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Aug 15, 2008

Paul Krugman: The Great Illusion

Is the "second great age of globalization" about to end?:

The Great Illusion, by Paul Krugman, Commentary, NY Times: So far, the international economic consequences of the war in the Caucasus have been fairly minor, despite Georgia’s role as a major corridor for oil shipments. But as I was reading the latest bad news, I found myself wondering whether this war is an omen — a sign that the second great age of globalization may share the fate of the first.

If you’re wondering what I’m talking about,... our great-great grandfathers lived, as we do, in a world of large-scale international trade and investment... Writing in 1919,... John Maynard Keynes described the world economy ... on the eve of World War I. “The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth ... he could at the same moment and by the same means adventure his wealth in the natural resources and new enterprises of any quarter of the world.”

And Keynes’s Londoner “regarded this state of affairs as normal... The projects and politics of militarism and imperialism, of racial and cultural rivalries, of monopolies, restrictions, and exclusion ... appeared to exercise almost no influence at all on ... internationalization ... which was nearly complete in practice.”

But then came three decades of war, revolution, political instability, depression and more war. By the end of World War II, the world was fragmented economically as well as politically. And it took a couple of generations to put it back together.

So, can things fall apart again? Yes, they can.

Consider ... the current food crisis. For years we were told that self-sufficiency was ... outmoded..., that it was safe to rely on world markets for food supplies. But when the prices of wheat, rice and corn soared, Keynes’s “projects and politics” of “restrictions and exclusion” made a comeback: many governments rushed to protect domestic consumers by banning or limiting exports, leaving food-importing countries in dire straits.

And now comes “militarism and imperialism.” ...[T]he war in Georgia ... mark[s] the end of the Pax Americana — the era in which the United States more or less maintained a monopoly on the use of military force. And that raises some real questions about the future of globalization.

Most obviously, Europe’s dependence on Russian energy, especially natural gas, now looks very dangerous... After all, Russia has already used gas as a weapon...

And if Russia is willing and able to use force to assert control over its self-declared sphere of influence, won’t others do the same? Just think about the global economic disruption that would follow if China ... were to forcibly assert its claim to Taiwan.

Some analysts tell us not to worry: global economic integration itself protects us against war,... successful trading economies won’t risk their prosperity by engaging in military adventurism. But this, too, raises unpleasant historical memories.

Shortly before World War I another British author, Norman Angell, published ... “The Great Illusion,” in which he argued that war had become obsolete, that in the modern industrial era even military victors lose far more than they gain. He was right — but wars kept happening anyway. ...

Most of us have proceeded on the belief that ... we can count on world trade continuing to flow freely simply because it’s so profitable. But that’s not a safe assumption.

Angell was right to describe the belief that conquest pays as a great illusion. But the belief that economic rationality always prevents war is an equally great illusion. And today’s high degree of global economic interdependence, which can be sustained only if all major governments act sensibly, is more fragile than we imagine.

    Posted by Mark Thoma on Friday, August 15, 2008 at 12:42 AM in Economics, International Trade, Politics | Permalink | TrackBack (0) | Comments (177)



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    TigerPaw says...

    Yet another mess we can thank Baby Bush and his friends for. By destroying/ignoring international law they've now given everyone else with a grudge carte blanche to do as they please.

    Posted by: TigerPaw | Link to comment | Aug 15, 2008 at 12:02 AM

    reason says...

    Yep, that is the trouble with exceptionalism (or Libertarianism for that matter), if you remove the safety net, you can't afford to fall.

    Posted by: reason | Link to comment | Aug 15, 2008 at 12:15 AM

    Lee A. Arnold says...

    The illusion? Keynes' Londoner had no inkling that the reason he could telephone products from around the world was because of the British Empire's militarism and imperialism? This seems a bit disingenuous on JMK's part. Or maybe sarcastic? Then the very next thing: Your history quiz: Where were the first British troops sent when Archduke Ferdinand was shot? Answer: To Basra -- because the German and British navies had both just converted from coal to oil, and Germany was going to extend the Orient Express past Constantinople to take all the petroleum in the area out by rail. When Ferdinand was shot, everything went up into the air... Starting the ninety-year (so far) resource war. Now the U.S. is run by climate-denying gasoholics and the American public apparently hasn't guessed the possibility that their leaders have handed Iraq to Iran's best friends and the Shi'ites are merely standing-down and smiling until the Americans leave. So it looks like Bush and Cheney must change the regime in Iran, in order to exit Iraq. No wonder David Kilcullen, Petraeus' counterinsurgency consultant, called the invasion "fucking stupid." (Later changed to an "extremely serious strategic error.") With which the entire foreign policy community (except for the numbnuts neocons) and all the military analysts heartily agree. The U.S. could be tied-down there for generations. But but but Victory looms large, baby! So the Russians take a piece, while the right-wing howls it's totally unjustified. Well of course it is, you dumbasses. And the Russians might have done it anyway. But you throw things up in the air, all sorts of people start grabbing.

    Posted by: Lee A. Arnold | Link to comment | Aug 15, 2008 at 12:53 AM

    hari says...

    Paul should be asking himself how did we get into this illusion once again....Historical parallels are what they are. Good illustration of how imperialism exploited the earth for its merchandize and aggrandizement. It does not deal with the objective conditions which govern the planet today. The parallels are irrelevant and delusional, at best.

    Its Republican Democracy over three decades which has brought this wraught in global politics - nothing more or less. Racism and hegemonic politics is a recipie for disaster in a world groping for accomodation and prosperity.
    Militarism is the credo of Republican Democracy (*League of Democracy* is next) and it has surely cost enough by now - time for Change.

    Neither China mainland nor Russia has the national interest to decapacitate its long won revolutionary accomplishments - good or bad. It doesn't matter. It's Chinese and Russians who decide their own fate under their centralized authoritarian system. If one leaves them alone to deal with their domestic problems, perhaps, they too will evolve into a successful social system - as the Chinese are proving, so far.

    There is no reason for pessimism in our age - if we can muster the political courage to dismantle militarism and all its decadence inherited by the West.

    Posted by: hari | Link to comment | Aug 15, 2008 at 12:56 AM

    Cynthia says...

    Well said, Lee Arnold!

    Posted by: Cynthia | Link to comment | Aug 15, 2008 at 03:42 AM

    ken melvin says...

    Long the list of essential things America no longer produces.

    Posted by: ken melvin | Link to comment | Aug 15, 2008 at 05:04 AM

    Alex Tolley says...

    But the belief that economic rationality always prevents war is an equally great illusion. And today’s high degree of global economic interdependence, which can be sustained only if all major governments act sensibly, is more fragile than we imagine.

    Anyone with the slightest sense of history does not have these illusions. All the knowledge gained in the last 100 years that could be used to understand how best to manage human affairs is overridden by base human nature. In our (US) own milieu, we have at least half the population that is effectively anti-science and prefers to make emotional decisions and votes for political candidates that do the same thing. The US congress routinely votes on emotional or ideological lines only. I see no evidence that the rest of the world is any less irrational.

    Posted by: Alex Tolley | Link to comment | Aug 15, 2008 at 06:14 AM

    save_the_rustbelt says...

    The "wealthy" Londoner could pick up the telephone and order anything in the world.

    If globalization falls (more likely slows) it will be due to the realization that rapid globalization shifts income and wealth to the wealthy, regardless of who leads countries.

    Posted by: save_the_rustbelt | Link to comment | Aug 15, 2008 at 07:04 AM

    Philip Combs says...

    Mr. Arnold has the right of it; no pun intended.

    One can only hope the criminal scum Cheney and Bush will have room to send the 'Democrat' Party leadership to Paraguay so that they may continue their love-fest for which the bill could be a generation of growth.

    Real income has declined every year the ReThugs have been in power. Hopefully, the teeming masses will notice.

    This time or maybe next.

    Posted by: Philip Combs | Link to comment | Aug 15, 2008 at 07:15 AM

    ndd says...

    Hallelujah! At last the necessary and correct argument has been made by a top-flight economist.

    The first step in the solution of every problem, is to recognize that it exists.

    Posted by: ndd | Link to comment | Aug 15, 2008 at 07:47 AM

    Julio says...

    hari:
    "There is no reason for pessimism in our age - if we can muster the political courage to dismantle militarism and all its decadence inherited by the West."

    Yes; it's one of the crucial issues for our future.

    Which brings me, at the risk of sounding like a broken record, to the question:

    Why is Obama asking for an increase in the size of the military?

    For what purpose?

    Posted by: Julio | Link to comment | Aug 15, 2008 at 07:56 AM

    anne says...

    http://www.nytimes.com/2008/08/15/opinion/15krugman.html?ref=opinion&pagewanted=print

    August 15, 2008

    The Great Illusion
    By PAUL KRUGMAN

    And Keynes's Londoner "regarded this state of affairs as normal, certain, and permanent, except in the direction of further improvement ... The projects and politics of militarism and imperialism, of racial and cultural rivalries, of monopolies, restrictions, and exclusion ... appeared to exercise almost no influence at all on the ordinary course of social and economic life, the internationalization of which was nearly complete in practice."

    [I can understand Kenynes being blinded inh some matters by the times in which he lived, but for Krugman to be so blinded is beyond understanding. This passage is absurd beyond compare.]

    Posted by: anne | Link to comment | Aug 15, 2008 at 08:17 AM

    anne says...

    Imagine a time in which militarism, imperialism, racism, sexism, class divides, monopoly, were beyond profound, but somehow not recognized as influencing the course of daily life. Was there, for instance, a country in Africa other than Ethiopia that was not a European colony (Liberia having been specially colonized)? What of China? India? Where in Europe was monarchy as such absent? What absurd never-land is Keynes referring to and Krugman calling forth?

    Posted by: anne | Link to comment | Aug 15, 2008 at 08:25 AM

    anne says...

    Only the Londoner who could afford to be blind while having time to think could have entertained the illusions of Keynes or Angell.

    At least Renoir would come to understand what illusion in Europe was about, but that was later and Krugman has no interest here in focusing on illusions proper.

    Phooey.

    Posted by: anne | Link to comment | Aug 15, 2008 at 08:30 AM

    anne says...

    "But as I was reading the latest bad news, I found myself wondering whether this war is an omen — a sign that the second great age of globalization may share the fate of the first."

    The first great age of globalization was the age of endless international plunder and exploitation, only from the perspective of the triumphant this is entirely missed. This age could be entirely different, especially if we can get past the whining of conservatives about forever being victims with no recourse except to plunder and exploit. China is not the problem for America, India is not the problem, Brazil, South Africa is not the problem. Where is American economic policy that secures domestic needs as such?

    Also, get the story right. Georgia shelled and attacked and occupied Ossetia for no possibly moral reason, Russians were attacked on Russia's border, then Russia responded.

    Get the story right.

    Posted by: anne | Link to comment | Aug 15, 2008 at 08:42 AM

    Winslow R. says...

    Mark wrote:"Is the "second great age of globalization" about to end?"

    The U.S. is no longer constrained by a gold based fixed exchange regime, though many delusional Delong style economists still exist in positions of influence.

    As the dollar gains strength as the foreign sector weakens, the 'free lunch' reappears and the choice to lead returns to America.

    Obama's infrastructure plan stands at the ready.

    Posted by: Winslow R. | Link to comment | Aug 15, 2008 at 08:44 AM

    anne says...

    http://query.nytimes.com/gst/fullpage.html?res=EE05E7DF173BE564BC4B52DFBF668383629EDE

    September 13, 1938

    Grand Illusion
    By FRANK S. NUGENT

    Surprisingly enough, in these combustible times, the French have produced a war film under the title Grand Illusion.... Jean Renoir, the film's author and director, has chosen consistently to underplay his hand. Time after time he permits his drama to inch up to the brink of melodrama: one waits for the explosion and the tumult. Time after time he resists the temptation and lets the picture go its calmer course.

    For a war film it is astonishingly lacking in hullabaloo. There may have been four shots fired, but there are no screaming shells, no brave speeches, no gallant toasts to the fallen. War is the grand illusion and Renoir proceeds with his disillusioning task by studying it, not in the front line, but in the prison camps, where captors and captives alike are condemned to the dry rot of inaction. War is not reality; prison camp is. Only the real may survive it.

    Renoir cynically places a decadent aristocrat, a German career officer, in command of the camp; he places his French counterpart among the prisoners. Theirs is an affinity bred of mutual self-contempt, of the realization of being part of an outgrown era. The other prisoners are less heroic, but more human. They are officers, of course, but officers of a republic, not an aristocracy. One is Marechal, ex-machinist; another is Rosenthal, a wealthy Jew. Von Rauffenstein, the German commandant, held them both in contempt. The elegant Captain de Boeldieu respected them as soldiers, admired them as men, faintly regretted he could not endure them as fellow beings.

    So it becomes a story of escape, a metaphysical escape on de Boeldieu's part, a tremendously exciting flesh-and-bone escape on the part of Marechal and Rosenthal. Renoir's narrative links the two adventures for a while, but ultimately resolves itself into a saga of flight. As an afterthought, but a brilliantly executed one, he adds a romance as one of his French fugitives finds shelter in the home of a young German widow. The story ends sharply, with no attempt to weave its threads together. It is probably the way such a story would have ended in life....

    Posted by: anne | Link to comment | Aug 15, 2008 at 08:47 AM

    Julio says...

    [I can understand Kenynes being blinded inh some matters by the times in which he lived, but for Krugman to be so blinded is beyond understanding. This passage is absurd beyond compare.]

    Anne, thank you, good to know I'm not the only one that was struck by this as absurd.

    Once again someone manages to write a history of the world. Without the people.

    Where is Howard Zinn when we need him?

    Posted by: Julio | Link to comment | Aug 15, 2008 at 09:02 AM

    hari says...

    Look the world in which we live today is not only globalized but beginning to dislodge itself from the hegemonic power of US, as power distills to emerging markets in mainland China and India, in particular.

    The fear of Paul is the dislodgement of US economic power globally as current credit crunch manifestly demonstrates how SWF have become the undeclared credit-life-lines of US Treasury. And more of it is due to come as the recession destabalizes the banking sector....

    Globally, there is not similar distrust of globalization. However the emergence of new centres of financial and economic power will inevitably give rise to a multi-polar universe, a remedy long awaited by all because of the arrogance of US military power in the world today.

    Posted by: hari | Link to comment | Aug 15, 2008 at 09:05 AM

    Winslow R. says...

    hari wrote:"The fear of Paul is the dislodgement of US economic power globally as current credit crunch manifestly demonstrates how SWF have become the undeclared credit-life-lines of US Treasury. And more of it is due to come as the recession destabalizes the banking sector...."

    Baloney.

    The U.S. Treasury now decides whether the banking sector thrives or dies. SWF's are caught between devaluing their currencies and slowing their economies even further, or continuing to accumulate more U.S. reserves.


    Posted by: Winslow R. | Link to comment | Aug 15, 2008 at 09:14 AM

    anne says...

    Julio:

    "Once again someone manages to write a history of the world. Without the people."

    That was always the point of British literature, to take for granted that there was no social perspective, beyond say an occasional sentimental individual story, explaining why the British, a particular strata of the British mostly were able to live the way they lived.

    Posted by: anne | Link to comment | Aug 15, 2008 at 09:17 AM

    save_the_rustbelt says...

    "The first great age of globalization was the age of endless international plunder and exploitation,..."

    During this age of globalization we were plundered and looted by investment bankers and their pinstriped mobsters.

    AG Cuomo is really busting some chops (go man go), if he behaves better than Spitzer he will be NY Governor soon.

    Posted by: save_the_rustbelt | Link to comment | Aug 15, 2008 at 09:43 AM

    save_the_rustbelt says...

    "Why is Obama asking for an increase in the size of the military?

    For what purpose?"


    The U. S. Army is exhausted, over-committed and working with busted equipment.

    For better or worse, the only buffer between freedom and the thugs is the US military.

    Posted by: save_the_rustbelt | Link to comment | Aug 15, 2008 at 09:46 AM

    anne says...

    "For better or worse, the only buffer between freedom and the thugs is the US military."

    Say what, for whom precisely? Freedom for whom, from whom, for what? What sort of freedom? Ah, freedom.

    Posted by: anne | Link to comment | Aug 15, 2008 at 09:54 AM

    Bruce Wilder says...

    PK: "we can count on world trade continuing to flow freely simply because it’s so profitable. But that’s not a safe assumption."

    Indeed. If the goal is to predict general trendlines, then the preferred method is to look at where there are gains to be had, and particularly, where there are gains to be had from parasitism.

    For the U.S., in particular, I think the balance of gain, favors a general withdrawal from a leading role. Sitting amidst an underpopulated continent, still rich with resources, the U.S. gains in a resource-strained, overpopulated world, by conserving and isolating.

    Russia, too, gains, but from continuing an international role, and from an aggressive forward-defense of its frontiers.

    China -- I'm not so sure. China, after showing great promise, seems likely to descend into chaos and suffering, on an umimaginable scale.

    Europe?

    Posted by: Bruce Wilder | Link to comment | Aug 15, 2008 at 09:54 AM

    anne says...

    http://angryarab.blogspot.com/2008/08/between-putin-and-stalin-it-seems-that.html

    August 15, 2008

    Between Putin and Stalin, it seems that the West has chosen Stalin. But yesterday Rice referred to the government in Georgia as "democratically-elected". Is there an ally of the U.S. that is not described as "democratically-elected"? I mean, all the governments of U.S. allies in Morocco, Tunisia, Libya, Jordan, Egypt, Saudi Arabia, Qatar, Oman, Iraq, and Kuwait are described as "democratically-elected".

    -- As'ad AbuKhalil

    [Afghanistan? Surely.]

    Posted by: anne | Link to comment | Aug 15, 2008 at 09:58 AM

    anne says...

    "China -- I'm not so sure. China, after showing great promise, seems likely to descend into chaos and suffering, on an unimaginable scale."

    Americans always know all things, because they are, well, Americans however absurd and mean-spirited what they think they know happens to be.

    Posted by: anne | Link to comment | Aug 15, 2008 at 10:01 AM

    Winslow R. says...

    STR wrote: "During this age of globalization we were plundered and looted by investment bankers and their pinstriped mobsters."

    We should explicitly name Saudi Arabia as likely both types as they manipulate the price of oil and invest the proceeds. To temper somewhat, Saudi production increased several hundred thousand bbl/day with the latest fall in oil prices. If world demand continues to increase from here the world is in for a bundle of trouble since the Saudi's have perhaps 1.5 million bbls/day spare capacity hence the need to move forward on alternate forms of energy.

    Posted by: Winslow R. | Link to comment | Aug 15, 2008 at 10:04 AM

    anne says...


    http://angryarab.blogspot.com/2008/08/my-favorite-thing-about-whole-coverage.html

    August 15, 2008

    My favorite thing about the whole coverage of the Georgia situation in the U.S. is the way the White House and media are feigning outrage over Russian actions. They just are aghast that a country can send its troops (across the border) under pretext of national security and defense. I mean, the U.S. would never ever send troops, say 10, 000 miles away from its border, under those pretexts. Never.

    -- As'ad AbuKhalil

    Posted by: anne | Link to comment | Aug 15, 2008 at 10:17 AM

    anne says...

    http://angryarab.blogspot.com/2008/08/i-noticed-that-libyan-news-agency.html

    August 15, 2008

    I noticed that the Libyan news agency carried a story about a warm letter sent by Bush to Qadhdhafi in which he praised the "role in favor of stability" by the Libyan dictator. None of the U.S. media reported on that letter. (Oh, Qadhdahfi--like all U.S. allies--is also "democratically-elected".

    -- As'ad AbuKhalil

    Posted by: anne | Link to comment | Aug 15, 2008 at 10:21 AM

    John V says...

    Reason,

    "Yep, that is the trouble with exceptionalism (or Libertarianism for that matter), if you remove the safety net, you can't afford to fall."

    That's a very incomplete and disingenuous way of assessing the world right now. Personally, I have no quarrel with what you say about exceptionalism. Viewed correctly, exceptionalism is the antithesis of of any strand of grain of libertarian thought. Exceptionalism is borne and forged from everything that is un-libertarian in any and every way.

    Libertarianism is respect the privacy, person and property of each and every individual. It is not about government taking "exceptional" and aggressive action against others and it is most certainly not about the government deciding, by putting its numb, faulty thumb into the wind, to take a course of action that would be illegal and immoral if done by private individuals.

    Yes, we live in a very un-libertarian world that disregards the value and privacy of each and every individual. But that doesn't mean that we need to allow our government, on our behalf, to take extremely un-libertarian action and exacerbate problems by yielding to un-libertarian and primal desires that create strife and tension between individuals who happen to arbitrarily live across borders. By that I mean taking action that disrupts personal and economic activity between individuals in other parts of the world or down the street. People, however imperfect we all are, don't cause war and aggression by themselves, governments, comprised of these same imperfect people with narrow views and conflicting interests with the needed and added shallow veneer of authority to act on them, do.

    I am far, far more than willing to see government take the more benign action of helping displaced workers in dire straits than take the more malignant action of interfering with the peaceful and commercial activity of people and companies across and within borders. There is simply no justification for our or any government to jeopardize peace by interfering in world markets and making the very problems they helped bring along with short-sighted, myopic and flawed action, a reason for further action of the same kind.

    We, as Americans and Europeans and Westerners in general, have the ability to resist such silly aggression on our behalf and we should...but many choose not to. But first, we need to acknowledge wholesale that our governments are not true economic actors and, thus, should not be interfering the economic exchange between peoples on the basis of some narrow POV influenced by narrow interests. This is of course different from lending a helping hand to the poor and insecure.

    Russia is not a threat unless we allow them to be one. Russia needs to sell its energy. Otherwise it's of no use to them. They know this. It's only when we imagine dangers and threats to be greater than they really are, like Russia jeopardizing its own livelihood by hurting the commercial activity of state-run energy firms and private ones, and act on them that we invite real problems....and it's not the "libertarian-minded" who are doing this.

    In all his writing above, PK, ignores that simple lesson from history.

    Posted by: John V | Link to comment | Aug 15, 2008 at 10:23 AM

    hari says...

    Winslow - your great illusion is even greater than that of Paul, I'm afraid. Either you're wearing blinders...or become absolutely myopic!

    Bruce Wilder - your comment on mainland China not only reflects your ignorance of developments in China but also to what extend China has become a co-partner with Paulson to safeguard American hi fi sector - at least for a while.

    Posted by: hari | Link to comment | Aug 15, 2008 at 10:23 AM

    Barkley Rosser says...

    anne,

    Your pal As'ad is full of it on some important matters. I have never seen any US government figure ever refer to the Saudis as having a "democratically elected government." He is right that this phrase is often thrown around for some cases where it does not apply, but regarding the Saudis, that is a case that is so far from it that nobody has ever tried to say otherwise, indeed, the Saudis would be offended if anybody did. They are officially proud of their autocratic monarchy.

    I happen to agree with you that Georgia should not have invaded South Ossetia, but there were provocations prior to the invasion, with the major claims being of a sharply stepped up campaign against ethnically Georgian villages inside South Ossetia. It is possible these reports are exaggerated, but it is fairly clear that there had been a substantial escalation of this conflict on both sides for some time, with the Bush administration falling down on the job for not getting at seriously trying to calm this down earlier, especially with such informed observers as Richard Holbrooke loudly and publicly calling for them to do so.

    Where I think Krugman may be right is that we have gotten back to a situation like that prior to WW I where nasty little conflicts between rather small ethnic groups seem to have developed the ability to drag in much larger powers into larger conflicts. In Sarajevo in 1914 we had the Serbs and the Austrians. In this current mess it is the Georgians and the Ossetians. Bah.

    Posted by: Barkley Rosser | Link to comment | Aug 15, 2008 at 10:28 AM

    hari says...

    Listening to the result of Merkel/Medvedev talks in Sochi, one gets the feeling they're talking across each other. However the great illusion of past decades may be finally coming to an end, as the decline of the hegemonic US power registers on the global scene. Bush used a lot of *hot air* to move Russia into line with his wish - on Georgia - without any success.

    Merkel tried to toe the line of Bush WH, in public, but we don't know exactly what she said during their private 90mins discussions on Georgia, at Sochi.

    The dawn of a new realpolitk era is finally on the horizon. It will be interesting to notice how the pendulum swings - shld BO win the election.

    Posted by: hari | Link to comment | Aug 15, 2008 at 10:40 AM

    anne says...

    Hari:

    "The dawn of a new realpolitik era is finally on the horizon."

    Interesting possibility, a legitimate realpolitik, and precisely why we need a smaller military and not a larger. A large military having proven so inadequate as a diplomatic force these last years.

    Posted by: anne | Link to comment | Aug 15, 2008 at 10:53 AM

    anne says...

    John V:

    "I am far, far more than willing to see government take the more benign action of helping displaced workers in dire straits than take the more malignant action of interfering with the peaceful and commercial activity of people and companies across and within borders...."

    Isaiah Berlin, really.

    Posted by: anne | Link to comment | Aug 15, 2008 at 11:00 AM

    Julio says...

    Barkley Rosser:
    Where I think Krugman may be right is that we have gotten back to a situation like that prior to WW I where nasty little conflicts between rather small ethnic groups seem to have developed the ability to drag in much larger powers into larger conflicts. In Sarajevo in 1914 we had the Serbs and the Austrians. In this current mess it is the Georgians and the Ossetians. Bah.

    I don't think that situation changed in the intervening period. What was different, and still is at least in the case of Russia, is their nuclear arsenals and MAD. So the "major conflicts" were replaced by "proxy wars".

    And I don't think "drag in much larger powers" is the right terminology here -- I don't see anyone being dragged, just trying to stick a foot in the door.

    Posted by: Julio | Link to comment | Aug 15, 2008 at 11:02 AM

    ndd says...

    Such a shame that Kaiser Wilhelm didn't share John V's views on the peace created by free trade....

    Posted by: ndd | Link to comment | Aug 15, 2008 at 11:17 AM

    John V says...

    ndd,

    Such a shame indeed. Such a shame that these leaders allowed themselves to be taken by short-sighted thinking into many many compounding factors that brought war to all of Europe's people.

    I'm no expert on WWI but I'm sure a detailed look will reveal a series of actions, one after the other, that defies simple conclusions as to the nature of the conflict.

    Posted by: John V | Link to comment | Aug 15, 2008 at 11:24 AM

    Julio says...

    "August 15, 2008

    My favorite thing about the whole coverage of the Georgia situation in the U.S. is the way the White House and media are feigning outrage over Russian actions."

    John Stewart, one of the few US journalists who (when he's not making jejune sex jokes) focuses quite intelligently on the essence of news items, quoted our UN ambassador Khalilzad:

    “The days of overthrowing leaders by military means in Europe — those days are gone.”

    (kid you not, he actually said that)

    and does a great sendup here.

    Posted by: Julio | Link to comment | Aug 15, 2008 at 11:28 AM

    Michael Cain says...

    For the U.S., in particular, I think the balance of gain, favors a general withdrawal from a leading role. Sitting amidst an underpopulated continent, still rich with resources, the U.S. gains in a resource-strained, overpopulated world, by conserving and isolating... Russia, too, gains, but from continuing an international role, and from an aggressive forward-defense of its frontiers... China -- I'm not so sure. China, after showing great promise, seems likely to descend into chaos and suffering, on an umimaginable scale.

    Inasmuch as standard of living correlates well with per-capita energy use, I tend to agree. The US, or at least significant regions of it, can probably produce the necessary energy from regional resources. Russia will extract tribute from Western Europe in exchange for access to natural gas supplies; over the next decade, I expect Western Europe to acquiesce to Russian consolidation of some of the former Soviet republics in exchange for energy supplies (I stop short of calling it energy security). As for China, I simply don't see the energy resources anywhere to lift 700 million peasants up to a reasonably modern lifestyle.

    Posted by: Michael Cain | Link to comment | Aug 15, 2008 at 11:39 AM

    save_the_rustbelt says...

    According to a report I heard on CNBC a few minutes ago, maybe oil speculators do impact oil prices. Well huh.

    Posted by: save_the_rustbelt | Link to comment | Aug 15, 2008 at 11:39 AM

    Peter Schaeffer says...

    Lee Arnold,

    British forces landed in Mesopotamia on Oct 23, 1914. The battle of the Somme started on Jul 1, 1914.

    Posted by: Peter Schaeffer | Link to comment | Aug 15, 2008 at 11:48 AM

    ndd says...

    John V: Thank you for agreeing that state actors did not behave in an "economically rational" manner.

    Now that we have established that free trade in no way prevents war, let's discuss what restrections might be more consistent with avoiding catastrophic conflict.

    Posted by: ndd | Link to comment | Aug 15, 2008 at 11:49 AM

    Patricia Shannon says...

    Hari,
    What is "hi fi", other than a good music sound system?

    Posted by: Patricia Shannon | Link to comment | Aug 15, 2008 at 11:56 AM

    anne says...

    "High Finance"

    Posted by: anne | Link to comment | Aug 15, 2008 at 12:07 PM

    John V says...

    ndd,

    I never said state actors were entirely rational in an economic sense...at least not rational in the same sense as the individual person. That is a large part of the problem because I don't think state actors SHOULD be economic actors.

    Posted by: John V | Link to comment | Aug 15, 2008 at 12:12 PM

    Peter Schaeffer says...

    On the larger issues at hand, Krugman is correct. The second era of globalization is very much at risk. The flat world so beloved by Francis Fukuyama and Thomas Friedman is looking bumpier all the time.

    The reasons are many. However, turning Bush into an all purpose scapegoat won't suffice. Note that, Krugman, no Bush apologist, doesn't waste even 4 letters on our current president.

    Brad De Long has an interesting comment on this

    "Of the four big potential threats to world peace--the Islamic Reformation, the rising industrial power that is Imperial Wilhelmine China, the potential for a National Hinduist India, and Weimar Russia--Weimar Russia may be the most dangerous."

    I don't agree with BDL and I find his descriptions of the Islamic world, Russia, China, and India weird / offensive. However, American imperialism doesn't make the top 4 for him either.

    Posted by: Peter Schaeffer | Link to comment | Aug 15, 2008 at 12:30 PM

    anne says...

    Though there is much unclear, the fighting seems to be long over about Ossetia and likely will turn out to be a simple routing of Georgian forces with damage mostly to military targets. Russia will have stopped an assault on Ossetia, and the independence of Ossetia and Abkhazia will be a given from here.

    Russia did precisely what any country of military capability would have done given an unprovoked assault on its borders, involving its citizens. America which had spent billions helping to arm Georgia and training its soldiers, is being shown unable to dictate what Russia's immediate defense interests must be.

    We have been shown dreadfully faulty in intelligence, and unable to respond promptly diplomatically to negotiate a settlement between Georgia and Russia. The problem now is will there be enough public understanding of what happened to limit unwarranted bitterness toward Russia that will be problematic diplomatically from here.

    Posted by: anne | Link to comment | Aug 15, 2008 at 12:34 PM

    hari says...

    US under Bush has been the greatest threat to world peace...and continues to pretend he understands the world out there, as if they will join him in decapitating the Russian bear.

    Posted by: hari | Link to comment | Aug 15, 2008 at 12:36 PM

    anne says...

    http://delong.typepad.com/sdj/2008/08/marching-throug.html#comments

    August 11, 2008

    Marching Through Georgia, or "Some Damn Fool Thing in the Caucasus"...
    By Brad DeLong

    Of the four big potential threats to world peace--the Islamic Reformation, the rising industrial power that is Imperial Wilhelmine China, the potential for a National Hinduist India, and Weimar Russia--Weimar Russia may be the most dangerous.

    Posted by: anne | Link to comment | Aug 15, 2008 at 12:36 PM

    Alex Tolley says...

    http://www.businessweek.com/print/magazine/content/08_34/b4097000700662.htm

    Georgia: A Blow to U.S. Energy

    The plans of the U.S. and Western oil companies for expanded pipelines in the Caspian region may well be a casualty of Russia's attack

    by Steve LeVine

    The sudden war in the Caucasus brought Georgia to heel, reasserted Russia's claim as the dominant force in the region, and dealt a blow to U.S. prestige. But in this part of the world, diplomacy and war are about oil and gas as much as they are about hegemony and the tragic loss of human life. Victory in Georgia now gives Russia the edge in the struggle over access to the Caspian's 35 billion barrels of oil and trillions of cubic feet of gas. The probable losers: the U.S. and those Western oil companies that have bet heavily on the Caspian as one of the few regions where they could still operate with relative freedom.

    At the core of the struggle is a vast network of actual and planned pipelines for shipping Caspian Sea oil to the world market from countries that were once part of the Soviet empire. American policymakers working with a BP-led consortium had already helped build oil and natural gas pipelines across Georgia to the Turkish coast. Next on the drawing board: another pipeline through Georgia to carry natural gas from the eastern shore of the Caspian Sea to Austria—offering an alternate supply to Western Europe, which now depends on Russia for a third of its energy.

    But after the mauling Georgia got, "any chance of a new non-Russian pipeline out of Central Asia and into Europe is pretty much dead," says Chris Ruppel, an energy analyst at Execution, a brokerage in Greenwich, Conn. The risk of building a pipeline through countries vulnerable to the wrath of Russia is just too high.

    The Russia-Georgia war thus may have dealt a blow to 15 years of American economic diplomacy. Back in the mid-1990s, Clinton Administration officials looking at a map of the recently dismantled Soviet Union grasped a singular fact about its southern perimeter: The newly independent countries there were overflowing with oil and natural gas but had to ship it via Russia to reach customers. Without pipelines of their own, the Caspian states would never fully develop their energy industries, or be politically independent of Russia. The lack of pipelines also curbed the export potential of companies like Chevron, which owns half of Tengiz, the giant Kazakhstan oilfield. After first resisting, BP (BP) and Chevron (CVX) backed the American pipeline strategy.
    Moscow's Anger

    Georgia was a key transit point for any line to the West. John Wolf, a former U.S. ambassador and now head of the Eisenhower Fellowship program in Philadelphia, was in the thick of the bargaining and arm-twisting that created the so-called East-West Energy Corridor. Wolf recalls powwowing with the leaders of Azerbaijan, Georgia, and Turkey on the construction of what would become the 1,000-mile-long Baku-Ceyhan, the Caspian's first independent oil export pipeline. These leaders knew they risked provoking Russia's wrath but figured the gamble was worth it, Wolf says. Now almost 1 million barrels a day normally course through the pipeline. For Georgia, it's not the fees it collects from pipeline transit—about $60 million annually—that are important. Instead, the pipeline's presence signaled Georgia's stability and encouraged a flood of foreign investment.

    That stability, of course, has proved illusory. Yet the Russians won't interfere with the Baku-Ceyhan pipeline directly, analysts say. Moscow's strategy depends on not spooking the Europeans, who might then be encouraged to back the construction of other non-Russian energy pipelines. Since there have been no confirmed attacks on the pipelines running through Georgia, no European leader has called for a reconsideration of energy policy.

    Besides, the Russians may not need to shut down the Baku-Ceyhan line to win the advantage in the energy wars. "There's no doubt that what's happening has increased the investment risk within the region," says Nick Butler, a former senior executive at BP who directs the Cambridge Centre for Energy Studies at the University of Cambridge's Judge Business School. Already, on Aug. 12, BP shut down a secondary oil pipeline that ends at Georgia's Black Sea port of Supsa, saying there could be a risk of attack on the line.
    Russia's Pipeline Plans

    Both Chevron and ExxonMobil (XOM) had also planned to ship hundreds of thousands of additional barrels a day along the route traversing Georgia. Now that may be subject to change. "Do you want to put more eggs in the South Caucasus basket?" asks Edward C. Chow, a former Chevron executive and now a senior fellow at the Center for Strategic & International Studies in Washington."And if you do, are there certain accommodations that need to be made with the Russians to protect them?"

    What about the White House's plans for a pipeline to ship natural gas to Europe? The proposed pipeline's success depends on Turkmenistan, which has the fourth-largest natural gas reserves on the planet, an estimated 3 trillion cubic meters. The Turkmen are cautious: Under former President Saparmurat Niyazov, they refused to defy the Russians and support the construction of the Baku-Ceyhan pipeline. "[Niyazov] thought about it and probably decided he didn't want to wake up dead," says former U.S. diplomat Wolf.

    The assault on Georgia may make the Turkmen even more wary of the new pipeline. Instead, they may end up cutting a deal with the Russians, who are vigorously pursuing new gas pipelines of their own in a bid to dominate energy in the region. "A new Iron Curtain," says analyst Ruppel, "is descending around the periphery of Russia."

    Posted by: Alex Tolley | Link to comment | Aug 15, 2008 at 12:41 PM

    Bruce Wilder says...

    anne: "absurd and mean-spirited"

    Always so charming, and willing to engage in fruitful exchange of views.

    Posted by: Bruce Wilder | Link to comment | Aug 15, 2008 at 12:46 PM

    hari says...

    US/EU used Kosovo to breakup Serbia and even recognized its de jure international legitimacy. Recall it was breakaway Albanian part of Serbia. Now Lovorov/FM is claiming the same principle will apply to OS and Abkasia. They will never fall under Georgian sovereignty, he said.

    CarlBildt, as UN High Rep in Kosovo, pushed its recognition taking into account the Russian opposition to it. Sweden even waited out the rest of the EU nations before recognizing Kosovo. Sweden didn't want to antaganize Russia across the Baltic Sea....

    Now, the same CB is claiming EU must oppose Russian *aggression* in Georgia - disregarding that Georgian combat forces entered and massacred innocent civilians in OS before Russia came to their rescue - claiming they were Russian passport holders.

    This is going to be a Caucasus battle in which Russian strategic interest is more closely linked to dethrone Saak and his regime, in Tbilisi, and bring about regime change.

    Posted by: hari | Link to comment | Aug 15, 2008 at 12:48 PM

    Bruce Wilder says...

    Peter Schaeffer: The battle of the Somme started on Jul 1, 1914.

    The Battle of the Somme occurred in 1916.

    Posted by: Bruce Wilder | Link to comment | Aug 15, 2008 at 12:51 PM

    anne says...

    "A new Iron Curtain," says analyst Ruppel, "is descending around the periphery of Russia."

    A new idiocy is descending around Cold War-forever wishing analysts. Notice how China, with profound energy needs, is avoiding thinking and acting hysterically.

    Russia will be selling energy, and absent a diplomatic ineptness caused by Western stereotyping there will be no more than any number of other economic trade squabbles represent from time to time.

    Posted by: anne | Link to comment | Aug 15, 2008 at 12:52 PM

    Lee A. Arnold says...

    Bruce Wilder, you beat me to it. The Battle of the Somme was not until 1916.

    Ferdinand was shot in 1914.

    The first British troops dispatched were the Dorset Regiment. The second battalion went to Basra.

    Posted by: Lee A. Arnold | Link to comment | Aug 15, 2008 at 12:57 PM

    anne says...

    Lee A. Arnold:

    "The illusion? Keynes' Londoner had no inkling that the reason he could telephone products from around the world was because of the British Empire's militarism and imperialism? This seems a bit disingenuous on JMK's part. Or maybe sarcastic? Then the very next thing: Your history quiz: Where were the first British troops sent when Archduke Ferdinand was shot? Answer: To Basra -- because the German and British navies had both just converted from coal to oil...."

    Clever.

    Posted by: anne | Link to comment | Aug 15, 2008 at 01:03 PM

    hari says...

    Anne - you're right about Cold War warriors/analysts who went out of business when Berlin Wall came tumbling down in 1989. They'd love to get their puditry back, don't you think so?

    But what amazes me is that Putin/Medvedev are the younger generation of (KJB) technocrats and they're now behaving like old time Czarist Russian emissaries. Of course, Russia lost a lot of prestige when Soviet Union collapsed (Regan triumphed!).

    For EU, there is no long term European security without Russian cooperation. How this will now unfold is getting muddled after Georgia's invasion of OS enclave - and resurgent Russia on the march.

    Posted by: hari | Link to comment | Aug 15, 2008 at 01:09 PM

    hari says...

    BTW - Maliband/FM/UK is leading the charge inside EU against Russian *aggression* and stopping all further negotiations with Russia on close cooperation. He's not updating his own official Blog since 2 Aug. He was out to replace Brown/PM.

    The interesting twist about Maliband is that his father was a Polish immigrant to UK. He's now echoing Polish argument against Russia - demanding Russian forces to leave Georgia.

    Posted by: hari | Link to comment | Aug 15, 2008 at 01:15 PM

    Peter Schaeffer says...

    Bruce Wilder,

    Yes, you are correct. The Somme was in 1916. I was thinking of the Battle of Mons, Aug 22-23, 1914.

    Posted by: Peter Schaeffer | Link to comment | Aug 15, 2008 at 01:28 PM

    anne says...

    Remember, there has been the persistent move to set missiles in Poland and the Czech Republic; and not against the dread Iranian missile hordes but against Russia. Russia is acting altogether rationally in diplomatic terms, while Georgia astoundingly forced the military response.

    Russia is being diplomatic, can France and Germany be so? Britain is about as politically clouded as we are. Remember, always, that we either had no sense what Georgia was about, which is beyond excuse, or we wished the Georgia probe for whatever nutty chess-like reason.

    Posted by: anne | Link to comment | Aug 15, 2008 at 01:32 PM

    anne says...

    http://angryarab.blogspot.com/2008/08/yesterday-cnn-had-on-expert-on-ukraine.html

    August 15, 2008

    Yesterday, CNN had on "an expert" on Ukraine. And he admitted that there is a substantial segment of the population in Ukraine who are opposed to the membership in NATO. But he basically said that you can ignore them because those who are in favor are more "intense" in their support.

    -- As'ad AbuKhalil

    Posted by: anne | Link to comment | Aug 15, 2008 at 01:32 PM

    anne says...

    Can you seriously believe that an aware Georgian watching or listening to the same European reports of hours of shelling of Ossetia followed by a Georgian occupation would not have thought Mikheil Saakashvili entirely mad. I sure thought so, but Secretary Rice never called to ask what I thought.

    Sarkozy at least seemed to understand the response was inevitable, but France could not be sympathetic to Russia from the time Rice began to condemn Russia.

    Posted by: anne | Link to comment | Aug 15, 2008 at 01:40 PM

    hari says...

    NATO is now also discredited - Saak has attacked European negligance to wake up to Russian hegemony, with Rice listening at their press conference. Saak argued Russia was encouraged when Georgia was refused membership of NATO. And he went to detail the actions taken by Russia against his sovereign state.

    Posted by: hari | Link to comment | Aug 15, 2008 at 01:43 PM

    hari says...

    There will be no further expansion of NATO into Eastern Europe, after Georgian and (now) Polish anti-missile decision.

    Posted by: hari | Link to comment | Aug 15, 2008 at 01:47 PM

    anne says...

    Watching European film, I noticed that Russia seems to have quickly gone about destroying Georgian military capability but little more since little more was necessary to secure Ossetia and Abkhazia. I think a clear delineation of event sequence by America or the French could have allowed a quick move to diplomatic negotiation, but the Polish missile agreement was a slap at Russia beyond the condemnation by Rice, Cheney, Bush and Gates in seemingly that order.

    Fear not, though, Poland is safe from Iranian missile tossers.

    Posted by: anne | Link to comment | Aug 15, 2008 at 01:50 PM

    anne says...

    Hari:

    "NATO is now also discredited - Saak has attacked European negligence in waking up to Russian hegemony, with Rice listening at their press conference. Saak argued Russia was encouraged when Georgia was refused membership of NATO."

    Ah, another Columbia University lawyer loosed on thr unsuspecting world. Does Columbia have a fight song? Nittany Lions? Whatever is a Nittany? Paper Lions?

    Posted by: anne | Link to comment | Aug 15, 2008 at 01:56 PM

    anne says...

    No; Nittany Lions are from entirely different school, as it turns out. Then, what kind of lions are Columbia lions? Obviously the problem must be a lack of Nattany. But, Saakashvili is seriously troubled.

    Posted by: anne | Link to comment | Aug 15, 2008 at 02:00 PM

    Organic George says...

    Since the Clinton Administration the pentagon has chosen weapons development over troops when it come to budget considerations. If you are in charge of a development project at the pentagon, a cushy job with the lead contractor awaits you when you retire.

    Commanding troops, not so much.

    Rumsfeld also saw manpower as expensive inventory with a premium on new technology as the new military paradigm. This is why we have 50 year old reservist serving in combat today.

    So we have troops living in substandard housing, non-livable wages, and little family support structure; while contractors reap billions.

    Obama wants to rebuild the military, most of our current equipment is now either obsolete or worn out due to the wars, to treat soldiers as assets, and reduce the amount of uber-expensive military toys.

    Posted by: Organic George | Link to comment | Aug 15, 2008 at 02:02 PM

    Bruce Wilder says...

    hari: "your comment on mainland China not only reflects your ignorance of developments in China but also to what extend China has become a co-partner with Paulson to safeguard American hi fi sector - at least for a while."

    Does it reflect "ignorance"? Maybe. Maybe poor reasoning on my part. But, China has some severe problems, that will make the ceiling on the world's resources hurt her more in a few years, than right now, and more than most other Great Powers (except India and Indonesia).

    I did not intend to suggest that China descends into hard times, beginning tomorrow, so I'm not sure what the ephemera of Paulson's wheeling and dealing have to do with it. I was thinking more of a 20-25 year, generational time-horizon.

    For the U.S., the overhang of dollars abroad, loom as an important economic policy factor, over the next decade. Paulson, although I think unusually capable for a Bushite, represents the interests a very small plutocratic elite, with a stake in mining dollar finance. A much larger set of U.S. interests have been severely harmed by policies that made the small circle of Manhattan bankers extremely rich, and large swathes of the (electorally vital) Midwest poor. U.S. banking is in trouble, and will remain in trouble for the next couple of years. I expect that selling banks and businesses will compete with exports in righting the U.S. balance of payments, a factor that will feed a nationalist/isolationist backlash, which may well make common cause with the environmentalists and those concerned with global warming and developing a green U.S. energy infrastructure. A kind of green isolationism has a lot of momentum behind it for U.S. politics; whether it will wash away the plutocracy's focus on better living for rich folks through international and domestic domination of poor folks remains to be seen -- its a contest between immoveable object and potentially overwhelming force. Plutocrats, following the example of T. Boone Pickens, may decide the issue by a strategic change of sides.

    China, with considerable self-sacrifice, used a "strong dollar" and massive domestic savings, to engineer large-scale development of an industrial economy. Like all authoritarian development, it has been extremely rapid, but it has also been fairly uneven, leaving a need for some fairly massive adjustments in sectoral employment and price level. And, then, there's the problems of externalizing costs within China -- as in the building of schools that collapse in earthquakes and in the horrifying pollution of everything, leaving a large rural population in extreme poverty or migratory labor hell, etc -- you can think of these problems as also representing some postponed adjustments in economic and political governance and resource allocation. China's geographic resources are big, but its population is four times that of the U.S. and six times that of Brazil and eight times that of Russia. That's going to be a serious social problem in a world of very high productivity production technologies and severly limited resources.

    I think the falling ceiling of global resources mean that the world business cycle will be significantly shaped over the next generation by the phenomena we just witnessed, of growth leading to commodity price spikes bringing about slo-mo crashes, characterized by declining median real incomes. Per capita productivity growth will be stagnant (in the "expansive" phase of business cycles) or even negative, and then severely negative in contractions, meaning that real incomes may decline in some major regional and national economies -- at the moment, the U.S. is bearing much of the brunt, but I see Europe is hurt as well.

    Some reductions in real income in the U.S. and Europe can be handled politically, because they are modest and marginal to a high level of prosperity and welfare. There can be quality adjustments to offset the loss -- like gaining health care, vacation time, shifting the tax burden in a progressive direction.

    I think the political problems of being on a per capita income treadmill that keeps falling back is going to be increasingly severe for China over the next 10 years. U.S. consumers will end up riding nice trains and driving fewer, smaller cars, and maybe losing weight; in China, it is a matter of a decent diet and living past 60. China has, for the moment, some room to increase domestic real incomes by changing the terms of trade in its own favor, but that will mean changing the pattern vis a vis the U.S. that got China moving forward over the last 15 years. And, China will find itself fighting the commodity spikes at the top of every world business cycle, without the enormous continental resources combined with limited populations of Russia, Brazil or the English-speaking countries. They will be forced to reach out to Africa, pay top ruble in Siberia, and to compete with Europe.

    For the moment, in this business cycle, China has considerable scope to improve its own situation by modifying the terms of trade in its own favor, putting most of the burden on the U.S. Maybe, in the next business cycle as well, but, in the long run, that rope runs out. My guess is that, along about 2012-2016, things will be looking a good deal darker for the world as a whole and for China in particular.

    If you like historical parallels, consider the prominence of Vienna, circa 1908, the Capital city of Mahler, Schumpeter, Freud, Wittgenstein, Klimt. The hazards of history.

    Posted by: Bruce Wilder | Link to comment | Aug 15, 2008 at 02:07 PM

    John V says...

    Alex Tabarrok's take on the Krugman column.

    Just as I eluded to upthread, Alex thinks it would seem the threat to globalization is disruptive, government-sponsored nationalism interfering with peaceful trade for its own misguided and myopic ends.

    And why? Because, unlike true economic actors (read: private individuals), it can. Not good....especially when people support it.

    Posted by: John V | Link to comment | Aug 15, 2008 at 02:08 PM

    Bruce Wilder says...

    Expanding the uniformed military can be an excellent political cover for massive cuts in the politically corrupt privatization of the Pentagon. That the U.S. has more contractors in Iraq/Kuwait than soldiers, as considerable dollar cost, is just a symptom of general military-industrial complex problems. Modestly increase the numbers of uniformed personnel, and slash private support operations and arms development.

    Posted by: Bruce Wilder | Link to comment | Aug 15, 2008 at 02:11 PM

    anne says...

    No; Obama absurdly and destructively wants to add 100,000 troops to American forces, which is enitrely the wrong thing to do unless the point is to continue to misuse our soldiers for wholly unnecessary combat when diplomacy is called-for. Obama wishes to go beyond re-building whatever need to be re-built militarily, to expand the military.

    Obama wishes to trade war in Iraq, for war in Afghanistan. Afghanistan a larger country by territory and population, smaller and bordered by millions of people wholly unsympathetic to us.

    Posted by: anne | Link to comment | Aug 15, 2008 at 02:13 PM

    piglet says...

    Just for the fun of reading some sense:

    http://www.guardian.co.uk/commentisfree/2008/aug/14/russia.georgia

    The outcome of six grim days of bloodshed in the Caucasus has triggered an outpouring of the most nauseating hypocrisy from western politicians and their captive media. As talking heads thundered against Russian imperialism and brutal disproportionality, US vice-president Dick Cheney, faithfully echoed by Gordon Brown and David Miliband, declared that "Russian aggression must not go unanswered". George Bush denounced Russia for having "invaded a sovereign neighbouring state" and threatening "a democratic government". Such an action, he insisted, "is unacceptable in the 21st century".

    Could these by any chance be the leaders of the same governments that in 2003 invaded and occupied - along with Georgia, as luck would have it - the sovereign state of Iraq on a false pretext at the cost of hundreds of thousands of lives? Or even the two governments that blocked a ceasefire in the summer of 2006 as Israel pulverised Lebanon's infrastructure and killed more than a thousand civilians in retaliation for the capture or killing of five soldiers? ...

    By any sensible reckoning, this is not a story of Russian aggression, but of US imperial expansion and ever tighter encirclement of Russia by a potentially hostile power. That a stronger Russia has now used the South Ossetian imbroglio to put a check on that expansion should hardly come as a surprise. What is harder to work out is why Saakashvili launched last week's attack and whether he was given any encouragement by his friends in Washington.

    If so, it has spectacularly backfired, at savage human cost. And despite Bush's attempts to talk tough yesterday, the war has also exposed the limits of US power in the region.

    Posted by: piglet | Link to comment | Aug 15, 2008 at 02:19 PM

    anne says...

    http://www.tomdispatch.com/post/print/174964/Tomgram%253A%2520%2520Andrew%2520Bacevich%252C%2520The%2520American%2520Military%2520Crisis

    August 11, 2008

    Illusions of Victory: How the United States Did Not Reinvent War… But Thought It Did
    By Andrew Bacevich

    "War is the great auditor of institutions," the historian Corelli Barnett once observed. Since 9/11, the United States has undergone such an audit and been found wanting. That adverse judgment applies in full to America's armed forces.

    Valor does not offer the measure of an army's greatness, nor does fortitude, nor durability, nor technological sophistication. A great army is one that accomplishes its assigned mission. Since George W. Bush inaugurated his global war on terror, the armed forces of the United States have failed to meet that standard.

    In the aftermath of September 11, 2001, Bush conceived of a bold, offensive strategy, vowing to "take the battle to the enemy, disrupt his plans, and confront the worst threats before they emerge." The military offered the principal means for undertaking this offensive, and U.S. forces soon found themselves engaged on several fronts.

    Two of those fronts --- Afghanistan and Iraq -- commanded priority attention. In each case, the assigned task was to deliver a knockout blow, leading to a quick, decisive, economical, politically meaningful victory. In each case, despite impressive displays of valor, fortitude, durability, and technological sophistication, America's military came up short. The problem lay not with the level of exertion but with the results achieved....

    Posted by: anne | Link to comment | Aug 15, 2008 at 02:22 PM

    anne says...

    http://www.tomdispatch.com/post/print/174965/Tomgram%253A%2520%2520Andrew%2520Bacevich%252C%2520The%2520Lessons%2520of%2520Endless%2520War

    August 14, 2008

    Is Perpetual War Our Future? Learning the Wrong Lessons from the Bush Era
    By Andrew Bacevich

    To appreciate the full extent of the military crisis into which the United States has been plunged requires understanding what the Iraq War and, to a lesser extent, the Afghan War have to teach. These two conflicts, along with the attacks of September 11, 2001, will form the centerpiece of George W. Bush's legacy. Their lessons ought to constitute the basis of a new, more realistic military policy.

    In some respects, the effort to divine those lessons is well under way, spurred by critics of President Bush's policies on the left and the right as well as by reform-minded members of the officer corps. Broadly speaking, this effort has thus far yielded three distinct conclusions. Whether taken singly or together, they invert the post-Cold War military illusions that provided the foundation for the president's Global War on Terror. In exchange for these received illusions, they propound new ones, which are equally misguided. Thus far, that is, the lessons drawn from America's post-9/11 military experience are the wrong ones....

    Posted by: anne | Link to comment | Aug 15, 2008 at 02:22 PM

    piglet says...

    "However, turning Bush into an all purpose scapegoat won't suffice. Note that, Krugman, no Bush apologist, doesn't waste even 4 letters on our current president. ... American imperialism doesn't make the top 4 for [Brad DeLong] either."

    Outside of the US, American imperialism easily makes first or second place among the biggest threats. Is that fair? Well, people will disagree. Just remember, since we are already steeped in historical analogies, that 1914 wasn't such a black and white moral landscape either. Imperialists of all stripes contributed to the genesis of the then most barbaric conflict in human history. Back to 2008, you have to be blind to not see why Russians, for example, might feel threatened by US imperialism destabilizing their borders.

    Posted by: piglet | Link to comment | Aug 15, 2008 at 02:30 PM

    anne says...

    Which reminds me again, in 1914 where was there not imperialism and no excuse needed?

    Posted by: anne | Link to comment | Aug 15, 2008 at 02:39 PM

    Barkley Rosser says...

    Julio,

    One oddity about all this talk about wars in Europe and what should or should not be done there, Georgia is actually in Asia, I believe.

    anne,

    Let me see, you had Georgia assaulting the borders of Russia and Russian citizens? Well, it is true that Russia has been granting passports illegally to people who are still technically Georgian citizens, but it was the border of what is still technically an autonomous region of Georgia that the Georgians crossed, with never getting anywhere near Russia's border, much like what the Russians have done in going into Chechnya to engage in mass and brutal slaughter regarding which barely anybody has registered much above a whisper.

    As for Abkhazia and South Ossetia gaining their "independence," well indeed there is no way that they will be going back under Georgian control in the foreseeable future. That plank of Saak's is pretty clearly dead. But "independence"? You must be kidding. They are satrapies of Russia, or "protectorates," if you prefer, and the likely outcome will be eventual formal absorption into Russia, not independence.

    BTW, I am blowing the country for another week, so have fun everybody.

    Posted by: Barkley Rosser | Link to comment | Aug 15, 2008 at 02:52 PM

    Bruce Wilder says...

    Andrew Bacevich: "In each case, the assigned task was to deliver a knockout blow, leading to a quick, decisive, economical, politically meaningful victory. In each case, despite impressive displays of valor, fortitude, durability, and technological sophistication, America's military came up short. The problem lay not with the level of exertion but with the results achieved...."

    I don't think I could disagree more with this summary analysis, beginning with the idea that that there was "an assigned task".

    In Tom Rick's Fiasco and Rajiv Chandrasekaran's Imperial Life in the Emerald City and George Packer's Assasin's Gate, as well as numerous, substantive news reports, including the testimony of insiders, the overwhelming impression is that there was no "assigned task" at all. Just a bunch of bureaucratic in-fighting at the highest levels, a President sucking his thumb and whimsically acting the part of Decider-in-Chief, and a cadre of Republican pigs sucking on every offered teat of the Beast of Babylon.

    I think the U.S. military would have been ill-equipped to carry out a strategically sensible plan in either Afganistan or Iraq (assuming, for the sake of argument that the bona summa strategic plan of not-invading was put aside). But, they could have adapted, if they had been free to improvise in acquiring necessary resources.

    The prime problem was always that George W. Bush was a careless idiot with no appreciation of what he was doing, as chief executive.

    I would fault the U.S. military leadership, for not standing up for the Powell Doctrine, and demanding a higher level of strategic competence from White House and policy-makers at State and Defense. But, the detailed story of what happened features a great deal of cynical manipulation of personnel appointments to get a military leadership that would go along with catastrophic planning failures.

    The results achieved were perfectly predictable, given the strategic management of the wars. I don't think one can credit the Taliban or the various insurgents in Iraq with much power to shape outcomes. In the circumstances, an honest assessment would not fault the U.S. military as an instrument of policy, it would fault the policy and its makers, exclusively.

    Posted by: Bruce Wilder | Link to comment | Aug 15, 2008 at 03:02 PM

    Bruce Wilder says...

    BR: "I am blowing the country for another week, so have fun everybody."

    Hmmm. Perhaps, you should consider rephrasing that.

    Posted by: Bruce Wilder | Link to comment | Aug 15, 2008 at 03:02 PM

    Bruce Wilder says...

    piglet: "1914 wasn't such a black and white moral landscape"

    World War I was more about the self-overthrow of oppressive, incompetent elites than about the actual conflict between states. The only thing that ever flashes white is the innocence of the masses sent to slaughter by morons and fools.

    Posted by: Bruce Wilder | Link to comment | Aug 15, 2008 at 03:16 PM

    anne says...

    Barkley Rosser:

    Be well.

    Posted by: anne | Link to comment | Aug 15, 2008 at 03:37 PM

    Julio says...

    Bruce Wilder:

    Re Andrew Bacevich: "In each case, the assigned task was to deliver a knockout blow, leading to a quick, decisive, economical, politically meaningful victory."

    We may be saying the same thing, I'm not sure, but it seems to me that the first, purely military part of the task, was achieved. Saddam's army was routed. The Taliban was routed.

    It's the "politically meaningful victory" that they obviously had no clue about. So in that sense I have to agree completely, there was no assigned task. (Unless you count "stay there as an occupation force cum secret police until you achieve 'victory'". Even McCain might balk if confronted with that "plan"...)

    You say:
    "I don't think one can credit the Taliban or the various insurgents in Iraq with much power to shape outcomes."

    Don't know about the Iraq insurgencies but the Taliban has a lot of popular support, both in Afghanistan and in neighboring areas of Pakistan, and therefore a lot of resiliency. They defeated all their various enemies and took over the country, and are clearly able to mount a widespread and protracted resistance, so it seems to me they have a lot of ability to influence outcomes, no?

    Posted by: Julio | Link to comment | Aug 15, 2008 at 04:16 PM

    ilsm says...

    Krugman's piece today reminds me of the fear the US military had when I was a young troop so many years ago.

    The Russians were going to build a pipeline to sell their Caucasus oil to the Japanese and get in the way of our Saudi friends in keeping Japan on our energy leash.

    Th Brits and French also allied themselves against the Tsarist version of Russian hegemony in the 1850's when the Tsar began pushing the Turks out of Bulgaria.

    When does the west stop fearing the other branch or Christianity?

    Constantinople feel more than 500 years ago.

    Posted by: ilsm | Link to comment | Aug 15, 2008 at 04:49 PM

    anne says...

    http://krugman.blogs.nytimes.com/2008/08/15/putins-soul/

    August 15, 2008

    Putin’s soul
    By Paul Krugman

    Not Vladimir Putin [Picture]

    Apropos of nothing much, but way back when, when George W. Bush — displaying those instincts he prefers to careful analysis — proclaimed his satisfaction with what he saw of Putin’s soul, my instincts told me that Putin looked an awful lot like Number 5 from "From Russia With Love." I recently Tivoed the movie, and I think I was closer to the mark.

    Posted by: anne | Link to comment | Aug 15, 2008 at 04:52 PM

    anne says...

    Ilsm:

    "The Brits and French also allied themselves against the Tsarist version of Russian hegemony in the 1850's when the Tsar began pushing the Turks out of Bulgaria.

    "When does the west stop fearing the other branch of Christianity?

    "Constantinople fell more than 500 years ago."

    Posted by: anne | Link to comment | Aug 15, 2008 at 04:56 PM

    anne says...

    http://www.j-bradford-delong.net/movable_type/2004-2_archives/000123.html

    September 4, 2004

    Welcome to Weimar Russia!

    When I was in the Clinton administration in 1993-95, one of the background ideas was that it was desperately important to avoid the emergence of a "Weimar Russia"--a country that felt that things had gone downhill, that the promises of a better tomorrow had been lies, that projected aid and promises of economic partnership and integration had been a screen behind which had taken place the real maneuvering to weaken Russia. In my view, U.S. attempts to prevent the emergence of a "Weimar Russia" ran into three major obstacles:

    The Reagan-Bush budget deficits that precluded aid on a Marshall Plan-equivalent scale--and thus greatly weakened the U.S.'s ability to shape institutions.

    The lack of a political consensus within Russia on what the future should be like--eastern Europe, which felt certain that in a good future they would be like western Europe--has had a much easier time.

    Bill Clinton's excessive empathy for Boris Yeltsin: Clinton's view that Yeltsin was a good man playing a difficult hand who did not need his life further complicated by pressure from Treasury technocrats was, I think, in the end not a plus. (Even worse, I think, has been Bush's excessive empathy for Vladimir Putin.)

    -- Brad DeLong

    [Phooey.]

    Posted by: anne | Link to comment | Aug 15, 2008 at 05:16 PM

    anne says...

    http://angryarab.blogspot.com/2008/08/youd-be-hard-put-to-recall-after-all.html

    August 15, 2008

    "You'd be hard put to recall after all the fury over Russian aggression that it was actually Georgia that began the war last Thursday with an all-out attack on South Ossetia to "restore constitutional order" - in other words, rule over an area it has never controlled since the collapse of the Soviet Union. Nor, amid the outrage at Russian bombardments, have there been much more than the briefest references to the atrocities committed by Georgian forces against citizens it claims as its own in South Ossetia's capital Tskhinvali. Several hundred civilians were killed there by Georgian troops last week, along with Russian soldiers operating under a 1990s peace agreement: "I saw a Georgian soldier throw a grenade into a basement full of women and children," one Tskhinvali resident, Saramat Tskhovredov, told reporters on Tuesday."

    * http://www.guardian.co.uk/commentisfree/2008/aug/14/russia.georgia

    -- As'ad Abukhalil

    Posted by: anne | Link to comment | Aug 15, 2008 at 05:20 PM

    im1dc says...

    We have to have trade just as countries have to have food for their people to eat so nations behaved rationally in a time of lean.

    What does this tell us about the future and the future of so-called free trade? I don't think PK has thought this through, i.e., disequilibriums both long term and short are normal events.

    Posted by: im1dc | Link to comment | Aug 15, 2008 at 05:52 PM

    Patricia Shannon says...

    Do you people live in a cave? No mention when talking about threats to world peace of environmental degradation, including global warming. This is especially weird because you acknowledge possible food shortages to be threats to peace.
    http://www.sciencedaily.com/releases/2008/08/080801152137.htm

    Tracking Down Abrupt Climate Changes: Rapid Natural Cooling Occurred 12,700 Years Ago

    ScienceDaily (Aug. 4, 2008) — Researchers in Germany, Switzerland, and the United States have shown, for the first time, that an extremely fast climate change occurred in Western Europe. This took place long before human-made changes in the atmosphere, and is causatively associated with a sudden change in the wind systems.

    The proof of an extreme cooling within a short number of years 12,700 years ago was attained in sediments of the volcanic lake Meerfelder Maar in the Eifel region of Germany. The seasonally layered deposits allow to precisely determine the rate of climate change. With a novel combination of microscopic research studies and modern geochemical scanner procedures, the scientists were able to successfully reconstruct the climatic conditions even for individual seasons. In particular, the changes in the wind force and direction during the winter half-year caused the climate to topple over into a completely different mode within one year after a short instable phase of a few decades.
    =====================================
    Some African Drought Linked To Warmer Indian Ocean, NASA Data Show
    http://www.sciencedaily.com/releases/2008/08/080805124005.htm

    ScienceDaily (Aug. 7, 2008) — A new study, co-funded by NASA, has identified a link between a warming Indian Ocean and less rainfall in eastern and southern Africa. Computer models and observations show a decline in rainfall, with implications for the region's food security.

    Rainfall in eastern Africa during the rainy season, which runs from March through May, has declined about 15 percent since the 1980s, according to records from ground stations and satellites. Statistical analyses show that this decline is due to irregularities in the transport of moisture between the ocean and land, brought about by rising Indian Ocean temperatures, according to research published today in Proceedings of the National Academy of Sciences. This interdisciplinary study was organized to support U.S. Agency for International Development's Famine Early Warning Systems Network.
    ===========================================
    Mass Extinctions And 'Rise Of Slime' Predicted For Oceans
    http://www.sciencedaily.com/releases/2008/08/080813144405.htm

    ScienceDaily (Aug. 13, 2008) — Human activities are cumulatively driving the health of the world's oceans down a rapid spiral, and only prompt and wholesale changes will slow or perhaps ultimately reverse the catastrophic problems they are facing.

    Such is the prognosis of Jeremy Jackson, a professor of oceanography at Scripps Institution of Oceanography at UC San Diego, in a bold new assessment of the oceans and their ecological health. Jackson believes that human impacts are laying the groundwork for mass extinctions in the oceans on par with vast ecological upheavals of the past.

    He cites the synergistic effects of habitat destruction, overfishing, ocean warming, increased acidification and massive nutrient runoff as culprits in a grand transformation of once complex ocean ecosystems. Areas that had featured intricate marine food webs with large animals are being converted into simplistic ecosystems dominated by microbes, toxic algal blooms, jellyfish and disease.

    Jackson, director of the Scripps Center for Marine Biodiversity and Conservation, has tagged the ongoing transformation as "the rise of slime." The new paper, "Ecological extinction and evolution in the brave new ocean," is a result of Jackson's presentation last December at a biodiversity and extinction colloquium convened by the National Academy of Sciences.

    "The purpose of the talk and the paper is to make clear just how dire the situation is and how rapidly things are getting worse," said Jackson. "It's a lot like the issue of climate change that we had ignored for so long. If anything, the situation in the oceans could be worse because we are so close to the precipice in many ways."
    ...
    To stop the degradation of the oceans, Jackson identifies overexploitation, pollution and climate change as the three main "drivers" that must be addressed.

    Posted by: Patricia Shannon | Link to comment | Aug 15, 2008 at 06:33 PM

    Patricia Shannon says...

    Anne,

    Thank you for answering my question about "hi fi". I tried looking it up on wikipedia, but it only had the normal definition.

    Posted by: Patricia Shannon | Link to comment | Aug 15, 2008 at 06:43 PM

    piglet says...

    You are quite right:

    "Do you people live in a cave? No mention when talking about threats to world peace of environmental degradation, including global warming."

    Posted by: piglet | Link to comment | Aug 15, 2008 at 06:49 PM

    outsider says...

    Kurt Vonnegutt: "The Earth's auto-immune system is getting ready to throw us off."

    Posted by: outsider | Link to comment | Aug 15, 2008 at 10:17 PM

    Peter Schaeffer says...

    Lee Arnold,

    A quick check online shows that it takes 22 days to sail from London to Basra at 12 knots.

    One online source, "The Dorsetshire Regiment" (http://www.1914-1918.net/dorsets.htm) shows that the 1st Battalion landed at Le Havre on 16 August 1914. The same source indicates that the 1/4th Battalion landed at Basra on 23 February 1916 with the 42nd Indian Brigade and remained in Mesopotamia for the rest of the war.

    Based on the sailing time, it would appear that the first British forces left for Basra around Oct 1, if they departed from the UK and considerably later if they left from India.

    Posted by: Peter Schaeffer | Link to comment | Aug 15, 2008 at 10:17 PM

    hari says...

    @ Patricia -

    my apologies of not seeing your q's on *hi fi*.
    Anne clarified it, I hope.

    @ Bruce Wilder -

    Thanks for your usual long soapbox - You know, for a fact, I always enjoy your rejoinders and didn't wish to challenge your intuition about Mainland China and its future prospects. We all need to understand the Chinese Revolution from the bottom-up (unlike Russian from top-down).

    My knowledge is based on studies of the two revolutions and its impact on the West. So, I come with a different historical perspective. I've also delivered T/A to mainland China (1908s) right after Cultural Revolution. Authoritarian *democracy* is possible on the mainland - compared to the chaotic parliamentary democracy in Asian subcontinent (India, in particular).

    My crystal ball says that in a generation mainland China will be united with Taiwan and Hong Kong - finally whole!

    There will be a lot of ups and downs as China moves forward on its development path - *creative destruction* may become a handy tool in Poltiburo management of the macroeconomic fundamentals - however, you are right, not only basic commodities but also energy will remain a serious bottlekneck to industrialization.

    That's why I suspect Japan-China will jointly exploit the disputed SouthChina Sea deposits. It's not in the interest of Japan to compete with mainland China - but active partnership is what I notice is currently on the menu.

    This Olympics has more or less been the final confirmation of mainland China's emergence on the world scene....

    Posted by: hari | Link to comment | Aug 16, 2008 at 01:27 AM

    anne says...

    http://angryarab.blogspot.com/2008/08/influenced-by-american-foreign-policy.html

    August 15, 2008

    Influenced by American foreign policy rhetoric, I now will insist on being referred to as "the democratically-elected Angry Arab." Take note NOW.

    -- As'ad Abukhalil

    Posted by: anne | Link to comment | Aug 16, 2008 at 03:06 AM

    anne says...

    http://delong.typepad.com/sdj/2008/08/the-second-comi.html

    August 15, 2008

    China's government attempts to reassure its citizens of its power and worth by hosting the Olympic Games. Russia's government attempts to reassure its citizens of its power and worth by picking up a small country and throwing it against the wall--as recommended by AEI scholar Michael Ledeen.

    -- Brad DeLong

    [Phooey.]

    Posted by: anne | Link to comment | Aug 16, 2008 at 04:03 AM

    anne says...

    http://delong.typepad.com/sdj/2008/04/paul-berman-is.html

    April 1, 2008

    For the record, I was in favor of the war on Iraq in the winter of 2003. I reasoned:

    Condi Rice is not-stupid and not-malevolent, and is for the war.

    Colin Powell is not-stupid and not-malevolent, and is for the war.

    This means that even though the public intelligence is bs, that there must be solid evidence of an advanced nuclear program in Iraq and of a willingness to give serious weapons to terrorist groups--otherwise attacking Iraq while we have real enemies like Osama bin Laden running loose would be really stupid.

    And although Bush is really stupid, not everyone in the administration is.

    Wrong on all counts. I am very sorry.

    I may be the stupidest man alive.

    -- Brad DeLong

    Posted by: anne | Link to comment | Aug 16, 2008 at 04:05 AM



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