How are we to use history?

March 4, 2015

“The Middle East is completely imprisoned in the past. Nobody can let go….The great thing about Southeast Asia is really exactly what you‘re pointing out, that people are able to let go. I remember being in Vietnam and asking people what do you think about the war? And they said, ‘which war?’”(David Pilling in Financial Times Feb 27, 2015).


Pilling’s article on Indian author Amitav Gosh provides insight into how to view the past and present in different parts of the world. For the past, my interest is the impact of the British Empire on today’s world, an enormous topic which requires a lifetime of study, but which even a stab at learning can provide some understanding of our current world.


As for the present, try to comprehend religions in a comparative sense. What does each believe and practice and what happens when followers of different religions come into contact with each other? In India, the country with the world’s second largest Muslim population (Indonesia 209m, India 176m, Pakistan 167m, Bangladesh 133m), the interaction is mainly peaceful, except for a few outstanding past exceptions.


All religions encourage their followers to read certain works, but as far as I know only Muslims require devout followers to memorise large portions, in their case, of the Koran. Given a person’s limited time for study, this can only be done at the expense of reading more widely in other fields of learning. This practice helps explain Amitav Gosh’s view that “the Middle East is completely imprisoned in the past.”


History and the empire; history of the empire

The list of British Empire horror stories is well documented such as the slave trade, opium trade, racial events in South Africa, Kenya and Rhodesia (now Zimbabwe), the Amritsar massacre, the Bengal famine, and the treatment of native peoples in North America and Australasia. But there is another side. What the empire left behind helped to shape countries which have prospered politically, economically, and socially. Not all the countries, but the US, Canada, Australia and New Zealand had strong imperial connections and are doing reasonably well, as is India. Former British colonies in Africa have a more mixed record, but are probably doing better than any likely counterfactual set of circumstances might portray. Without the empire, my guess is that people would have often remained living in tribal societies not known for their adherence to today’s recognized human rights. The rise of ISIS/ISIL is in some sense a return to or reappearance of tribal type religious conditions.


History of the empire or parts of it is described in Arnold Smith with Clyde Sanger, Stitches in Time, The Commonwealth in World Politics, (General Publishing, 1981). The Commonwealth (originally the British Commonwealth and now the Commonwealth of Nations, as opposed to the Commonwealth of Independent States made up of former Soviet republics) is the country club for imperial alumni.


Today it includes two countries which were never part of the empire, Madagascar and Rwanda, but which had neighbouring ties to it. It excludes the US which before its rebellious exit was a jewel in the imperial crown. The Commonwealth today consists of 53 states, covering 25% of the world’s land area, with about one-third of the global population and about 17% of world GDP (measured in PPP). The countries are united by a combination of language, history, culture, shared values of democracy, human rights and the rule of law. If the US was added, the share of world GDP would increase to 35%.


There have been five secretary-generals of the Commonwealth since its establishment in 1965. For the first ten years, Arnold Smith, a Canadian, held the position followed by persons from Guyana, Nigeria, New Zealand and presently India.


Stitches in Time is a valuable account of the first ten years. It shows how the empire morphed into the Commonwealth, by breaking, but not entirely severing, the political bond with the UK, while maintaining the ingredients for nation building required for the creation of states with values ascribed to by members of the UN…even if not practised by many of them.

Several of the initial Commonwealth countries had rocky starts as described by Smith and Sanger, including Singapore, Malaya, Kashmir as part of India and Pakistan, Rhodesia (Zimbabwe), Pakistan and Bangladesh, Cyprus, Uganda, Nigeria, and Papua New Guinea. The secretariat helped ease these national growing pains. Today it describes its activities as follows:

“Commonwealth organizations are involved in diverse activities, from helping countries with trade negotiations to encouraging women’s leadership, building the small business sector, supporting youth participation at all levels of society and providing experts to write laws.

The Commonwealth Secretariat promotes democracy, rule of law, human rights, good governance and social and economic development. We are a voice for small states and a champion for youth empowerment.

The Commonwealth Fund for Technical Co-operation (CFTC) was set-up in 1971 and is the principal means for the Commonwealth Secretariat to provide technical assistance to Commonwealth countries. Our approach emphasises country ownership by delivering technical assistance on a demand-driven basis.” (from Commonwealth website).


In The Royal Commonwealth Society Journal, Dec 1961, Arnold Smith concludes on a positive note:

 “In my judgment the peoples of the little island of Britain have probably accomplished more for the social and political advancement of mankind than any other people: the development of English as an approximation to a world lingua franca, the development and spread of parliamentary democracy, the industrial revolution. Decolonisation involved some temporary ambivalence of attitude and outlook, but compared with other empires it was accomplished remarkably gracefully. A hundred years from now, I suggest, historians will consider the Commonwealth the greatest of all Britain’s contributions to man’s social and political history.”

I leave it to the historians to debate this.


What Stitches in Time contributes is to show how facets of the British Empire, which, despite starting in Elizabethan times, only flourished for a brief period from around 1800 to 1914, have become embodied in today’s societies and nations in what I would consider to be positive ways.

Today, there are a variety of global indices which could throw light on the impact of Britain’s imperial past. Aside from national economic data such as GDP, employment, and income distribution, various organizations publish a range of data:

Economic Freedom of the World Index (Fraser Institute)

Worldwide Press Freedom Index (Reporters Without Borders)

Freedom in the World (Freedom House)

Freedom of the Press (Freedom House)

Index of Economic Freedom (Wall Street Journal and Heritage Foundation)

CIRI Human Rights Data Project (University of Connecticut)

Democracy Index (Economist Intelligence Unit)

Polity Data Series (Polity Instability Task Force funded by the CIA)


While each index may be promoted by those with some axe to grind, considerable information by country exists for an assessment of the contribution of the British and of other empires past and present.

Empires and Caliphates – anything new here?

February 27, 2015
It is a struggle to sort out who dislikes whom in the Middle East what with Al Quada, ISIS/ISIL, Sunni and Shia Muslims and warring factions within each group. It appears to be both a series of civil wars going on within the Muslim community and a wider conflict which at times carries to the outside world, to other religions and to other places. Its aim is to spread the faith, or a version of it, globally, and thereby change people’s way of life, and destroy the faith of others.
An informative article by Audrey Kurth Cronin, “ISIS Is Not a terrorist Group,” appears in Foreign Affairs, March/April, 2015. A principal argument is,
But ISIS is not al Qaeda. It is not an outgrowth or a part of the older radical Islamist organization, nor does it represent the next phase in its evolution. Although al Qaeda remains dangerous—especially its affiliates in North Africa and Yemen—ISIS is its successor. ISIS represents the post–al Qaeda jihadist threat.
While Al Qada is described as a terrorist organization, ISIS is a pseudo state. It has an estimated 30,000 fighters (of varying quality), currently controls territory in Iraq and Syria, has military capabilities which allows it to engage in sophisticated military operations, funds itself through sale of oil, hostage taking, black market dealings, revenues from supporters abroad and other means. It aims to establish a caliphate with its own version of the Muslim faith.
What is a Caliphate?
There is much more to learn from Cronin’s article. Here, I explore the idea of a caliphate and how it relates to the region’s history. According to Wikipedia, a caliphate is a type of Islamic government which can have a Sunni and Shia version.
”… led by a caliph or leader as a successor to the prophet Muhammad The  Sunni branch of Islam stipulates that, as a head of state, a Caliph should be elected by Muslims or their representatives. Followers of Shia islam, however, believe a Caliph should be an Imam chosen by God from the Ahl al-Bayt (the “Family of the House”, Muhammad’s direct descendants). In 2014, the extremist group Islamic State of Iraq and the Levant declared itself a Caliphate; …its authority remains unrecognised by any country.”
A caliphate is a form of empire with religious overtones. ISIS/ISIL operates in a region which was once part of the Ottoman Empire. It covered a geographical area of today’s Middle East, extending westwards into parts of Europe, including some of Northern Africa and eastwards towards the Indian subcontinent. An illustration of this is contained in from 1300AD to 2001Ad (type in Ottoman Empire in the search box).
This website shows over time the geographical spread and shrinkage of the Ottoman Empire until its demise at the end of WW1 leaving Turkey as a separate country. At its height it covered not only a large land area but a population of different religions which often engaged in civil wars as well as fighting against each other. The crusades pitted Muslims against Christians; protestant and catholic Christians often opposed each other as did Shia and Sunni Muslims. The present is a continuation of the past over much of the same territory.
Today’s narrative tends to take its starting point as the postcolonial borders of countries which emerged from arrangements drawn up after 1918 by mainly the French and British under the eye of the League of Nations. They delineated countries like Syria, Iraq, and Lebanon, and later on Israel and Jordan emerged as separate countries. But the story and conflicts did not start then. They are mainly a continuation of what happened in previous centuries including the crusades from the eleventh century which involved Christians, Jews and Muslims fighting themselves and each other. Religion is often a bloody sport. The latest proposal for a new Muslim Caliphate provides a footnote (at present) to this historical record.
What’s different today?
Each generation, encouraged by academics, thinks that what they are experiencing is new, but this is seldom the case, or only new in particular dimensions. Geographically, land and sea areas remain the same over centuries. One difference is that demographically there are far more people in the world and Middle East today than there were in the past. Up to 1900, the world population had remained for centuries at around one billion. It is now seven plus billion and expected to climb to over nine billion. That is change worth noting especially when you consider its location, religion, economic and social wellbeing. For example, in 1900, a world population of 1.6 bn was located 60% in Asia in contrast to 2000 with a world population of 6bn and 54% in Asia, that is almost twice the world population 100 years earlier.
Today over half the world’s population is in a smallish area of the world including China, the Indian subcontinent, Indonesia the countries of south-east Asia. A map of the globe shows how geographically concentrated half of the world population is, and how spread out is the remainder. Today, China and India each has a total population only slightly smaller than the global population in 1900.
The other area to recognize as being new is technological change. Summed up in terms like globalization, this change includes the impact of transportation and communications both of which have experienced declining costs of moving people, goods and services. The use of social media, foreign outsourcing of production, employment of temporary foreign workers, and the “uber” sharing method of producing goods and services have all changed the location of production domestically and globally, and made more efficient use of existing resources. At the same time it has changed the demand for different types of skills and altered the career patterns for individuals.
What has this got to do with the Middle East cauldron of violence? At the moment (Feb 2015) the violence is conducted as guerilla warfare or terrorism. This is a far cry from WW1 trench warfare, WW2 trench, air and naval warfare with recognizable troops who wore uniforms, and when captured received some protection from the Geneva Convention rules of warfare. These conflicts saw guerilla tactics used, but generally opponents would give prisoners reasonable care. There were exceptions. Japanese treatment of prisoners was often similar to those meted out today by ISIS/ISIL.
Today ISIS/ISIL engage in unconventional warfare using whatever weapons they can buy or capture from their opponents. They execute their prisoners in a brutal fashion, unless they can sell them back to their native countries or trade them on a black market. ISIS/ISIL fighters can be called guerillas, terrorists, criminals, the label does not matter. It’s what they do that matters as are their actions reported daily in Syria, Iraq, Yemen, and now parts of Africa including Egypt, Libya and Nigeria.
The violence taking place in the Middle East and in countries with connections to the Middle East, for example in Europe, North America and Australia is not new in general terms. Religious conflicts fill the pages of history books. What has some newer aspects are the means by which the conflict is conducted, and that is because of technological developments. Some people remain as evil as their predecessors, but they are now able to perform their acts in different ways. Whether they are called terrorists or criminals is immaterial. Their actions are horrific including to most of those who profess the same religion. This too has happened before, for example, when Germans of the Christian faith supported the murderous actions of Hitler. At the moment, prospects for the success of a new Caliphate may seem remote but this does not mean there will no more violence in and outside the Middle East……and responsibility cannot just be assigned to post-colonialism.


All About Eve – the sequel

February 24, 2015


Paul Wells, in an article entitled “In the small mind of a rare bird” notes dialogue from All About Eve, the 1950 film starring Bette Davis and George Sanders (Maclean’s, Feb 23, 2015, p.12):

“That I should want you at all suddenly strikes me as the height of improbability. But that in itself is probably the reason: You’re an improbable person, Eve, and so am I. We have that in common. Also our contempt for humanity and inability to love and be loved, insatiable ambition, and talent. We deserve each other.”

The current I could be today’s Eve listening to her current friend or current political leader. The dialogue fits. But could it be a self-inflicted wound for both Eve and Dmitri? Does this make her a more attractive candidate, and does it improve his employment opportunities? Or is it a move to reinforce unfavourable views about her leader’s judgment? In which case, Eve and Dmitri may still be working for the Conservatives. It provides much fodder for the Ottawa “bubble” to discuss.

What does the future hold?

February 18, 2015

A flurry of recent writings addresses western political and economic decline. Culture may follow this downward path, but is often motivated by distress in other parts of society. Some of Picasso’s paintings dealt with the Spanish Civil War, and during WW1 war artists and poets flourished, including some of Canada’s Group of Seven painters. Jackson and Varley were official war artists


Francis Fukuyama is the author of Political Order and Political Decay dealing mainly with the West but also with other parts of the world. George Friedman in Flashpoints focuses on emerging problems in Europe and points east. China, Japan, Africa and Latin America have their troubles too which could upset world order, that is, if one exists.


Another frame of reference is to compare the present with previous periods of imperial influence. The most recent one, Pax Americana, which is now in decline, was preceded by others including Pax Romana (27BC to 180AD), and more recently Pax Britannica from 1815 to 1914. None of these encompass long periods of world history. After the defeat of Napoleon at the Battle of Waterloo (1815), Britain increased its global power until it weakened in the post WW1 era to be replaced by the rise of American influence.

The end of WW2 marked the beginning of Pax Americana when the US became the sole world power confronted by the Soviet Union in a nuclear stalemate until the latter fragmented after 1989. At that time the Washington Consensus of democracy and capitalism was proclaimed as the dominant organizing force for national economies. If some did not have it yet, they would progress in this direction. Unfortunately events have not turned out exactly as prescribed. Stress fractures have appeared in existing capitalist systems. Those which appeared to be progressing in the right direction have hit speed bumps or been diverted from their desired destination.


Indices now measure not only national economic growth but the democratic freedoms or the lack thereof. The economic prosperity of countries, especially in Asia, like China, India and Indonesia is on the rise but democratic freedoms are restricted in places like China, Hong Kong (now part of China), Singapore, Malaysia and Thailand. All hold elections but conditions place limits on freedoms regarded as necessary for full blown democracy.


I suspect that terms like democracy and capitalism need to be redefined or even replaced, as they have lost meaning when a country like North Korea labels itself The Democratic People’s Republic of Korea. Capitalism too comes in many forms with various mixtures of government and private enterprise and financing, with private enterprise often the beneficiary of government policies. Even the most right wing political parties in North America and Europe support measures which provide, subsidies, protection and tax breaks for their supporters. Kleptocracies are today’s nearest approximation of unbridled capitalism; one definition is  “… the term for systematic corruption and thievery by the state or state-sanctioned corruption…with ties or aid from organized crime syndicates.”.

Examples of decay and flashpoints

Today has some similarities to the 1930s, especially in Europe. Then many in Great Britain supported appeasement for Hitler, including about half the Conservative cabinet. Lord Halifax, a contender for Prime Minister at the time of Churchill’s appointment in May 1940, was a strong supporter of appeasement. He was sent as Ambassador to the US to remove him from daily politics in the UK. The Duke of Windsor, who had close ties with Nazi leaders, was also sent abroad as Governor of the Bahamas where he could do little harm in a world devoid of social media.

Today, appeasement is the approach of many countries to Russia, for example over the Ukraine. Invasion of the Crimea took place at the time the Winter Olympics were being held in Sochi. Russian troops entered the Crimea on Feb 26th, 2014 and the Paralympic Games were held March 7th-16th, 2014. They followed the regular Winter Olympics when Russian intentions were clear. Historians may ask why at least some countries did not withdraw from these games.

Russia was suspended, not expelled, from the G8 group of nations on March 24, 2014. Its actions since then, especially in the Ukraine, have been to confront the West, where countries have been unable to provide a unified response, leading to de facto appeasement. Weakness exists in the actions of NATO, the EU and the US, the sole western military and economic superpower.

Other global hotspots include: China in the South China Sea; Greece and its relation to EU countries; ISIS/ISIL unrest in the Middle East, North and other parts of Africa; criminal (terrorist) incidents, often religiously motivated, around the world including Canada, the US, Denmark, France and other countries.

Each of these areas, although geographically separated, have some common elements which require a coordinated approach by countries willing to recall the past century of two world wars and many regional conflicts. Future smaller conflicts may easily metastasize into larger ones – (it did in 1914 after the assassination in Sarajevo)  – with the shrinkage of the world due to advances in communications and transportation, and the growth of the international movement of people, goods and services especially money.

The End of Pax Americana; what will follow?

February 6, 2015

A review of Clyde Sanger, Malcolm MacDonald, Bringing an End to Empire, McGill-Queen’s Press, 1995.

A chance reading of Malay and Thai history brought me to this biography of Malcolm MacDonald (1901-1981), son of British Labour Prime Minister Ramsay MacDonald. Malcolm’s career as MP, cabinet minister and diplomat covered not only the winding down of the British Empire but influenced many of the measures taken in SE Asia, the Middle East, especially Palestine (Israel and Jordan), parts of Africa, Canada and Ireland. This makes him one of the most knowledgeable participants in the end of empire. Clyde Sanger has done a remarkable and informative job of documenting MacDonald’s professional and personal life. The two are intertwined as is often the case.

This biography, as well as any other I have read (a few it must be admitted) allows the reader to appreciate how the empire ended, and whether it did or what replaced it. The book gives the reader a glimpse of the empire during this period, what caused the changes and what emerged in its place, which is what we live with today.

A  global tour shows developments in several colonies and dominions. The Middle East is one of the most interesting where MacDonald negotiated the conditions in Palestine which is now Israel, Palestine and the neighbouring countries.  As Colonial Secretary MacDonald wrote (from Constant Surprise, pp. 161,165, of Macdonald’s unpublished biography) :

“By the summer of 1938 the situation in Palestine was appalling. The quarrel between the Arabs and the Jews there had reached a vicious stage; and the problem was made more complex by the fact that the former were supported by all the nearby independent Arab nations and the latter were supported by the influential Jewish communities and their powerful friends in Great Britain, the United States and elsewhere…”

Eighty years later, has anything changed? One thing is that there are many more people living in this area.

Malcolm MacDonald was British High Commissioner to Canada 1941-46, liaised closely with Prime Minister Mackenzie King, whom he had known since before the war, as well as with some of Canada’s distinguished diplomats and senior civil servants. At that time, domestic and foreign policy was conducted on a more personal basis, and MacDonald’s relationship with British politicians and officials from his earlier times allowed him to influence Canada’s domestic and foreign policy, and to alert British politicians to the likely reaction of Canada to measures flowing from London.

Malcolm MacDonald was a part of the ending of Pax Britannica which lasted from the Battle of Waterloo in 1815 to 1914. It was followed with a 31 year gap by the Pax Americana in 1945, which now appears to be weakening. In the former period, Britain was seen to be the dominant world power, while in the latter it has been the US. When the ending comes, it happens quickly. In earlier times, there was a Pax Romana which too ended.

Today, the signs are writings dealing with America in decline (a number of recent books have decline in the title). America in Retreat by Bret Stephens is a thorough discussion of weaknesses displayed by the current US administration, and argues that the US should be more assertive with regards to the Middle East, the Ukraine, China, Europe and Africa. Elsewhere, the retiring Economist editor (Jan.31, 2015) paints a depressing picture of the US, “…Washington remains synonomous with gridlock.”  And “The only way to feel good about American democracy is to set it beside Brussels. Woefully unaccountable and ineffective……”

Jon Stewart in the Daily Show provides a comedic take on US issues which are of serious concern to domestic and world politics. It has become an important way of presenting and influencing political issues. A related sign of global change is the weakening of the Washington consensus which proclaimed that democracy and capitalism would liberate the world. Francis Fukuyama, a proponent of this after 1989 is revising his views in his latest book, Political Order and Political Decay, where a reviewer summarises Fukuyama’s views that “…. unless liberal democracies can somehow manage to reform themselves and combat institutional decay, history will end not with a bang but with a resounding whimper.”


Thailand, escape from colonization?

January 27, 2015

Thailand and Ethiopia are often mentioned as countries which were not colonized. In the latter case the Mussolini tried but without much success. Thailand experienced different conditions. It is bordered by Malaysia and Myanmar, formerly Burma and both once part of the British Empire, by China, Laos, and Cambodia, the last two being part of French colonization as was Vietnam which is nearby. How did Thailand escape the European empire builders? Did it escape?

Two books on the history of Thailand, The King Never Smiles (2006) by Paul Handley, and William Stevenson, The Revolutionary King (1999) provide clues to how the country avoided imperial clutches. These included making territorial deals with neighbours and submitting to certain demands of foreign countries. (W. Stevenson, a Canadian author, was author of William Stephenson, A Man Called Intrepid}.

Neighbouring countries did make claims on Thai territory, but at times the government gave up territory on its borders, to the French and Burmese for example, rather than face submission to foreigners. Some of this land was subsequently reclaimed so that there has been a border-concertina process which warded off or responded to foreign pressures.

Fast forward to WW2 when Japan forced Thailand to provide a land route for the invasion of the Indian subcontinent. The death railway (Bridge on the River Kwai) is an example of what Japan had in mind to create a shortcut to India, one which avoided more dangerous sea lanes. One group of Thai politicians collaborated with Japan, assisted in building the railroad with the use of allied prisoners and Asians. There were far more Asians used to build the death railway than allied soldiers, and many more Asians who died in its construction. Another group of Thai politicians supported the allies but had to leave the country to do so.Towards the end of the war, the pro-Japanese faction turned on their occupiers and cooperated with the allied powers.

Although Thailand was not colonized, it avoided this by having to make deals with countries which might have colonized it. In the 1950s and 60s the country was supported by US policies and forces in south-east Asia. The US was concerned that Thailand would fall under the control of the Chinese communists as happened in Vietnam, Laos and Cambodia. Malaya, which included Singapore, also had a communist insurgency in the early postwar years but this was suppressed by British forces.

In sum, Thailand did not succumb to the traditional path of colonization, but in order to avoid it the country had to make concessions to foreign powers. While the political crisis now gripping Thailand does not have a direct colonial or foreign connection, some of the same Thai interests (urban versus rural) are still at play on the domestic scene. A good survey of the current situation is published in the Nov. 20, 2104 New York Review of Books, 51-53.

Events over the past century

January 6, 2015

The years from 1900 to 2015 contain a series of events that it would have been impossible to predict in 1900. Predicting the next century will be equally difficult. Consider the past. WW1 from 1914-18 is followed by inflationary times in Europe and a worldwide depression in the 1930s. In the immediate postwar period an estimated 18 million people died worldwide from a flu strain, far more than had died during the war. In Western Europe and the Soviet Union in the 1930s, the political choice was seen to be between communism and fascism. The Soviet Union went one way and Germany, Italy and Spain the other. Somehow the UK steered a course between the two and like the US followed a liberal democratic path. The UK had coalition governments for most of the 20 interwar years which helped manage opposing left and right wing political views.

WW2 from 1939-45 represented a continuation of WW1 which had had a short respite while the players rearmed. Economic policies adopted to fight WW2 ended the depression years of the thirties, as men were conscripted and women employed to take their places in factories and on farms. Similar actions took place in the US once it decided to join the allies in fighting Germany and Japan. This time Italy joined the other side. It had actually adopted fascism before Germany. The Soviet Union started off allied to Germany and then changed sides when Hitler decided to invade Russia in order to expand his empire to the east.

The postwar years saw the west confronting the east, especially The Soviet Union and the occupied countries of Eastern Europe. A Cold War ensued under the shadow of nuclear weapons which remains today with a number of countries owning this weaponry. Some like North Korea and Pakistan are not too politically stable, as would be the case with Iran if it obtains them.

A brief synopsis of the recent past shows how difficult it is to forecast even the main events of the next 50 years.

Touristic GDP

December 27, 2014

Fluctuation in tourism may be a useful indicator of changes in national GDP. Thailand’s tourist industry is down. In the decade since the tsunami hit, the country has expanded the infrastructure for tourism. Today the problem is that fewer tourists are arriving. The reason is both demand and supply related. Admittedly the Thai tourism sector is less than 10 percent of Thai GDP, nevertheless it may be a more accurate reflection of economic activity than what is covered in the wider measure of GDP.

Tourists from Northern Europe and Russia are attracted to south-east Asia during the winter months. Reasonable air fares, accommodation and other attractions make Thailand a favored destination until recently. On the demand side, economic slowdown in Europe has reduced spending on vacations. In the case of Russia, the declining rouble makes any type of import, which includes spending on foreign travel, prohibitively expensive. You see it on the streets and in the restaurants in Cha Am and Hua Hin, two east coast resorts which usually bustle with European tourists.

On the supply side, Thailand’s move to a military dictatorship almost a year ago means that travel insurance is impossible or very expensive for tourists to buy. Neighboring countries offer similar tourism opportunities and the sun-seekers move there, perhaps to remain. Why or whether the political systems in Cambodia, Myanmar, Indonesia, Sri Lanka and Vietnam are seen more attractive to travel insurers is unclear to me, but Thai tourism seems to be suffering from living under the present regime of military rule.

A focus on sectoral statistics as an indicator of overall economic activity may appear myopic. However my view is that the known shortcomings of GDP well documented by Diane Coyle and others means that alternative measures need to be sought.

Entitlements – the weakening of democracy and capitalism?

December 19, 2014

When the Soviet Union imploded in 1989, some predicted that western style democracy and market capitalism would reign supreme. Countries without these institutions would move in a westerly direction. It was a nice thought but did not happen and the hubris has since been deflated.

One reason is the epidemic of entitlements granted to and then protected by special interests. Everyone from corporations to poverty groups seek benefits from governments which once granted are difficult to roll back. While the interested parties may benefit the system as a whole becomes infected and debilitating illnesses ensue.

Twenty-five years after writing The End of History in 1989, Francis Fukuyama has revised his previous view and examined the weaknesses of market capitalism and the democratic process as practiced in the North America, Western Europe and various other countries.

A question now is whether these institutional arrangements are in decline and what will replace them? Alternatives include, amongst others, some degree of anarchy, a repressive political regime, a more centrally controlled economy, or some combination of the foregoing.

Not being a student of these issues, my views are based on the limited history I have read and experiences I have lived through.

Measures which may weaken the democratic process.

1. First past the post electoral systems result in winners often being elected with well less than 50 percent of the vote. Proportional representation lessens this problem but creates others, the existence of many parties, each with a narrow interest creating difficulties in getting majority votes for the passage of legislation. One alternative is a preferential voting system whereby an elected representative must get 50 percent of the votes cast.

2. The electoral process encourages candidates to propose policies which attract particular groups of voters. These almost always cost money and over time become considered as entitlements. They are difficult to remove and tend often to increase in terms of cost. Sunset clauses supposedly limit these effects but don’t seem to work well once a constituency is created.

3. Electoral boundaries may be drawn so as to favour a certain party. U.S. Congressional districts are rife with this process of gerrymandering but it occurs elsewhere. Limiting the number of voters is another way to rig electoral systems as is specifying the qualifications which candidates for election must have.

4. Unelected (appointed) bodies such as Canada’s Senate may be given legislative powers, while in other jurisdictions the powers of an elected upper chamber may influence appointments or legislation.

5. Judicial positions may be held as a result of appointment or election with or without specified terms. There are downsides to both processes. Appointees may be given short terms. In the case of election, the person may be influenced in decision making by the likelihood of reelection.

These are some of the shortcomings I see of the democratic process. The term democracy is much abused. It is used in cases which result in one party rule. Many authoritarian systems describe themselves as democratic, while so-called democratic regimes have elements which are often undemocratic. In the long term, I think that the growth of entitlements, which are difficult to roll back, is the main Achilles heel of functioning democracies. This is one reason for the growth of right wing groups. If the elixir of democracy is to give people more and remove nothing, then the system may grind to a halt or at least malfunction so badly that people are encouraged to resort to extreme measures.

There is now a website which ranks countries by their degree of democracy. More countries are now considered democratic than in the past, but the criteria used do not include measures like the extent, growth and permanency of entitlements.

The future for market capitalism

1. Capitalism was always a mixed system with governments involved both to produce certain goods and services, and to provide a legislative framework for private actors to produce and distribute them. The issue is the extent and nature of this government activity. Even most libertarians expect that their property rights will be protected by a judicial system, their borders defended from attack and certain public goods like highways provided by the state. Socialists advocate much more government involvement in areas affecting the distribution of income as well as the production of goods and services.

2. Issues include the effectiveness and cost with which governments provide for the publicly supplied goods and services, as well as the extent to which things like education and healthcare are publicly supplied and regulated. Some lobby for more government involvement, some for less.

3. Private and public interests are now more intertwined. Financial institutions which are free market advocates also lobby intensively for a legislative framework which promotes their activities and protects them from loss in the case of defaults. After the latest global financial meltdown, the financial sector, with assistance from governments, has seen measures introduced which protect their interests. This is a form of corporate entitlement which becomes entrenched in the economy.

4. In the past the framework for market activity included laws and policies dealing with incorporation, taxation, competition, bankruptcy and contracts. These are now extended to include special measures for particular industry or market segments. They become a form of entitlement for the private sector similar to entitlements for individuals. Removal or amendment is difficult unless they are to be increased.

5. All may not be lost. One set of forces working against the debilitating effects of entitlements is the competition generated by information technology. The list of sectors shaken up by IT include all forms of communication, broadcasting, newspapers, magazines, films, television, publishing, education, transportation, healthcare and many other industrial and especially service activities. New technologies serve to undermine established entitlements in markets and may do the same in the political sphere as well with the growth of social media.

Spheres of Influence

December 14, 2014

Today, there is less talk about empires and more about a country’s sphere of influence. With its armed forces, especially it’s blue water navy and air force, the U.S. is today the country with the greatest sphere of influence. Others which challenge the US to some extent are Russia and China, each of which has a sphere of influence rather than an empire. Another region, the EU is a group of countries which has global influence but does not challenge the US economically or militarily. Other countries with nuclear weapons have a degree of global power but would not be described as having a general sphere of influence.

The Middle East and North African countries are a region with religious based conflicts. In the past these might be isolated from the rest of the world, but today through a combination of cheap communication and transportation costs and the use of social media, are integrated into the rest of the world. In a sense there are fewer regional issues and more global ones. Countries distant from a regional hotspot are now more likely to be involved.

An appreciation of how countries are linked with each other geographically, historically, economically and politically is increasingly important for people growing up in today’s world. Those in school today will benefit from studying technological developments, not just those related to information and communications. Fortunately in many ways they already do so. The future will be based on how technology is grafted onto an understanding of the past, and a willingness to stay up todate. Lifelong learning and the realization that each will have a number of jobs in the future is the mindset which the next generation should have.


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