Admin Editorial- Assessing strands of liberalism.

Liberalism in International Politics- Admin editorial.

(The opinions expressed in this piece reflect only those of the author and not of anyone else at alevelpolitics.com)

Liberalism, it would seem, is a way of studying international relations which has different implications based on the strand of liberalism- of which there are three. Commercial liberalism is a strand which assumes the world can be safer through international trade. Republican liberalism assumes the internal character of the state affects their foreign policy decision making. Furthermore, it is argued, democracy is the mode of government least prone to war and most prone to co-operation. Thus democracy should be spread, sometimes with force. Institutional liberalism is a school that believes the character of countries can be projected onto global supranational organisations or intergovernmental bodies. It’s absurd to claim none of these strands have any valid insights. But policy prescriptions based on the fundamental insights are riddled with fundamental errors, and very often these errors are fatal.

Commercial liberals correctly claim that free-trade and interdependence reduce the incentives for war and thus drive a more prosperous world. This has been proven by a study by Erik Gartzke which finds “nations with very low levels of economic freedom are 14 times more prone to conflict than those with very high levels”. He’s cross referenced this claim, accounting for levels of development, democracy and many other factors, demonstrating that economic freedom is the strongest cause of peace. The claim WW1 was a result of free-trade is also a misnomer- most countries in Europe were implementing protectionist measures before 1914. Britain, the most open economy at the onset of the war, was also the least willing to be enticed into the war. While Thomas Friedman was wrong to claim that two countries that trade will never go to war (Since he claimed in 1999 that no 2 countries with a McDonald’s will go to war, this has happened 4 times)- the lack of absolutism doesn’t disprove the theory in general.

A number of criticisms of Commercial liberalism have been made. Critics of global trade argue that the process of economic globalization weakens government power and therefore undermines democracy. This is a correct argument, but ultimately meaningless unless one wants a Leviathan state that can do anything it wants without consequence. For a government to implement anti-market policies, for example punitive corporation taxes, it would have to accept the consequence of less economic activity or lower employment that would result from these policies. As a result no serious contender for public office will ever make promises that he knows will not work (though of course  unintended consequences are a factor in government policy). As Margaret Thatcher put it “You can’t buck the market”. That age-old maxim applies even if your government is democratically elected by an economically mislead populace.

In the wake of the financial crash of 2008 concerns have been made that free markets make the global economy unstable. But to blame the crash on the free-market is another misnomer. The crash started in America, where the Federal Reserve lowered interest rates to 1% in 2004, encouraging banks to lend out too much money. They then quintupled the rates to 5% in late 2006, meaning those enticed with low interest rate loans in 2004 were suddenly unable to afford mortgage repayments. This was exacerbated by the Community Reinvestment Act 1977- which encouraged banks to lend money to people with a poor credit rating and no ability to repay the loan. The policy of Washington was to reinforce faith in the American dream by attempting to ensure high levels of home-ownership, without any real checks by the banks as to whether they could pay. Additionally George Bush was determined to close the gap between white home ownership and ethnic minority home ownership. The government further reinforced moral hazard by bailing out the banks in 1984 with Continental Illinois and in 1998 with Long-Term Capital Management. Banks operated under the assumption they would be bailed out. The only surprise in the U.S federal government’s response in 2008 was that it DIDN’T bail out Lehman brothers, it did bailout every other major bank in the country. This created uncertainty, and thus a financial crash. The only reason faith in market liberalism has waned after 2008 was because leftist academics have created a media consensus that the crash was caused by free-market capitalism to already skeptical nations such as China, who have capitalized on the myth to undermine faith in capitalism worldwide.

One way in which modern commercial liberals can be critiqued is in its obsession with creating government managed trade, as is manifested in the European Union. Far from being a free trade area, the European Union’s a customs union in which free-trade and free movement are encouraged within the 28 member states but strongly discouraged among the states outside the union- with the common external tariff stopping member states reaping the full rewards of cheap goods from emerging Eastern Markets. The European Union’s eagerness to go to war with Russia is unsurprising given its protectionist nature against non-EU goods. As the EU forms an ever shrinking part of global GDP, it is hypocritical for Commercial liberals to support projects like these. The WTO, although purporting to be a global institution, is really a quasi governmental organisation which manages trade in closed room negotiations which usually benefit well connected corporations. Those who genuinely believe in commercial liberalism should be at least sceptical of all these government instiutions purporting to be bastions of free trade.

Republican liberalism’s insight that the character of the state affects foreign policy is obvious. For example the dictatorship in Iraq launched a war against Iran in 1980 predominantly for religious reasons but also to expand Iraqi prestige and power- something common to military dictatorships. But the Republican liberals ignore that the the internal character of a democracy can also make decision making aggressive. For example the Red Scare of the 1950’s created democratic pressure for the USA to take a strongly anti-communist foreign policy- and post 9/11 hysteria most likely drove the call for wars in the Middle East. This policy of forcefully spreading Western democracy- another tenet of Republican liberalism, has been an unmitigated disaster since the 1990’s,  with Afghanistan unstable and in thrall to the Taliban, Iraq almost entirely under the control of ISIS and Libya having an official government which controls a few hotels. Ironically the influence of “Republican liberals” such as Robert Kagan is the ideological force that is making democracies more violent, contra to their own theories on the subject.

The Institutional liberal insight that the character of a country can be projected onto the international level is correct. But just as virtuous notions of liberalism and peace can be projected onto international institutions- so too can worse notions such as nationalism, bureaucracy and corruption. All these features are present in the European Union to a very large extent- the latter two in the UN as well. Additionally the Institutional liberals forget that just as the worst people get on top in nation-states, so too can they get on top in international organizations. This idea has been vindicated by the recent appointment of a Saudi to head a UN Human Rights council and the continued presence of Russia and China on the P5 Security council. International bodies are often controlled by hostile elements who, far from trying to build a better world, as Institutional liberals would expect,, are merely using the organisation as a means to serve their own interests. This is by no means a uniquely Marxist insight- Nigel Farage contests that the presence of former-communists in the commission affects their anti- nation state ideology. Most media commentators, regardless of political viewpoint, agree that the way the refugee crisis or the Greek debt crisis were handled by Angela Merkel (a woman with large power over the whole European project) were ways conducive to German interests rather than the interests of wider Europe as a whole.

Similarly, the United Nations, far from being a peace loving organisation, has often pursued US interests over the pursuit of a peaceful world. For example the UN, contra to conventional wisdom, was highly complicit in the 2003 US and UK invasion of Iraq. By placing sanctions on Iraq in 1990, the UN were ignoring the Commercial liberal insight that protectionism causes war. By doing so, the UN was indirectly responsible for the deaths of over ½ a million children, and this drove Iraq into isolation and reduced the losses western countries would suffer in a war. The UN expected that sanctions would bring Iraq to the negotiating table. This assumption ignored the Republican liberal insight that the character of a state affects their decision making. Iraq, as a military dictatorship, was unlikely to be seen giving in to western demands and thus be seen to look weak to the war-hungry generals (who would always be affluent regardless of how well the people were doing)  The Institutional liberals in the UN were so driven by their determination to perfect Iraq and spread democracy, they ignored other important insights of liberalism and thus they must take responsibility for Iraq’s current state of affairs as much as the Republican liberals.

In conclusion we can say that although each of the three strands has valid insights, the thinking that follows from the basic insights is often non-sequiturial or flawed. It’s from this subsequent thinking that many of liberalism’s policy failures lie.

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