Saturday, March 26, 2011

Protecting Values

Why should rich world powers involve themselves in the internal conflicts of the countries with oppressive regimes? Like in Libya.

Two options lie ahead of us (whether of rich or poor-oppressed nations):

  1. We can tolerate that other people are being oppressed & they should rise up against their own evils.
  2. Another approach is that we should intervene and get rid of the oppression & help those people stand up on their own feet, sooner.

What are the pros & cons of such an approach?
To intervene or not intervene?

The foremost reason is "trade" or "economic relations" between different regions of the world. When it was easy to get away with not moving around & live within self sustainable means, there was no incentive to reach out to see what the world had to offer. Even if there was an incentive as we can see in hindsight, it wasn't always economically viable. Instead local economics dominated over the minds of the locals. Since there was no conception of what goods/resources the world can offer, there wasn't any desire to explore the possibility. Fortunately not all people thought this way & some of them explored (mostly for the search of treasure to loot or countries to colonize) but nevertheless ventured out on funded expeditions. Once the goods from the new lands were brought back, there was an immediate comparison between its value with locally available goods. This might have created a dichotomy of value, what can we make better than them & what can they make better than us?

Stealing ideas & designs was probably as old as then. But it doesn't change the economic basis of trade. We buy what we think is more valuable than the money we spend on it. If we believe that someone in a far away land can make something better than us & it can be economically transported with the least possible risk - we can hope to buy it at a reasonable price. This is the basis of international trade or at least the version that the WTO wants to believe.

With massive explosion in distribution networks, it is far more prudent to find such economic value in a lot more nations than our own / our neighbors. So if a supply chain is disrupted on account of internal conflict in some part of the world, it automatically affects the lifestyle & economics of the nations that depend on the output of these strife led countries.

But are there rules of protecting such economic interests of the world?
Are there rules of engagement meant for the rich countries, which can be relied upon to engage in such situations?
What should be the priorities of the intervening nations - to protect their own interests or the interests of those oppressed?
Can being selfish truly absolve the world's conflicts & create a better environment for trade?

So intervention even if it sounds ridiculous in the newspapers & borderline meddlesome - does it not ensure that markets remain free & their access remains equitable?

I think international diplomatic relations are much more necessary to protect the smooth functioning of the markets as much as they are important for usurping oppressive regimes. But it will be exceptionally naive to assume that all the intervening parties will have the best intentions in mind. All of them, under the guise of freeing markets can have ulterior motives to control or dominate the region for themselves.

Will this lead to controlled colonization of the nations under strife?
Should a super power be trusted with the authority to benevolently return the state to the rightful rulers after the conflict is over?

This was exactly the reason why most nations came under the oppressive regimes in the first place. Laying tremendous trust into the hands of someone powerful, in order to run the state as they please, until the state stabilizes. Besides, the rulers never left. Remember Caesar?

The power, it seems, to turn the wheels of global trade & commerce will always lie in the hands of the powerful. As Muammar Gaddafi quoted in one of his speeches, 'The Strong will always rule".

Is power of the people stronger than one regime?
Is the wit of the people greater than one regime?
Is camaraderie a reliable force to sustain trade?
Finally, why does it always end up being a question about sustainable trade? Don't we have anything better to do?

There are examples of good governance leading to tremendous improvement in the standards of living of people. Singapore is an example that comes to mind. There are contradictions in the way the world works & they more or less evolve from they way people think about their values. The most ancient dichotomy lies between the values of the West vs the East. Western nations believe that free trade is the way ahead & they have evolved their political systems surrounding the assumptions arising out of it. Since they have been more prosperous with their approach, despite the price paid in history - this model of global capitalism seemed very juicy not to adopt. If these values spread, it will not only benefit the West, but also benefit the nations who adopt them. This has also been demonstrated by India, China, Brazil, & so on. So there lies an economic incentive in spreading your values & protecting your economic interests.

The East on the other hand has perhaps evolved its idea of capitalism from a more socialistic or a communist point of view.

But, as your interests more & more depend on how other people lead their lives, it becomes necessary to set the path straight once in a while by intervening & suppressing the volatility in policy, The Economist has a brilliant argument, which seems logically correct so far - that in order to be able to promote its model of economic well being, it has to intervene & the moment it sacrifices its values by not intervening, the economic model will blow up in its face.

As for why don't we have anything better to do than just trade?
Well, we weren't always like this. In Matt Ridley's book, The Rational Optimist - he cites that 'Transacting is not a natural phenomenon'. Humans developed the idea of trading/exchanging at least 100,000 years ago. They seemed to have figured out the logic, that the more you trade the more you prosper. Animals, although show examples of transactions in isolation it is nothing compared to the way we humans have evolved. If trading was such a dominant revelation in human thought, then it is necessary to ask, why did the industrial revolution not happen sooner?

Now comes the biological kicker - human tendency, like other animals is to isolate & create special factions which share amongst themselves but not with outsiders. This has hugely restricted new ideas & inculcated group think amongst cultures. Well the obvious advantage of trade, specialization, production & consumption is apparent from our current urban lifestyles. But is it worth protecting? Are these values really so important that we have to try & show others the right path towards them?

What if, there is some hidden, unknown sense of life underlying the values of oppressed state - that the intervening world fails to see?

To answer that I'd like to cite what Ridley cites which more or less sums it up for why protecting markets is sometimes more important that protecting political ideologies -

'Political decisions are by definition monopolistic, disenfranchising and despotically majoritarian; markets are good at supplying minority needs.'

- simply put - if we don't like an outcome of an election, we have to live with it. But if we don't like a hair dresser, we can always look for another one.

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