Nightcap

  1. The genealogies of migration Danijela Majstorović, Disorder of Things
  2. States versus societies Michael Koplow, Ottomans & Zionists
  3. Free expression and evolving standards Ryan Muldoon, RCLs
  4. Engakuji and the Winds of War Peter Miller, Views

Hazony’s nation-state versus Christensen’s federation

Yoram Hazony’s 2018 book praising the nation-state has garnered so much attention that I thought it wasn’t worth reading. Arnold Kling changed my mind. I’ve been reading through it, and I don’t think there’s much in the book that I can originally criticize.

The one thing I’ll say that others have not is that Hazony’s book is not the best defense of the status quo and the Westphalian state system out there. It’s certainly the most popular, but definitely not the best. The best defense of the status quo still goes to fellow Notewriter Edwin’s 2011 article in the Independent Review: “Hayekian Spontaneous Order and the International Balance of Power.”

Hazony’s book is a defense of Israel more than it is a defense of the abstract nation-state. Hazony’s best argument (“Israel”) has already been identified numerous times elsewhere. It goes like this: the Holocaust happened because the Jews in mid-20th century Europe had nowhere to go in a world defined by nationalism. Two competing arguments arose from this realization. The Israelis took one route (“nation-state”), and the Europeans took another (“confederation”). Many Jews believe that the Israelis are correct and the Europeans are wrong.

My logic follows from this fact as thus: the EU has plenty of problems but nothing on the scale of the Gaza Strip or the constant threat of annihilation by hostile neighbors (and rival nation-states).

The European Union and Israel are thus case studies for two different arguments, much like North and South Korea or East and West Germany. The EU has been bad, so bad in fact that the British have voted to leave, but not so bad that there has been any genocide or mass violence or, indeed, interstate wars within its jurisdiction. Israel has been good, so good in fact that it now has one of the highest standards of living in the world, but not so good that it avoided creating something as awful as the Gaza Strip or making enemies out of every single one of its neighbors.

To me this is a no-brainer. The Europeans were correct and the Israelis are wrong. To me, Israelis (Jewish and Arab) would be much better off living under the jurisdiction of the United States or even the European Union rather than Israel’s. They’d all be safer, too.

Nightcap

  1. Russia’s Ambassador writes to the New York Times
  2. What AOC gets that Bernie didn’t Michael Grunwald, Politico
  3. Coronavirus class conflict is coming Olga Khazan, Atlantic
  4. Re-centering the United States in American foreign policy TNSR

Coronavirus and the spirit of internationalism

Introduction

Iran has asked the International Monetary Fund (IMF) for emergency funding (it is for the first time since 1962 that Iran has sought IMF assistance) to fight the deadly Corona Virus outbreak (COVID19).

As of Saturday, March 14, 2020, Iran reported over 600 deaths (611) and over 12,000 cases arising out of the deadly virus. That makes Iran the third most affected country in the world after China and Italy. A number of prominent personalities, including the country’s Vice President (Eshaq Jahangari) and two other senior cabinet members, have contracted the virus.

On Wednesday, March 4, 2020, the IMF’s managing director, Kristilina Georgieva, stated that developing countries will be supported in their efforts to take on the Corona Virus through the Fund’s Rapid Financial Instrument. The IMF announced a $50 billion aid package with the aim of specifically assisting ‘low income’ and ‘emerging market’ economies. (On Monday, the World Bank had announced a $12 billion package to deal with the epidemic.)

Iran’s Central Bank chief, Abdolnaser Hemmati, said on Thursday that he had written to the IMF requesting $5 billion in emergency funding via the latter’s Rapid Financing Instrument. In a tweet on Thursday, the Iran’s Foreign Minister, Javad Zarif, urged the IMF to release this amount immediately. The Iranian Foreign Minister also said that Iran was facing a severe shortage of medicines and equipment. US sanctions on Iran, which have prevented it from selling oil or participating fully in the world’s financial ecosystem, have had a detrimental impact on the country’s economy. Iran, in a letter to the UN Secretary General Antonio Guerres, stated that US sanctions should be suspended keeping in mind the current crisis.

Iran’s apprehensions

Even if the IMF were to agree to releasing $5 billion for Iran, there are a number of obstacles that may result in Iran not being able to get the money from the IMF. First, the US is part of the IMF’s decision-making board (interestingly, in his tweet Zarif had stated that the IMF/IMF board should act responsibly) and even if the IMF agrees to disburse the amount, given the strains between Washington and Tehran it is quite possible that the US will veto such a move by the IMF. If Trump is willing to annoy US allies like the EU (on Wednesday, Trump took a decision to suspend flights from 26 Schengen countries to US, for a period of 30 days without consulting the EU), there is no reason why he will adopt a nuanced approach towards Iran.

Second, the Financial Action Task Force (FATF) has blacklisted Iran, which means that even if IMF agrees to provide the loan, banks and financial institutions can block such transactions.

Corona Virus is an opportunity for the US to exhibit statesmanship and maturity, and also lower tensions with Iran. While Trump has claimed to being open towards engaging with the Iranians, and seems to have changed his approach towards Tehran, he has not really exhibited much statesmanship in dealing with Tehran. Ever since the killing of Iranian General Qasem Soleiman (a major general in the Islamic Revolutionary Guard Corps) in a drone attack, in January 2020, ties went further downhill.

Opportunity for the US

This is an opportunity for the US to send a positive message to the international community, and to also distinguish between the Iranian public and its political class. China’s messaging with regard to helping the international community has been far better. On March 12, 2020, a team of Chinese doctors reached Italy (Italy, which is the most worst hit nation after China, had requested assistance from the latter). A number of Italian leaders have also criticised EU countries for being slow in reacting to Italy’s call for assistance.

Positive steps taken by China

What is also significant is that at a time when Washington and Beijing have been engaged in unnecessary mud-slinging with regard to the virus, with the US Secretary of State Mike Pompeo dubbing the Corona Virus as ‘Wuhan Virus’, and a senior Chinese diplomat responding by calling it a ‘conspiracy’ by the US army, on Friday March 13, 2020, Chinese billionaire Jack Ma stated in a tweet that he would donate one million face masks and 500,000 corona virus testing kits to the US. Earlier, Jack Ma’s charitable foundation, and his China-based company’s foundation, the Alibaba Foundation, had already donated supplies to a number of countries including  Japan, Korea, Italy, Iran, and Spain.

Conclusion

In case, the US does not agree to provide immediate assistance to Iran, other countries should step in including US allies like the UK, EU member states, and Japan. It is also important for multilateral organizations to show their teeth and not allow petty politics to come in the way of the fight against COVID 19. The Corona Virus is a clear reiteration of the point that while there may be numerous problems with economic globalization, we live in a truly interconnected world however much we may try to obliterate this fact. Humanity should trump petty politics and bickering, and this is an opportunity to revive the true spirit of internationalism.

Nightcap

  1. The Russian enigma (bitter) Lisa Gaufman, Duck of Minerva
  2. How women dominated the 2010s Tyler Cowen, Bloomberg
  3. Kleptocracy and kakistocracy in the 1990s Russia Branko Milanovic, globalinequality
  4. Governance by jury Robin Hanson, Overcoming Bias

Nightcap

  1. Beyond the ideological lie: The revolution of 1989 thirty years later Daniel Mahoney, Law & Liberty
  2. Cheer the fall of the Wall Bryan Caplan, EconLog
  3. Don’t venerate the nation-state Dalibor Rohac, Standpoint
  4. Finally, a good idea comes out of Washington Jack Crowe, National Review

Be Our Guest: “Liberty, Government, and Technology: 2019”

Jack Curtis is the latest to submit a piece for NOL‘s “Be Our Guest” feature. A slice:

We will compare China, Russia and the United States. China is a post-communist police state that has never experienced democracy. Russia is a post-communist, quasi democratic republic devolving back into a police state. And the United States is a traditionally democratic republic. Excepting the vagaries of disparate cultures, their three governments seem increasingly similar, revising themselves to adopt the new technology. However, these revisions have not originated only within governments; they also reflect the gradual confluence of the underlying societies.

Do read the rest, and I must point out that Jack has been a long time reader of NOL. For that I am personally grateful. It’s nice to be able to link up and collaborate like this.

Submit your own thoughts to us. Be our guest. Tell your friends, too.

Nightcap

  1. Ottoman cosmopolitanism Ussama Makdisi, Aeon
  2. American racism Coleman Hughes, City Journal
  3. WTO arrogance John Quiggan, the Conversation
  4. Chinese Antarctica David Fishman, Lawfare

A decentralized look at the U.S.-China trade war

For the time being, it is highly unlikely that the Trade war between Beijing and Washington will be resolved. In May 2019, Trump increased tariffs on Chinese commodities (worth $200 billion) from 10% to a whopping 25%. So far, the US has imposed tariffs worth about $250 billion on China, while China has retaliated with tariffs on US goods estimated at well over $100 billion.

It would be pertinent to point out that trade disputes have not been restricted only to Washington and Beijing. Imposition of tariffs has been a bone of contention with numerous US allies, including Japan.

Of late, trade issues have resulted in major differences between New Delhi and Washington. Even though there are convergences between both countries on numerous strategic issues, resolving the differences between both sides on trade-related matters is likely to be an onerous responsibility.

In response to tariffs imposed by Washington, New Delhi retaliated, and has imposed tariffs, estimated at $200 million, on 29 commodities (including apples, almonds, and chickpeas). India’s decision was a response to Washington’s decision to impose tariffs, of 10% and 25% on aluminium and steel, in May 2018. Last year, New Delhi refrained from imposing tariffs, but did raise import taxes on a number of US goods to 120% after Washington declined to exempt New Delhi from higher steel and aluminium tariffs. The key propelling factor for India’s recent imposition of tariffs was the US decision to scrap the Generalized System of Preferences (GSP) for India from June 5, 2019. India benefited immensely from this scheme, as it allowed duty-free exports of up to $5.6 billion from the country.

Pressure on Trump

Even though no solution is in sight, there are a number of lobbies in the US, especially trade groups and US businesses, which have been repeatedly urging the Trump Administration to find a solution to the current impasse with China.

Only recently for instance, 600 companies, including Walmart, in a letter to the U.S. President, urged him to resolve trade disputes with China, stating that tariffs were detrimental to the interests of American businesses and consumers. The letter was sent as part of the ‘Tariffs Hurt the Heartland’ campaign.

To underscore the detrimental impact of trade wars on the American economy some important estimates were provided. The letter stated that tariffs of up to 25% on $300 billion worth of goods could lead to the loss of two million jobs. Costs for an average American family of 4 would also increase an estimated $2000 if such tariffs were to be imposed.

Reports indicating the challenges to the US economy and FDI from Chinese companies in US

A number of surveys and reports illustrate the profound challenges which the US economy is facing, as well as a drop in FDI from China.

The University of Michigan’s consumer sentiment index also revealed a drop in consumer sentiment from 100 in May to 97.9 in June. This was attributed to trade wars between China and the US.

According to a survey released by the China General Chamber of Commerce USA, investment by Chinese companies in the United States has witnessed a significant decline since 2016 (including a sharp drop in 2018 and early 2019).

A number of important events have been held recently, where efforts were made to draw more Chinese investments to the US. One such event was the Select USA Summit. Speaking at the Summit, US Commerce Secretary Wilbur Ross stated:

We welcome investment from any place as long as it’s investment that poses no challenges for national security.

US states and FDI

What was clearly visible at the Select USA Summit was the fact that a number of US states pitched for expanding economic ties with China, and drawing greater Foreign Direct Investment.

The state of North Carolina sought to attract investments in areas like IT, aviation, and biotech. The US headquarters of Lenovo are in the state of North Carolina. Trump’s trade wars have hit the state in a big way, and one of the sufferers has been soy bean farmers. As a result of a 25 percent imposition of tariffs, the price of a bushel of soy beans has dropped to $8, from $10 in 2018.

Other US states brought to the fore the impact of tariffs on their respective economies. According to a senior official from the state of Louisiana for instance, it has suffered immensely as a consequence of the imposition of tariffs. Agricultural commodities from Middle America to China are imported through export terminals in Louisiana. Don Pierson, the senior official from Louisiana, said that the agricultural economy of the state, as well as the logistics economy of the state, have taken a hard hit as a consequence of the trade wars. Pierson also spoke about the possibility of exporting LNG from Louisiana to China. Chinese companies in the state of Louisiana, which include Yuhuang Chemical Group (Shandong’s), have made major investments. Shangdong’s decided to invest $1.85 billion in a methanol production complex (this was one of the largest Chinese direct investments in US). Wanhua Chemical Group invested over $1 billion (1.2) in a chemical manufacturing complex in southeastern Louisiana.

A number of Chinese companies have also begun to realise that there is need to adopt a nuanced approach, and are still tapping certain US states for investment.

Another important event was the Select LA Summit. The Los Angeles Mayor Eric Garcetti, and Lenny Mendonca, chief economic adviser to the California governor, assured overseas investors of all possible support from the town of LA, as well as the state of California.

Impact of trade disputes and Washington’s stance vis-à-vis Huawei

US states and Chinese provinces have been at the forefront of improving economic ties between both countries. Both are likely to suffer as a consequence of not just the trade war between both countries, but also the US ban on Huawei. The tech company, according to a report published in 2016, contributes 7% of the GDP of the town of Shenzhen (Guangdong province). Affiliates of Huawei provide employment to an estimated 80,000 people, while a research facility in a nearby city of Dongguan, provides employment to well over 3,000.

Conclusion

In conclusion, it is important for all stakeholders, not just businesses from both countries, to play their role in resolving economic and technological disputes between China and the US. It is also important for Chinese provinces as well as US states to play a pro-active role in reducing tensions. Both governments, while realising the importance of federating units, have set up official dialogues and set up other mechanisms for sub-national exchanges. It is important that these platforms now contribute towards reducing the divergences between both countries. While all eyes are on the political leadership of both countries, it is important to realise that the stakeholders in the US-China relationship are not restricted to Beijing and Washington DC.

The nature of the China-US-Vietnam economic triangle

While addressing a joint press conference in Hanoi, after his summit with North Korean Leader Kim Jong Un, US President Donald Trump spoke not just about the Summit, but also the current state of US-China relations. Trump criticised his predecessors for not doing enough to address the trade imbalance with China, while also making the point that he was all for China’s economic progress and growth, but not at the cost of the US.

If one were to look beyond the Summit in terms of the US-Vietnam economic relations, top US companies – Boeing and General Electric – sealed some important deals.

Given the focus of Trump’s visit (which was the Summit with Kim), perhaps these deals did not draw the attention they ought to have. The fact is that the US has begun to recognise Vietnam’s economic potential, as well as its geopolitical significance in Asia. This long note will give a backgrounder to Vietnam’s economic growth story in recent years, highlight some of it’s key strategic relationships, and then examine the nature of the China-US-Vietnam economic triangle.

Vietnam’s growth story: The key reasons Continue reading

Nightcap

  1. Don’t believe the myth that this is a nation of Little Englanders Alex Massie, CapX
  2. The American Greatness narrative: a look under the hood Samuel Goldman, Law & Liberty
  3. In South Africa, minorities are at risk (even though it’s Not Yet Genocide) Mpiyakhe Dhlamini, Rational Standard
  4. Military dictatorship in Brazil: was it worth it? Bruno Gonçalves Rosi, NOL

How the United States can woo Africa away from China

On December 13, 2018, US National Security Advisor John Bolton, while speaking at the Heritage Foundation, highlighted the key aims and objectives of ‘Prosper Africa,’ which shall probably be announced at a later date. The emphasis of this policy, according to Bolton, would be on countering China’s exploitative economics unleashed by the Belt and Road Initiative, which leads to accumulation of massive debts and has been dubbed as ‘Debt Trap Diplomacy’. A report published by the Centre for Global Development (CGD) (2018) examined this phenomenon while looking at instances from Asia as well as Africa.

During the course of his speech, Bolton launched a scathing attack on China for its approach towards Africa. Said the American NSA:

bribes, opaque agreements and the strategic use of debt to hold states in Africa captive to Beijing’s wishes and demands.

Bolton, apart from attacking China, accused Russia of trying to buy votes at the United Nations through the sale of arms and energy.

Bolton also alluded to the need for US financial assistance to Africa being more efficient, so as to ensure effective utilization of American tax payer money.

The BUILD

It would be pertinent to point out that the Trump administration, while realizing increasing Chinese influence in Africa, set up the US IDFC (International Development Finance Corporation), which will facilitate US financing for infrastructural projects in emerging market economies (with an emphasis on Africa). IDFC has been allocated a substantial budget — $60 billion. In October 2018, Trump had signed the BUILD (Better Utilization of Investments Leading to Development) because he, along with many members of the administration, felt that the OPIC (Overseas Private Investment Corporation) was not working effectively and had failed to further US economic and strategic interests. Here it would be pertinent to mention that a number of US policy makers, as well as members of the strategic community, had been arguing for a fresh US policy towards Africa.

Two key features of IDFC which distinguish it from OPIC are, firstly, deals and loans can be provided in the local currency so as to defend investors from currency exchange risk. Second, investments in infrastructure projects in emerging markets can be made in debt and equity.

There is absolutely no doubt that some African countries have very high debts. Members of the Trump administration, including Former Secretary of State Rex Tillerson, had also raised the red flag with regard to the pitfalls of China’s unsustainable economic policies and the ‘Debt Trap’.

According to Jubilee Debt Campaign, the total debt of Africa is well over $400 billion. Nearly 20 percent of external debt is owed to China. Three countries which face a serious threat of debt distress are Zambia, Republic of Congo, and Djibouti. The CGD report had also flagged the precarious economic situation of certain African countries such as Djibouti and Ethiopia.

US policy makers need to keep in mind a few points:

Firstly, Beijing has also made efforts to send out a message that BRI is not exploitative in nature, and that China was willing to address the concerns of African countries. Chinese President Xi Jinping, while delivering his key note address at the China-Africa Summit in September 2018, laid emphasis on the need for projects being beneficial for both sides, and expressed his country’s openness to course correction where necessary. While committing $60 billion assistance for Africa, the Chinese President laid emphasis on the need for a ‘win-win’ for both sides.

African countries themselves have not taken kindly to US references to debt caused as a result of China. While Bolton stated that Zambia’s debt is to the tune of $6 billion, an aide to the Zambian President contradicted the US NSA, stating that Zambia’s debt was a little over $3 billion.

At the China Zhejiang-Ethiopia Trade and Investment Symposium held in November 2018, Ethiopian State Minister of Foreign Affairs Aklilu Hailemichae made the point that Chinese investments in Ethiopia have helped in creating jobs and that the relationship between China and Ethiopia has been based on ‘mutual respect’. The Minister also expressed the view that Ethiopia would also benefit from the Belt and Road Initiative.

During the course of the Forum of China-Africa cooperation in September 2018, South African President Cyril Ramaphosa had also disagreed with the assertion that China was indulging in predatory economics and this was leading to a ‘New Colonialism,’ as had been argued Malaysian Prime Minister Mahathir Mohammad during his visit to China in August 2018.

Washington DC needs to understand the fact that Beijing will always have an advantage given the fact that there are no strings attached to it’s financial assistance. To overcome this, it needs to have a cohesive strategy, and play to its strengths. Significantly, the US was ahead of China in terms of FDI in Africa in 2017 (US was invested in 130 projects as of 2017, while China was invested in 54 projects). Apart from this, Africa has also benefited from the AGOA program (Africa Growth and Opportunity Act), which grants 40 African countries duty free access to over 6000 products.

Yet, under Trump, the US adopts a transactionalist approach even towards serious foreign policy issues (the latest example being the decision to withdraw US troops from Syria) and there is no continuity and consistency.

US can explore joint partnership with allies

In such a situation, it would be tough to counter China, unless it joins hands with Japan, which has also managed to make impressive inroads into Africa, in terms of investments, and has also been providing financial assistance, though it is more cautious than China and has been closely watching the region’s increasing debts. Japan and India are already seeking to work jointly for promoting growth and connectivity in Africa through the Africa-Asia Growth Corridor. The US is working with Japan and India for promoting a free and open Indo-Pacific, and can work with both countries for bolstering the ‘Prosper Africa’ project.

Perhaps, Trump should pay heed to Defence Secretary Jim Mattis’ (who will be quitting in February 2019) advice where he has spoken about the relevance of US alliances for promoting its own strategic interests.

There are of course those who argue that US should find common ground with China for the development of Africa, and not adopt a ‘zero-sum’ approach. In the past both sides have sought to work jointly.

Conclusion

African countries will ultimately see their own interests, mere criticism of China’s economic policies, and the BRI project, and indirectly questioning the judgment of African countries, does not make for strategic thinking on the part of the US. The key is to provide a feasible alternative to China, along with other US allies, or to find common ground with Beijing. Expecting nuance and a long term vision from the Trump Administration, however, is a tall order.

Afternoon Tea: “Independent Indians and the U.S.-Mexican War”

This cross-border conversation had a broad and tragic context. In the early 1830s, following what for most had been nearly two generations of imperfect peace, Comanches, Kiowas, Navajos, and several different tribes of Apaches dramatically increased their attacks upon northern Mexican settlements. While contexts and motivations varied widely, most of the escalating violence reflected Mexico’s declining military and diplomatic capabilities, as well as burgeoning markets for stolen livestock and captives. Indian men raided Mexican ranches, haciendas, and towns, killing or capturing the people they found there, and stealing or destroying animals and other property. When able, Mexicans responded by attacking their enemies with comparable cruelty and avarice. Raids expanded, breeding reprisals and deepening enmities, until the searing violence touched all or parts of nine states.

This is from Brian DeLay, a historian at Cal-Berkeley. Here is a link.

Eye Candy: the five largest cities in each American state, as constellations

Yup, you read that correctly. Behold:

NOL map 50 states constellations
Click here to zoom

RCH: America and Russia use to be friends

It’s true, and it’s the subject of my latest Tuesday column over at RealClearHistory. Check it out:

The two future superpower rivals had more in common than mere future greatness, though. Both were expanding rapidly, gobbling up huge swaths of territory at the expense of isolated polities like the Khiva Khanate and the Sioux confederacy, and hapless autocracies like Mexico and the Ottoman Empire. Russia and the United States also shared common foes – France and the U.K. – due mostly to the fact that American and Russian expansion was beginning to step on French and British toes. Both empires – one democratic, the other autocratic – also had looming labor crises that overshadowed everything they did in international affairs: slavery and serfdom.

Yes, I’m writing about the widely-ignored Crimean War. Please, read the rest, and don’t forget to tune in Friday for ten cool facts about the Crimean War!