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Thursday, May 19

Elephant in the world's living room

Dear Pundita, Your blog is supposed to be about US foreign policy but I notice you write very little about the Middle East and China and I don't think you've written at all about the situation with North Korea, even though those regions are of particular importance to US policy at this time. I know you're examining what you consider to be fundamental issues, however, you also do a lot of writing about Russia and Mexico. Do you have a special interest in those two countries, or do you think they are of particular importance to US policy?
[Signed] Justin in Toronto"

Dear Justin:
The tendency in Washington has been to line up foreign policy behind issues that relate to the war on terror; e.g., violent radical Islam. This is despite the fact that Bush made it very clear in his Axis of Evil speech that the enemies we're fighting are states, not individual terror organizations.

Of course, from the military standpoint--from the standpoint of war--one has to study and deal with radical Islam and issues relating to terrorism tactics. But this is a job for the military and intelligence agencies--counterintelligence, psyops, counter-propaganda, and so on. To build foreign policy on all that diverts attention and funds from situations that gave rise to the terror-sponsoring regimes in Saddam's Iraq, Iran, North Korea, Pakistan, Syria, and so on.

What's striking about all these regimes is that their political or religious ideology is not their chief characteristic. The chief characteristic is that they're crooks. Yet it's as if the cattle rustlers took over Dodge City and instead of looking at the situation that way, the Feds ponder the rustlers' religion, their views on totalitarian government, and agonize over whether they've smuggled a cannon into the town. That's hot pursuit of red herring.

Pundita doesn't like chasing red herring. So I asked, "How did so many governments in so many diverse cultures, and with such diverse histories, end up plain crooks during this era?"

I don't think you can begin to make effective foreign policy until that question is answered.

Thus, my special interest in Russia and Mexico. I like those two countries for contrast because they are so very different in culture and history and they're separated by vast distances. Yet their problems are strikingly similar.

What's also striking is that Mexico is the United States' next-door neighbor--yet the country might as well have been situated behind the Iron Curtain, for all the understanding that American foreign policy has shown toward Mexico. So I think it overlooks factors, if we simply blame the Cold War for bad US policy toward Russia today.

However, US Cold War policy got so entrenched in Washington that it's now hard for Washington to frame discussions about democracy outside the anti-totalitarian and anti-Communist arguments. Yet you can go down the list and find country after country where it's clear the regimes don't give a hoot about governing and economic philosophy; they'll float any rap but their only philosophy is about how to raise mega cash through crime.

The problem is that there is not one neat answer to the question I posed. There are a variety of factors that converged, then took on great force and momentum when globalized trade got off the ground. The upshot can be considered a 'system.' There is a powerful system in force, and it's this system that is the greatest enemy of civilization.

However, once a problem becomes systemic, it's very tricky to dismantle the system without crashing larger orders of systems. A case in point is the system of development bank loans. If you shut down all the development banks or even fiddle too much with the development loan model, you risk putting a lot of contractors out of business. That sets off a chain reaction, which can crash the society in a small country.

Another example is dismantling state-run major industries. It's a bad system but once it's a system, it has to be broken up very carefully.

Because more than one factor created the system of crook regimes, the question is how to prioritize the factors and whether repairs should be stepwise or coordinated across several factors.

One factor is that there's too much cash and specifically US dollars sloshing around the world. I suspect that diversifying from the dollar to a basket of currencies for oil and gold purchases would only be kicking the can down the road.

However, I leave that mess to what I call the Lords of the Craps Table--the central banks, BIS, OPEC, IMF, and treasury chiefs of the major developed countries. They're supposed to figure out how to sop up the oceans of dollars flooding The Casino--the international monetary system.

I've focused on a factor that is so obvious it's hidden in plain sight. The last person you'd call for advice on how to set up and maintain a workable government is a crook. Yet here we have gun runners, dope dealers, money launderers, counterfeiters, crooked accountants, and so on trying to master the intricacies of modern government. It doesn't work.

Saddam Hussein said many times that he had to be ruthless because it was the only way to maintain order in Iraq. Actually there are other ways, but they entail a detailed knowledge of the mechanisms of modern government, which Hussein and his technocrats didn't have.

When the governed population is small, you can wing it on the details. But once the numbers climb, and when a sizable portion are nomadic, you have to get the governing mechanics down pat; e.g, make sure the tax base is adequate. If that doesn't happen, the alternatives to maintaining social order are very ugly: brute force, or cutting down the population via mass murder (e.g., "ethnic cleansing") or driving large numbers away from the country.

Developing countries inherited or copied government administration from the Colonial imperialist model or mid-twentieth socialism. To the extent those types of central government administration worked, they were not designed to deal with the convergence of large populations and the complexities of the modern era of trade. Right there is the elephant in the world's living room. Getting the elephant to decamp is the foundation for sound foreign policy in today's world and the best way to carry forward the democracy doctrine.
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