a Random Rant on Economic Freedom, and Better Ways to Spend Money than Bombing Infrastructure (from a Ryze 500 Citizens post):
>>Is the current crisis and the about to come war against Irak the sign of change of economic center to come?
doubtful. although there is change going on in economic centers, i'm not sure that's the primary issue re: iraq. more likely the change in military-political doctrine (pre-emptive action, sidelining the UN) is the notable event here.
you could perhaps make the argument that because the world currency reserves are slowly shifting from being universally denominated in USD (due in part to petrodollars being priced in USD) to other currencies, most notably Euros, that the war in Iraq has some hidden motive re: holding on to USD currency standards. possibly accurate, but sounds like a bit of a stretch for motivation. the move away from USD currency reserves is happening anyway, due to the emergence of Europe as an economic bloc and the Euro as a legitimate and stable currency. also the long-term fading ROI for the US bond market, and the emergence of asian bond markets (china, india, etc) as better value.
>>From a purely academic respone, I would think Bejing would be the likely candidate given their vast population base and industrial complex. However, until their people have true freedom, I do not think they will have the global economic power to shift the economic center to Asia.
actually, agree on the first point, but not the second one. there isn't a lot of evidence linking democratic freedom with economic performance. on the contrary, economic performance is much more closely linked to property rights. if Asia solves the corruption issues holding back China and India, you'll see a dramatic shift in economic centres to Asia in the next 20 years (and regardless of corruption, it's already been happening in the past 10).
China has had tremendous economic progress since the 70's when they started simulating property rights with long-term land leases and moving towards individual rather than group accountability for agricultural output. China's economic powerhouse since then is testimony to how economic gains do not have to happen only in democratic territories.
Strangely enough, i'd argue that ensuring China's economic success has led to greater freedoms for the people there than pushing for democratic reforms. While this may sound like anathema to both right-wing and left-wing alike, the simple observations are these:
- property rights and solid economic foundations lead to economic returns, which (eventually) lead to economically-empowered individuals, who (eventually) push for democratic reforms.
- democratic reforms with limited capital investment and economic reforms don't always result in economic leadership, but rather, simply poor people who get to vote for their leaders.
in fact, this is my primary argument for why i'd suggest there are better things to do than invading iraq to "liberate the people of iraq". while i don't greatly disagree with the action -- in fact, i'd say we should also be invading Zimbabwe on those grounds -- i question the risk/return metric.
we could be doing a lot more to create economic liberation around the world by investing our dollars to reduce corruption, setting firm economic principles (such as property rights, secondary markets for mortgages, bond markets, etc), and improving education standards. rather than investing lots of dollars invading other countries at great expense, bombing their infrastructure to oblivion, and then having to spend more dollars rebuilding it. not exactly the most efficient use of our influence or our money.
while i'm not suggesting we should lose interest in democratic reforms, i am saying that perhaps economic principles come first. democracy is a luxury of people who are well-fed. good economic principles are a necessity regardless, and might bring the democracy along for free -- without having to bomb anyone to achieve it.
Heard this a few weeks ago on the radio, and it really made an impact. Not so much a left or right perspective, just a really amazing 1st-person account of what's happening in Afghanistan right now as they attempt to rebuild their nation. The person who recorded it is a 17-year old afghan-american from the bay area who's father is an official in the new afghan government. really worth listening to.