"The man who prefers his country before any other duty shows the same spirit as the man who surrenders every right to the state. They both deny that right is superior to authority."
Lord Acton

Monday, January 31, 2011

Tunisia and Egypt are just the beginning...

 Ambrose Evans-Pritchard wrote an article well worth reading: Egypt and Tunisia usher in the new era of global food revolutions.  He tends to be swayed by the siren songs of central planning, and consequently, I do not agree with his conclusions of "what to do".  Ambrose is a very thoughtful journalist in an era of journalistic garbage that seems to dominate, and though I may not always agree with him, he discusses the correct issues and uses logical reasoning to reach a point.  In his article he discusses some of the issues I outlined in my previous post Inflation impact to world economies.  Our world is witnessing monetary inflation of the defacto world wide currency (USD) during a time of supply constraints of agricultural commodities and petroleum.  Consequently we are witnessing a break down at the margins.  This trend will continue and very likely accelerate.  The consequences will be far reaching, numerous and unpredictable.

For example, there are significant risks to the future and freedom of the Egyptians if the ousting of Mubarak results in an extremist government outcome, such as in the power vacuum, a new dictator gaining some level of control.  The potential impacts are orders of magnitude greater in Saudi Arabia where there is a much higher population aligned with extremist leaning leaders.  This is further compounded by the world's dependency on their exports.  The words of Frédéric Bastiat are fair warning as governments at the margin are placed under increasing pressure: “When goods do not cross borders, soldiers will.”  The soldiers may well be Chinese, Indian, or organic insurgent forces.  The pressure placed on all of these regions as a result of breakdown of petroleum supply will be significant.  On the other hand, "preventative" measures taken by US, the native regime, or other national forces will likely further inflame regional strife of these nations.  The peoples of each of these nations are moving for political change against corruption and in most cases in the interests of freedom.

The western nations are in a catch-22 scenario on the immediate surface, while the real game plays out on a deeper level.  In leadership's eyes, the West benefits from stability and status-quo no matter what leaders may say in contrast.  By supporting a peaceful transition or return to normal of a currently sitting corrupt leadership, they encourage stability, and avoid damage in relations with the regime should the turmoil end.  On the other hand, the West is damaged by not supporting the forces for democracy and liberty that are pushing the old regime out. Leaders of the world increasingly view their world as a complex game board who's strategy to win is to most cleverly engineer the movement of it's pieces.  These leaders haven't realized the game board is alive and is turning on it's master.  In many cases, it is a recursive revulsion of central planning, one issue at a time a self organized system coalesces for a cause, then dissipates.  So long as they are able, empowered individuals will fight oppression and increasingly act for their own self interest.  The same can be said for the American "Tea Party" (to some extent), Anonymous (in response to the Assange Wikileaks incidents), the Iranian Green Revolution, the Tunisians, and again in Egypt. 

To further complicate matters, we have a highly and tightly optimized system of worldwide supply and consumption. As in any complex system, we should expect to see occasional breakdowns in component parts.  Temporary disruption is inevitable.  Where there is free trade, prices and the market will circumvent obstacles.  Where isolationism takes root and grows, misery will result and will likely increase the chance for violent revolution later on.    

For further reading and to combat the counterproductive views of isolationism, I highly encourage the reader to reference:

What Is Free Trade? by Frédéric Bastiat


  1. isolationism often refers to a foreign policy that is counter to interventionism (incl. covert), militarism, and empire... though in your case you seem to use this in an economic sense. I'll agree with you insomuch as you oppose the central planners' attempt to control markets by imposing tariffs, and other obstacles to the free market.

  2. Josh, Thanks for the observation. Yes, I do mean isolationism in the Hayekian economic sense. Isolationism was often interchangeably used to argue for tariffs and trade restrictions. These restrictions of trade have been demonstrated with empirical facts to damage everyone involved. I also argue against the policies of empire, nation building, and interventionism.