Mexican government was having severe trouble with the Comanche in the area and invited Americans to settle the region. This pushed the Comanche west and helped weaken them, but it also laid the groundwork for a Texian secession from Mexico. Texas declared independence from Mexico in 1835, but of course nobody in Mexico City recognized this declaration. Texas and Mexico fought for more than a decade before representatives from the Lone Star Republic finally succeeded in lobbying Washington to annex Texas and incorporate it into the American federation. It’s worth noting here that immigration was not the cause of Texian secession from Mexico, as some nativists are apt to claim today. Texas was, like Yucatán, tired of being governed poorly from Mexico City. The anti-immigration argument would be much stronger if Mexico wasn’t facing revolts and secessions everywhere it turned.

Please, read the rest. I’m going to, as I promise in the piece, delve into slavery and the war next Tuesday, but there’s also other topics to think about. Secession comes to mind for me, as I can’t help but ask what could have been if the Senate had not rejected Yucatán’s bid for annexation. Also, is annexation the missing piece of the puzzle when it comes to not only “exit” in libertarian circles, but entrance as well?

Speaking of entrances, I’d like to officially, warmly welcome Mary Lucia Darst to the consortium and highlight her first thoughts with NOL: “The Sad Retreat.” I’m not going to spoil it for you, so if you haven’t read it yet, now would be a good time (don’t forget to say ‘hi’ while you’re at it). Here is her bio. I am extremely excited to read what she shares here over the next few years.

Secessions that didn’t work out

No, not that secession. It’s the ten most important unsuccessful secessions of the last few decades. That’s the topic of my latest column over at RealClearHistory, anyway. An excerpt:

You already know about Catalonia and its unsuccessful bid to secede from Spain late last year. (Check out our archives if you want to get up to speed.) A comparative approach is useful here. The unsuccessful secession movements in Africa have all been violent. The unsuccessful ones in Europe and North America started out violent but have evolved into democratic movements. The key to understanding this shift is the federative structures that exist, or don’t exist, in different parts of the world. The secessionist movements in Europe and North America are not looking to go it alone any longer. These movements don’t want full sovereignty. Separatists in Europe and North America want more decision-making power in federative structures. In the case of Quebecers, it’s Canada’s unique federation; for Catalonians (and the Scottish, for that matter), it’s the European Union. Once a federative body roots itself in a region of the world, separatist tendencies cease to be violent and they shift to more peaceful forms of resistance. Kurdistan provides a microcosmic example of this evolution, In Turkey, where the Kurds continue to be ignored and oppressed, violence reigns supreme. In Iraq, where the Kurdish region has been given autonomy and self-governance, grievances are aired out in the open, in the form of non-binding referenda and in arguments put forth in a free and open press.

I also spend a good deal of time explaining why the Confederacy is no longer relevant for understanding the world we live in. Please, check it out.