Sunday, August 12, 2007

Do You Understand it?

From Reuters:
BAGHDAD, Aug 12 (Reuters) - Years of economic policy mistakes after the fall of Saddam Hussein left unemployed young Iraqis easy targets for recruitment by al Qaeda and other insurgents, a U.S. Defense Department official said on Sunday.

Paul Brinkley, deputy under-secretary of defense for business transformation in Iraq, said Iraq's shattered industrial base had to be revitalised to bring down unemployment levels of about 60 percent and help reconciliation.

He said political, social and economic stability would be much easier if factories, many left idle since the 2003 invasion to topple Saddam, could win even a small fraction of the trade the United States conducts every year with economies like China, India, Indonesia and Thailand.

"If we could just get some of that factored into Iraq we'd uplift the lives of every Iraqi and al Qaeda wouldn't have any people to recruit," Brinkley told Reuters in an interview.

Brinkley said early economic planners had made the understandable mistake of assuming that a free market would rapidly emerge to replace what he described as Saddam's "kleptocracy", and create full employment.

This mistaken assumption led to a series of decisions which "sowed the seeds of economic malaise and fuelled insurgent sympathies" after industrial production collapsed and imports flooded in to replace locally made goods.
They made the "understandable mistake"? Understandable? Really?

You mean, they just assumed that, after decades of rule by a greedy authoritarian crazy man, who had squandered huge sums on palaces and wars against Iran and against the first Bush's coalition, followed by over a decade of economic sanctions from the world community, that following the invasion a functioning free market would just happen somehow?

That's about as 'understandable' as grown men expecting the tooth fairy and the Easter Bunny would rapidly emerge as heads of the ministries of Health and Agriculture.

Normally, by the time one has advanced to a high position in government, one has come to appreciate that, in the real world, the idea of a 'free market' is merely a theoretical construct, not, like, an actual thing. In real life, markets happen when there is a supportive context involving laws, enforcement, and regulation of some kind. Markets function better when there is some system for preventing your 'customer' from taking what he wants from you at gunpoint, for example laws against murder, assault and so forth. Similarly, many market systems have created methods for authenticating things like currency, identity, assets, and measures to prevent fraud, including laws and people to enforce them.

It shouldn't be a surprise that people who, for political reasons, have been telling themselves and us that government was merely a parasitic leech that should be 'drowned in the bathtub' (in Grover Norquist's phrase), might be confused about this. But it still amazes me that they can actually believe it, or think that believing it would be an "understandable mistake." Have they really grown up so well-protected by our system that they don't even have an inkling of the myriad ways it makes their daily life what it is? Are they really that dense?

It's a little like a goldfish believing in a 'free fishbowl', in which fish could swim without the horrible burden of water. Perhaps such a fish would find it bewildering that Iraqi goldfish were just flopping around with their gills flapping desperately once someone dumped out their fishbowl. But to the rest of us it wouldn't be a surprise.

Maybe next time we appoint a bunch of guys to go set up a democratically-governed market economy out of nothing, we could require them to have read Hobbes' The Leviathan and Locke's Second Treatise on Government. True, political and social science has progressed in the last few hundred years, but bringing them up to the state-of-the-art circa 1689 would apparently be better than what we sent last time.

Even way back in 1660, Thomas Hobbes had a more nuanced understanding than Donald Rumsfeld's "Freedom's untidy". And, as Thomas Jefferson and his friends realized, John Locke had a pretty good alternative to "stuff happens".