Monday, February 20, 2006

Busy Shops or Voting Most Conducive to Peace?

Is it democracy or wealth that promotes peace? Middle East Forum – ‘promoting American interests’ (Winter 2006) – publishes a series of articles addressing the conundrum between democracy and wealth.

Among them is an article by Martin Sherman (Tel Aviv University, and author of ‘Despots, Democrats and the Determinants of International Conflict’, St Martin’s Press, 1998), entitled: ‘What Brings Peace, Wealth of democracy?’ (from Middle East Quarterly, 1998).

It is an excellently argued article. Included is an exposition of the economic argument:

Economic. Adam Smith warned of the perils of penury, cautioning that "No society can surely be flourishing and happy, of which the greater part of the members are poor and miserable."5 In line with this sentiment, the advocates of the economic paradigm see the creation of greater wealth as the preeminent factor for the achievement of political stability. In the words of Shimon Peres, the "higher the standard of living rises, the lower the level of violence will fall."6 This outlook derives from a view of man as homo economicus, a being whose conduct is dictated by a desire to maximize his utility as a consumer of goods and services. Satisfaction of material needs will generate contentment, thereby reducing the incentives for violence. Conversely, frustration of this desire generates a sense of deprivation that is liable to lead to interstate conflict as governments try to deflect the blame for the nation's plight away from themselves and channel public anger against some external enemy—whether real or contrived.
Proponents of this view hold that violence harms prosperous states more than it does impoverished ones. For example John Mueller, professor of political science at Rochester University, suggests that "As countries raise their standard of living . . . they will find the prospect of war decreasingly attractive because they will have more to lose."7 Since greater economic development implies more elaborate and interlocking commercial links, the structure of the world economy implies that economic and financial disruptions resulting from war are liable to be far more severe for wealthy countries than for poor ones. Accordingly, greater wealth will purportedly lead to greater stability

Discussing this important question (and not just one for the Middle East) is beset with problems. Each situation, in each time period where it is relevant, is subject to changing dynamics, not fixed states in which universal maxims and choices can by applied. Examples of various combinations of wealthy and poor nations, and democratic and totalitarian regimes, can be adduced which support or contradict simple explanatory hypotheses that sum to a single word like ‘democracy’ or ‘wealth’.

Richer countries attack poorer countries (Germany v Poland/Russia) and poorer countries attack richer countries (Japan v USA). All countries engage in defence expenditures (because defence, while expensive, is cheaper than war) and ‘defence, however, is of much importance than opulence’ said Smith (Wealth of Nations, IV.ii.30: 464-5). Given the government’s first duty, ‘that of protecting the society from the violence and invasion of other independent societies, can be performed only by means of military force’ (WN V.i.a.1: 689), it follows that richer countries can allocate larger absolute amounts of annual resources in preventing (defence), preparing and conducting wars that poorer countries.

That their economic interests conflict with their political interests is part of the rich tapestry of the choices facing governments of all hues and states of wealth. As African poverty deepens, a small body of armed men, suitably led, can seize power and help themselves to the fruits of statehood, even if (perhaps especially if) the general economy is dominated by abject poverty.

In the context of terrorism, even smaller groups of determined men and women can exert disproportionate influence on choices and have disproportionate influence on general poverty. Long-lasting low-intensity warfare is cumulatively as disastrous for a county’s infra-structure as a short technologically biased war. Unrepaired roads after a year or so become as bad as roads with bridges blown up by missiles from fast-jet aircraft. Lightly armed ‘soldiers’, who extract ‘local taxes’, soon deter all but the most hardy of commercial traffic.
The poorest countries may go to, or threaten to go to, war over the most frivolous of reasons (set against their real problems) – taken deadly serious by the contenders – such as India-China in 1962 and Eritrea-Ethiopia 2006. Contrasting these unhappy outcomes with two wealthy countries (Germany and Britain, 1939-45), we realise that wealth is a moving characteristic. European countries in the 1930s were poor compared to 2006, but wealthy by contemporary standards at the time.

We should also be careful with linking Smith’s name with today’s neo-classical assumptions:

This outlook derives from a view of man as homo economicus, a being whose conduct is dictated by a desire to maximize his utility as a consumer of goods and services.”

This was not Smith’s assumption. He did not formulate his assessment of human motivations in that manner, not even when he examined motivations in “Wealth of Nations”.

That all persons sought to ‘better’ themselves he did not doubt; that it was the sole or major motivation is not established merely by assumption and ascription. Homo economicus is a post-Smithian assumption that leads to false ideas that human exchange behaviour is motivated by selfishness, a wholly misleading notion when attributed to Smith.


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