Showing posts with label peace and order. Show all posts
Showing posts with label peace and order. Show all posts

Friday, November 16, 2012

Free Trade Between China and Russia Promotes Peace

“If goods don’t cross borders, then armies will” has been one my favorite quotes from the great French classical liberal or proto Austro-libertarian Frederic Bastiat.

Emerging market investing guru and Franklin Templeton’s Mark Mobius notes of such dynamic in motion between China and Russia
From a geographic perspective, Russia and China’s common border along the Amur River is an area of past conflict but also one of potential cooperation. Russia’s side is under-populated but boasts arable land, timber and other resources while the Chinese side is densely populated with limited resources. In 1969, cross-border tensions nearly resulted in a full-scale war, but today the mood is quite different. Reports indicate that most Siberian and Far East officials are positive about the presence of Chinese in their regions since they are suffering from the departure of ethnic Russians from their areas, and the Chinese labor force can help cultivate the land.

Of course, even the friendliest of neighbors can disagree at times, but if neighbors like China and Russia can focus on projects to their mutual economic benefit, I think that’s an approach we might pursue in our own backyards.
It’s really individuals from China and Russia, through the employment of voluntary exchange via the “division of labor” channel, who promotes “mutual economic” interests.

Friday, October 12, 2012

European Union wins Nobel Prize for Peace

Surprise.  The Nobel Prize for peace has been awarded to the crisis stricken European Union.

Ironically, the award of prestige has been focused on the long historical role even when the panel of judges appear to be substantially concerned with present political conditions

Reports the New York Times 
Thorbjorn Jagland, the former Norwegian prime minister who is chairman of the panel awarding the prize, said there had been deep concern about Europe’s destiny as it faces the debt-driven woes that have placed the future of the single currency in jeopardy.

“There is a great danger,” he said in an interview in Oslo. “We see already now an increase of extremism and nationalistic attitudes. There is a real danger that Europe will start disintegrating. Therefore, we should focus again on the fundamental aims of the organization.”

Asked if the euro currency would survive, he replied: “That I don’t know. What I know is that if the euro fails, then the danger is that many other things will disintegrate as well, like the internal market and free borders. Then you will get nationalistic policies again. So it may set in motion a process which most Europeans would dislike.”

In announcing the award, Mr. Jagland described it as a signal focusing on the union’s historical role binding France and Germany together after World War II and its perceived impact in spreading reconciliation and democracy beyond the Iron Curtain that once divided Europe and on to the Balkans. “The stabilizing part played by the E.U. has helped to transform most of Europe from a continent of war to a continent of peace,” he said.
I have pointed out that increasing capital controls and rising political tensions from bailouts have led to increasing border controls. 

Nevertheless UK Independent Party’s Nigel Farage has a stirring rebuke on this. 
"You only have to open your eyes to see the increasing violence and division within the EU which is caused by the Euro project" he said.

"Spain is on the verge of a bail-out, with senior military figures warning that the Army may have to intervene in Catalonia. In Greece people are starving and abandoning their children through desperate poverty and never a week goes by that we don't see riots and protests in capital cities against the troika and the economic prison they have imposed.

"The next stage is to abandon the Nation state: the awarding of this prize to the EU brings it into disrepute."

Mr Farage added, " The last attempt in Europe to impose a new flag, currency and nationality on separate states was called Yugoslavia. The EU is repeating the same tragic mistake.

"Rather than bring peace and harmony, the EU will cause insurgency and violence."
Let me add that interventionism, inflationism, protectionism, and all other coming government or political –isms from EU politicians and the bureaucracy will signify as seeds to political and social conflicts. 

If social conflict should arise, the Nobel Prize would further erode its credibility.

Friday, October 15, 2010

Is Social Cooperation A Product of Evolution?

Some people mistakenly think that social cooperation is merely a product of evolution.

They seem to forget that if evolution is about the “survival of the fittest” then men would always be at war perennially with each other. And societal advancement at current conditions would not have occurred as people would have lived off from each other through violence (war and plunder).

Yet there is no compelling reason for people to simply co-opt outside free trade. Altruism and or political submission (Social Darwinism) cannot be held as sustainable conditions for progress.

Murray Rothbard has seen through such Social Darwinist nonsense. He writes,

``For the Social Darwinist erroneously saw history and society through the peaceful, rose-colored glasses of infinitely slow, infinitely gradual social evolution. Ignoring the prime fact that no ruling caste in history has ever voluntarily surrendered its power, and that therefore Liberalism had to break through by means of a series of revolutions, the Social Darwinists looked forward peacefully and cheerfully to thousands of years of infinitely gradual evolution to the next supposedly inevitable stage of individualism.”

The only sustainable way for people to attain lasting social cooperation is via division of labor and specialization through voluntary exchange.

To quote Henry George, (bold emphasis mine)

Civilized nations, however, do not use their armies and fleets to open one another's ports to trade. What they use their armies and fleets for, is, when they quarrel, to close one another's ports. And their effort then is to prevent the carrying in of things even more than the bringing out of things—importing rather than exporting. For a people can be more quickly injured by preventing them from getting things than by preventing them from sending things away. Trade does not require force. Free trade consists simply in letting people buy and sell as they want to buy and sell. It is protection that requires force, for it consists in preventing people from doing what they want to do. Protective tariffs are as much applications of force as are blockading squadrons, and their object is the same—to prevent trade. The difference between the two is that blockading squadrons are a means whereby nations seek to prevent their enemies from trading; protective tariffs are a means whereby nations attempt to prevent their own people from trading. What protection teaches us, is to do to ourselves in time of peace what enemies seek to do to us in time of war.

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And obviously deepening free trade around the world has caused greater access to more products at more affordable prices, which has led to longer lifespan (see above chart), more conveniences, diffusion of knowledge, advancement in technology that has increased connectivity and productivity.

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Of course perhaps one of the unseen benefit has been the reduced scale of international wars.

In other words, free trade has raised the world’s standard of living (even if measured in per capita GDP).

Evolution cannot be the principal driver of societal advancement because man emerged from a hostile (predator-prey) environment.

And the nasty and belligerent experiences by our forebears seem to have been hardwired into people’s intuitive aversion to free exchange.

As Paul Rubin eloquently explains,

There are two aspects of our evolved psychology that help explain beliefs about trade. First, humans tend towards zero-sum thinking. That is, we do not intuitively understand the possibilities of economic growth or the benefits of trade in achieving it.

Our ancestors lived in a static world with little intertribal trade and virtually no technological advance. That is the world our minds understand. This doesn't mean that we can't grasp the crucial concept that trade benefits both parties to a transaction--but it does mean that we must learn it.

Positive-sum thinking doesn't come naturally. By analogy, we learn to speak with no teaching, but we must be taught to read. Understanding the mutual benefits of exchange is like reading, not speech.

Second, we evolved in a hostile world. Our ancestors engaged in constant conflict with neighbors, much like present-day chimpanzees. We developed strong in-group and out-group instincts, and for many aspects of behavior we still have such feelings.

These feelings are benign when applied to something like rooting for local sports teams, but are more harmful when applied to international trade. They are most harmful when they generate actual warfare. Yet the metaphor of a "trade war" shows how close to the surface harmful instincts are.

These two sets of beliefs interact to explain our natural (mis)understanding of trade. We believe that the number of jobs is fixed (a result of zero-sum thinking) and that as a result of trade these jobs go to foreigners, whom in a deep sense we view as enemies. Both beliefs are incorrect, but both are natural. And in many cases politicians are only too eager to capitalize on these beliefs to be re-elected.

In short, the anti-trade sentiment is rooted fundamentally from archaic or primitive martial instincts than from rational arguments based on people’s growing acceptance of trade as means to achieve social cooperation.

Awhile back, I recall a socialist colleague mentioned a popular axiom—that “money makes the world go around”.

I said that this misleads, because money isn’t wealth, but only a medium of exchange. And what makes wealth truly go around is trade. Without trade money is useless.

Aside from wealth, the deepening of trade also means people are learning to get past our evolutionary instincts of bellicosity, aggression and hostility.

Thus, free trade not only enriches society but also is the principal way to achieve lasting peace and order.