Tagged: Middle East

Institutional crowding out is one obstacle to peace and prosperity

One goal of the neoconservative project of military interventionism is to protect the business interests of Western companies in what might otherwise be unstable business environments abroad. The underlying idea is to catalyze the classical liberal project internationally, to “civilize” the world.

Even if you accept the 9/11 liberal premise that moral progress is possible and different cultures have attained different levels of moral progress, it doesn’t follow that preemptively establishing military might will effectively, robustly, and permanently bring Enlightenment values to cultures where they don’t already exist.

Spreading gentle commerce, in Montesquieu’s formulation, is certainly a noble goal, but to do so by force is untenable. Why?

One major issue that plagues the neoconservative project is their Marxist understanding of power. Millennials wearing Che t-shirts who have grown up hating Bush and Rumsfeld for their military interventionism are completely ignorant of intellectual history, because neoconservatives are former Marxists: Irving Kristol, Jeane Kirkpatrick, David Horowitz, and Christopher Hitchens. Paul Wolfowitz may not have been a Marxist, but he came from the center-left. The neocons never abandoned their belief in the power of the state to transform society for the better, and this is a Marxist artifact.

In reality, it’s not so easy to transform society with brute force. Christopher Coyne argues in After War that flourishing civil society is based on a complex set of evolved cultural institutions. Slowly and incrementally, people can find clever solutions for socially optimal outcomes of prisoners’ dilemmas and stag hunts. Never in modern history has a foreign military been able to force societal cooperation from without.

What about Japan and Germany after World War II? Coyne argues that Japan and Germany both already had established the elements of civil society. German and Japanese fascism did subvert many important elements of civil society, but civil society had already existed in these nations previously. Fascism was a developmental regression, but not the status quo.

When the United States supports authoritarian regimes to suppress volatility, there isn’t some kind of societal conditioning that can produce a liberal order. In the case of Egypt, propping up Mubarak just generated a dangerous and violent Black Swan.

Turkey has had similar problems in the way they suppressed Islam. The Kemalist government of Turkey cracked down on religious institutions that weren’t affiliated with the state, effectively excluding discussions of Islam in the political sphere. Kemalist elites were only able to crack down on Islam for so long, and then the AKP cropped up. Now Turkey faces a countercultural threat of political Islam.

A more effective and robust way to nurture classical liberalism is to decentralize power, both within nations, and between nations.

In contrast to Turkey, the Age of Enlightenment in Western Europe was a cultural phenomenon, making secularization in the Western world much more robust. In Western Europe and the United States, governments followed the Enlightenment philosophers. In Turkey, the government mandated secularism on a culture that hadn’t yet organically developed it.

Currently, Saudi Arabia is a tyrannical nightmare, severely lacking in civil and human rights. They suffer from the resource curse. Their growth is extractive. Saudi Arabia might look different if they had a stake in appealing to Western interests to sell oil. If the U.S. weren’t providing military aid to Saudi Arabia, with policy strings attached so as to protect Western companies from collectivist Islamism, might Saudi Arabia find the political will to liberalize? It’s quite plausible that playboys in the House of Saud would drive institutional innovation. If it would be profitable to cooperate with Western oil companies, those with the power to make decisions would find ways to cooperate.

Essentially, the United States is institutionally crowding out classical liberalism abroad. Crowding out is a phenomenon in public finance whereby expansionary fiscal policy causes interest rates to rise, thereby reducing investment spending in the private sector. Culture doesn’t have a clean signal of scarcity like an interest rate, but the amount of support for classical liberalism does vary at different times and places in history. One analogue of a situation that would have  an institutional “artificially high interest rate” would be an institutional arrangement that provides just enough stability for Western businesses to operate, but locks out a region’s impoverished from full, empowered participation in global markets.

With institutional crowding out, there is not enough buy-in by the stakeholders. On the international level, WikiLeaks revealed that the Arab League wanted to challenge Iran, but preferred to remain silent and depend on the United States to do so. The Arab League was more vocal against Qaddafi, but only after he was occupied with a full-blown revolution. What military action were any of the Arab League member states willing to contribute themselves?

The conditions to generate peace and prosperity are fragile. Institutional crowding out isn’t the only problem facing the Middle East, or even the main problem, but neoconservative policy, with its flawed and myopic conception of power, aggravates the very problems its proponents intend to solve.

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