This isn’t GetRichSlowly.org. Politics are in. I know you don’t care to hear my political views, which is why you can click right here to skip my rant and go straight to the good stuff.
Basically minutes after we finally leave Iraq (except for 15,000 “contractors” and a $1 billion embassy) we’re already on the hunt for new evils. I guess I could just tell you that 2012 is an election year. Republicans have to prove how they “support a strong foreign policy” by talking up war with any country for the sake of a massive international arm wrestling competition.
Democrats, needing political “cover” for leaving Iraq (seriously, who still thinks we should be there?) are going to play into any bit of war propaganda.
Economic War with Iran
In case you’ve missed it, the world is unleashing economic war on Iran at the moment we speak. Virtually every country around the world has agreed to cease to reduce Iranian oil imports. BusinessWeek has a great write-up on European involvement in international sanctions.
Of course, these sanctions are the reason why oil looks like this:
But it’s also the reason why the Iranian currency looks like this:
(Note: Rial PER dollar. A move up in the chart is related to a decline in the Rial.)
Anyone knows that trade makes every economy stronger. Even in the most basic sense we as individuals partake in trade to create better outcomes. I pay Target $5 for a 24 pack of Coca-Cola, because I’m not very good at making it myself. Target values the $5 more than the 24 pack. We both leave happy.
An end to trade essentially kills every bit of an economy. The United States is extremely awesome at finance, for example, but we lag horrendously in manufacturing. If other nations stopped trading with us, we’d have no manufactured goods because we simply don’t have the capital to start manufacturing stuff. And we’d expend far more resources for the same standard of living like people who choose to live without money. Think about how much of the stuff in your home is imported, and how much of it you would miss if the rest of the world cut you off.
Now – I’m no extremist, nor do I necessarily side with Iran in the debate about Iran’s nuclear program. However, I do realize that economic sanctions are almost always a precursor to war.
- The Japanese bombed Pearl Harbor after the US refused to continue exports of anything remotely related to war-time materials. Apparently even very mundane and ordinary products like motor oil and other industrial goods were included on the do-not-sell list.
- The War of 1812 was fought over hemp supplies. The English had the strongest Navy around the world, but even the strongest Navy was worthless without sails. Realizing this weakness, Napoleon pushed Russia to cease hemp exports to the English. Without hemp, then the main component of ship sails, Britain had the most ships but the most worthless Navy. American ships begin buying Russian hemp to sell discretely to England. American shippers make bank. American hemp farmers go broke. Congressmen from farming states vote for war with England. Congressmen from seaside states vote against war. Farmers win – to war we go over economic sanctions.
- The Cold War is another example, although there were no shots fired. It is commonly understood that the Cuban embargo enabled extremism in Cuba at the height of the cold war. Even Hillary Clinton takes this very conservative position, noting that the embargo has only helped Castro, stating “It is my personal belief that the Castros do not want to see an end to the embargo and do not want to see normalization with the United States.” Giving another country the justification for war – potentially unrelenting nuclear war – is suicide.
There are plenty of examples for sanctions leading to war. Just pick a war, and you’ll find that it escalates rapidly – almost exponentially – in the moments following an end to free trade.
Bottomline + Game Theory
There is no logic in economic sanctions. If the supposed enemies are as evil and as irrational as we are lead to believe, then why would we suppose – for even one second – that somehow they are to care about the economic welfare of their own citizens?
And if these leaders care so little about human life, wouldn’t mass degradation in the public’s standard of living from continued economic sanctions (potentially to the point of starvation) and the death of the same people in warfare be equal?
If anything sanctions serve to lower the barriers to war while increasing the public’s willingness to take part in it. That’s a dangerous double whammy. But hey – these are just my viewpoints. Share yours!
Photo by: skuds