Showing posts with label Somalia. Show all posts
Showing posts with label Somalia. Show all posts

Monday, June 06, 2016

Why 4G Has Hardly Been A Factor For Some African Telecom Monopolies

Sure, countries of Africa are NOT the same as the Philippines. And sure, African monopolies are state owned. 

Just to repeat. TEL-GLO’s deal makes their 4G company a monopoly. This firm may not be technically state owned, but such have been a product of prohibitionist- anti-competition legal environment. And no, they are hardly emblematic of a “natural monopoly”. That’s because again since their existence has been dependent on legal protection, hence they are instead “rent seeking” firms or crony firms. 

4G is yet to exist here.

Moreover, because the competition of 4G will be the non-4G services brought about by the same owners of the 4G monopoly, in effect, TEL and GLO now functions as a cartel for non-4G services. 

But as I have pointed out yesterday, 4G does NOT necessarily equal GROWTH.  That’s because other factors come into play: price, income, monopoly and politics play important  roles 

My theory in practice:

From IGMENA.org

Algeria is at all times lagging behind in terms of Internet use, but this doesn’t necessarily mean that Algeria has an effective Internet situation. The Algerian Internet end-user knows better than anyone the extent of shortcomings in Internet services and broadband connectivity.

However, this reality is even more difficult to accept for citizens who realize that the poor and destitute grow everyday in Algeria in terms of utilizing IT services.

End-users in Algeria are in a catastrophic situation characterized by constant internet technical latency, high cost, frequent cuts of online Internet subscriptions.  

The situation of the Internet in Algeria is still alarming. It is worth mentioning that a growing number of Algerian end-users have suffered for decades from bad connections due to state technical monopoly over Internet ISPs….

Recently, Algeria Telecom completed 279 Multi-Service Access Node Sites (MSAN) in the province of Algiers. It offers its customers a comprehensive range of 200,000 new connections to high-speed Internet. Algeria has, despite the introduction 4G, a long way to reach a place among the countries where high-speed Internet can be easily accessed by end-users.

From BMI Research (a Fitch company)

BMI View: The Q1 2016 East Africa report analyses the latest industry, regulatory and macroeconomic developments within the telecommunications markets in Burundi, Ethiopia, Malawi, Rwanda, South Sudan and Sudan. These six markets are characterised by several challenging business dynamics, including low consumer spending power, high infrastructure costs, large rural populations with poor access and, some cases, politically volatile environments. Limited competition in several of these markets, along with unfavourable fiscal regimes, creates considerable downside risks to market growth. 3G and 4G subscriber penetration rates, as well as their share of total mobile subscriber bases, are expected to remain among the lowest in the world for the foreseeable future.


Oh by the way, remember the movie Black Hawk Down?

The once stateless Somalia appears to have the cheapest and best telco services in Africa

From Wikipedia

After the start of the civil war, various new telecommunications companies began to spring up in the country and competed to provide missing infrastructure. Somalia now offers some of the most technologically advanced and competitively priced telecommunications and internet services in the world. Funded by Somali entrepreneurs and backed by expertise from China, Korea and Europe, these nascent telecommunications firms offer affordable mobile phone and internet services that are not available in many other parts of the continent. Customers can conduct money transfers (such as through the popular Dahabshiil) and other banking activities via mobile phones, as well as easily gain wireless Internet access. 

After forming partnerships with multinational corporations such as Sprint, ITT and Telenor, these firms now offer the cheapest and clearest phone calls in Africa. These Somali telecommunication companies also provide services to every city, town and hamlet in Somalia.There are presently around 25 mainlines per 1,000 persons, and the local availability of telephone lines (tele-density) is higher than in neighboring countries; three times greater than in adjacent Ethiopia. Prominent Somali telecommunications companies include Somtel Network, Golis Telecom Group, Hormuud Telecom, Somafone, Nationlink, Netco, Telcom and Somali Telecom Group. Hormuud Telecom alone grosses about $40 million a year. Despite their rivalry, several of these companies signed an interconnectivity deal in 2005 that allows them to set prices, maintain and expand their networks, and ensure that competition does not get out of control.


More 

From African Review


In Mogadishu Somalia, the report says, the average cost is $2.53. This is the cheapest anyway in Africa, with Zimbabwean operating charging the highest rates at an average $20.08.

The formulae used to compute the rates is based on one developed for OECD countries to measure cost of mobile tariff, based on 30 outgoing calls a month (on and off-peak) in three minutes, plus 100 text messages. 
The factors at play in determining price differences between countries include: Degree of competition, regulation of the sector; taxes applied to telecom services in a country and the differences between on and off-net calls. The extent to which the the US dollar exchange rate in a particular country is an accurate reflection of the purchasing power parity, also a critical factor.

In Somalia that suffered over two decades of war, and currently undergoing some stabilisation, mobile services are in the hands of private operators, with very little regulation. That could explain the good rates, thanks to less government controls and charges plus the benefits of stiff competition as opposed to monopolies. 

Just to add Somalia just reestablished a transitional government in 2012 (Federal Government of Somalia) 

Somalia’s Telecom boom occurred at the new millennium. 

And presently, there are about 25 TELCO companies operating in the nation! 

That by the way is an example of free market competition!

Wednesday, February 13, 2013

Has Private Security Scuppered the Somali Piracy?

Incidences of Somali piracy has significantly declined. The main reason: Private security contractors

From Yahoo.com (bold mine) [hat tip Bob Wenzel]
In truth, the Queen Mary 2 - carrying 2,500 passengers and 1,300 crew from Southampton to Dubai on the first leg of a world cruise - is not particularly at risk.

Some 345 metres long and 14 stories high, even its promenade deck is seven floors above the sea. The liner is fast, hard to board and - on this passage at least - moderately well armed.

Like many merchant vessels, the QM2 now carries armed private contractors when passing through areas of pirate risk.

Cunard will not discuss precise security arrangements. But contractors on other vessels routinely carry M-16-type assault rifles and sometimes belt-fed machine guns, often picked up from ships acting as floating offshore armouries near Djibouti and Sri Lanka…
More from the same article:
Most vessels passing through the area - container ships, tankers, cruise liners and dhows - now register daily with UKMTO. If they believe they are in danger, they will contact the British team to request military support.

"We've had calls when you could hear gunfire and rocket propelled grenades in the background," says Lieutenant Commander Simon Goodes, the current officer in charge. "But lately, the phones are ringing much less."

The only confirmed attack this year, Goodes said, was on a merchant vessel in early January as it sailed towards the Kenyan port of Mombasa. On-board private security guards repelled the assault after a 30 minute firefight…

For many in the shipping industry, the fall in attacks is a vindication of the decision to massively ramp up the use of armed guards.

So far, not a single ship with armed guards has been taken by pirates - although naval officers and other piracy specialists say hired guards can be excessively trigger-happy and have fired on innocent fishermen from India, Oman and Yemen.
The above shows how the private sector can effectively provide security services.

Saturday, October 06, 2012

Has the CIA Sponsored Some of the Pirates and Terror Groups in Somalia?

US foreign or imperial policies “spawn” their own “monsters” which they eventually end up fighting against.

They never seem to learn from their experience with Al Qaeda, or perhaps these have been part of the undercover scheme to promote foreign interventions and wars abroad in the interests of neoconservative politics and of the Wall Street backed military industrial complex.

From the Business Insider,
An attempt by CIA-connected trainers to create a sophisticated counter-piracy force in Somalia turned into hundreds of half-trained and well-armed Somali mercenaries being left to their own devices in the desert, Mark Mazzetti and Eric Schmitt of The New York Times report.

The Puntland Maritime Police Force, trained by dozens of South African mercenaries from sometime in 2010 to June 2012, was run by a Dubai-based company called Sterling Corporate Services that seems to be connected to the CIA.

The Times reports that in July a United Nations investigative group uncovered that the force shared some facilities with the Puntland Intelligence Service, a spy organization that answers to the president of the semi-autonomous Somali region of Puntland and has been trained by the CIA for more than a decade.

Michael Shanklin, a former C.I.A. station chief in Mogadishu, was reportedly hired to work his contacts both in Washington and East Africa to build support for the force while Erik Prince, the founder of the private security firm Blackwater, made several trips to the Puntland camp to oversee the training of the counter-piracy force.
It is important to emphasize that the “private company” has not only been backed by the CIA, the UAE government had considerable involvement in them. According to the New York Times “millions of dollars in secret payments by the United Arab Emirates”. So the private sector contractor is in reality a crony or a politically connected firm operating on stealth political goals.

In addition, the unintended consequences of interventionism have not merely been that these abandoned highly trained and armed groups have been left to their devices, but rather, as the NYT points out they may have joined up with “the pirates or Qaeda-linked militants or to sell themselves to the highest bidder in Somalia’s clan wars — yet another dangerous element in the Somali mix”. So in essence, the CIA trained possible and or potential, if not current, members of future pirates and terror groups.

The above signifies as further evidence that the perpetual foreign interventions, which ironically fostered her pirate industry has, contrary to mainstream expectations, induced the vicious cycle of violence in “stateless” Somalia.

However, Somalia isn’t “stateless” anymore. Repeated foreign interventions has finally resulted to the installation of a new Western backed government for the first time in four decades. As for the longevity of this US sponsored government, this remains to be seen.

Monday, May 28, 2012

Is Greece Falling into a Failed State?

According to the mainstream media and establishment experts, Greeks supposedly loathed austerity. They wanted “growth”, which is a euphemism for continued unsustainable government spending. If true, then this means that Greeks wanted free lunch.

But many Greeks may have come to realize that there is NO such thing as a free lunch. They needed to pay taxes in return for political entitlements.

Yet Greeks have been balking at doing so.

From Reuters.com/GreeceReporter.com

With anxiety mounting that Greece might vote for anti-austerity parties in the June 17 elections and be forced to leave the Eurozone of 17 countries using the euro as a currency, more Greeks – already legendary tax evaders – have stopped paying taxes. A senior Finance Ministry official on May 23 said that tax revenues have fallen 10 percent while two tax officials who declined to be named told Reuters that May revenues fell by 15-30 percent in tax offices away from the major cities and relative wealth centers of Athens and Thessaloniki.

So Greeks have been refusing to pay taxes. The left hand does not know what the right hand is doing. That’s if the establishment’s assertion is true. Greeks cannot have it both ways.

Yet Greeks realize that if they cannot pay, then they would have to default on their debts.

But the establishment says that the only way to salvation is through devaluation that can only be actualized from an exit. So their prescription: Default by devaluation.

So this ‘exit’ prospect gives further jitters not just to the average Greeks, but to foreign businesses based on Greece, as well. Foreign businesses have been apprehensive about having inadequate laws to cover or protect them once Greece decides to exit.

From the New York Times,

What can companies do when the legally impossible becomes reasonably probable?

Under European Union law, Greece cannot leave the euro. That is the theory. But in practice, any protection the law offers investors could be difficult to enforce, according to lawyers trying to protect their corporate clients against the upheaval sure to follow if Greece were to default on its debts and adopt a new currency.

So their advice is blunt: Remove cash and other liquid assets from Greece and prepare to take a short-term hit on any other investments…

But, apart from trying to ensure that debts are paid promptly and therefore in euros, legal options for companies are limited. Contracts covered by Greek law, particularly for services delivered in Greece, provide little protection against the currency’s being redenominated and devalued — a development regarded as unlikely until recently.

“Greece would, through its laws, be able to amend contracts governed by Greek law or to be performed within the territory of Greece,” Mr. Clark said. “It is the governing law and the place of performance of the contract that is most important.”

International contracts, which might be covered by British, German or Swiss law, would be more likely to be honored in the designated currency, though in some cases the wording of the legal document may be vague.

And even if the law is on their side, companies would find that to extract payment from a Greek company, they would need a judge in Greece to enforce a ruling from a foreign court.

When the average Greeks doesn’t want to pay taxes, and when foreign businesses are either closing shop or transferring elsewhere, then this means that there will be insufficient tax revenues for the current government to finance her survival.

This also means that parasites have severely impaired the hosts, which may mean the prospective extinction of the parasitical relationship.

From FT/IBNLive.in

Greece's public finances could collapse as early as next month, leaving salaries and pensions unpaid unless a stable government emerges from the June 17 election, according to Lucas Papademos, the technocrat prime minister who left office after this month's inconclusive vote.

Mr Papademos warned that conditions were deteriorating faster than expected with cash flow likely to turn negative in early June amid a sharp fall in tax revenues and a loosening of spending controls during two back-to-back election campaigns.

Mounting anxiety that Greece is headed for further political instability and a possible exit from the euro has prompted many Greeks to postpone making tax payments, and has also accelerated outflows of deposits from local banks.

Athens bankers estimate that more than €3bn of cash withdrawn since the May 6 election has been stashed in safe-deposit boxes and under mattresses in case the country is forced to readopt the drachma.

Austerity becomes a NATURAL process as economic reality has been reasserting itself. This exposes the promises of a "state based elixir" as monumental delusion.

The prescription of devaluation has been provoking a bank runs and has been blowing up right ON the faces of establishment experts calling for devaluation.

This brings us to where the Greece might be headed for.

The new Deutsche bank boss calls Greece as a "failed state".

From Irish Times,

The incoming co-chief executive officer of Deutsche Bank today described Greece as a "corrupt" and "failed" state.

"Greece is the only country, I feel, where we can say 'it's a failed state,' it is a corrupt state, corrupt as far as its political leadership is concerned, and obviously other people had to be willing to support this," Juergen Fitschen, who takes up his post next week, said in a speech at a conference in Berlin.

Failed states, are characterized according to Wikipedia.org by

  • loss of control of its territory, or of the monopoly on the legitimate use of physical force therein,
  • erosion of legitimate authority to make collective decisions,
  • an inability to provide public services, and
  • an inability to interact with other states as a full member of the international community.

Often a failed state is characterized by social, political, and/or economic failure.

In reality “failed states” are mainly products of unsustainable parasitical relationships, whether in Somalia, Chad or Sudan as rated by US think tank Fund for Peace and Foreign Policy.

But this does not necessarily mean social, political and economic failure as commercial operations exists. Otherwise logic says that these nations will have been uninhabited or deserted either through diaspora or death. But this has clearly not been the case.

Ironically, the US Central Intelligence Agency even admits that the number one “failed state” Somalia as having a “healthy informal economy”.

Thus the “inability to provide public services” does not represent reality. The difference is that mainstream cannot swallow or fathom such ideas. And the global political establishment has been repeatedly attempting for “failed states” to go mainstream through foreign interventions.

Instead, what a “failed state” means is that there is no standing government or that imposed government will mostly likely be ignored by society or what could be called “stateless society”.

I am not sure if Greece will technically become a failed state.

What is certain is that we are witnessing the accelerating collapse of a parasitical relationship anchored upon the spendthrift welfare and bureaucratic state.

This validates anew the great Ludwig von Mises who presciently warned more than half a century ago that

An essential point in the social philosophy of interventionism is the existence of an inexhaustible fund which can be squeezed forever. The whole system of interventionism collapses when this fountain is drained off: The Santa Claus principle liquidates itself.

And like Dr. Marc Faber, the collapse of the current Greece form of government should be bullish for Greeks over the long term (whether through exit or as part of the EU), as Greeks will be compelled to live within the laws of economics through greater economic freedom, and eschew feeding on political parasites.

Monday, July 25, 2011

Telecommunication Boom: This Time for Africa

There’s an ongoing mobile technology economic boom in Africa that’s bringing in a slew of new enterprises from from banking to agriculture to healthcare

Here is Killian Fox of the Guardian (hat tip Mark Perry)

My survey underlined a simple fact: Africa has experienced an incredible boom in mobile phone use over the past decade. In 1998, there were fewer than four million mobiles on the continent. Today, there are more than 500 million. In Uganda alone, 10 million people, or about 30% of the population, own a mobile phone, and that number is growing rapidly every year. For Ugandans, these ubiquitous devices are more than just a handy way of communicating on the fly: they are a way of life.

It may seem unlikely, given its track record in technological development, but Africa is at the centre of a mobile revolution. In the west, we have been adapting mobile phones to be more like our computers: the smartphone could be described as a PC for your pocket. In Africa, where a billion people use only 4% of the world's electricity, many cannot afford to charge a computer, let alone buy one. This has led phone users and developers to be more resourceful, and African mobiles are being used to do things that the developed world is only now beginning to pick up on.

Read the rest here

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Chart from McKinsey Quarterly

What’s even more interesting is that even in stateless and civil strife torn Somalia, the mobile industry has been flourishing. (much of this civil strife are due to foreign intervention, e.g. the US CIA has been exposed for maintaining several prison cells)

According to the BBC.co.uk (bold emphasis mine)

The business success story of the last 20 years has been the growth of the mobile telecommunications sector.

Somali telecoms expert Ahmed Farah says the first mobile telephone mast went up in Somalia in 1994, and now someone can make a mobile call from anywhere in the country.

There are nine networks to choose from and they offer services from texting to mobile internet access.

All this required investment in infrastructure, but, as Mr Farah argues, Somali investors were betting on the need for people to stay in touch in times of crisis.

More from Wikipedia, (bold emphasis mine)

Somalia now offers some of the most technologically advanced and competitively priced telecommunications and Internet services in the world. After the start of the civil war, various new telecommunications companies began to spring up and compete to provide missing infrastructure. Funded by Somali entrepreneurs and backed by expertise from China, Korea and Europe, these nascent telecommunications firms offer affordable mobile phone and Internet services that are not available in many other parts of the continent. Customers can conduct money transfers and other banking activities via mobile phones, as well as easily gain wireless Internet access.

After forming partnerships with multinational corporations such as Sprint, ITT and Telenor, these firms now offer the cheapest and clearest phone calls in Africa. These Somali telecommunication companies also provide services to every city, town and hamlet in Somalia. There are presently around 25 mainlines per 1,000 persons, and the local availability of telephone lines (tele-density) is higher than in neighboring countries; three times greater than in adjacent Ethiopia. Prominent Somali telecommunications companies include Golis Telecom Group, Hormuud Telecom, Somafone, Nationlink, Netco,Telcom and Somali Telecom Group. Hormuud Telecom alone grosses about $40 million a year. Despite their rivalry, several of these companies signed an interconnectivity deal in 2005 that allows them to set prices, maintain and expand their networks, and ensure that competition does not get out of control.

"Investment in the telecom industry is one of the clearest signs that Somalia's economy has continued to grow despite the ongoing civil strife in parts of the southern half of the country". The sector provides important communication services, and in the process thus facilitates job creation and income generation.

Somalia also has several private television and radio networks. Prominent media organizations in the country include the state-run Radio Mogadishu, as well as the privately-owned Horseed Media,Garowe Online and Radio Laascaanood.

Talk about how the free markets in telecoms has thrived and even blossomed under a stateless society. And how the beauty of competition has worked to give African consumers one of the lowest prices at best quality of services.

Filipinos should stop bickering over PLDT-DGTL buyout and study the lessons of Africa. If we want true competition then we should simply get government’s hands off the industry (repeal Congressional franchise, allow 100% foreign ownership and abolish the NTC)

As for the Mobile-telecom boom, Shakira in the music video below has an apropos theme for the mobile revolution boom in Africa: “This Time for Africa”


Wednesday, May 11, 2011

Video: Attack On Libertarianism Using Somalia

Here is a terse video attacking Libertarianism which misleadingly uses Somalia as a "Libertarian's Paradise". (hat tip Bob Wenzel)

Why the video is short?

Because it deliberately applies the “cum hoc ergo propter hoc” or correlation is causation fallacy. The video's implication: Because Somalia has no government therefore she is poor PERIOD. By making it short the video eludes the required proofs. So this easily would dupe the ignorant.

Again, reference point matters.

I would like to say that Somalia IS NO LIBERTARIAN UTOPIA. But we certainly can learn some lessons from her experiences.

Yet it is very important to point out that even before Somalia overthrew her government she has already been poor. So it would be wrong to adduce poverty to statelessness.

And the reason for the impoverished state is that Somalia had been ruled by a nasty communist regime; the Somali Democratic Party (1969-1991). So essentially Somalia has swung from the extremes of total government to statelessness.

So the appropriate question is “has Somalia been better off at her current state or with the communists?”

The obvious answer is that Somalis said NO to communism.

Here is a briefer of Somalia from Wikipedia,

Somalia, from 1991 to 2006, is cited as a real-world example of a stateless society and legal system. Since the fall of Siad Barre's government in January 1991, there had been no permanent national government in Somalia until the current Transitional Federal Government. Large areas of the country such as Puntland, and Galmudug are internationally unrecognized autonomous regions, while Somaliland is a de facto sovereign state. The remaining areas, including the capital Mogadishu, were divided into smaller territories ruled by competing warlords. In many areas there were (and still are) no formal regulations or licensing requirements for businesses and individuals.

One would ask, if Somalis has been better off why the civil wars?

Again the Wikipedia,

With worsening conditions in Somalia, rebels of the United Somali Congress (USC) led by Mohamed Farrah Aidid attacked Mogadishu and on January 26, 1991, Barre's government was taken out of power.

In May 1991, the northernwestern Somaliland region of Somalia declared its independence. This Isaaq-dominated governing zone is not recognized by any major international organization or country, although it has remained more stable and certainly more peaceful than the rest of Somalia, neighboring Puntland notwithstanding.

UN Security Council Resolution 794 was unanimously passed on December 3, 1992, which approved a coalition of United Nations peacekeepers led by the United States to form UNITAF, tasked with ensuring humanitarian aid being distributed and peace being established in Somalia until the humanitarian efforts were transferred to the UN. The UN humanitarian troops landed in 1993 and started a two-year effort (primarily in the south), known as UNOSOM II, to alleviate famine conditions.

Many Somalis opposed the foreign presence. In October, several gun battles in Mogadishu between local gunmen and peacekeepers resulted in the death of 24 Pakistanis and 19 US soldiers (total US deaths were 31). Most of the Americans were killed in the Battle of Mogadishu. The incident later became the basis for the book and movie Black Hawk Down. The UN withdrew on March 3, 1995, having suffered more significant casualties. Order in Somalia still has not been restored.

Yet again another secession from Somalia took place in the northeastern region. The self-proclaimed state took the name Puntland after declaring "temporary" independence in 1998, with the intention that it would participate in any Somali reconciliation to form a new central government.

A third secession occurred in 1998 with the declaration of the state of Jubaland. The territory of Jubaland is now encompassed by the state of Southwestern Somalia and its status is unclear.

A fourth self-proclaimed entity led by the Rahanweyn Resistance Army (RRA) was set up in 1999, along the lines of the Puntland. That "temporary" secession was reasserted in 2002. This led to the autonomy of Southwestern Somalia. The RRA had originally set up an autonomous administration over the Bay and Bakool regions of south and central Somalia in 1999.

So we have a combination of foreign meddling and competing tribes. We might say that foreign meddling to impose a national government may have been a significant factor in creating tribal frictions.

We see such relevance in the repeated foreign incursions on Somalia’s fishing grounds which partly depleted local fisherman’s livelihood that has spawned famously notorious Pirate Industry which I earlier wrote about.

How about today?

Again the Wikipedia, (bold highlights mine)

The various Somali militias had at that point developed into security agencies for hire. Due to that development, security had much improved and an economic rebound occurred. Somalia was then arguably partly in a state of anarcho-capitalism, where all services were provided by private ventures. According to the CIA, Somalia's telecommunication firms provide wireless services in most major cities and offer the lowest international call rates on the continent.

In 2000, Abdiqasim Salad Hassan was selected to lead the Transitional National Government (TNG).

This was followed in 2004 by the establishment of the Transitional Federal Government (TFG) of the Republic of Somalia, the most recent attempt to restore national institutions to the nation after the 1991 collapse of the Barre regime and the ensuing civil war. On October 10, 2004, Somali parliament members elected Abdullahi Yusuf Ahmed, the former President of Puntland, to be the next president and head of the TFG. The other institutions adopted at this time were the Transitional Federal Charter and the selection of a 275-member Transitional Federal Parliament.

Though internationally recognized, the TFG's support in Somalia was waning until the United States-backed 2006 intervention by the Ethiopian military, which helped drive out the rival Islamic Courts Union (ICU) in Mogadishu and solidify the TFG's rule. Following this defeat, the ICU splintered into several different factions. Some of the more radical elements, including Al-Shabaab, regrouped to continue their insurgency against the TFG and oppose the Ethiopian military's presence in Somalia. Throughout 2007 and 2008, Al-Shabaab scored military victories, seizing control of key towns and ports in both central and southern Somalia. At the end of 2008, the group had captured Baidoa but not Mogadishu. By January 2009, Al-Shabaab and other militias had managed to force the Ethiopian troops to withdraw from the country, leaving behind an underequipped African Union (AU) peacekeeping force.

Over the next few months, a new President was elected from amongst the more moderate Islamists, and the Transitional Federal Government, with the help of a small team of African Union troops, began a counteroffensive in February 2009 to retake control of the southern half of the country. To solidify its control of southern Somalia, the TFG formed an alliance with the Islamic Courts Union and other members of the Alliance for the Re-liberation of Somalia. Furthermore, Al-Shabaab and Hizbul Islam, the two main Islamist groups in opposition, began to fight amongst themselves in mid 2009.

As a truce, in March 2009, Somalia's newly established coalition government announced that it would implement shari'a as the nation's official judicial system.

As one would note, there has been so many and continuous foreign meddling in Somalia in the attempt to foist a national government, on what seems to be a society averse to government.

As Professor Ben Powell writes, (bold highlights mine)

The Somalis again have united against this attempt by outsiders to force a government on them. Unfortunately, the result has been an increase in the power of the Union of Islamic Courts (UIC), who, since June, has gained control over much of southern Somalia, including the former capital, Mogadishu. An estimated 600 militias have joined the UIC since the TFG moved into Baidoa in February.

Every government of Somalia has exploited the country’s population. International meddling created the TFG and, unintentionally, a more powerful UIC. If either group were to become a true government, the population likely will once again become oppressed. In the meantime, the two groups appear headed back into civil war, which will likely result in the kind of chaos the country has not experienced since 1995.

Prime Minister Gedi of the TFG recently said, “It is totally misguided not to accept the government. The alternative is chaos.” Unfortunately, he’s got it exactly backwards. It is, in fact, the attempts to impose a government on Somalia that create chaos.

Aside from the wireless services which offers the “lowest international call rates on the continent” as cited by above by Wikipedia, the current economy of the 9.1 m population of Somalia, again as tersely described by Wikipedia, (bold emphasis mine)

Although it states that no reliable statistics are available for the period in question, the United Nations claims that Somalia, already one of the poorest countries in the world, has become even poorer as a result of civil war. However, the CIA Factbook maintains that gains were made during the early 2000s; "despite the seeming anarchy, Somalia's service sector has managed to survive and grow. Mogadishu's main market offers a variety of goods from food to the newest electronic gadgets. Hotels continue to operate, and militias provide security."

When extreme poverty (percentage of individuals living on less than PPP$1 a day) was last measured by the World Bank in 1998, Somalia fared better than many other countries in Africa, over some of whom Somalia also had superior infrastructure. The CIA World Factbook counsels that "Statistics on Somalia's GDP, growth, per capita income, and inflation should be viewed skeptically", while estimating Somalia's GDP per capita at $600.

In the absence of a Somali state and its institutions, the private sector grew "impressively" according to the World Bank in 2003, particularly in the areas of trade, commerce, transport, remittance and infrastructure services and in the primary sectors, notably in livestock, agriculture and fisheries. In 2007, the United Nations reported that the country's service industry is also thriving. Economist Peter T. Leeson, in an event study of "the impact of anarchy on Somali development", found that "[t]he data suggest that while the state of this development remains low, on nearly all of 18 key indicators that allow pre- and post-stateless welfare comparisons, Somalis are better off under anarchy than they were under government." Powell et al. concur that in absolute terms, Somalia’s living standards have improved and compare favorably with many existing African states, but also report that living standards have often improved "relative to other African countries since the collapse of the Somali central government."

It would be a nightmare for governments and politicians around the world to see a stateless society succeed. So the intuitive response is to view data from a stateless government “sceptically”.

Just imagine if Somalia should succeed then there could be mass revolutions to overthrow governments around the world. That's something governments won't want to happen.

So obviously there will always be a reason to keep Somalia poor.

And this video is part of such propaganda.

Tuesday, May 18, 2010

Are People Inherently Nihilistic?

For proponents of government the answer yes.

This means that if a group of people gets stuck in a remote island outside of the ambit of civilization and government, the immediate reaction by the concerned is to instinctively go for each other’s throats.

In other words, since people are inherently nihilistic, chaos is the default response for everyone, whereby rules do NOT and CANNOT ever exist. You can picture this scene from the Mad Max movie series.

And for this camp, government is the only entity that can provide lasting peace and order among people.

The Hobbes Doctrine

This position has long been argued by English philosopher Thomas Hobbes in his book the Leviathan where he sees man’s innate “state of nature” is to resort to war for three reasons: competition, diffidence and glory

According to Wikipedia.org, ``Beginning from a mechanistic understanding of human beings and the passions, Hobbes postulates what life would be like without government, a condition which he calls the state of nature. In that state, each person would have a right, or license, to everything in the world. This, Hobbes argues, would lead to a "war of all against all" (bellum omnium contra omnes), and thus lives that are "solitary, poor, nasty, brutish, and short" (xiii).

Overtime, many philosophers, including the illustrious John Locke and David Hume, challenged the validity of the Hobbes "state of nature" doctrine.

Although it would probably take a book to respond to such philosophical themes, below are my simplified objections to the man-is-evil doctrine as an excuse for government.

Granted that man’s default nature is indeed nihilistic; since government is an organization composed by men, then obviously government will not last.

This is for the simple reason that leader-subordinate relationship will perpetually be in a state of turmoil, as government will be subjected to coups and counter coups or repeated upheavals. This, in effect, would be a Machiavellian utopia.

In short, if man is truly evil or barbaric, no amount of organization will stop him from revealing his chaotic nature.

And the same reasoning can be applied to the justification where man is inherently good. At the extreme where people are all angelic like in virtue then government will probably not be required.

But the propositions here doesn’t escape the fact that the real matter about the debate of the need for government or anarchism (defined in this statement as no government) isn’t because of good or evil, which is nothing but a floating abstraction, but because of scarcity.

It is the allocation of scare resources which serves as the foundation for a majority of politics.

Man As Social Animal

People are neither inherently good nor evil, but we certainly are social creatures.

And such social tendencies aren’t even limited to men, they can be observed in mammals, according to Wikipedia,

``All mammals (and birds) are social to the extent that mothers and offspring bond. The term "social animal" is usually only applied when there is a level of social organization that goes beyond this, with permanent groups of adults living together, and relationships between individuals that endure from one encounter to another.”

Wikipedia adds, ``A chief debate among ethologists studying animal societies is whether non-human primates and other animals can be said to have culture.” [As a side note, if non-human animals can have a culture, then obviously man with vastly more intelligence is likely to be more intuitively organized, formally or informally.]

And since we are the supreme specie in the animal kingdom, then the penchant is for more social cooperation and not militancy, as alleged by Hobbes, given the right environment.

Proof?




Hobbes wrote that people’s lives are “solitary, poor, nasty, brutish, and short”, which is obviously, as shown in the above charts from Google on life expectancy and population trends and Allyunintuitive also on populaton trends, is dead wrong.

Global population keeps growing while life expectancy has been expanding.

Think of it, if man’s genesis from a few thousand years ago emanated from 2 persons (Adam and Eve) or from a Darwinian evolution of primates (probably a few hundreds), then the explosion of population growth came amidst a transition of social arrangements, notably from tribal to feudal to the modern forms of government.

In short government or no government people’s population have continually grown.

So what has allowed man such expansive growth in population and life expectancy trends amidst scarce resources?

The obvious answer is the deepening trends of division of labor, comparative advantage and technology.

In short, real wealth has allowed society to grow in spite of government.

True, we had episodes of nasty wars and vicious political experiments that have led to massive losses in life and wealth, aside from pandemics, but apparently this hasn’t stop people’s realization that trade makes for social cooperation.

Of course, social acceptance has been reflected on politics or governance, where the ensuing policies has accommodated more trade and integration as shown in the above chart.

Yet it is misleading to argue that governments has prompted for such a progress considering that government does not produce anything but to tax only her constitutes and engage in redistribution of wealth.

Anarchy In Different Perspectives

My other major objection is the use of the same false “Hobbes” doctrine to argue that anarchism (defined as no government in this statement) is even a worse alternative than communism.

It’s fundamentally a strawman fallacy.

First of all, I’m not committed to the anarchy position, but having followed the Austrian school of Economics, I have seen some of the merits of their theory. Besides not all Austrians are anarchists.

Second, there are four mainstream definitions to the word anarchy, according to dictionary.com:

1. a state of society without government or law.

2. political and social disorder due to the absence of governmental control: The death of the king was followed by a year of anarchy.

3. a theory that regards the absence of all direct or coercive government as a political ideal and that proposes the cooperative and voluntary association of individuals and groups as the principal mode of organized society.

4. confusion; chaos; disorder: Intellectual and moral anarchy followed his loss of faith.

It is important to distinguish between the carrying definition of the term anarchy or the reference of the word, so as not to lead to confusion and to wrong interpretations.

The commonly held impression of anarchy is the fourth definition; chaos and disorder.

And many have argued strictly from this sense of the word, without considering the other definitions, which is arrantly fallacious or misleading.

Example, the statement where property rights or rules of law cannot exist in anarchy as defined in chaos and disorder is perceptibly correct strictly under such assumptive parameters. Whereas property rights that cannot exist in anarchy as defined by no government is incorrect, as the Somalia’s experience will show.

Nevertheless, the communist experiment in the last century left a wave of horror with an astounding estimated 94 million lives lost, according to the Black Book of Communism.

In addition, the other grand big government experiment which resulted to 2 major world wars at the cost of some 50-100 million lives had been extreme or Ultra nationalism.

We can observe that the repeated attempts to concentrate political and economic power through government leads to only more deaths and societal decadence.

For me, this exemplifies as systematized anarchy (as defined by organized chaos and disorder-in this statement) which led to a massive loss of lives, rampant poverty and general suffering. It’s even worse than having no government.

While there is NO existing society where a model based on libertarian anarchy [defined here as a society based on private institutions] can be made to make an adequate comparison with, the only country we see today which operates under an anarchic system [defined here as stateless society] is Somalia.

That’s because the Somalian military dictatorship government collapsed in 1991.

Somalia has a provisional government, the Transitional Federal Government (TFG), albeit this is more nominal, as the country operates free from formal government institutions. In short, Somalia’s anarchy [statelessness] emerged from its being a failed state [population threw out government and have yet to replace it].

True, there have been repeated violence in the country, but this has been due to attempts by foreign groups as the Islamic Courts Union (ICU) to foist a government on her. ICU’s splinter group, the Al-Shabaab, continues to harass Somalia today.

However, the death toll from these violent episodes in Somalia seems to be a mere fraction when compared to even the Pol Pot regime of communist Cambodia, where nearly a quarter of the population have been killed, considering that it has been more than a decade where Somalia has had a formal government.

If we go by the argument where people are inherently nihilistic then obviously Somalia would already have been non-existent today. This proves the fallacy of the assumption.

Yet the failed state-anarchy has reportedly a thriving economy, according to Wikipedia.org,

``Despite civil unrest, Somalia has maintained a healthy informal economy, based mainly on livestock, remittance/money transfer companies, and telecommunications. According to a 2003 World Bank study, the private sector grew impressively, particularly in the areas of trade, commerce, transport, remittance and infrastructure services, in addition to the primary sectors, notably livestock, agriculture and fisheries. In 2007, the United Nations reported that the country's service industry is also thriving. Anthropologist Spencer Heath MacCallum attributes this increased economic activity to the Somali customary law, which provides a stable environment to conduct business in.” (bold emphasis mine)

So a stateless society thrives amidst its own community based rules and regulations outside a formal government. In short, it simply is misguided to argue that societies cannot exist without government.

Somalia may not be prosperous on a relative scale when compared to the world but they seem to be better off than they were during a military dictatorship or compared to a systematized anarchy [defined as organized chaos] via a communist regime.

In addition, Somalia continues to survive for the simple reason that people, as a social creature, as shown above, will default to the fundamental laws of the land, which on the part of Somalis, has been the customary law, the XEER.

Based on the definition of Wikipedia.org, Xeer “is the polycentric legal system of Somalia. Under this system, elders serve as judges and help mediate cases using precedents. It is a good example of how customary law works within a stateless society and is a fair approximation of what is thought of as natural law. Several scholars have noted that even though Xeer may be centuries old, it has the potential to serve as the legal system of a modern, well-functioning economy.” (bold highlights mine)

Essentially this serves as the rule of law, where as we have quoted F. A. Hayek in Mainstream’s Three “Wise” Monkey Solution To Social Problems ``Political wisdom, dearly bought by the bitter experience of generations, is often lost through the gradual change in the meaning of the words which express its maxims...Stripped of all technicalities, this means that government in all its actions is bound by rules fixed and announced beforehand.”

Of course the major difference why violence would have less incidence and casualties even in a nihilistic ‘Mad Max’ anarchy [defined here as complete chaos and disorder] compared to a frenzied communist or totalitarian states is because armaments are unilaterally held or that the coercive powers are strictly monopolized by the government. Hence, the conduct of violence is systemic, organized or wholesale as compared “Mad Max” anarchy where everyone fights to save his skin. Yet to remind you, nihilistic anarchy is different from libertarian anarchy.

Yet, if anarchy from a failed state did not wipe out Somalia from the face of earth, the same nihilistic Mad Max anarchy is not what comprises as libertarian anarchy.

This from Hans Hermann Hoppe,

``Rothbard's anarchism was not the sort of anarchism that his teacher and mentor Mises had rejected as hopelessly naive, of course. "The anarchists," Mises had written,

“contend that a social order in which nobody enjoys privileges at the expense of his fellow-citizens could exist without any compulsion and coercion for the prevention of action detrimental to society … The anarchists overlook the undeniable fact that some people are either too narrow-minded or too weak to adjust themselves spontaneously to the conditions of social life. An anarchistic society would be exposed to the mercy of every individual. Society cannot exist if the majority is not ready to hinder, by the application or threat of violent action, minorities from destroying the social order.”

``Indeed, Rothbard wholeheartedly agreed with Mises that without resort to compulsion, the existence of society would be endangered and that behind the rules of conduct whose observance is necessary to assure peaceful human cooperation must stand the threat to force if the whole edifice of society is not to be continually at the mercy of any one of its members. One must be in a position to compel a person who will not respect the lives, health, personal freedom, or private property of others to acquiesce in the rules of life in society.

``Inspired in particular by the nineteenth-century American anarchist political theorists Lysander Spooner and Benjamin Tucker and the Belgian economist Gustave de Molinari, from the outset Rothbard's anarchism took it for granted that there will always be murderers, thieves, thugs, con artists, etc., and that life in society would be impossible if they were not punished by physical force. As a reflection of this fundamental realism — anti-utopianism — of his private-property anarchism, Rothbard, unlike most contemporary political philosophers, accorded central importance to the subject of punishment. For him, private property and the right to physical defense were inseparable.”

In short, a libertarian anarchy isn’t a world predicated on disorder and chaos from a false premise of the evil state of man, but on a system of private based institutions.

I am not here to argue about the merits of these private institutions, but the point is to put into perspective the argument about anarchy [as defined by nihilism], libertarian anarchy [system of private social institutions] and communism and totalitarianism.

The Strawman Fallacy

But one would point out, how about religious zealots, gangsters and other social misfits? Are they not reasons why we need government?

These arguments serve as a strawman for the simple reason of failing to account the cause and effect of why social miscreants emerge.

We do not argue that libertarian anarchism will bring about a society of perfection, as there would always be misfits or non-conformist, but as shown in Somalia, society can compel their constituents to act within traditional rules and regulations.

Religious extremism comprises only a fraction of the world’s population.

To consider, even as the world population growth has been swiftly expanding, where world religions has divergently dispersed as shown above, yet we aren’t seeing an explosion of religious wars.

The other way to see it is that while there are indeed some frictions or conflicts brought about by religious diversity, this hasn’t stopped the world from advancing or from globalizing.

However, as pointed out earlier, many of these religious frictions have not been due to ideologies from religion per se, but from external causes that has amplified a rift in religious standings or some sectors see policies undertaken as having undermined their religious interests.

A major reason of the global religious tensions has been caused by geopolitical interventions, Congressman Ron Paul says,

“According to our own CIA, our meddling in the Middle East was the prime motivation for the horrific attacks on 9/11. But instead of re-evaluating our foreign policy, we have simply escalated it...Shutting down military bases and ceasing to deal with other nations with threats and violence is not isolationism. It is the opposite. Opening ourselves up to friendship, honest trade and diplomacy is the foreign policy of peace and prosperity.” (bold highlights mine)

And we find the same reasons attributed to Osama Bin Laden’s war against America, who incidentally was a former ally.

Whyguide.com enumerates some of these: US Presence in the Middle East, US Support for Israel, Imperialism, Undermining Islam and Acts of Aggression.

In other words, cause and effect tells us that many of the terroristic activities which has been colored by religion, have been political ramifications from geopolitical interventionism or has manifested as retaliatory measures against perceived abuses by the government (the US government as in the above instances).

So government policies seem to be the source of the problem and not from inherent human action.

Besides to consider the diversity of religion or of culture, does this mean that a unified world government should exist to impose a "law among laws" in order to resolve such conflicts?

Yet, for many, only the visible is worth being interpreted. Lacking the reasoning to adequately explain societies’ troubles, they resort to oversimplification.

Many of society’s woes aren’t because of the natural state of man to be evil, in fact, many of society’s miscreants have been a manifestation of the consequences of poor, abusive, unilateral or skewed regulations, policies or government actions.

According to Murray N. Rothbard, ``the institution of the state establishes a socially legitimatized and sanctified channel for bad people to do bad things, to commit regularized theft and to wield dictatorial power. Statism therefore encourages the bad, or at least the criminal elements of human nature. As Frank H. Knight trenchantly put it: “The probability of the people in power being individuals who would dislike the possession and exercise of power is on a level with the probability that an extremely tender hearted person would get the job of whipping master in a slave plantation.”’ A free society, by not establishing such a legitimated channel for theft and tyranny, discourages the criminal tendencies of human nature and encourages the peaceful and the voluntary.

``Liberty and the free market discourage aggression and compulsion, and encourage the harmony and mutual benefit of voluntary interpersonal exchanges, economic, social, and cultural. Since a system of liberty would encourage the voluntary and discourage the criminal, and would remove the only legitimated channel for crime and aggression, we could expect that a free society would indeed suffer less from violent crime and aggression than we do now, though there is no warrant for assuming that they would disappear completely. That is not utopianism, but a commonsense implication of the change in what is considered socially legitimate, and in the reward-and-penalty structure in society.”

Summary And Conclusion

To sum up, our point is that people aren’t inherently bad or nihilistic.

The Hobbesean error has fundamentally been based on wrong or misplaced assumptions, where according to Rodney Long, (bold highlights mine)

``Well, Hobbes is assuming several things at once here. First he’s assuming that there can’t be any social cooperation without law. Second, he’s assuming that there can’t be any law unless it’s enforced by physical force. And third, he’s assuming you can’t have law enforced by physical force unless it’s done by a monopoly state.

``But all those assumptions are false. It’s certainly true that cooperation can and does emerge, maybe not as efficiently as it would with law, but without law. There’s Robert Ellickson’s book Order Without Law where he talks about how neighbors manage to resolve disputes. He offers all these examples about what happens if one farmer’s cow wanders onto another farmer’s territory and they solve it through some mutual customary agreements and so forth, and there’s no legal framework for resolving it. Maybe that’s not enough for a complex economy, but it certainly shows that you can have some kind of cooperation without an actual legal framework.”

And it’s a strawman to argue a case for government and against a libertarian anarchy model strictly based on the above premises- man is evil, societal misfits, anarchy equals communism.

So while there are many issues to discuss in the libertarian anarchy model or a society premised on privately held institutions, I guess I am stepping out of my bounds.

Nevertheless, there are tons of literatures that deal with objections to the libertarian anarchy model.

Perhaps when time allows, we can deal with this in the future.