Economics, Markets and Politics

As I started reading this article I really had no idea what the author's point and political perspective was. I was pretty confused. He seemed to be spinning something that was new, at least to me, so I kept reading.

I really don't have the same level of trust in free markets and capitalism as the author. I'm a bit more skeptical. However, I have to admit that I've never really studied economics and/or it's effect on politics. I do find that authors general premise that free markets lead to free thinking and hence democracy. Sure, sometimes it takes a little while (or a long while) but there is a flow in that direction when economics are leading the way. China is no small test bed of this theory now and in the years to come.

http://www.nytimes.com/2005/01/28/opinion/28wright.html
January 28, 2005
OP-ED CONTRIBUTOR
The Market Shall Set You Free
By ROBERT WRIGHT


Princeton, N.J.

LAST week President Bush again laid out a faith-based view of the world and again took heat for it. Human history, the president said in his inaugural address, "has a visible direction, set by liberty and the author of liberty." Accordingly, America will pursue "the ultimate goal of ending tyranny in our world" - and Mr. Bush has "complete confidence" of success. Critics on the left and right warned against grounding foreign policy in such naïve optimism (a world without tyrants?) and such unbounded faith.

But the problem with the speech is actually the opposite. Mr. Bush has too little hope, and too little faith. He underestimates the impetus behind freedom and so doesn't see how powerfully it imparts a "visible direction" to history. This lack of faith helps explain some of his biggest foreign policy failures and suggests that there are more to come.

Oddly, the underlying problem is that this Republican president doesn't appreciate free markets. Mr. Bush doesn't see how capitalism helps drive history toward freedom via an algorithm that for all we know is divinely designed and is in any event awesomely elegant. Namely: Capitalism's pre-eminence as a wealth generator means that every tyrant has to either embrace free markets or fall slowly into economic oblivion; but for markets to work, citizens need access to information technology and the freedom to use it - and that means having political power.

This link between economic and political liberty has been extolled by conservative thinkers for centuries, but the microelectronic age has strengthened it. Even China's deftly capitalist-yet-authoritarian government - which embraces technology while blocking Web sites and censoring chat groups - is doomed to fail in the long run. China is increasingly porous to news and ideas, and its high-tech political ferment goes beyond online debates. Last year a government official treated a blue-collar worker high-handedly in a sidewalk encounter and set off a riot - after news of the incident spread by cell phones and text messaging.

You won't hear much about such progress from neoconservatives, who prefer to stress how desperately the global fight for freedom needs American power behind it (and who last week raved about an inaugural speech that vowed to furnish this power). And, to be sure, neoconservatives can rightly point to lots of oppression and brutality in China and elsewhere - as can liberal human-rights activists. But anyone who talks as if Chinese freedom hasn't grown since China went capitalist is evincing a hazy historical memory and, however obliquely, is abetting war. Right-wing hawks thrive on depicting tyranny as a force of nature, when in fact nature is working toward its demise.

The president said last week that military force isn't the principal lever he would use to punish tyrants. But that mainly leaves economic levers, like sanctions and exclusion from the World Trade Organization. Given that involvement in the larger capitalist world is time-release poison for tyranny, impeding this involvement is an odd way to aid history's march toward freedom. Four decades of economic isolation have transformed Fidel Castro from a young, fiery dictator into an old, fiery dictator.

Economic exclusion is especially perverse in cases where inclusion could work as a carrot. Suppose, for example, that a malignant authoritarian regime was developing nuclear weapons and you might stop it by offering membership in the W.T.O. It's a twofer - you draw tyrants into a web of commerce that will ultimately spell their doom, and they pay for the privilege by disarming. What president could resist that?

Correct! President Bush is sitting on the sidelines scowling as the European Union tries to strike that very bargain with Iran.

It's possible that skepticism about the European initiative is justified - that Iran, in the end, would rather have the bomb than a seat in the W.T.O. But there's one way for the Bush administration to find out: Outline a highly intrusive arms inspection regime and say that the United States will support W.T.O. membership if the inspectors find no weapons program (or if Iran fesses up) and are allowed to set up long-term monitoring.

There are various explanations for Mr. Bush's position. Maybe some in the administration fear losing a rationale for invading Iran. Maybe the administration is ideologically opposed to arms control agreements (a strange position, post-9/11). But part of the problem seems to be that Mr. Bush doesn't grasp the liberating power of capitalism, the lethal effect of luring authoritarian regimes into the modern world of free markets and free minds.

That would help explain the amazing four-year paralysis of America's North Korea policy. Reluctant to invade, yet allergic to "rewarding" tyrants with economic incentives and international engagement, the president sat by while North Korea's leader, Kim Jong Il, apparently built up a nuclear arsenal. Now, with Iran no more than a few years from having the bomb, we're watching this movie again. And it may be a double feature: the inertia we saw in North Korea followed by the war we've seen in Iraq. With Iraq and Iran in flames (live, on Al Jazeera!) and Mr. Kim coolly stockpiling nukes, President Bush will have hit the axis-of-evil trifecta.

Pundits have mined Mr. Bush's inaugural address for literary antecedents - Kennedy here, Lincoln there, a trace of Truman. But some of it was pure Bill Clinton. Like Mr. Bush, Mr. Clinton said that history was on freedom's side and stressed that freedom abroad serves America's interests. But he also saw - and explicitly articulated - something absent from Mr. Bush's inaugural vision: the tight link between economic and political liberty in the information age, the essentially redeeming effect of globalization. That's one reason Mr. Clinton defied intraparty opposition to keep commerce with China and other nations strong.

In the wake of John Kerry's defeat, Democrats have been searching for a new foreign policy vision. But Mr. Clinton laid down as solid a template for post-9/11 policy as you could expect from a pre-9/11 president.

First, fight the spread of weapons of mass destruction, which means, among other things, making arms inspections innovatively intrusive, as in the landmark Chemical Weapons Convention that President Clinton signed (and that Dick Cheney, Donald Rumsfeld, et. al., opposed). Second, pursue terrorist networks overtly and covertly (something Mr. Clinton did more aggressively than the pre-9/11 Bush administration). Third, make America liked and respected abroad (as opposed to, say, loathed and reviled). Fourth, seek lasting peace in the Middle East (something Mr. Bush keeps putting off until after the next war).

And finally, help the world mature into a comprehensive community of nations - bound by economic interdependence and a commitment to liberty, and cooperating in the global struggle against terrorism and in law enforcement generally.

But in pursuing that last goal, respect and harness the forces in your favor. Give history some guidance, but resist the flattering delusion that you're its pilot. Don't take military and economic weapons off the table, but appreciate how sparingly you can use them when the architect of history is on your side. Have a little faith.

Robert Wright, a fellow at Princeton University's Center for Human Values and at the New America Foundation, is the author of "Nonzero: The Logic of Human Destiny."