Home > Uncategorized > Best way to “solve” natural disasters = economic liberalization?

Best way to “solve” natural disasters = economic liberalization?

Per Bret Stephens

I tend to agree with this piece. Economic liberalization = higher living standards = better protection against Mother Nature. I said this about Haiti.

Although those vehemently against free markets might argue in a convoluted way that Milton Friedman helped an evil dictator like Pinochet, I would argue market liberalization leads to a faster removal of heavy-handed dictators. As private investment and foreign businesses open up in otherwise insular states, governments can’t be as controlling of individual decisions. No matter what the government does to try to hide its citizenry from the tide of foreign influence, trying to stop it would be akin to trying to to block off water with a screen door.  As citizens grow in their economic capital, this often gives them a power that governments can’t just dismiss or put in a prison.

My prediction: though China is by no means the bastion of civil liberties and justice, I do think their sharp growth and more open markets will lead to a less autocratic state. (Not profound, I know sorry)  Certainly we can argue many reforms have already taken place, and even debates on censorship (China’s fight with Google) are so overwhelmingly rising against the Chinese government, that they will eventually have to acquiesce.

The question is of course should economic prosperity be our end goal? Your thoughts?

Categories: Uncategorized
  1. March 2, 2010 at 5:40 pm

    An age-old question, BDK. Not sure if there’s a right answer. I will say that people often succumb to post-hoc ergo proctor hoc fallacies when drawing links between economic liberalization and democracy. Germany and Japan devolved into autocracy after going through their industrialization.

    But yeah, in general i think rising living standards leads to less authoritarianism.

  2. March 2, 2010 at 11:24 pm

    Neil, not sure how Germany and Japan are suddenly defined as autocracies right now? OK so they became autocratic after their industrialization. But industrialization does not equal economic liberalization, you and I both know that. Does every case of liberalization lead to democracy? Nope. But would it encourage more democratic forms of governance, heck yeah. Opening the doors and freeing markets only encourages economic interdependence. As businesses grow in their own influence and power, this can often temper and discourage the capricious, provincial and heavy-handed behavior of autocrats.

  3. Kevin
    March 3, 2010 at 12:14 pm

    Two caveats to be considered:

    1. Re: “As private investment and foreign businesses open up in otherwise insular states…” – opening up a (developing) insular country is only advantageous if it competes in markets where developed nations are prevented from subsidizing the production of their goods (e.g. agriculture). Since this is not the case, liberalization of these insular economies should be done prudently, with just consideration.

    2. Re: China – The Chinese government actually provides its people with a liberal amount of room for lateral movement, with the caveat being that its citizens do not criticize the state’s policy on its four principle issues, namely: Tibet, Taiwan, Religion and the Uighur population. That said, I think you are correct in saying that Beijing is loosening its reins on the country; however, the cadence of cultural change will be retarded by the bias towards “social cohesion”. Unlike the States where individualism has primacy, it is my impression that the Chinese have ubiquitously adopted a mentality where all else is forfeited for the sake of social cohesion. Whether this was forced upon them by the State or was organically adopted because of cultural reasons, the end result will be that the cultural liberalization of China will be a few steps behind its economic liberalization.

  4. adnan
    March 6, 2010 at 10:22 am

    Best way to “solve” natural disaster is economic liberalization….and unlimited supplies of copper. Common dude. If you’re going to make a bold statement like that, there are some more boxes to check. This is why journalists hate bloggers

    • March 6, 2010 at 11:00 am

      Not sure copper has anything to do with solving natural disasters. Not sure if Haiti had unlimited resources it would really have the infrastructure/governance set up to distribute them. I don’t want to pretend I win by straw-manning your argument either because obviously there are some other boxes to check as well (I need to also keep in mind everyone says I write too much).

      Certainly if certain African nation decided to “liberalize” the weak rule of law would prevent any transaction from being respected. That being said, the underlying reasoning behind economic liberalization with respect to:
      1) both strengthening economies to deter the impact of natural disasters
      2) weakening the impact of autocrats (Good point by Kevin though, about how perhaps in China this won’t be as lockstep as other nations. Certainly, cultural differences play a role, but I would still argue the impetus towards social change will result from more open markets rather than anything we or the UN explicitly says.

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