Civil Unrest and the Market Economy

So far dictators - backed by the U.S. government - have fallen in Egypt and Tunisia. There are riots and demonstrations in Morocco, Libya, Bahrain, Yemen, Iran, Iraq, and now it looks as if the bad global economy and its consequences are spreading to China.

What is remarkable about these protests is just how little the United States seems to be implicated in the problems associated with these societies' problems. Libya's dictator has been ardently anti-American for his entire career as a dictator, and Iran's regime has made a name for itself largely on the principle of being a counter-weight to American power its region.

A modern map of the Maghreb region

While it is true that the protests in Iraq, Bahrain, and Yemen have some anti-Americanism in them (and why wouldn't they?; the U.S. has deeply vested interests in these states), I think it can be safely argued that the current round of worldwide civil unrest has more do with the bad economy and less to do with battling the supremacy of an aspiring global hegemon.

An older map of the Maghreb. Notice how the states are largely the same as they are today? Perhaps this helps to explain why standards of living and stability are - although deplorable by Western standards - much higher than in sub-Saharan Africa.

If we hearken back about three years to the American presidential elections, we can hear a certain congressman from Texas warning about the crisis that is currently unfolding before our eyes: higher food prices, malinvestment, civil unrest, price inflation in energy, etc., etc.

Ron Paul warned us about this crisis, and we would all be better prepared for what is looming by studying the history of central banking and how these special interest groups - once they gain a state-granted monopoly - distort the economy and create the bubbles that contribute to the "busts" that have been so prevalent in American (and now global) society for the past 100 years.

On a side note, sub-Saharan Africa seems immune to the current crises affecting the rest of the world. I think that this helps to explain why this region has gotten poorer since the post-war period, while the rest of the world has gotten a little bit better off: the region is still isolated from the global economy.

Until Africa's leaders begin to really liberalize their economies and open their societies to world trade, they will continue to be mired in abject poverty and socialist utopia.

What is interesting about all of this is what has lain beneath these "socialist" economies. Remember, these Third World countries decided to try socialism rather than freedom when they won their independence, and so we can gauge a useful description of how socialism actually works in practice. I think we can see that socialism inevitably leads to nationalism, protectionism, isolationism, and abject poverty for most members of a society. It also leads to oligarchy.

The fact that so many national industries (i.e. nationalism) are run by cronies rather than technocrats suggests that socialism inevitably cannot set out to even accomplish its main goal: that of abolishing the marketplace and the supposed inequalities that it creates.

Lets hope these new revolutionaries realize this when they go about re-organizing their government.