Category: War

Protection from terrorists

My heart goes out to those in London who died at the hands of the British born citizen, Adrian Russell Elms, now going by the name of Khalid Masood. May Keith Palmer, Leslie Rhodes, Kurt Cochran, and Aysha Frade rest in peace. Whether he was a terrorist or a mentally disturbed citizen, he inflicted terror. How should we react?

Like health care reform, some topics never seem to go away. Indeed, striking the right balance between freedom and security is and should be under constant review. However, some approaches should be rejected out of hand. Trump’s travel ban would not have helped (hopefully it will never be implemented). In fact, his disgraceful gesture is a political stunt that does harm if anything at all. His rumored ban on carrying laptops and tablets in the cabins of flights from ten Middle Eastern and North African (predominantly Muslim) cities, while the same items may be checked and thus carried in the hull of the same plane is incomprehensible (other than as a protectionist measure, as only non American carriers fly from these cities). Beyond jeopardizing the cooperation we need from these countries to more effectively combat terrorism, these two measures are hurting our tourism and “jobs in America.”

Reasonable measures should be taken to detect and deter organized terrorist undertakings, without undermining our privacy and freedom of movement. But most attacks since 9/11 have been by lone wolves who didn’t have any actual contact with terrorist organizations. Anyone can decide to drive their car or truck into a crowd as was done in France, Germany and now England. No one in their right mind would suggest extending a travel ban to all road travel in the U.S. as a way of keeping us safe. U.S. traffic deaths have fallen significantly from 54,589 in 1972 to 35,092 in 2015 but dramatically exceed any from terrorists. With the advent and wide spread use of driverless cars such deaths will plummet dramatically in the future. But we accept that risk and drive anyway. No sane person would propose keeping every one home as a safety measure. In any event over 25,000 people die from accidents in their home in the U.S. every year. “Our risks from terrorists”

A full, rich life entails taking calculated risks. It is prudent to limit risks were the cost of doing so is not excessive in terms of our freedom of movement and quality of life. We need to keep this in mind when considering the measures we want our government to take to reduce the risk of terrorist attacks.

A related but different issue is how best to defeat ISIS, al-Qaida and the like. During his presidential campaign Trump stated that: “The other thing with the terrorists is you have to take out their families, when you get these terrorists, you have to take out their families.” “Trump on terrorists families.” Such an approach does not accord with the lessons of experience (aside from being repulsive and violating international law). Combating terrorist groups requires cooperation from the countries in which they operate and from the people in whose neighborhoods they live, etc. The International Crisis Group has distilled these lessons in the following report. From its executive summary they state that Trump’s “administration… should be careful when fighting jihadists not to play into their hands. The risks include angering local populations whose support is critical, picking untimely or counter-productive fights and neglecting the vital role diplomacy and foreign aid must play in national security policy. Most importantly, aggressive counter-terrorism operations should not inadvertently fuel other conflicts and deepen the disorder that both ISIS and al-Qaeda exploit.” “Counter-terrorism pitfalls-what US fight against ISIS and al-Qaeda should avoid”

 

 

The Market vs. the State

It is in our natures to serve our personal interests first and those of others second. The interests of others include not only those around us in need but also our children and future generations in general, which are served by far sighted policies that might entail short-run and immediate sacrifices. Communities and societies that have instilled in each generation the values that promote and serve such longer-run interests will flourish relative to those with more narrowly “selfish” values.

Adam Smith famously explained in The Wealth of Nations how an individual’s pursuit of his personal gain benefits society at large. In the marketplace the fruits of our labors enjoy the greatest profit the better they meet the desires and needs of our customers at the lowest possible cost. While we might like to cut corners and raise our prices if we could get away with it, competition in the market prevents us from doing so.

Free trade and the international agreements that promote it is an example of the trade off between personal and community or national interests that I am raising. The Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP) will further extend the freedom to trade among the countries signing up to them while raising the standards for working conditions, intellectual property protection, and conflict resolution.

I began an article on free trade written a year and a half ago with: “World per capita income didn’t change much from the time of Christ to the founding of the United States ($444 to $650 in 1990 dollars), a period of 1,790 years. But in the following 320 years it jumped to $8,080. And about half of that jump came over the last 50 years. What explains this fairly recent explosion of well being? Many things, of course, but central to this explosion of wealth was trade.” free-markets-uber-alles As the most disheartening and distressing U.S. presidential campaign in my lifetime has made clear, the huge gains from freer trade as with the huge gains from technical advances have not been evenly shared thus highlighting the trade off between personal and community interests I am exploring.

We have long accepted that economic progress should not be stopped because it would make a particular set of skills or tools less valuable. When someone developed cheaper and better ways of providing us with music than the old 78 inch vinyl record—itself an amazing technological feat in its time—those producing the old records were forced to learn new skills. We should debate whether society (family, church, community governments, etc.) should help those adversely affected by technological progress and how best to do it, but few would want to prevent such progress from which almost everyone in the world has eventually benefited enormously.

Government, which represents an exercise of our collective will, is meant in part to give primacy to our concerns for the interests of others and/or the long run over our individual, immediate personal well being. The American constitution was all about trying to do that without the government becoming captive of the self-interest of those running it. Our natures, whether we operate as private individuals constrained by the market place or as public officials constrained by the law and a broadly agreed public purpose, remain a mix of self-interest and public interest. The fundamental difference between our behavior as private citizens or public servants is in the external constraints that impact our behavior. Our natures otherwise remain the same.

The power of government can be exploited to thwart the discipline of competitive markets on the dominance of self-interest over the common interest. Preventing government from being captured by the self-interest of those running it or those who seek special privileges from it is no easy task. To that end our constitution strictly limited what government could do (the enumerated powers) and encumbered it with checks and balances. The dangers of such capture posed by the military industrial complex of which President Eisenhower warned, is well known and real (e.g. $400 billion F-35 Joint Strike Fighter that few believe we need), but the same is true of most other intrusions of government into private affairs, such as all of our many wars (on drugs, terror, poverty, etc.) as well.

Sadly our government has expanded well beyond its necessary functions into every nook and cranny of our personal lives with increasingly pernicious and alarming results. The abuses of its ever-expanding powers for personal and partisan benefits are exemplified by the scandal of asset forfeiture,the-abuse-of-civil-forfeiture/, which alarmingly continues, the long and bipartisan history of political abuse of the IRS, irs-tea-party-political, and most recently the legal attack on companies questioning the climate change forecasts of the Intergovernmental Panel on Climate Change (IPCC) by the AGs United for Clean Power using the Racketeer Influenced and Corrupt Organizations (RICO) Act in an effort to silence criticisms of UN climate studies. prosecuting-climate-chaos-skeptics-with-rico. Such a blatant government attack on free speech is truly shocking. These are but a few examples of growing government tyranny and corruption.

The most effective defenses against such corruption are to limit the scope of government as much as possible (i.e. subject individual actions to the discipline of the market as much as possible) and to strengthen public insistence on adherence to the rule of generally applicable law. As trade has moved beyond the village and nation, so must the rule of law.

Following World War II the United States led the establishment of international arrangements and laws governing trade (WTO) and financial (IMF and WB) and diplomatic (UN, NATO) relations among nations. The U.S. was the natural leader of this globalized world not only because it had the largest economy and the largest military, but because it was generally respected for its commitment to the rule of law. More than any other country the U.S. was seen as committed to the longer run prosperity of the world above short run tactical benefits for itself.

In an April 12, 2016 interview by Steve Clemons in The Atlantic, U.S. Treasury Secretary Jacob Lew observed that “In the 21st century, the world needs the United States to be a North Star. The world wants us to be the North Star. I really do believe that. I am amazed at how other countries want to hear our advice and what we think makes sense. Sometimes we may have the habit of lecturing too much. We have to be careful not to do that.”

In recent years American leadership has been slipping. Rather than draw China more tightly into the global rule based trading system, we have pushed them away. After the United States convinced the IMF’s European members to accept a reduction in their share of votes in the IMF in order to bring the voting shares of China, India, and some other emerging economies more in line with their economic size, it took the U.S. Congress more than five years before it approved the amendments to the IMF Articles of Agreement needed to implement this agreement. In the mean time China set up its own international lending organization. US-leadership-and-the-Asian-Infrastructure-Investment-Bank

Rather than strengthen cooperative, diplomacy based relationships the U.S. has launched a series of generally failed wars to promote “democracy,” (Gulf War 1990-91, Somalia 1992-5, Haiti 1994-5, Bosnia 1994-5, Kosovo 1998-99, Afghanistan 2001 – to date, Iraq 2003-11, Libya 2011). These have weakened respect for American leadership.

On the economic front the United States has imposed hugely costly anti-money laundering (AML) and global tax reporting (FACTA) requirements on the rest of the world without regard for their cost and despite the lack of any evidence of benefits.  Operation Choke Point   These are serious abuses of American leadership that will produce a growing backlash. But it is not just misguided arrogance that is undermining our role in the world, it is the growing perception that our leadership is increasingly motivated by the selfish personal interests of crony capitalists rather than the high principles that have serviced us and world so well in the past.

Consider the example of the FATCA (Foreign Account Tax Compliance Act). Badly designed corporate and income tax laws in the United States have pushed an increasing number of companies and wealthy people out of the U.S. Rather than clean up its tax laws, the U.S. attempts to tax the income of Americans where ever they earn it and where ever they might live. The only escape is to renounce U.S. citizenship. The Obama administration is now proposing an exit wealth tax for American’s giving up their citizenship. It reminds me of the measures the Soviet Union took to prevent its citizens from leaving. Have we really fallen so low?

The use of off shore, tax minimizing structures by American companies and individuals (i.e. legal tax planning measures) as well as illegal efforts to hide income have been met by increasingly intrusive efforts by the U.S. to find and tax such income. Quoting from the introduction of the Wikipedia article on FATCA: “The Foreign Account Tax Compliance Act (FATCA) is a 2010 United States federal law to enforce the requirement for United States persons including those living outside the U.S. to file yearly reports on their non-U.S. financial accounts to the Financial Crimes Enforcement Network (FINCEN). It requires all non-U.S. (foreign) financial institutions (FFI’s) to search their records for indicia indicating U.S. person-status and to report the assets and identities of such persons to the U.S. Department of the Treasury.”

As the world attempts to comply with American extra territorial demands, the United States itself is not. Such reporting requires knowledge of the beneficial owners of companies. Most companies established in the United States, such as those incorporated in Delaware, are not required to provide the identities of beneficial owners. The U.S. seems to have no intention of requiring its companies to comply with what it demands from other countries.

The decline and fall of the “American Empire” seems to be underway. It doesn’t need to be.

Fighting Terrorists, Part II

How do we as a free society protect ourselves from terrorists without in the process losing our freedom to our protectors? To the extent that terrorists are part of organized groups, our counter terrorism agencies need to identify and track the members of such groups with tools and techniques that do not violate our individual privacy. As such groups often operate internationally, the information collected should be shared with similar agencies in other trustworthy countries, though this has been and will remain challenging given quite different data standards from one jurisdiction to another. Individuals identified as part of a terrorist network, or suspected of such involvement, or suspected of having potential interest in such involvement should be closely watched wherever they are. The risks of such state scrutiny to our civil liberties are obvious, but should be pursued with proper oversight and care. The careful balancing of these conflicting objectives is a critical aspect of successful, largely free societies.

The above measures can be helpful up to a point, but they cannot eliminate all risks of terrorism even if we should give up all of our liberties to a security garrison state, which hopefully we still have the courage to resist. Throwing up our arms and bunkering down every time a terrorist blows himself and others up only feeds the enthusiasm of the terrorists. Just as even the safest societies have and will always have some criminals, we can never be fully free of terrorists. Effective policing and a respected, fair, and efficient court system will minimize but not eliminate crime. Most mass murders in the U.S. have been the work of mentally disturbed individuals. While we can do better at identifying and helping those who might otherwise undertake mass murders, we will never succeed fully even if we lock up every person we think has such potential, and those Americans who still value their freedom enough to face such risks would not want to live in such a society.

In the past, terrorist attacks and mass murders in the U.S. have been perpetrated by a wide range of groups and individuals, including white supremacists, black extremists, anarchists, anti-Semites, Puerto Rican nationalists, anti-abortion radicals, and the emotionally disturbed, to name a few. Today’s best identified terrorist risks come from the Islamic State (Daesh) and the radical Islamists who join them or are inspired by them, though the vast majority of deaths in the U.S. from mass murderers since 9/11 have not been at the hands of Muslims.

The threat from Daesh is particularly challenging because it is built upon religious beliefs. The radical religious beliefs of Daesh are incompatible with modern civilization.[1] Killing non-believers, whether by suicide bombings or otherwise cannot be justified by the religious or moral beliefs held by most of humanity, whether Jewish, Christian, Muslim, humanist, or whatever. Virtually all terrorist attacks in the United States since 9/11 have been, and can be expected to be, committed by Americans. Of those few claiming to act in the name of Islam, we have benefited from American Muslims reporting radicalized, potential terrorists in their midst to the authorities. This helps explain why so few of these attacks have been by Muslims. Attempting to protect us from such attacks via the police methods noted above cannot stop those who are driven by what they believe is right in the eyes of their god (or those who are mad more generally). They are prepared and even eager to die for those beliefs. If some individuals are willing to blow themselves up for what they believe in, it will never be possible to totally prevent them from occasionally achieving their goal.

Deterring radicalized Islamist youth from their terrorist plans would require convincing them that their understanding of Islam is wrong. Given their willingness to die for their beliefs, undermining those beliefs is likely to be insufficient, though it is important. Virtually all young people seek an understanding of the purpose of their lives and moral values to guide their behavior. Muslims are best equipped and best placed to convince radical Islamists that their understanding of their religion is wrong. But all of us through our Churches, Mosques, Synagogues, schools and our culture more generally must do a better job teaching our young the moral values, and where appropriate the religious beliefs, that should guide their and our behavior toward our fellow man appropriate to living together in the modern civilized world. Coercion will not be enough.

[1] See my earlier blog: https://wcoats.wordpress.com/2015/12/18/fighting-terrorists/

Fighting Terrorists

A front-page article in the Washington Post announced that: “Saudi Arabia launches alliance to fight terrorism.”[1] This news truly gave me pause. If the irony of this does not hit you in the face, and even if it does, please read on.

Before exploring approaches to fighting terrorism, we need to define who or what our terrorist enemy is. The failure to do so clearly has badly undermined our efforts to defeat this enemy. Clearly the thousands of young men and women from around the world fighting in Iraq and Syria under the self designated Islamic State are terrorist enemies, as are Syed Farook and Tashfeen Malik, who killed 15 of Farook’s co workers in San Bernardino, California recently, and so are the French and Belgian Jihadists who killed 130 people in Paris on November 13th. Dropping bombs on San Bernardino or Paris or carpet bombing the Levant will not stop this enemy and the collateral damage, both human and physical,… well, you get the point.

If we understood why they were doing what they are doing, either at home or in far off places, we might be better able to deter them. What is their goal? Several steps are needed to reach such an understanding, but they all claim to be fulfilling what they understand to be their obligation to Allah to kill non-believers who refuse to convert to Islam:

I have been ordered by Allah to fight and kill all people (non-Muslims) until they say “No God except Allah.”

The above statement is a hadith collected and recorded by Sahih al-Bukhari and Sahih Muslim, the two most important compilers of the oral history of the words and deeds of Muhammad.

So our enemies are young Muslims who accept martyrdom and the prospect of early entry to paradise by fulfilling the commands of their religion as it has been taught to them. Those of us who live beyond this period of desperate searching for the meaning and purpose of our lives and make it to a more mature adulthood generally find less demanding objectives and meanings for our lives. Do most Muslims accept this version of their religion? This is a complicated subject but obviously we see the vast, vast majority of Muslims living in compliance with the laws and customs of whatever country they live in. Have they embraced a more peaceful understanding of Islam or have they managed to ignore those aspects of their religious beliefs that are clearly unacceptable in the modern civilized world?

Following 9/11, once I was able to return to the U.S., I asked a Pakistani colleague why he and his fellow Muslims did not speak out to condemn this barbaric act made in the name of Islam. He replied that it was very difficult for a Muslim to publically criticize a fellow Muslim. I only now think I understand what he meant. For a Muslim to criticize or renounce his religion is called apostasy. According to Dr. Tawfik Hamid in his very illuminating book Inside Jihad: “The portion of Sharia concerned with apostates is known as Redda law, and according to the literal implementation of Redda in Saudi Arabia, the punishment for apostasy is death.”[2]  Thus condemning Muslim’s who kill non-believers can be dangerous.

The proponents of this strict, fundamentalist form of Islam are called Salafists. According to Dr. Hamid: “Salafists desire a return to the Islamic Caliphate. They do not respect secular states or weak Islamic regimes. They believe Sharia law should constitute, ideally, the only legal system in any society, because it is the divine law…. For Salafists, the perfect world is one in which apostates are slain, adulterous women are stoned to death, enslavement of war captives is permitted, polygamy is admired and wives can be beaten when the husband deems it appropriate.”[3] Such views are not compatible with our Constitution or culture nor with any other modern culture and should be condemned as unacceptable.

According to Dr. Hamid, Salafist interpretations of Islam promulgated around the world by the Wahhabi sect of Sunni Islam financed by the Saudi Arabian government has come to dominate the understanding of the teachings of Muhammad by most Muslims. In exchange for the commitment of the Wahhabi leadership to respect and not politically challenge the Saudi royal family, the Saudi rulers financed the Wahhabi movement and its expansion. So the irony of Saudi Arabia launching an alliance to combat terrorism is that it is Saudi Arabia that continues to finance its primary cause, the Salafist version of Islam. For starters the Saudi government should cut off the funds it now provided to the promotion and spread of such teachings.

If the United States or any other military were able to kill every ISIS fighter in the Levant (Iraq and Syria), even if it could do so without destroying the cities and communities and kill their citizens that ISIS now occupies and controls, and even if it could leave behind or install a creditable, peaceful, and broadly accepted government that could prevent a new ISIS from arising, this would not end the threat of Islamic terrorism. As long as young men and women around the world continue to believe that their ticket to paradise entails fulfilling their religious duty to kill infidels, innocent people will continue to die at their hands and we will remain at risk.

Saudi Foreign Minister Adel al-Jubeir has the right idea, if he means it, that “we” must “stop the flow of funds to terrorists and confront the ideology of extremism that promotes killing of the innocent.”[4] But according to Dr. Hamid, this is not enough. “Islamic terror is not likely to decrease until Muslims cease being passive terrorist and become active defenders of hard truth, true peace and real tolerance.”[5] “For every jihadist in the world there is a much larger number of individuals who quietly approve of his conduct. Islamic terror often makes passive terrorist secretly proud.”[6] This is because the passive terrorist believes on the basis of Salafist teachings that the active terrorist is fulfilling the requirements of Islam. “In the case of passive terrorists the schism is one between the cultural mind and the religious mind.”[7]

Islam needs a reformation. While peaceful forms of Islam already exist (e.g., Sufism), Dr. Hamid argues that a more rigorous and scholarly reinterpretation can emerge from a refocusing on the Koran (the word of Allah), which does not contain many of the offending texts in the hadiths and Sunnah (the words and deeds of Muhammad), and placing certain commands and acts in the historical context in which they originally occurred as is generally done when interpreting the Bible.

The United States and other secular societies need the help of peaceful Muslims, those who have accepted the secular laws of their country (e.g. the U.S. Constitution) and thus rejected those Salafist teachings that contradict them. We need their help in attracting Muslims to its acceptable and peaceful versions and we need their help in isolating and exposing the few Islamic terrorists among them. These peaceful Muslims, in turn, need our condemnation of the intolerant and violent elements of Salafism, to help support their campaign for reformation. To ignore that Islamic terrorists are acting on their understanding of their religion, i.e. that they are Islamic, undercuts any effort and hope for the reformation that Islam needs in order to peacefully take its place in the modern world.

In his farewell speech to the Nation in 1988 Reagan spoke of America as a shinning city on the hill: “In my mind it was a tall, proud city built on rocks stronger than oceans, windswept, God-blessed, and teeming with people of all kinds living in harmony and peace; a city with free ports that hummed with commerce and creativity. And if there had to be city walls, the walls had doors and the doors were open to anyone with the will and the heart to get here.” Implicit in Reagan’s vision was that anyone “with the will and heart to get here,” had already embraced the laws and customs of their new land. Those who have and who satisfy our other requirements for immigration should be welcomed.

[1] https://www.washingtonpost.com/world/national-security/saudi-arabia-launches-islamic-military-alliance-to-combat-terrorism/2015/12/15/ad568a1c-a361-11e5-9c4e-be37f66848bb_story.html

[2] Tawfik Hamid Inside Jihad: How Radical Islam Works, Why it Should Terrify Us, How to Defeat it, Mountain Lake Press, 2015 page 83. http://www.tawfikhamid.com/

[3] Ibid.

[4] Washington Post Op. Cit.

[5] Hamid, Op. cit. page 98

[6] Ibid. page 87

[7] Ibid. page 102

What to do about Syrian refugees?

When frightened most people take or support steps to reduce risks to their security even at the expense of their liberties or other normally valued principles. Failure to do so might even be considered foolish if such steps might actually increase their safety. On the other hand, we regularly accept small risks in exchange for more interesting lives. The fact that 92 people died every day on average in the U.S. in traffic accidents in 2012 (about the same number who died from falling) has not kept most of us home, where we would have faced the risk that an average of 7 people per day died from home fires.

I am prompted to return to this subject (for an earlier blog see: https://wcoats.wordpress.com/2013/08/06/are-we-becoming-a-nation-of-cowards/) by a recent Bloomberg poll in which the majority of adult American’s surveyed (53%) following the recent terrorist attacks in Paris that killed 129 people said that “the nation should not continue a program to resettle up to 10,000 Syrian refugees.” Leaving aside that this is an almost unnoticeable share of the more than 3 million Syrians who have fled their country and the 6.5 million displaced within Syria, and leaving aside the causes of the horrors from which they are fleeing, are we justified in refusing to accept refugees if it makes us safer? But before taking that on, we should have a clear understanding of whether it is likely to make us safer.

The concern, of course is that among these poor desperate souls, terrorist might pose as refugees in order to gain entry to the U.S. (or Europe) in order to wreak havoc. Despite best efforts this possibility cannot be ruled out any more that we can rule out dying by fire if we lock ourselves in our homes. But the recent Paris attacks were carried out by French and Belgian citizens, not refugees. “Then there was the curious case of the Syrian passport found near the body of a suicide bomber. Who takes a passport to a terrorist operation? Someone who wants it to be found.” (Frida Ghitis, CNN, November 18, 2015: http://www.cnn.com/2015/11/18/opinions/ghitis-isis-self-destructive/index.html)

Gaining entry to the U.S. as a political refugee is a time consuming and difficult process. I have written a number of letters in support of applications by Iraqis and Afghans I have worked with and that is a very small part of what is required. Ms. Ghitis’ very interesting article continues: “The Paris operation had multiple objectives. The passport was a way of provoking the West to turn against refugees. The attack sought to provoke France, NATO and Europe to fight ISIS and the public to turn against the Muslim population and against refugees. ISIS wants a war between Islam and the rest of the world, with Muslims on its side, as a way of creating and expanding its so-called ‘caliphate.’ ISIS wants the world’s Muslims to feel they are at war with the modern world. It also wants to stop the flow of Syrians to the West, because it’s more than a little embarrassing that Muslims are fleeing its utopian Islamic ‘state.’”

In short, the risks of terrorist attacks (or attacks by deranged students at schools, etc.) in the U.S. come almost totally from our own citizens, just as do virtually all other crimes, violent or otherwise, in the U.S.  We call their perpetrators criminals and have vast and expensive programs to minimize such acts and to protect us to the extent compatible with our values from the crimes that nonetheless still take place. Aspects of these programs are the promotion of respect for the rights of others and for law and order and addressing and minimizing injustices toward individuals or groups that might provide the basis for grievances and hostility. For the rest we rely on the police to maintain order and arrest those who persist in crime (violent or otherwise). Crime and its perpetuators have always been and always will be with us. Some approaches to containing them have worked better than others and we should continuously strive to find the most effective balance between our freedom and our security.

So will ending the already negligible immigration of Syrians or Muslims improve our safety? If anything at all, it will worsen it by alienating and angering some of the almost 3 million Muslim’s already living here. The cry by some Governors and Presidential candidates and others to close the door to Muslims is much more likely to turn an American Muslim into a terrorist than to prevent one from entering the country from abroad. Thus these ugly cries by understandably frightened people fail on all counts (the promotion of American values and the promotion of security).

We need champions of the “Land of the free, home of the brave.” We have been the “Home of the free because of the brave;” not the brave young men and women sent off as cannon fodder to fight wars all over the place by deranged neocons but those brave enough to stand tall for the values of human respect and freedom that have (and hopefully still will) define America.

 

US Global Leadership – More on AIIB

Following the end of the second of two devastating World Wars within three decades, the world came together to establish international institutions and norms meant to prevent another world war and to promote the shared economic and political interests of all peace loving countries. The United States led this effort and has dominated the resulting global governance structure (the UN, IMF, World Bank, WTO to name a few of the best known). The one-country-one-vote structure of the UN has limited its effectiveness. The International Financial Institutions like the IMF, on the other hand, are governed on the basis of votes and financial contributions proportional to their economic importance. Their effectiveness and legitimacy depend, in part, on maintaining such relative voting strength as countries’ economies grow.

Resolving conflicts without world war has been a magnificent achievement. But the opening of the world to freer trade and finance with broadly agreed rules under which it is conducted are dramatically important achievements as well. Economic growth is not a zero sum game. Every country has benefited from global financial cooperation. Estimates (by Bradford DeLong and the World Bank) of Global World Product rose from $1.1 trillion dollars in 1900 to 4.1 trillion in 1950 but exploded there after reaching $41.1 trillion in 2010 (all in 1990 US dollars). According to the World Bank, global poverty has been cut in half in the last twenty years.

The dominant role of the US in International Financial Institutions reflects its economic size and military strength but equally the perception of the rest of the world that the liberal, free markets and trade model promoted by the US was indeed the right one for each country’s growth and prosperity. The world’s continued acceptance of the US’s leadership rests on the general belief that the US is an honest broker, fairly promoting rules that serve the general good rather than seeking special advantage for its own people and industries. The US cannot expect other countries to abide by such international norms of behavior if it is not willing to conform to them itself (i.e. subjugate its sovereignty to international agreements in these areas).

America’s record is not pure by any means. The increasing crony capitalist nature of our military industrial complex, about which we were so presciently warned by President Eisenhower, is hardly a model of competitive market capitalism. But the political structures established after WWII have generally worked well to coordinate national cross boarder activities peacefully and without wars. To cite one example, the International Telecommunications Union has developed rules and procedures for allocating radio spectrum, satellite orbits and technical telecommunications standards that have made possible efficient and interconnected global communications systems. You could not telephone anyone you want any where in the world from anywhere in the world (not to mention the Internet) without them.

The International Monetary Fund is another example of an international cooperative agreement, in this case for facilitating the financing of trade and capital movements (cross border investments). It has played an important role in removing economic restrictions on global trade and finance, though that role has been undermined to some extent and made more complex by the US abandonment of its obligations to redeem its currency for gold under the gold exchange standard imbedded in the IMF’s Articles of Agreement when President Nixon killed what was left of the gold standard.

Few countries want the leadership provided by the US replaced by China or anyone else, but as China and many other country’s economies and trade have grown relative to the US and especially to Europe, they rightly expect to have a larger role in organizations that act for the entire world. The US congress has very shortsightedly and foolishly refused to approve the adjustments in the governance of the IMF that would accomplish that. As a result it is undermining the foundation of the US’s leadership role. “Indeed, Treasury Secretary Jacob Lew made this point implicitly in testimony this week in which he also restated U.S. reservations about the AIIB: Our continued failure to approve the IMF quota and governance reforms is causing other countries, including some of our allies, to question our commitment to the IMF and other multilateral institutions that we worked to create and that advance important US and global economic and security interests.

…The IMF reforms will help convince emerging economies to remain anchored in the multilateral system that the United States helped design and continues to lead.” http://www.lobelog.com/washington-misses-bigger-picture-of-new-chinese-bank/#more-28547

While there are legitimate arguments over whether an Asian Infrastructure Investment Bank is a good thing or whether such funds would be better spent through the Asian Development Bank (China, which would lead the new AIIB, doesn’t have such a great record with the quality of its own infrastructure spending), the real issue is whether the world will remain united in the post WWII international order and presumably under US leadership of the International Financial Institutions it helped establish. The principles of inclusiveness and a level playing field that have always been the foundation of US promoted institutions clearly call for and would be promoted by supporting the expanded role of China in these institutions in keeping with its increasing involvement in the world economy. US opposition to the IMF governance reforms and its reaction against the AIIB appear duplicitous and are undermining the foundations of its leadership. “The decision by the UK, and subsequently, France, Germany, and Italy, to participate is therefore significant not only because they will be major shareholders, but also because the decision by traditional U.S. allies signals that Washington is increasingly isolated.” http://www.cfr.org/global-governance/bank-too-far/p36290

Everyone has a strong interest in having China join and work within the established liberal economic order rather than going its own way with a competing order. Recent US behavior hardly promotes that goal.

For my earlier comments on the AIIB see: https://wcoats.wordpress.com/2015/03/18/the-asian-infrastructure-investment-bank-aiib/

Economic Sanctions

Economic sanctions can be a political tool to punish and hopefully stop or deter bad behavior by another country, group, firm, or individual. However, sanctions are rarely effective, often hurting the wrong people. Robert Pape’s examination of past sanctions on countries found that only 4% were clearly effective. Their virtue is that they tangibly register disapproval of bad behavior without going to war. An important policy question is when to use them. In my opinion sanctions should be used very rarely against countries when there is a broad global consensus that the behavior of the country is significantly and unacceptably at variance with established international norms. This is both because they are rarely effective, in part because they often hurt the general public rather than the leaders responsible for the bad behavior, and because it should generally not be the business of our government to dictate how other governments behave unless that behavior is directly against us. What that means, for example, is that sanctions should not generally be used against countries whose human rights behavior we disapprove of.

Under what circumstances might the use of economic sanctions be justified and effective? The effectiveness of economic sanctions varies greatly with their nature and the circumstances in which they are applied. In what follows I very briefly illustrate the range of experience and possibilities.

Cuba

Clearly the sanctions of one country against another, such as outlawing trade in certain products or outlawing trade and financial transactions of any sort, are of very limited effectiveness as the sanctioned country can simply trade with others instead. Cuba illustrates this point. First imposed over 50 years ago by President John F. Kennedy and now enforced through six different statutes, the United States forbids most trade with Cuba by its citizens or companies. President Bill Clinton extended and stretched the reach of this embargo to apply to the foreign subsidiaries of American companies as well. The purpose of this embargo as stated in the Cuban Democracy Act of 1992 is to encourage the Cuban government to move toward “democratization and greater respect for human rights”.

Though the U.S. has put a lot of pressure on other countries to restrict their own trade with and travel to Cuba, it has been largely ignored. The U.S. pretty much stands alone. The cost of the embargo has fallen more on the U.S. than on Cuba. The U.S. Chamber of Commerce estimates the cost to the U.S. economy at $1.2 billion per year in lost sales and exports. More over it has not improved governance in Cuba nor led to regime change. In 2009, Daniel Griswold, director of the Cato Institute’s Center for Trade Policy Studies, criticized the embargo by stating:

“The embargo has been a failure by every measure. It has not changed the course or nature of the Cuban government. It has not liberated a single Cuban citizen. In fact, the embargo has made the Cuban people a bit more impoverished, without making them one bit more free. At the same time, it has deprived Americans of their freedom to travel and has cost US farmers and other producers billions of dollars of potential exports.” Former Secretary of State George P Schultz called the embargo “insane.”

Cuba is a mess not because of U.S. sanctions but because of the highly repressive Marxist regime in control for the last 52 years. The American embargo has given the Castro government an escape goat for its own failures—and the Castro government still rules. President Obama recently reestablished diplomatic relations with Cuba but the embargoes will remain until Congress amends or removes them. The President has been criticized for not getting enough in return for reestablishing relations and its link with Cuba’s freeing of American spy Alan P. Gross is certainly unfortunate, but the U.S.’s diplomatic recognition of a country should have nothing to do with whether we approve of its government and its approach to governing. The 50 plus year-old embargo has totally failed in its objectives as well, which were not justified in any event. It should finally be lifted and we, and our government, should continue to criticize the Cuban government’s oppressive and destructive policies.

Iran

Economic and financial sanctions against Iran have been more successful. Though the U.S. initially imposed limited sanctions following the Iranian revolution in 1979, international sanctions were imposed by the U.N. Security Council in 2006 and later by the EU in response to Iran’s refusal to suspend its uranium enrichment program. These sanctions banned supplying Iran with nuclear-related materials and technology, and froze the assets of key individuals and companies related to the program. In the following years these sanctions were expanded to include an arms embargo and broader freezes on assets held abroad and monitoring the activities of Iranian banks, and inspecting Iranian ships and aircraft.

These sanctions have reduced Iran’s export (largely oil) revenue and sharply restricted its imports of materials needed for its uranium enrichment program. The international arms embargo has negatively impacted Iran’s military capacity as it is now reliant on Russian and Chinese military assistance. The U.S./EU embargo on oil shipments was made more effective when the EU extended its embargo to ship insurance resulting in most supertankers refusing to load Iranian oil. Excluding Iran from international payments via SWIFT has significantly complicated such payments. The value of Iranian rial plunged by 80% and the standard of living is suffering.

While smuggling has allowed wide spread evasion of many restrictions, they significantly raise the cost of, and thus reduce the gains from, trade. In the list of unintended consequences, Fareed Zakaria argues that sanctions have strengthened the state relative to civil society because in Iran the market for imports is dominated by state enterprises and state-friendly enterprises, thus smuggling requires strong connections with the government.

While it is difficult to assess the impact of sanctions on public attitudes, they seem to be succeeding in increasing pressure on the government to reach an agreement with the U.S. and EU to reign in its uranium enrichment program. This qualified success reflects the broadly accepted purpose for the sanctions (thwarting Iran’s nuclear weapons potential), and hence broad (but not universal) enforcement of such sanctions.

Islamic State — Da’ish

Da’ish is not a recognized state but is so widely seen as an evil pariah that it constitutes an entity and cause for which sanctions should have their maximum impact. Moreover it is being resisted and attacked militarily as well. While direct U.S. military engagement would be counterproductive in the long run (it is their region and interest, not ours), logistical and weapons support to the government of Iraq and close coordination with Iraq’s neighbors has been and will be helpful. Blocking every possible source of income, payments, and weapons procurement by Da’ish will gradually degrade its ability to fight and to hold on to the territory it needs to fulfill its Islamic caliphate objective.

When virtually the whole world is behind sanctions, we have many tools and capability to make them effective. But even in this most obvious and potentially effective case, there are challenges. While strongly and rightly defending the right of anyone to offend the Prophet or anyone else we can hardly forbid public statements in support of Da’ish. The British “human rights group” CAGE, for example, is under attack for calling Jihadist John “a beautiful young man.” The group, led by former Guantanamo Bay inmate Moazzam Begg, is being attacked by both public and private groups in the UK for its jihadist sympathies. Similar issues exist in the U.S. Read more: http://www.dailymail.co.uk/news/article-2972757/Fury-charities-fund-ISIS-Jihadi-John-apologists.html and http://www.bbc.com/news/uk-31657333

But what about financial support to terrorist groups from their sympathizers? Striking the right balance between fighting terrorists and freedom of expression will require care. Who of my generation can forget the controversies raised in the 1970s and 80s over the financial contributions of Irish Americans and their charities to the Irish Republican Army (officially a terrorist group)?

Russia

In general, the modern world is blessed with many positive incentives for people and countries to behave well. The broadly embraced values of the Enlightenment, and classical liberalism’s respect for each individual and his and her rights has established a presumption against force and coercion and hence against war. It is far more profitable (for both sides) to buy what we want than to try to take it (trade vs war). But unfortunately this has not always been enough to deter bad behavior necessitating consideration of deterrents. Russia’s President Vladimir Putin, whose behavior I can only understand as that of a self enriching gangster who is happy to exploit the fears and paranoia of the average Russian to enhance his power and control, but who cares little for the future well being of his country, is grossly violating post Westphalian principals of sovereignty. Our interest in Ukraine is marginal and Putin’s is intense for reasons of Russian history and its emotional value for Russian support of its new autocrat. U.S. intervention of any sort in Ukraine would likely precipitate intensified interference by Russia. Where and when would the escalation on each side end? Would Russia’s bankruptcy end the fighting before reaching the nuclear level? We should not try to find out. Whether we should provide the pro west Ukraine government with defensive arms is a more difficult question, but would risk ill-advised escalation by Ukraine, a risk we should not take. This leaves us with economic sanctions as the most appropriate deterrent of Russia’s bad behavior.

Interestingly and frustratingly the vary interdependencies that develop with trade also create weapons that can be used by either side to promote a country’s aims. Da’ish is not in a position to deprive us of anything in retaliation to sanctions we impose on it. Even shutting down all exports of oil in the territories it controls or is likely to control would be barely noticed. On the other hand, Russian threats to shut off the flow of oil and gas to Europe and especially Germany, which receives 40% of its oil from Russia, must be taken very seriously. All of the natural gas consumed in Estonia, Finland, Latvia, Lithuania, and Macedonia comes from Russia as does over 50% in Bulgaria, Czech Republic, Greece, Hungary, Montenegro, Serbia, Slovenia, Turkey, and Ukraine. A Russian cut off of gas and to a lesser extent of oil would be devastating to Europe. On the other hand, the loss of that revenue would be devastating to Russia. This is the two-sided nature of trade. It introduces caution into measures to harm trading partners.

Russia’s recent deal to supply oil and gas to China will reduce its reliance on its European market and hopefully Europe will also take steps to reduce its reliance on Russia. However, the U.S. has moved slowly if at all to increase its capacity to ship gas and oil to Europe, which is currently heavily dependent on existing pipelines from Russia. Russia has spent billions of dollars in Europe through environmental groups and others to discourage the development of Europe’s oil shale potential and to encourage the reduction of its use of nuclear energy. http://www.thenewamerican.com/world-news/europe/item/18546-nato-head-russia-is-funding-anti-fracking-movement http://www.washingtontimes.com/news/2015/feb/2/richard-rahn-vladimir-putin-funding-opposition-to-/

Sanctions so far have been carefully (and wisely) targeted to a few specific individuals and companies. It is difficult to determine whether they are having any effect on Putin’s behavior. If they are increased, the risk of Russian retaliation will increase as well, the burden of which would fall on Europe, not the U.S. Russia has cut off the flow of its gas and oil to Europe before for relatively short periods but has resisted doing so for the last few years. Putin is now threatening it again: http://www.washingtonpost.com/world/europe/putin-threatens-to-cut-gas-to-ukraine-as-showdowns-shift-to-economy/2015/02/25/b0d709de-bcf6-11e4-9dfb-03366e719af8_story.html.

Putin’s behavior justifies increasing sanctions but they should remain well targeted. A total blockade of Russia, which would be extremely difficult for Europe, would lead to a collapse of the Russian economy with unpredictable political consequences. The collapse of the Soviet Union in 1991 following the end of the cold war in December 8, 1987, with the signing of the Intermediate Nuclear Forces (INF) Treaty launched the transition (for a while) to a more liberal regime. It was the most dramatic and totally peaceful regime change the world has ever seen, but it took 70 years of patience to achieve. In a letter to this week’s Economist former British Ambassador to Russia Sir Tony Brenton said: “The solution to the Russia problem is not to sanction and isolate, but to hug close and thus, eventually, subvert.” We have a strong interest in an orderly political transition in nuclear-armed Russia.

Israel

Ironically the opposite side of the page of the Washington Post story on Russia linked above reported on the very disturbing use of economic sanctions by Israel against the Palestinians living in the West Bank. Israel refused to turn on the promised water to a new upscale city (residences, shopping mall, theater complex, sports club, school, etc.) being built on a West Bank mountaintop. “Before granting water access to the planned city of Rawabi, Israel — which controls the area that the water pipe would run through — wants Palestinian Authority officials to return to an Israeli-Palestinian Joint Water Committee. The Palestinians abandoned the group in 2010 because they don’t want to approve water projects to Jewish settlements in the occupied West Bank, which are built on land that Palestinians want for a future state — and which still get plenty of water.” http://www.washingtonpost.com/world/middle_east/new-palestinian-city-has-condos-a-mall-and-a-sports-club–but-no-water/2015/02/24/d5a28dcc-b92e-11e4-a200-c008a01a6692_story.html

After driving Palestinians from their homes in the war of 1948 that established the Jewish state of Israel, the new state of Israel and the international community accepted boundaries between Israel and the rest of Palestine that were somewhat enlarged from the UN approved partition of Palestine into Israel and the West Bank and Gaza Strip. The right of the 700,000 displaced Palestinians to return to their homes remain one of the unresolved issues in the Israeli-Palestinian dispute. The Jewish settlements referred to above are in the West Bank and have been ruled illegal in a number of UN resolutions and U.S. State Department opinions. http://works.bepress.com/warren_coats/26/

On several occasions Israel has also withheld the import tariffs that it collects on behalf of the WBG government (the Palestinian Authority) in order to pressure the PA not to challenge the construction of additional illegal settlements in the West Bank. “To protest the Palestinian Authority’s move this year to join the International Criminal Court in The Hague, Israel has also withheld for three months the transfer of $381 million in custom duties Israel collects on Palestinians’ behalf.” http://www.washingtonpost.com/world/middle_east/israel-to-let-water-flow-to-west-bank-development-at-center-of-political-feud/2015/02/27/d1b598de-be84-11e4-bdfa-b8e8f594e6ee_story.html

These are examples of a country’s use of “sanctions” to achieve its own, not widely shared, political ends. In the New York Times Nicholas Kristof said: “The reason to oppose settlements is not just that they are bad for Israel and America, but also that this nibbling of Arab land is just plain wrong. It’s a land grab.” http://www.nytimes.com/2015/02/26/opinion/nicholas-kristof-the-human-stain.html?_r=0 The same can be said of Russia’s land grab in Ukraine.

Fortunately in the case of Israel, Prime Minister Netanyahu intervened on February 27 and approved turning on the water before traveling to the U.S., presumably worried about bad press from Israel’s behavior, something President Putin unfortunately but predictably doesn’t seem to care about.

Comments on the All-Volunteer Military

My friend and former University of Chicago classmate sent the following comments on my All-Volunteer Force note. From 1989-93 Chris Jehn was the Assistant Secretary of Defense for Force Management and Personnel.

Warren–
I read with interest your recent essay on unintended consequences of ending conscription in the U.S. Having spent a large part of my career on issues surrounding implementation of the All-Volunteer Force. I was curious to learn what consequences you had in mind. I was disappointed to read, “the top 20-30 percent of income earners in the United States provide almost none of their sons and now daughters” to the military. Where did you hear this? It is a commonly held view of liberal critics of the military, but, like many persuasions of the left, it is not based on fact. (You could have looked it up. See Table 41 of the DoD population report at http://prhome.defense.gov/portals/52/Documents/POPREP/poprep2011/appendixb/b_41.html.) Using the only available data on the issue, census tract home of record for new enlisted recruits, DoD/CNA analysis shows that 18.5% of recruits in FY 2011 came from the top quintile of the income distribution. Adding new officers to the analysis (not possible since officers’ original home is not carried in their military records) would probably raise that percentage somewhat since virtually all new officers are college graduates. It is surprising to many to learn that the recruits each year are drawn more or less evenly from across income quintiles, but this has been true for 30 years now.

However, the overall percent of the population recruited each year is quite low, regardless of income class. (About 4,000,000 kids turn 18 each year and the military recruits somewhat over 200,000.) This leaves most families without any first-hand connection to the military and that is another lament of the left (and some on the right). I think this is usually mindless World War II envy. At the end of WW II, about 12 million men and women were in uniform, about 10% of the TOTAL population of the U.S. So that meant everyone knew many in the military. That’s not true today. To match that percent today would require a military of over 30 million (compared to today’s 2.5 million, including reserves). And this demographic phenomenon was ultimately the source of draft opposition in the 1960s (and has been in many European countries recently). When most draft-age men serve (as they did in the ’50s) conscription’s inequities are more tolerable. The increasingly large birth cohorts of the baby boom changed that.

But fundamentally, all the debate about the military’s “representativeness” is silly (whether it’s representativeness in terms of socioeconomic class, race, geography or anything else). The requirement for representativeness is based on a view that military service is a burden to be equitably distributed rather than a profession freely chosen and well compensated. In other words, it is antithetical to the notion of a force of professional volunteers.

Another liberal criticism of the AVF is that it has enabled military adventurism. There is no evidence for this assertion either, despite its face appeal. Interestingly, the only Gates Commission member I’ve discussed this with, Allen Wallis, thought this was a positive aspect–freeing the President to use the military without immediate political pushback. So, at least for Wallis, this consequence was not unintended. Of course, pushback from the draft objectors didn’t slow Johnson and Nixon down much, despite an eventual 50,000 deaths in Viet Nam, ten times the toll of Iraq and Afghanistan.

I must apologize for not inviting you to a CNA event in September when we discussed many of these questions at a symposium to honor Walter Oi. I think you would have found it interesting. We did a reprise at last month’s AEA meetings in Boston. Most agree Walter was the most important economist in the battle to end conscription. Among my remarks, I said the following about Walter:

“There are many heroes in this story [of the end of conscription]: the Gates Commission members, Mel Laird, Marine Corps Generals Wilson and Barrow, Army General Max Thurman, and many economists and other analysts. But among the analysts and economists, none was more important than Walter Oi.

It’s tempting to cite instead the economists on the Gates Commission, Milton Friedman, Allen Wallis, and Alan Greenspan. They were essential. But they were advocates, cheerleaders. Walter made the first empirical, data-based argument for voluntarism. And that case helped convince President Nixon and, later, other Gates Commission members. It’s possible that without Walter’s early work—which, as the Hogan-Warner paper notes, stood the test of time and subsequent analyses—conscription would have ended much later, if at all. There were, after all, other politically plausible proposals to ‘fix’ the draft and end the controversy surrounding it, not just a force of all volunteers.”

Some support for my argument is contained in a short note Stephen Herbits prepared for the CNA event (also attached). As part of the planning for the two events, I interviewed the two surviving members of the Gates Commission, Herbits and Alan Greenspan. That was fun and educational.

I should also note that an AVF’s budget costs are not clearly higher than those of a conscripted force of equal capability, due to the high turnover and training costs for draftees. The most careful analysis of this question was GAO’s in 1988. I cite it (as well as my article on conscription in Europe) in my piece on conscription in David Henderson’s encyclopedia (http://www.econlib.org/library/Enc/Conscription.html).

Finally, I think your memory of the 1960s may have failed you here. You and your colleagues may have had some skin in the game. The first lottery in 1968 included those under 26 who had held student deferments. You were probably too old, but I and other classmates were subject to conscription depending on our lottery number (based on our birth date, not our Selective Service number). I luckily drew a number in the 300s.

As for your concluding proposal, while your draft-related arguments don’t support it, it has merit on other purely budgetary grounds, as you note. I too think it’s unconscionable that “overseas contingencies” (to use the Pentagon’s euphemism) are funded through supplemental appropriations funded from borrowing and the general revenues. (And DoD has not “suffered” as a result. You can safely ignore the whining on the subject by Pentagon leaders and their allies in Congress and the press.) But your proposal will never go anywhere. If the Congress had wanted do things differently, they wouldn’t have been doing it like this for as long as I can remember.)

I hope you find much of this interesting, perhaps even educational. If you do nothing else, please look at the Warner-Hogan paper: “Walter Oi and His Contributions to the All-Volunteer Force: Theory, Evidence, Persuasion”, by John T. Warner and Paul F. Hogan, presented at the Contributions to Public Policy: A Session in Honor of Walter Oi, American Economic Association Annual Meetings, Boston, MA, January 3, 2015

–Chris

Should the U.S. help finance Ukrainian weapons?

Ukraine is much more important to Russia than to the U.S. It borders Russia, was part of the Soviet Union, and much of what is now Ukraine, including Kiev, has been part of Russia from time to time for as long as the United States has existed. Ukraine’s importance to the U. S. is, however, more academic. It is reasonable to assume that as long as it is economically able Russia will counter any increase in Ukraine’s military capacity and activity in eastern Ukraine (the part bordering Russia) with equal or greater military force. If we increase our support and Ukraine elevates its military activities in the east, so will Russia. The Russian economy is suffering from years of exploitation by Putin and his friends as well as inadequate investment and is now suffering from the sharp fall in the prices of its primary exports– oil and gas. Russia will presumably only stop matching escalations from the West when it is no longer economically able to do so. Do we have a national security interest in escalating that far?

Our interest in Ukraine is humanitarian– not military out of a concern for our own security. We would like to see the people of every country enjoy the freedom and prosperity that we have. Moreover, most of us have long believed that healthy, prosperous, well-governed countries make better neighbors and a more peaceful and prosperous world. So it serves that interest and our humanitarian natures to encourage and financially support the new Ukrainian government’s efforts to reduce the corruption their country has long suffered from. Military aid is an entirely different matter.

Both we and Ukraine’s government in Kiev must accept and come to reasonable terms with Russia’s dominance in the area and its determination to remain in Eastern Ukraine as it has in South Ossetia and Abkhazia. The alternative, which would likely follow the injection of western arms into the conflict, would be a continued escalation of fighting with unknown consequences and an unknown end point. We don’t like to give in, and wouldn’t and shouldn’t whenever our national security is truly at stake, but this is not our war. What, after all, did our “victory” in Iraq (one of the most insane and ill-advised wars we have ever launched) gain us? ISIS!!

Let’s help Ukraine financially, which it desperately needs, as long as its government continues to seriously fight the corruption that has characterized it for so long (easier said than done). Ukrainian offensives in “rebel”/Russian dominated areas of the East are futile and we should not encourage them by providing the weapons that make them possible. Freeze the status quo until Russia comes to its senses (which we should encourage in every possible way) or collapses economically (which we should not hope for).

The All Volunteer Military: Unintended consequences and a modest proposal

America’s war in Vietnam, its longest before Afghanistan, relied on the obligatory military service of its young men if drafted. When we turned 18, we were required to enroll with the Selective Service System and those of us who did not volunteer lived in terror for about ten years of eligibility that we would be “called up.” To protect the education of our more talented youth, deferments from the draft were given to those of us in college. Not surprisingly this did not go down well with those who could not or chose not to go to college and the fairness of the system was challenged. Thus, college deferments for anyone older than I was (lucky me) were ended and replaced with a lottery at the beginning of each year based on the selective service numbers we received when we first enrolled. Those whose numbers where at the top of the list were sure to be drafted and those closer to the bottom were sure not to be.

Because of the draft the majority of American families with sons were emotionally involved and connected to the war and as it became more and more unpopular this broad connection helped finally bring it to an end.

In 1967, a group of libertarian University of Chicago students and I founded the Council for a Volunteer Military to publicize the inequities of the draft and the benefits of an all volunteer military. We were not subject to the draft ourselves as our college deferments were grandfathered, and thus we were purely motivated by our sense of fairness and believe in the superior effectiveness of a volunteer Army. The Council’ directors were Jim Powell, Henry Regnery, myself as Executive Secretary, Danny Boggs, and David Levy (the one who is now a Professor of Economics at George Mason U). Our Sponsors included my teacher, Milton Friedman, as well as Yale Brozen, Richard Cornuelle, David Franke, James Farmer, Karl Hess and socialist Norman Thomas.

President Richard Nixon appointed Professor Friedman to a commission to study the viability of an all volunteer military headed by Thomas S. Gates, Jr. This led to Nixon’s replacement of the draft with higher pay and other employment conditions that made it possible to man our military with hired professionals. The result was a more expensive (the draft was effectively a tax on those drafted, who tended to be poorer to begin with) but significantly more effective military. After some years adjusting to the new approach, even the Generals praised the great success of our all-volunteer force.

As our military adventurism of recent decades has resulted in more and more American troops fighting and dying abroad, some observers have noted that the volunteer force left most American families unaffected directly by these wars thus undercutting the opposition they might otherwise express. This was obviously an unintended and negative aspect of the All-Volunteer Force (AVF). If there were no way to compensate for this negative consequence, the AVF would still be the best and fairest approach to manning our military. However, there is a simple way to help mitigate this negative feature, which has much merit in its own right.

Since 2001 our wars have cost us $1.6 trillion dollars ($10.5 million dollars per hour). This is just the direct budgetary cost and does not take account of the lives lost and other indirect costs and distortions to the economy, worsened relations abroad, etc. While the top 20-30 percent of income earners in the United States provide almost none of their sons and now daughters to fight these wars and thus might be more inclined to support them, they do provide almost one hundred percent of the taxes raised to finance our government. (In 2012, the latest income tax data available, about half of American families reported taxable income of which the top 50% paid 97.2% of all income tax revenue in that year. The top 5% of tax payers earned 36.8% of total adjusted gross income reported that year and paid 58.9% of total income taxes received.) None of the costs of these wars have been paid for by raising taxes or cutting other spending (except within the Defense Department, where equipment and weapons development expenditures suffered). The funds were borrowed from those buying U.S. treasury securities, adding to our debt that will have to be paid by our children.

My modest proposal, echoing one made a few years ago by U.S. Congressman David Obey, D-Wis., who on Nov. 19, 2010 introduced H.R. 4130, the “Share the Sacrifice Act of 2010,” is that any budget supplemental appropriations to cover the costs of fighting abroad must be paid for fully by an income tax surcharge. See Bruce Bartlett’s discussion of this issue: http://www.forbes.com/2009/11/25/shared-sacrifice-war-taxes-opinions-columnists-bruce-bartlett.html. By explicitly putting the cost on income taxes, any war and its financing will get the attention it deserves from the wealthier members of society who pay that tax. Taxing to pay for wars has the double benefit of adhering to principles of sound finance (properly paying for whatever the government spends), and of bringing the costs (at least the budgetary costs) of war to the pocket books of American voters.