How to be Safe

Much can be said about how and why almost everyone on earth has risen from poverty to affluence. Two of the most important are free markets that allow entrepreneurs to invent and build, and peace and security that allow our work to build consumer goods and services rather than weapons of war.

Taking the second of these, the safety of our persons and our property allows us to specialize and trade – an absolutely critical condition for flourishing. The more broadly we can trade the greater is the wealth producing potential of our efforts. So a key question and the focus of this blog is how we maximize our safety in order to maximize trade the production of consumer goods and services rather than weapons of war.

Since 9/11 almost one million people have been killed in wars and when including indirect deaths from wars the number rises to around 4.5 million. The U.S. alone has spent over $21 trillion dollars on defense since 9/11.  This is 5.25% of the U.S.’s cumulative GDP over that period of $400 trillion.

If we could trust every country in the world, we could get rid of our military complex and add that amount to our incomes. Obviously that would be unrealistic thus some defense spending will always be necessary. However, with the deployment of skillful diplomacy it can be greatly reduced and the losses from actual wars could potentially be eliminated.

We must live among other people. If we are good neighbors, we will be safer from attacks (verbal or worse) by those around us. Being a good neighbor requires being trustworthy (honest) and behaving in ways that take into account and respect the interests of our neighbors. What is true on the block and village is true globally as well. The adoption of mutually agreed rules/norms for our interactions with others is an important aspect of our safety and productivity.

Within each country, at least, agreement has been reached on which side of the road to drive, what frequency we can broadcast on, and what voltage our electricity will be. Across boarders we have agreed on setting dates and time (the calendar), airline overflight rules, and the orbits our satellites will occupy. After WWII, in addition to the UN and its many agencies, NATO, the World Bank, the IMF, and World Trade Organization, countries established the International Organization for Standardization (ISO), International Telecommunication Union (ITU), and the International Electrotechnical Commission (IEC). Moreover, the US and most every other country have established embassies in each other’s countries in order to serve the needs of their own citizens abroad and to maintain dialog and informed relations with each other’s governments.

An important part of soft power diplomacy are the supportive relationships with “allies” who contribute to mutual defense, thus lowering its cost. But good (cooperative) relationships in general are an important contributor to our safety and commercial interaction with other countries. To a large extent formal rules of war and treatment of others have promoted peace in the world.

Violating these rules (e.g. Russia’s invasion of Ukraine and U.S. invasion of Venezuela) raises the cost of our security. It makes us less safe and less wealthy. https://wcoats.blog/2026/01/03/war-2/

President Trump has angered our friends and allies with his tariff and other threats and a generally bullying approach to our relations with other countries. He has created enemies where we didn’t have them before. After bombing Venezuela and kidnaping its President, he is now threatening the same for Cuba, Panama, Columbia, Iran, and Greenland. Denmark’s government, which controls Greenland’s foreign affairs and defense, has told the White House to “stop the threats.”

Protests of US lawlessness is growing. As but one example:

JOINT DECLARATION BY THE GOVENMENTS OF

BRAZIL, CHILE, COLOMBIA, MEXICO, SPAIN, AND URUGUAY

“The governments of Brazil, Chile, Colombia, Mexico, Spain, and Uruguay, in light of the gravity of the events that have occurred in Venezuela and reaffirming their commitment to the principles enshrined in the United Nations Charter, make the following joint declaration:

“We are deeply concerned and reject the military actions unilaterally carried out on Venezuelan territory, which infringe fundamental principles of international law, in particular the prohibition of the use and threat of force, and respect for the sovereignty and territorial integrity of States, as enshrined in the United Nations Charter. These actions set an extremely dangerous precedent for peace and security in the region and endanger civilian populations.”

Trump has isolated the U.S. by breaking the rules and angering our friends and alias. We are much less secure than in the past.  WP: “Venezuela-Trump-Global Law and Order”

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Author: Warren Coats

I specialize in advising central banks on monetary policy and the development of the capacity to formulate and implement monetary policy.  I joined the International Monetary Fund in 1975 from which I retired in 2003 as Assistant Director of the Monetary and Financial Systems Department. While at the IMF I led or participated in missions to the central banks of over twenty countries (including Afghanistan, Bosnia, Croatia, Egypt, Iraq, Israel, Kazakhstan, Kenya, Kosovo, Kyrgystan, Moldova, Serbia, Turkey, West Bank and Gaza Strip, and Zimbabwe) and was seconded as a visiting economist to the Board of Governors of the Federal Reserve System (1979-80), and to the World Bank's World Development Report team in 1989.  After retirement from the IMF I was a member of the Board of the Cayman Islands Monetary Authority from 2003-10 and of the editorial board of the Cayman Financial Review from 2010-2017.  Prior to joining the IMF I was Assistant Prof of Economics at UVa from 1970-75.  I am currently a fellow of Johns Hopkins Krieger School of Arts and Sciences, Institute for Applied Economics, Global Health, and the Study of Business Enterprise.  In March 2019 Central Banking Journal awarded me for my “Outstanding Contribution for Capacity Building.”  My recent books are One Currency for Bosnia: Creating the Central Bank of Bosnia and Herzegovina; My Travels in the Former Soviet Union; My Travels to Afghanistan; My Travels to Jerusalem; and My Travels to Baghdad. I have a BA in Economics from the UC Berkeley and a PhD in Economics from the University of Chicago. My dissertation committee was chaired by Milton Friedman and included Robert J. Gordon. I live in National Landing Va 22202

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