Dear God...

Dear Sirs and Madams,

The results for the European elections are in and I have become more worried for this world than before the elections. Not only was the voter turnout a historic low this year (43%), but the Europeans also managed to put anti-immigration and racist groups, like the British National Party, into the parliament. While these radical right groups hardly constitute a force to be reckoned with, I feel this is a serious sign of popular sentiments in Europe.

At the same time, no one has stepped forward to make any significant moves to tackle the big problems. The green paper, published by the European Commission, admits that 88% of European fish stocks are overexploited and 30% have collapsed. No serious voices advocate for the dismantling of NATO or to protect refugees.

Do the European want a closed continent? They clearly don't mind keeping the spoils of their plunder and further victimizing those who have escaped the inner-circles of hell that some EU member states have helped create.

The EU elections have been a step back for liberty.

Best,
Yong Kwon

On the future of the European Union

Dear Sirs and Madams,

As results come in from all over Europe for the European Union Parliament elections, I have a quick shout out to those that live in EU member states.

Denizens of the EU have a crucial role in this time of increasing volatility. The $50 billion of agricultural subsidies from the European Union are keeping other farmers in much worse of regions of the world from being able to access the food market. Their despair will transform into violence as it did for the fisherman in Somalia.

European Union and its member governments’ refusal to confront the fishing lobbies and decommission the excess boats encourages mass poaching in areas like Senegal and Somalia. One must recognize that this is a self destructive act that will only decrease the available fish in waters around Europe. As the Senegalese starve and the Somalis take up arms against international shipping, the European fishing boats are digging their own graves.

However, it is not just those beyond the borders of the European Union that face injustices waged upon them, sanctioned by the EU. There has to be a system of accountability which ensures the practice of adopted legislations regarding human rights and equal treatment. I do not wish the European Union to take on more federal power, so I beseech individuals in the EU to take it upon themelves to demand from their governments to ensure the liberty, equality, and justice for all.

All, including immigrants and refugees, many of whom have escaped hell-on-earth only to find themselves in shanty towns made of card board boxes, hunted down by the host government and ostracized by the local communities. Redistribution of wealth from the rich to the poor will inevitably occur under a free market and it is the most efficient, moral, and peaceful way to make the whole world a lot more prosperous. Your alternative is to await the violence unleashed by honest, hard working people whose only fault is that they were on the receiving end of the unfair and illiberal market conditions. I assure you that the losses in the former scenario to be insignificant, especially compared to the latter. Besides for the European nations whose population is decreasing who will pay for today’s young when they become pensioners?

Lastly, take the first step to disestablish NATO. There is no reason for its existence nor a European Union army, it will only provoke further tensions with Russia. Russia could probably use some help from the European Union. If people are so concerned with immigrants maybe Europe should look into diagnosing the issues after complaining about the symptoms for so long.
That goes for everything else as well.

Ah, I rant.

I hope you will not find offense in the above criticisms. I have tremendous respect for the European Union’s stance on all sort of things from humane treatment of animals to its position on ensuring the safety of food products. However, certain actions undertaken by the EU really damages the world and I believe it is important for the constituents of the EU to recognize those serious problems. The Common Agricultural Policy is under review regarding its subsidies and it has been promised to the world that it will be diminished. The Economist picked up the problem with fishing and it should be now on the minds of the politicians who have the means to change the situation. Everything necessary for Europe to finally lurch forward on the liberal path to global prosperity is present. Now the European Union constituents must send the right people into power.

They better, the livelihoods of many people depend on it.

I wish the old continent good luck.

Best,
Yong Kwon

This aggression will not stand, man

Dear Sirs and Madams,

Historicism dictates that the specific rhetoric utilized in deliberating our moral dilemmas indicates our society’s attitude, culture, and values. Observing the political language since and before the Bush administration betrays something highly disturbing. Enshrouded within the popular rhetoric exist the oppressive institutionalized suppositions that falsely pose as mediums for debate while marginalizing independent assessment.

Observe the value of justice. The debate in the popular media following the invasion of Iraq was whether or not the war in Iraq was just. However, to even contemplate the matter seems redundant. It is absolutely unjust for any state actor to contemplate the exchange value of individuals' lives and demean the basis of life, liberty, and justice by sacrificing innocent civilians without their consent. To debate whether or not a specific war is unjust would be to imply the plausibility of certain wars to be just.

The very fact that we have a rhetorical medium in place that could possibly justify war is unsightly. Presupposing that wars ‘should be just’ alters the inherent nature of war and undermines the premise of any argument against war. This makes any engagement in a debate a concession.

With this semantic shift, war itself enters into a definitive crisis. It goes from a form of excessive brutality to a legitimate solution, bolstered by human rationale. Robert McNamara said that the problem with war is that the human race have not yet grappled with the rules of war. However, how do we produce civility out of something that is inherently uncivil. Today, official terminologies such as “smart bombs” and “minimized collateral damage” work to exacerbate the basic fallacy in society’s perception of war.

Rationalization of war is not a modern construct, but there is a clear difference in rhetoric used in the past and today. When Britain engaged France during the Napoleonic War, Pitt never proclaimed that British victory would in any way better the French people. To the extent of my knowledge, even during the Second World War, the Allied forces never used the liberation of the German people from Nazism as a cause for war. In fact, the only precedence upon which the western civilization took it upon themselves to impose the benefits of war upon the opposing peoples was during the brutal imperial aggression against the peoples of colonial possessions.

The misuse the utilitarian value to justify war is a modern construct and is rooted in the perverse language used by the imperial powers with racist presuppositions. Journalist and author Chris Hedges writes that war "corrupts language... preoccupied with the grim perversities of smut and death". War rhetoric and war stories are addictive. Moral philosophers like Adam Smith recognized this danger in the Wealth of Nations. This corruption of reasoning through attractive rhetoric may be best depicted in the Coen brothers' movie The Big Lebowski in which the protagonist repeats President Bush's (senior) quip "this aggression will not stand".

We are deeply engaged in the semantic game established for the specific purpose of controlling independent public interpretations and institutionalizing the acceptable debates. Our entire society, regardless of whether or not we are for or against state intervention, has been duped into a trap. An illusion of a plausible ‘just war’ is created by establishing parameters on the rhetoric utilized in debates. The public conscience is effectively limited to a foregone conclusion established by the ideological apparatuses of control. The current mass media perpetuates and consolidates these parameters. For the sake of providing legitimacy to an illegitimate debate, the public rationale was sacrificed, processed, and institutionalized.

As we again charge into Afghanistan and Pakistan with renewed resolve under the new administration, let us not forget that no war is just. There will be many more innocent deaths and lives ruined despite the best intentions of the United States. This is the reality of war and I guarantee there will be unintended consequences.

Let us be always skeptical of our governments' best intentions.
Afterall, intellectual laziness leads to state abuse.

Best,
Yong Kwon

"Smokey, this is not 'Nam. This is bowling. There are rules... Has the whole world gone crazy? Am I the only one around here who gives a shit about the rules?" - Walter Sobchak from The Big Lebowski

How a Few remain at the expense of the Many

Dear Sirs and Madams,

Last year, I met the wife of the former Argentine minister of transport. Her husband was once imprisoned under Peron’s regime for refusing to consent to the nationalization of the railways. At the time of my meeting with her (of all the places, at the Bahraini embassy), the hotly debated issue was the plan by President Cristina Fernández de Kirchner to nationalize $24 billion of private pension funds. Since then the Argentine senate has passed the project into effect, but it raised serious questions about the role of governments and the intimate relationship between nationalization, populism, and individual liberty.

Populism in Latin America go hand in hand with the policies of industrialization by import substitution (ISI). Many blame this economic model for Latin America’s troubles, yet it is wrong to assume that ISI bears full responsibility. After all, European nations, South Korea, etc. have utilized some form or shape of ISI to establish a robust economy. The problem with ISI in Latin America was the shape it took under politics.

ISI required strict fiscal and monetary policies, applied over an extended period of time while carefully managing foreign loans. What had happened under the helm of populist governments in Latin America was the perversion of ISI for the objective of sustaining political control. Populist governments took advantage of catch phrases like “autonomy” from the economic model and used it to justify expensive projects (like nationalizing the rail which Peron’s minister of transport refused to sanction) in order to rally votes. Evita and Peron presented the most gross example of development derailed by unsustainable and irresponsible public spending. Their policies eventually led to deranged methods of raising revenue such as bullying their own voting base of urban laborers into paying mandatory donations. While the public was squeezed for their every last penny, the ruling elites squandered much of the revenues and loans on private spending. Eva Peron again best represented that abuse of public finances. (which makes me wonder why so many of my female peers admire Evita. Wouldn’t you rather support Mrs. Thatcher, ladies?)

The increasing need for revenue created an over dependency on the ever-less-valuable export of raw materials and development was simply pushed aside. The consequences of the economic disorder permeated into the rest of society making the political atmosphere increasingly unstable. The rest is history.

Returning to the concurrent point on the nationalization of pensions, private pension funds were unpopular, but mainly because the government bullied people into investing 55% of their assets in public debt. The Argentine government still puts on a populist standard by declaring that nationalization will defend future pensioners. Yet, the nationalization was clearly an attempt by the Kirchner administration to grab as much capital as possible for public debt. This is evident in the fact that under voluntary terms only 12% of pensioners opted to return to the state system. This is because Argentines understand the danger of entitling the vital provisions of the many into few hands that are not accountable for their losses.

If it is dignified to make decisions and take responsibilities for one’s own means of survival, then Kirchner’s government has sapped a major element of self worth from the Argentines. Without self worth, is every individual still equally entitled to life, liberty, and justice?

It is a point not just for Argentine pensioners.

Best,
Yong Kwon

More on Europe, Africa, fishing, and survival

Dear Sirs and Madams,

I would like to supplement my previous article on piracy and fishing with an article from the Guardian.

Nobel laureate economist Amrtya Sen had argued that famine is not always the result of not there being enough to eat, but rather the basic condition of individuals not having enough to eat. In another words, there may be store houses filled with food or a body of water capable of supporting the population, yet the individuals may not have the entitlement to access the necessities. The resulting starvation is a famine. Sen noted that the famines of the 20th centuries have all been man-made disasters, a product of inept and misguided politics.

The Guardian journalist George Monbiot makes a similar argument in his criticism of the European Union's fishing policies. His article highlights the legal depletion of Senegalese food source by European fishing boats. While Senegal refuses to renew its fishing agreements, European fishermen found loopholes to continue fishing on an industrial scale.

According to ActionAid "fishing families that once ate three times a day are now eating only once or twice."

European trade commissioner, Peter Mandelson, is trying to negotiate an economic partnership agreement which would legalize the dodges used by European fishermen.

Monbiot scathingly declares that "the rich world's governments will protect themselves from the political cost of shortages, even if it means that other people must starve."

The Guardian article recognizes two problems: Europe's failure to manage the fishing industry properly when it can no longer meet European demands and Europe's refusal to confront fishing lobbies and decommission all the surplus boats.

These problems were also noted in an Economist article few weeks ago.

Fishing is a larger issue than an average individual may presume. From piracy to an existential threat, as consumers, to what extent are we responsible? It's very unsettling to me that one part of the world is taking, albeit legally, the very basic items necessary for the survival of individuals in another part of the world.

Forget the millions of tons of emergency cereal poured into the African continent, what we need is a solution which establishes a long term means of sustenance.

God forgive us.

With much fear of what to come,
Yong Kwon

So long and thanks for all the fish

Dear Sirs and Madams,

My friend recently told me about the near patriotic frenzy that his NROTC classmates fell into after the US Navy Seal snipers killed the 3 Somali pirates who was holding Captain Richard Phillips hostage. Thank goodness that the courageous captain was rescued without harm. Yet the whole “we are going to kick their ass” attitude does nothing to resolve the situation and does not prevent future ship captains from facing similar perils.

I am at a loss when I hear people talking about how cool it is that pirates still exist, as though imagining Jack Sparrow facing off the US Navy off of the Horn of Africa. The fact of the matter is that piracy in Somalia is the direct result of abuse. A lot of people have argued about how decreased naval movement after the fall of the Soviet Union allowed pirates to return. In reality, most of the pirates are former fishermen who have lost their means to continue their trade due to poaching and pollution. Few years ago, Somali fishermen learned that an armed response to foreign vessels illegally dumping pollutants was the only means of collecting proper compensation. Now, they’ve taken the lesson to heart as international fishing ships illegally poach off of Somali waters on an industrial scale, depleting the fish and threatening the very survival of the Somalis. Ordinary people turn to brutality and violence when pushed to the extremities of survival, the Somalis are no different.

Looking long term, the Horn of Africa will not become any safer under an international military presence. Only a comprehensive plan protecting the livelihoods of the Somalis can achieve that goal. The governments and organizations of the world should seek to create a condition in which the use of arms would be unnecessary to the Somalis.

Poaching fish and dumping pollution needs to be vigilantly watched for and violators must be punished.

The serious political and ecological consequences are not limited to the Somali coast. Fishermen in the Philippines have turned to dynamite fishing, for many of the same reasons as the Somalis, damaging the reefs and endangering the fish population and the entire ecology of the region. Fishing rights is a far reaching issue.

I find it ironic (? perhaps ironic is not the correct term here but bear with me) that during the height of the financial bubble Icelandic university students abandoned studying the economics of fishing for finance and marketing. Now, they and we must recognize the utmost importance of conservation and sustainable fishing.

We are what we eat, provided we have something to eat.

Best,
Yong Kwon

Power, Democracy and Survival: The post-Soviet experience

Dear Sirs and Madams,

Adam Smith noted that greater damage is incurred when governments go out of their way to remedy the dearth of goods. But what should be done when the people’s representatives choose to continue government intervention in the market? Should those that “know better” overturn the democratic principles and pursue what they know to be in the best interest of the people? This question has sparked many passionate debates amongst my friends and colleagues. I wish to present to you why I believe that no matter what the situation the democratic system must be upheld and sustained

The great liberal philosopher Isaiah Berlin noted that those promoting liberty must never come to believe it to be an absolute idea, for such dogmatism makes the actors vulnerable to violence and coercion. I am in concert with Sir Berlin. The end should never justify the means. Even if the state does not go as far as outright killing people, the devaluation of individuals and their thoughts will have ghastly consequences. Russia provides a perfect example of this case.

While forwarding major reforms to liberalize the market, Boris Yeltsin faced opposition from the parliament. After a tussle over authority, Yeltsin opted to use the military to silence the popularly elected parliament in 1993. The repression allowed the liberal market policies to be further implemented in Russia. Vladimir Putin inherited this blatant disregard for the democratic system of governance and further concentrated power around the executive while diminishing the voice of the people.

One of the many consequences from the Yeltsin/Putin years (Yeltsin and Putin’s joint legacy… I argued in my last article that they are really two peas in a pod) is the intensification of the demographic crisis. The people, suffering from disease and pollution, cannot elect into office someone who would bring them the necessary services to battle diseases like AIDS. State regulated television, with limits to the amount of “negative news” it can air, further impedes vital news and information regarding disease prevention. The money that should be going to enhancing the public’s health has been drained into the military to wage another unnecessary cold war with the west. The policy of “government-knows-best” has turned into a direct roadblock to the survivability of the Russian people.

Both Yeltsin and Putin may have achieved short term successes in pushing forth reforms and establishing some façade of law and order. Nonetheless, whatever good they achieved cannot outweigh the crisis that these two leaders have allowed to amplify.

By ignoring the democratic system, the Russian government has created an unintended consequence. A consequence that Adam Smith had long talked about.

I hope I made my case clear.

Best,
Yong Kwon


p.s. The New Yorker had an article that intensively discussed the demographic crisis.

When Spring comes, how does the grass look under the snow?

Dear Sirs and Madams,

Vladimir Putin derives his popularity from the widespread perception among the Russian people that he single handedly reversed the lawlessness that prevailed after the collapse of the Soviet Union. Moscow is now the city with the highest concentration of billionaires. Furthermore, Russia seems to be a world power again, seemingly confirmed by the strong antagonism between it and NATO. Yet in all honesty, is Russia truly better off than it had been? Let us look at Russia from a political, economic, and social standpoints and evaluate its true state.

Boris Yeltsin eventually decided to rule by decree, consolidating his authority after shelling the Russian parliament in the 1993 Constitution Crisis. Not much has changed since then. It’s very likely that Putin and the FSB (Federal Security Service) masterminded the apartment bombings in 1999 to spread fear of terrorism and bolster Putin’s authority. The vertical rule of Vladimir Putin is just as, if not more, authoritative than that of Yeltsin. Election fraud have become more extensive than they had been in the 1990s, permeating into even the municipal elections.

There exists a perception that Putin has utilized his authority to establish law and order. However, what had once been at least internationally recognized as racketeering and other criminal activities continue on today on a grander scale, sanctioned by the government with former thugs holding government positions. A great example is Sergei Veremeyenko, a billionaire and former contender for the president of Bashkortostan (A candidate supported by Vladimir Putin won). He now develops land, utilizing the state anti-terrorist paramilitaries to rid himself of citizens who’s properties are in the way of his business. The state has clearly lined up behind the rich, the powerful, and the obedient. The few wealthy oligarchs that dare attempt to compete politically are ruthlessly discarded by Putin, Mikhail Khodorkovsky being the key example.

What we have seen under Putin is the increasing radicalization of racism, xenophobia, and coercive means of problem solving. The deteriorating situation is no where more evident than in the decreasing population of Russia. By 2050, Russia is expected to lose 50% of its population.

The oil wealth has proved effective in buffering the deteriorating condition by putting up a façade of wealth. Moscow may be filled with wealth, but the plight of the common people continues. In fact the lack of funding that has gone into health education, environmental protection, disease prevention has allowed the demographic crisis of Russia to snowball. AIDS, hepatitis, liver failure, etc. are now extremely prevalent and with the oil revenues decreasing, there is not much Putin can do to launch an effective health campaign to reverse the situation. A dying nation will be Putin’s greatest legacy. A great power is naught without the wealth and its human resources. With both drying up quickly where does Putin seek to take Russia?

It is important to remember that it is in the world’s best interest that Russia becomes a healthy and wealthy trading partner. It has much to offer economically, politically, socially, and culturally. Furthermore, its collapse will result in the greater proliferation of arms and loss of invaluable human resources.

The solution is in two folds. Russians need to be more open to foreign help in battling the demographic crisis. Russia simply does not have the resources. At the same time, the United States and the rest of the world needs to disband NATO and discontinue policies that create unnecessary antagonisms with Russia.

If world peace is an objective that we strive for, we must not only remember the size and firepower contained within Russia, but also Russia’s long history and traditions. It, like any other nation of the world, would probably appreciate a little bit of respect.

Best,
Yong Kwon

Wealth and Property: The failure of a revolution

Dear Sirs and Madams,

Driving through Summers County, West Virginia, you will notice the oddest collection of buildings along the precariously thin two lane highways that crisscross one of the poorest states in the United States. As though some child had mindlessly thrown together a place with whatever toy houses were available, large mansion like buildings stand next to small shacks, trailer homes, and collapsing wooden structures. A neglected part of the country, cut off from the wealth of the eastern seaboard by one of the oldest geological formations on the planet, West Virginia stands as a rejection of the Reagan-Thatcher model of a free and prosperous society based on a property-owning citizenry.

British Prime Minister Margaret Thatcher scathingly responded to critics who questioned the increasing rich-poor divide in Britain during her administration by accusing them of being “socialists” who wanted the “poor poorer provided the rich were less rich”. I certainly do not wish the poor poorer nor the rich less rich; however, I wish to provide an assessment of the socio-economic philosophy at the heart of the Thatcher and Reagan’s policies based on the conditions of the Appalachian communities.

Margaret Thatcher and her trans-Atlantic counterpart, President Ronald Reagan, aspired to create a property-owning democracy where people were more free and wealthy. Reagan, Thatcher, and all the cadres of this no minor revolution believed that cheaper mortgages and eliminating regulations on loans would induce higher homeownership, spending and investment. Some economists like Hernando de Soto Polar took another step further by hypothesizing that property could act as collateral for aspiring entrepreneurs and allow the impoverished to access loans. The neo-liberal revolution of the 1980s was built on the precondition of property ownership. Access to property was to liberate people from class and poverty. Freedom from rent was interpreted as the ultimate sign of self-ownership.

The problem with this simplistic notion of property yielding wealth and freedom is its one-dimensionality and naivety. Regardless of whatever brain crunching and refined equations are built upon this crude and basic philosophy, the fact remains that reality rejected this neo-liberal drive to make society more prosperous. The neo-liberal revolutionaries would have known this had they observed the socio-economic state of West Virginia.

Around 75% of the denizens of Summers Country, West Virginia, are home owners, but the area is nonetheless one of the poorest places in the United States and it is visibly impoverished. The fact of the matter is that owning property does not induce banks to provide loans. Most home owners in West Virginia do not qualify for loans because they do not have the security of a stable income. This is the same trend seen throughout the world, including Hernando de Soto’s home ground of Latin America. The brief and irresponsible lending throughout the country had led to a short term development in West Virginian service industry. However, with the economy taking a nosedive and tourism dwindling, these service sector jobs will be the first to disappear. In short, West Virginian homeowners do not live in the Reagan-Thatcher world of wealth and prosperity. In fact, West Virginians are far from being free despite many being free from rent.

One example arises from the field of psychiatry. Another relic of past projects to liberalize the society was the movement to free the populous from the psychiatric establishment. The flawed and seemingly arbitrary system of psychiatric diagnosis was replaced by a quantitative standard of normal behavior. The result was the rise of psychiatric drugs that would chemically induce normalcy in individuals. However, as Dr. Robert Spitzer, the modern architect of categorizing and diagnosing mental disorders, and many others suggest, this led to confusions between the symptoms of psychological disorders and normal human behavior. The resulting over medication of the populous yielded a negative social response. The Appalachians who received government subsidized medical care had ample access to psychiatric drugs and their subscriptions were encouraged by pharmaceutical companies which made a large profit by selling drugs to the government. The Appalachians in turn sold these drugs to complement their low income leading to violence and crime that so often accompanies illicit trades such as this.

The above explanation on psychiatrics seems out of place in a critique on a “property-owning democracy”. Yet, you must recognize by now that home-ownership alone does not create prosperity unless other conditions are met. Crime caused by mass social addiction to psychiatric drugs is but one example. The artificially crafted environment for greater homeownership is completely misguided. The problems in West Virginia does not stem from people who do not own their own homes, but those who do not have stable incomes. Likewise, problems elsewhere will not resolved magically overnight by homeownership.

Nobel laureate writer Wole Soyinka declared that there are “no such being as a dignified slaves”. In another word, those who do not have an independent means to sustain themselves cannot truly have dignity. Dignity being the conception of individual self worth stands as the basis of equal treatment, respect, and among other core virtues, liberty. There has never been any doubt to the fact that self-sustainability acts as a prerequisite to any sort of liberty. This Reagan, Thatcher, and the neo-liberals were quite dead on. However, they ignored the principle tenets of liberty that many intellectuals had reiterated and emphasized in the past. The famous philosopher of liberty, Isaiah Berlin, warned that those who promote liberty must never come to believe it to be an absolute idea, for the result of such dogmatism always results in direct or indirect coercion. The father of capitalism and classical liberalism, Adam Smith, believed that the “violent… [and] improper means [by the government] to remedy the inconveniencies of dearth” always resulted in greater problems for the rest of society. The Reagan-Thatcher revolution’s attempt to artificially induce home ownership created an imbalance that greatly damaged the socio-economic state of both Britain and the United States and arguable the rest of the world. At the end of the day basic truths on economics win out. Stable income and savings save the day.

As we seek a way out of the current economic crisis and a way forward into a new, more prosperous and freer society, the implications of the socio-economic conditions of Appalachia are far reaching. Perhaps this article was redundant and wastes time pointing out the obvious. Nonetheless, I thought I would share with you what I’ve come to reaffirm on the hills of West Virginia. We cannot expect one answer to solve our problems and we should be aware of the political venus flytraps that lure in unsuspecting citizens with its sweet promises of prosperity and wealth. It is the citizenry’s duty to work towards their own prosperity. All that the government should do is maintain roads, schools, and other services that facilitate citizens who seek wealth but never go out of its way to tilt the market in anyone’s favor. This, I believe, is the way to both wealth and liberty of nations.

Best,
Yong Kwon


p.s. For another article on stunted prosperity, read my past article on agricultural subsidies.

We Are What We Eat – The Burden of Agricultural Subsidies on the World Market

Dear Sirs and Madams,

One often forgets that repression of economic liberties constitutes a form of state violence. Whatever temporary good it seeks to accomplish, government intervention often tends to disturb the global market, exacerbating inequality and threatening the very survival of countless individuals around the world. Nowhere is this more clearer than in the agricultural policies of the United States and the European Union. The far-reaching ramifications of the west’s agricultural subsidies include not only the possibility of intensifying the current global economic crisis, but also undermining the security of the entire world.

It is important to grasp two very important facts from the Great Depression of the 1930s. First, the Depression did not develop from a vacuum, but as a consequence of the American government’s policy after WWI to increase tariffs, mostly in the agricultural sector. Second, once the depression began, the American government ignited a tariff war with the Smoot-Hawley Tariff Act of 1930, which by increasing tariffs further destabilized the deteriorating world market and order.

In the current global market, while agricultural tariffs no longer have as great an influence, the same detrimental effects are exerted by agricultural subsidies. The European Union alone spends $50 billion every year supporting domestic production of agricultural goods. As a result, not only are agricultural products from the third world not competitive within the EU but also the third world is forced to purchase subsidized agricultural products from Europe. By unfairly eliminating competing producers of agricultural goods in the third world, the United States and the European Union have effectively reduced the agricultural output of the world. Furthermore, the introduction of bio fuel subsidies exacerbated the diminishing supply of food. As a result, according to UNESCO, wheat prices have gone up 130% since March of 2007. Unable to compete in the food market despite the increase in prices, the purchasing power of many agriculture based nations will plummet as the crisis deepens. In this scenario, the world trade can only diminish with terrible consequences.

Although the crises in the housing and the financial markets overshadow the enormous burden placed on the global market by agricultural subsidies, the rest of the world is not so oblivious to the ongoing crisis. In retaliation to the west’s agricultural subsidies, increasing food prices, and the global economic crisis, 29 countries have curbed their export of food products. This feeble attempt to hoard domestic products has been a consistent response by nations facing economic hardship. During the Asian Financial Crisis of 1997, the response from many afflicted nations was to raise their tariffs, especially against highly competitive American produce such as beef. In response, the United States passed anti-dumping laws, causing havoc in Pacific commerce. This time the crisis is global and the global trends that we had seen in the 1930s, following the Smoot-Hawley Tariff Act, are already evident around the world. India, Russia, Vietnam, and other countries have already raised tariffs, spearheading the cataclysmic economic combustion which may decrease global trade for the first time since 1982.

If one remembers what lay at the end of the Great Depression in the mid and late 1930s, the direness of the current situation does not need to be reiterated. In 2008, Foreign Policy magazine ranked Pakistan the nation most heavily afflicted by the food crisis. With 200 million people losing the ability to purchase basic means for survival, the conditions are ripe for the radicalization of the population. Considering Pakistan’s nuclear capacity, this is no small matter. As the world heads deeper into an economic crisis, tariffs increasing, and the global commerce shrinking, the socio-political conditions can only worsen. Frederic Bastiat said that "If goods do not cross borders, armies will." In other words, tariff wars or subsidy wars can lead to shooting wars.

Recognizing the negative impacts of agricultural subsidies, the European Union seeks to phase out its Common Agricultural Policy which outlines Europe’s policies on food production. However, no global economic reform will be complete without the cooperation of the United States. For the United States, agricultural subsidies account for only a small part of the bigger problem surrounding government intervention. In 2007, government spending accounted for 37% of the entire GDP. The United States must liberalize its market and allow all peoples of the world to have a fair chance to subsist. For this may be the only means to save the world from irrational self destruction.

Best,
Yong Kwon