According to commentators, sanctions imposed by the US and the European Union are pushing Russia towards a recession. However, we hold that some key Russian economic data have been displaying weakening prior to the annexation of Crimea to Russia. This raises the likelihood that sanctions might not be the key factor for an emerging recession.
The yearly rate of growth of monthly real gross domestic product (GDP) eased to 0.3% in February from 0.7% in January and 1.8% in July last year. After closing at 12.2% in March last year the yearly rate of growth of retail sales fell to 7.7% in January before settling at 9.6% in February.
We suggest that the key factor behind any emerging slowdown and a possible recession is a sharp decline in the yearly` rate of growth of money supply (AMS) from 67.1% in May 2005 to minus 12.2% by September 2009. We hold that the driving force behind this sharp decline is a strong decline in the growth momentum of the central bank’s balance sheet during that period (see chart).
There is a long time lag from changes in money supply and its effect on economic activity. We suspect that it is quite likely that the effect from a fall in the growth momentum of money during May 2005 to September 2009 is starting to dominate the present economic scene.
This means that various bubble activities that emerged on the back of the prior strong increase in money supply are at present coming under pressure. So from this perspective irrespective of sanctions, the Russian economy would have experienced a so-called economic slowdown, or even worse a recession.
Now, to counter a further weakening in the ruble against the US$ the Russian central bank has raised the seven day repo rate by 1.5% to 7%. The price of the US$ in ruble terms rose to 36.3 in March from 30.8 rubles in March last year – an increase of 18%.
Whilst a tighter interest rate stance can have an effect on the present growth momentum of money supply this is likely to have a minor effect on the emerging economic slowdown, which we suggest is predominately driven by past money supply.
There is no doubt that if sanctions were to become effective they are going to hurt economic activity in general i.e. both bubble and non-bubble activities.
On this one needs to exercise some caution given the possibility that major world economies are heading toward a slower growth phase.
Hence from this perspective, regardless of sanctions the pace of the demand for the Russian exports is likely to ease.
We hold that it is quite likely that the Euro-zone, an important Russian trading partner, is unlikely to enforce sanctions in order to cushion the effect of the possible emerging economic slowdown in the Euro-zone. (Sanctions are likely to have a disruptive economic effect not only on Russia but also on the Euro-zone). Observe that Russia’s export to the Euro-zone as a percentage of its total exports stood at 54.1% in 2013 against 52.9% in 2012. In contrast Russia’s export to the US as a % of total stood at 2.1% in 2013. As a percentage of total imports Euro-zone imports from Russia stood at 8% in January whilst American imports from Russia as a percentage of total imports stood at 0.8%. Note that the Euro-zone relies on Russia for a third of its energy imports. Hence it will not surprise us if the Europeans are likely to be more reluctant than the US in enforcing sanctions.
Russia’s foreign reserves have weakened slightly in February from the month before. The level of reserves fell by 1.1% to $493 billion after declining by 2.1% in January. The growth momentum of reserves also remains under pressure. Year-on-year the rate of growth stood at minus 6.2% in February against a similar figure in January. A possible further weakening in China’s economic activity and ensuing pressure on the price of oil is likely to exert more pressure on foreign reserves.
Meanwhile, the growth momentum of the Russian consumer price index (CPI) displays a visible softening. The yearly rate of growth stood at 6.2% in February against 6.1% in January. Observe that in February last year the yearly rate of growth stood at 7.3%. Based on the lagged growth momentum of our Russian monetary measure AMS we can suggest that the yearly rate of growth of the Russian CPI is likely to weaken further in the months ahead.
Summary and conclusion
According to some experts sanctions imposed by the US and the European Union are likely to push Russia into a recession. We suggest that the key factor which is likely to push Russia into a recession is not sanctions as such but a sharp decline in the growth momentum of money supply between May 2005 and September 2009. Given the possibility that major world economies are heading towards a renewed economic slowdown, we suggest that regardless of sanctions the pace of the demand for Russia’s exports is likely to ease. Now, given that the Euro-zone relies on Russia for a third of its energy imports it will not surprise us if the Euro-zone proves likely to be more reluctant than the US in enforcing sanctions.
Richard Cobden was renowned for his role in the Anti-Corn Law League, campaigning against import tariffs. He was also a champion of the idea that peace would be strengthened by more individual business contacts across national borders.
I think it’s fair to say that Cobden would support the European Commission’s plan to scrap trade barriers between the European Union and the Ukraine announced last week. The Ukraine is not threatening war against any European Union countries and such boost to trade as will happen between now and September would tend to help peace and democracy in the region.
But surely it would be counter-productive to re-introduce barriers to trade with the Ukraine when the six months are up? And couldn’t similar arrangements be offered to Russia if its government decided to stop its own mercantile approach?
With his thoughtful restructuring of America’s military, secretary of defense Chuck Hagel — a Republican — has cemented Obama’s signature legacy: restoring America to a peacetime footing. Obama’s bringing American troops home from two wars, and, now, reducing the military to a strong, but proportionate, peacetime footing, was not easy.
Doing so required something of a political miracle. Obama, with a critical assist from Hagel, is pulling it off.
This columnist has critiqued many of Obama’s initiatives. The president’s follies in other areas detract from but do not diminish his real achievement here.
Bringing about peace is remarkable, historic, and transformational. Future historians almost certainly will scratch their heads as to how Obama’s own White House wrapped the boss’s prestige around Obamacare, a botch, rather putting to the fore the president’s greatest achievement.
An aside. Current events in Crimea are unlikely to destroy Obama’s achievement. While Kiev, understandably, and the West express alarm … what’s happening now in Ukraine presents more as chess rather than hand grenades. Putin is an autocrat (and geopolitical chess grandmaster), yet no brutal tyrant in the Stalin mode. Russian military intervention in Crimea appears based on securing a fundamental Russian asset — its sole warm water port — and protection of ethnic Russians living there.
President Reagan’s stated reason for invading Grenada (and deposing the government there, something Putin studiedly has not shown signs of attempting in Ukraine) was to protect 800 American medical students. Putin is not neo-imperialist. This predicament is likely to end with a Russian-led bailout of an insolvent Ukraine. The severe difficulties in Ukraine shall pass without reigniting the Cold War.
Meanwhile, over two years ago, Obama astutely observed, in a speech before the United Nations General Assembly, that “the tide of war is receding. … Moreover we are poised to end these wars from a position of strength.”
The world’s prevailing geopolitical winds truly, now, are winds of peace, not war. (This columnist originally missed Obama’s relevance to the process, for which he duly hereby issues a correction.) Obama promised to align America with the winds of peace in ways that his rivals for office simply did not. The electorate wants peace. Obama alone caught the political wave of peace. He rode it to election … and re-election. In great measure Obama is fulfilling his commitment to peace.
If a Republican were president — say Sen. John McCain, who lost to Obama in 2008, or Mitt Romney, who failed to unseat him in 2012 — he would have found a way to keep as many as 30,000 American combat troops in Iraq, making Iraq a violent client state rather than the distant disaster it is today. Troops would continue coming home in coffins, and Iraq would feel the wrath of continued air strikes and raids.
If Hillary Clinton had won the primary in 2008 and became president, she would have rallied to keep combat troops in Iraq, too….
If a Republican or Ms. Clinton were president, American troops would still be in Afghanistan ….
Secretary of defense Chuck Hagel’s plan declared on February 24th to reduce the military budget to the lowest level since before World War II seals Obama’s real legacy. For Hagel to have done this in a way that enjoys a broad-based, at least tacitly bipartisan, recognition — that the restructuring will not undermine American security — is an impressive achievement.
At Obama’s bidding, Hagel’s judicious slimming down, restructuring, and modernizing of America’s force structure, together with Obama’s winding down the presence of American troops in Iraq and Afghanistan, is an impressive, historic, legacy. The emergence of peace was foreshadowed by the 2009 award to the newly fledged President Obama of the Nobel Peace Prize. He has delivered, impressively.
Obama’s successful confrontation with, and victory over, the Military-Industrial complex is striking. Peace is in the sweet spot of American, and world, priorities.
Peace, not the benighted Obamacare, is Obama’s signature initiative. Continuing to defend, and even feature, the botched Obamacare likely will cost the Democrats control of the US Senate this year.
Meanwhile, virtually unadvertised, Obama is making good on his promise of ushering in a wave, and likely an era, of peace This columnist is a Tea Party Patriot, right wing conspirator, Republican Party loyalist, and Obama opponent. It is with some trepidation, therefore, that he points out something that, if noticed by the Democrats, might be used to avert the onrushing Democratic Party rout. (The captains of the Other Team reportedly do not routinely read here — their loss — so making this observation is not a reckless act.)
Hagel’sspeech cements President Obama’s legacy. Hagel:
Our force structure and modernization recommendations are rooted in three realities:
First, after Iraq and Afghanistan, we are no longer sizing the military to conduct long and large stability operations;
Second, we must maintain our technological edge over potential adversaries;
Third, the military must be ready and capable to respond quickly to all contingencies and decisively defeat any opponent should deterrence fail.
Accordingly, our recommendations favor a smaller and more capable force – putting a premium on rapidly deployable, self-sustaining platforms that can defeat more technologically advanced adversaries.
The forces we prioritized can project power over great distances and carry out a variety of missions more relevant to the President’s defense strategy, such as homeland defense, strategic deterrence, building partnership capacity, and defeating asymmetric threats. …
Our recommendations seek to protect capabilities uniquely suited to the most likely missions of the future, most notably special operations forces used for counterterrorism and crisis response. Accordingly, our special operations forces will grow to 69,700 personnel from roughly 66,000 today.
Thus has the Republican Secretary Chuck Hagel cemented the Democratic President Obama’s legacy. Both thereby make a great contribution to America’s well being and, likely, to history. Guiding America home to, or at least toward, a peacetime footing — not Obamacare — is Obama’s signature achievement. It is one that deserves recognition from conservatives and libertarians as well as progressives … and from all Americans.
This article was previously published at Forbes.com.
The 1928 Kellogg–Briand Pact, officially the General Treaty for Renunciation of War as an Instrument of National Policy, is a simple read. It’s so simple that its three short articles are easy to miss in the text of the Treaty.
These are the two substantial articles (the third deals with ratification):
The High Contracting Parties solemly declare in the names of their respective peoples that they condemn recourse to war for the solution of international controversies, and renounce it, as an instrument of national policy in their relations with one another.
The High Contracting Parties agree that the settlement or solution of all disputes or conflicts of whatever nature or of whatever origin they may be, which may arise among them, shall never be sought except by pacific means.
Steve Baker: To ask the Attorney-General if he will make an assessment of whether the General Treaty for Renunciation of War as an Instrument of National Policy remains binding on the UK.
The Solicitor-General: I am advised by the Foreign and Commonwealth Office that the General Treaty for the Renunciation of War as an Instrument of National Policy (also known as the Kellogg-Briand Pact) remains in force and that the United Kingdom remains a party.
Perhaps the brevity, simplicity and directness of the Treaty and its historic failure explain why certain statesmen continue to believe in war as an instrument of policy, with or without the support of the United Nations. The US State Department comments:
The first major test of the pact came just a few years later in 1931, when the Mukden Incident led to the Japanese invasion of Manchuria. Though Japan had signed the pact, the combination of the worldwide depression and a limited desire to go to war to preserve China prevented the League of Nations or the United States from taking any action to enforce it. Further threats to the Peace Agreement also came from fellow signatories Germany, Austria and Italy. It soon became clear that there was no way to enforce the pact or sanction those who broke it; it also never fully defined what constituted “self-defense,” so there were many ways around its terms. In the end, the Kellogg-Briand Pact did little to prevent World War II or any of the conflicts that followed. Its legacy remains as a statement of the idealism expressed by advocates for peace in the interwar period. Frank Kellogg earned the Nobel Peace Prize in 1929 for his work on the Peace Pact.
Idealistic the Treaty may be but the British Government just confirmed in the season of goodwill that it remains in force and the UK remains a party.
The spirit of it is simple enough: the UK may not engage in acts of aggression under any circumstances. I hope this straightforward lesson in international law will become widely known.
An article by Cobden Centre fellow David Howden for Mises.ca.
Today many of us are wearing a poppy on our lapels in a show of remembrance. What exactly are we remembering?
The Great War from 1914-18 saw many changes to the world. Many of them were bad, though as we shall see some good did come from one of, if not the worst war of all time.
Over 64,000 Canadians lost their lives fighting in Europe, almost 1% of her population. A further 150,000 were injured. The comparable statistics today, updated for population growth, would be nearly 315,000 dead soldiers and almost 700,000 wounded. Remember that these are just Canadian soldiers. The final global death toll was 17 million (including the civilian deaths in the neutral countries of Scandinavia) and over 21 million wounded.
In fact, in this regard one could argue that Canadians came away relatively unscathed. Romania lost 10% of its population, Serbia 16%, and the great Ottoman Empire almost 14%. This latter figure excludes the additional 100,000 Turks who died fighting the subsequent Turkish War of Independence following the signing of the Armistice in 1918.
The First World War was not only the first war to be waged on a truly global scale, it was the first to inflict the magnitude of destruction it did. Soldiers of previous battles were felled by disease more often than in direct combat. Advances in technology changed that, and even though the 1918 outbreak of Spanish influenza killed many more (current estimates place the deaths from the flu at 50-100 million), the Great War killed more people in four short years than most of the previous European wars combined.
In remembering the Great War it is easy to focus on the deaths of those who sacrificed their lives, but it is also important to reflect on what caused the War and what it achieved.
It’s true that advances in modern warfare and logistics made the War able to be fought on a wider scale than ever before. It is also true that a series of alliances – both formal and informal – agreed upon prior to the War brought belligerents into the melee with only tangential interest in it. Canada’s allegiance to Great Britain at the time might be thought of in this way, as could any number of the other Dominions and Colonies including Australia, India, New Zealand and Newfoundland.
Some simple economics also played an important role. Prior to the War most countries of the world had a monetary system linked to the gold standard. Government deficit spending was curtailed under this system as borrowing would be limited by the extent of a country’s gold reserves. The expression “to have a war chest” has its origins in the necessity of a sovereign to carry a chest of gold to war to pay soldiers. Wars under the gold standard were quite limited affairs, curtailed by the supply of gold available to keep soldiers paid (and motivated).
The War brought with it the breakdown of the gold standard as all belligerents resorted to monetary inflation to finance the growing expenses. This one simple fact goes far in explaining why the scope of the War and the resources driven into it were so great. The lack of a spending anchor under a fiat money regime allowed countries to print money and run deficits in order to finance the increasingly expensive battles, expensive both in money and lives. While governments could print money to paper over the cost of the War, soldiers were much less reproducible. As we shall see, the use of conscription was the counterpart to inflation and allowed the War to continue being waged once volunteers ran out.
The Great War was supposed to be the war to end all wars. Unfortunately the signing of the Treaty of Versailles to officially settle it proved to be the peace to end all peace.
A not well-known 36-year old economist by the name of John Maynard Keynes found fame penning his The Economic Consequences of the Peace in 1919. Keynes had two profound criticisms of the Treaty. First, that Europe could not survive and prosper without an integrated economic system, something that the Treaty precluded. Second, that the Treaty violated many terms of the Armistice signed 95 years ago on the eleventh hour of the eleventh day of the eleventh month of 1918. The armistice included terms relating to war reparations, territorial adjustments and general even-handedness in economic matters.
Keynes presciently predicted that the Treaty of Versailles would be the cause of a future war, and 20 years later he was proven correct. Poor economic conditions in Germany as a result of war reparations and the loss of culturally and economically important territories set in motion a series of events that brought Adolph Hitler to power and resulted in the invasion of Poland by both Fascist Germany and Communist Russia in September 1939.
Six years and 50-85 million additional deaths later the world had a new Great War. This one necessitated a numbering system to distinguish the first Great War from the Second.
All of this death and destruction could easily be pegged on one person. The Bosnian Serb student Gavrilo Princip may have fired the shot that killed the heir to the Austo-Hungarian throne, the young Archduke Franz Ferdinand of Austria on June 28th, 1914. But Princip was not alone in his distaste for the ruling class of that Empire.
Indeed, general unease concerning many sovereigns and governance structures were warming like kindling, ready to ignite Europe at any time. Secession problems in the Austro-Hungarian Empire and brewing revolutions in both the Russian and Ottoman Empires were slowly creating the conditions for civil wars.
The British Empire under the rule of King George V was also going through its own coming of age problems, though nothing severe enough to spark bloody revolution. Indeed, the Great War ushered in an era that saw Britain’s Colonies and Dominions reorganise into a peaceful and voluntary structure. In few places was this push more apparent than in Canada.
A bloody Battle of the Somme resulted in Prime Minster Robert Borden’s pledge to send 500,000 soldiers to Europe by the end of 1916, despite a population in Canada of only 8 million at the time. Conscription was enacted to offset the dwindling supply of volunteers to join the War cause.
Almost all French Canadians opposed conscription, feeling no allegiance or duty to aid either England or France. The Conscription Crisis of 1917 was primarily a backlash of Francophone Canadians against the forced military service imposed by Ottawa to aid his Majesty’s war. Uneasiness about being Catholic soldiers under predominantly Protestant commanding officers also fuelled the flames.
The Conscription Crisis exposed Ottawa to many difficult questions. One problem was that by forcing labour, the Canadian government had no knowledge who would be the best soldier, toolmaker or farmer. Someone had to stay back and supply those who went to fight, but the government lacked any rational way to make this decision. More importantly, there was the apparent rights issue. Canada had never before enacted conscription, and the idea of forcing someone to fight in a war against their wishes is morally repugnant. More to the point, fighting a war in a distant land to aid a government which one never voted for created its own problems. The problem lives on today for pacifists around the globe, as well as those who choose to refrain from political participation.
Indeed, in a bid to garner support for conscription the Military Service Act of January 1st 1918 included exemptions to remove oneself from the forced call of duty. By autumn of that year these exemptions were removed, in a move that offended not only the French but also English-speaking Canadians. This move by Robert Borden not only shut the Conservative Party out of Quebec for over 50 years, but also caused them to lose the next general election in 1921 to the Liberal’s of William Lyon Mackenzie King.
At the very least, the Conscription Crisis put in motion a debate as to what role and duty, if any, the Dominions and their citizens had in regards to the United Kingdom. The culmination of these debates was the Statute of Westminster, signed into law by the Parliament of the United Kingdom in 1931 and passed on to all realms within the Commonwealth for ratification shortly thereafter. Amongst other things, the Statute legislated equality and self-governance for the Dominions that ratified it. (Not all colonies did so: Newfoundland Colony did not ratify the Statute, and remained a Dominion of the British Empire until joining Canada in 1949.)
The Commonwealth of Nations today survives as an organisation of 53 countries, most of which were territories of the British Empire. It represents a quarter of the world’s land mass, almost a third of its population and 15% of the globe’s GDP. It is a voluntary group which exists due to some loosely shared values paired with some established statutes.
Racial equality is a requirement for inclusion, and this was tested with the withdrawal of South Africa under apartheid, as well as its eventual readmission after its end. Not all member states recognise the Queen as the head of State, though some (like Canada) do. We have a shared history, heritage and traditions (like wearing a poppy on Remembrance Day). Chief among these is obedience to the common law, one of the greatest forces of civilisation in history. A dedication to peace, liberty and free trade are all points for inclusion, secured by the values of the 1971 Singapore Declaration.
There are no formal laws dictating that member countries must trade or associate with one another, but they do. The voluntary nature of this institution is apparent in the immigrants that flow between Commonwealth nations as well as the fact that Commonwealth members trade up to 50% more with other Commonwealth members than with non-members.
Inclusion in the Commonwealth does not yet instil by law the free movement of goods, people or money across borders, but it would be wise to do so. Some countries give preferential treatment to immigrants or investors from other Commonwealth countries, and the benefits are clear. Economic prosperity reigns when people, goods and money go to where they are treated best. Informal preferences within the Commonwealth promote this.
There is discussion of making the Commonwealth into a broader free trade union, as is the case with the European Union. This should be welcomed as it would solidify into law those benefits which heretofore are only informally recognised.
A word of caution is in order. Should the Commonwealth choose to formalise its union it must do so in its own way and according to its founding principles. Liberty and freedom are among these, and the voluntary nature of the union must also be upheld. (This in distinction to the mandatory nature of the European Union which now results in ill feelings of coercion or otherwise being forced to behave in ways undesired by many citizens of the member states.) Infringements to freedom and liberty, such as those occurring in South Africa under apartheid must be met swiftly and surely with exclusion from the union.
United we stand, but only if you want. Countries can choose to break the rules that have promoted peace and prosperity for so long, but must do so of their own accord and separately of Commonwealth benefits.
There is historical precedent for this. South Africa was forced to withdraw from the Commonwealth in 1961 under growing opposition from other members to legislated discrimination based on race. The Commonwealth reopened its arms at the fall of apartheid, and South Africa was readmitted in 1994 (less than one year after the fall of apartheid). More recently Zimbabwe was suspended for its human rights violations, ignoring the rule of law and suspension of its constitution, and the country’s government decided to formally withdraw in 2003.
Zimbabwe – when your government gets its act together and restores the conditions for peace and prosperity so cherished by the rest of us we will be waiting with open arms.
The Commonwealth has no positive obligation to set straight those countries that pursue different policies than us; who are we to decide? But not playing by our rules will not be tolerated and will be costly for belligerent countries. This is established by the final article of the Singapore Declaration, which states:
These relationships we intend to foster and extend, for we believe that our multi-national association can expand human understanding and understanding among nations, assist in the elimination of discrimination based on differences of race, colour or creed, maintain and strengthen personal liberty, contribute to the enrichment of life for all, and provide a powerful influence for peace among nations.
Coercion is rejected as a policy tool to enforce these values. Even though the Millbrook Commonwealth Action Programme does set out that Commonwealth Nations must concern themselves with other members’ internal situations, it limits repercussions to sanctions, suspensions and expulsions from the group as punishments for persistent violations to its core values.
The continued voluntary nature of the Commonwealth sets it apart from other groups, such as the European Union, and goes far in explaining why this very large and diverse grouping of countries has stood together for almost 65 years. Countries have been free to leave in that period as well as apply for admission, but the core values shared by these member states – freedom and liberty – have not been altered. We are the better for it.
And so today we remember, not just the evils and injustices of 95 years ago but of the benefits that we have today as a result. The freedom and liberty that Canadians enjoy are in no small part the result of the injustices suffered during the Great War.
Canada’s Conscription Crisis in particular was a critical albeit costly coming of age moment. The Statute of Westminster that it resulted in freed Canada and the other Dominions from forced service to a Crown it never voted for. In its place was formed a voluntary Commonwealth of Nations, joined by certain principles and rights but not irrevocably so. Countries can choose to not adhere to these principles, but the Commonwealth will have nothing to do with them if they choose this path. Despite being a stalemate for many years the Great War did accomplish much. The formation of the voluntary union of the Commonwealth might not have been so without it.
And for this, in addition to the thoughts of those who perished and their families, we remember.
Recently, in the offices of the Mayor of the city of Nablus, Palestine, the missing pieces that would permit a just and lasting peace in the Middle East to flourish may have been presented. If harmony can be restored (as it can) within the social fabric that underlies the political fabric, peace finally becomes a possibility. If women, who are respected, not marginalized, in Palestinian and Israeli society will take center stage a fundamental rapprochement can be effected. Might this happen?
On February 14th, an American resident of Israel, Sharon Sullivan, who leads a gallant, if tiny, new group called “the Fellowship of Mothers” met with nine Palestinian women leaders under the generous auspices of Ghassan W. Shakaa, Mayor of Nablus, and Benyamim and Yefet Tsedaka, two social leaders of the Israelite-Samaritan community, and three members of the Samaritan Committee of the Mount Gerizim Community over Nablus. The meeting was led by Third Deputy Mayor Rima M. Zeid Al-Keilani.
This is not just one more story of an admirable but marginal “women for peace” movement. This is “women for harmony,” a subtle but profound distinction. The Fellowship of Mothers, while tiny, is possessed of an extraordinarily powerful narrative.
God had a plan for the descendants of both Sarah (the Hebrew matriarch of the Israelites) and Hagar (the Egyptian matriarch of the Arabs). To not allow Hagar’s offspring [the Ishmaelites] to be a great nation goes against God’s will. To not allow Sarah’s children to live in peace is also a violation of God’s will. There were promises made, and hope given, by the same God to both women. So God bridges the divide between “us” and “them.”
As Sullivan trenchantly observes: “We are outraged at the idea that the family relationship is denied by claims of Israelis being Western implants and of Palestinians not being accorded equal rights in the land that was, and under conditions of harmony, soon again would be, flowing with milk and honey. We focus on this as a ‘lie of men’ with indignation, rejecting it.”
The essence of the genius of the tiny Fellowship of Mothers is that peace is an outcome, not an input. Peace is the natural state resulting from social harmony. And social harmony comes from a high social rapport … which can be established.
While not implying that any political changes are in order — assuredly that would be premature, political structures typically following, rather than leading, the social consensus — it should be obvious by now that it is impossible to impose peace diplomatically — whether from the United Nations, or Washington, London, Moscow, or Oslo — or politically … from Jerusalem (known by the Arab branch of this family as Al Quds) — the capital both of Israel and Palestine. We now have not peace but an uneasy truce.
Peace can no more be forced to flower than a flower can be forced to blossom. Peace only can be, yet will be, an outcome of social harmony. Men, intrinsically more bellicose than women, have failed to deliver it. People who authentically like and respect one another can work through any problem. Antagonists, however, always will find a pretext for fighting. Only women, and, especially, mothers (such as Sullivan), have the discernment and innate authority to create, indeed insist upon, mutual respect and, with it, social harmony.
So the missing piece for Peace: resolve the underlying cause of strife rather than tussling with the symptoms. This calls for effecting a “family reconciliation” leading to vibrant social harmony. To accomplish this requires the formal recognition of the unique, and necessary, exercise of authority by women. Men have failed, for almost 4,000 years, to effect harmony between the descendants of two of the sons of the same great-grandfather, their mutual Patriarch, Abraham. Time for the daughters of Abraham to take on the responsibility and assert their authority.
Mayor Shakaa, himself a holder of the Samaritan Medal of Peace (2006), courageously organized for Sullivan the opportunity to meet with nine social lionesses of Nablus, among them Miriam Altif, an Israelite Samaritan. It took courage for Sullivan to accept this invitation. The trip from Jerusalem to Nablus is not for the faint of heart. Sullivan was accompanied only by her doughty Israeli fiancée, Haimon Eretz, and by Daniel Estrin, an AP reporter and Sullivan’s friend. She was received in Nablus by, in addition to her Palestinian hosts, a delegation of Israelite-Samaritans from their nearby Mountain of Blessings community, Kiryat Luza.
There is authentic historic significance to the presence of the Samaritans, the descendants of the northern Israelite tribes. Few are unfamiliar with the parable, told by Jesus, of the “Good Samaritan.” Far fewer know who the Samaritans are: the authentic representatives of the famed legendary “Lost Tribes of Israel” … who staged a tax revolt upon the death of Solomon.
Solomon’s son, as recorded in the Biblical books of Kings and Chronicles, ascending to power, confronted a very Tea-Party-like revolt by the ten northern tribes of the Kingdom against the crushing taxes imposed by King Solomon. Solomon’s successor to the throne contemptuously ignored pleas for a tax cut and, instead, raised taxes. This precipitated secession by the ten northern tribes, who created the Kingdom of Israel centered in the land of Samaria. When, later, this nation fell to invaders its people became known as “Samaritans,” or, more accurately, the Israelite Samaritans.
Fewer still are aware that a modest, fascinating, community of Samaritans lives on to this day. Mark Twain meeting a Samaritan elder wrote of the experience, in The Innocents Abroad, as to have been “just as one would stare at a living mastodon.” There are, as of this writing, 754 Israelite Samaritans. Almost half reside in Palestine and the balance live in Israel. The Israelite Samaritans live meticulously according to millennia-old Biblical traditions. Their High Priest Aaron b. Ab-Hisda b. High Priest Jacob, is the 132nd lineal descendent of Aaron, the brother of Moses. Yes, Moses’s blood great-grandnephew is alive and well.
Of key importance, this tiny noble community lives on terms of harmony and mutual respect with both the Arabs and the Israelis — possessing dual citizenship. The Mountain of Blessings, of Biblical fame, has given the world not just a “Good Samaritan” but four clans who might be called great Samaritans: Cohen, Tsedaka, Danfi, and Marhib.
During one of his goodwill tours, seven years ago, this columnist established an enduring personal friendship with Tsedaka and, later, was given the honor of serving, along with Sullivan, among others, on the board of the Samaritan Medal Foundation that Tsedaka founded and chairs. This body grants medals for Peace, humanitarian achievement, and scholarly studies. The Fellowship works inside the halo of moral authority of the only authentic Biblical Samaritans. Tsedaka, thus, is the moral godfather of the Fellowship of Mothers.
It is early in the process. But the tea party in the office of the Nablus Mayor reportedly was electric. Sullivan:
Each woman introduced herself and told a bit of her background in business, mothering, peacemaking (and in one case – prison). Yes, we had among us a Palestinian woman who had been released in a prisoner exchange between Israelis and Palestinians.
Haimon talked (as the only Israeli there — non-Samaritan — which was a big deal to the group of women there). Haimon’s opening line was ‘I look around and I see family. Look at us. We all look alike. One is no different than the other.’ It was sweet. He spoke of his Grandfather who was born in Gaza, long before this conflict began, to which women from Palestine exclaimed ‘You’re Palestinian!’
The Fellowship of Mothers, like the Samaritan people, is a small group with a powerful narrative and a big commitment. And as Margaret Mead said, “Never doubt that a smallgroup of thoughtful, committed, citizens can change the world. Indeed, it is the only thing that ever has.” May the women of Palestine and Israel now assert, under the auspices of the noble Israelite Samaritans, their authority, bring about this family reconciliation, restore social harmony, and, with harmony firmly established, show the whole world how a just and lasting peace really blossoms.
This article was previously published at Forbes.com.
On June 3, 1804, Richard Cobden was born. Nicknamed the “Apostle of Free Trade,” he spearheaded the campaign against the protectionist Corn Laws, leading to their repeal in 1846, which then spread to the liberalization of trade throughout much of Europe. His role was so great that it has been said the free market owes its existence to him.
Cobden saw that free trade was the key to material prosperity, as evidenced by England’s economic growth and rise to world leadership in virtually all aspects of trade—finance, insurance, shipping, etc.—after the Corn Law repeal. But more than prosperity, Cobden emphasized the injustice of protectionism, by which one group used government power to harm all other groups, which, in contrast, showed the moral superiority of free trade.
Further, Cobden saw free trade as the basis of peace, rather than government controlled trade, which often led to war, and to the moral and economic harm of people. And, indeed, the period of liberalized trade coincided with one of the most peaceful periods in history.
Author Jim Powell describes the reasons for free trade leading to peace in that era:
Peace prevailed, in large part, because nonintervention became the hallmark of foreign policy. Nations seldom tried to bully one another, and economic policy was a major reason why. There was unprecedented freedom of movement for people, goods, and capital. By reducing intervention in economic affairs, governments reduced the risk that economic disputes would escalate into political disputes. There wasn’t much economic incentive for military conquest, because people on one side of a border could tap resources about as easily as people on the other side of a border. Trade expanded, strengthening the stake that nations had in the continued prosperity of one another as customers and suppliers. While free trade was never a guarantee of peace, it reduced the danger of war more than any public policy ever had.
In an era of occasional trade liberalization, seasoned with a great deal of protectionism for politically powerful groups, we can benefit from Richard Cobden’s insights today as much as was true a century and a half ago.
Consider some of what he said:
The progress of freedom depends more upon the maintenance of peace, the spread of trade, and the diffusion of education, than upon the labors of cabinets and foreign offices.
Look not to the politicians; look to yourselves.
You who shall liberate the land will do more for your country than we have done in the liberation of its trade.
England, by calmly directing her undivided energies to the purifying of her own internal institutions, to the emancipation of her commerce…would, by thus serving as it were for the beacon for other nations, aid more effectually the cause of political progression all over the continent, than she could possibly do by plunging herself into the strife of European wars…
The foreign customers who visit our markets are not brought hither through fears of the power of influence of British diplomats…It is solely from the promptings of self-interest…
The people of the two nations [France and England] must be brought into mutual dependence by the supply of each others’ wants. There is no other way of counteracting the antagonism of language and race. It is God’s own method of producing an entente cordiale, and no other plan is worth a farthing.
…protection…takes from one man’s pocket, and allows him to compensate himself by taking an equivalent from another man’s pocket, and if that goes on in a circle through the whole community, it is only a clumsy process of robbing all to enrich none, and simply has this effect, that it ties up the hands of industry in all directions.
Holding one of the principles of eternal justice to be the inalienable right of every man freely to exchange the result of his labor for the productions of other people, and maintaining the practice of protecting one part of the community at the expense of all other classes to be unsound and unjustifiable, your petitioners earnestly implore…carry out to the fullest extent…the true and peaceful principles of Free Trade, by removing all existing obstacles to the unrestricted employment of industry and capital.
It is labor improvements and discoveries that confer the greatest strength upon a people. By these alone and not by the sword of the conqueror, can nations in modern and all future times hope to rise to power and grandeur.
Warriors and despots are generally bad economists and they instinctively carry their ideas of force and violence into the civil politics of their governments. Free trade is a principle which recognizes the paramount importance of individual action.
Peace will come to earth when the people have more to do with each other and governments less.
The great rule of conduct for us in regard to foreign nations is—in extending our commercial relations—to have with them as little political connection as possible.
I yield to no one in sympathy for those who are struggling for freedom in any part of the world; but I will never sanction an interference which shall go to establish this or that nationality by force of arms, because that invades a principle which I wish to carry out in the other direction—the prevention of all foreign interference with nationalities for the sake of putting them down…
It appears to me, that a moral and even a religious spirit may be infused into that topic [free trade], and if agitated in the same manner that the question of slavery has been, it will be irresistible.
…throughout the long agitation for Free Trade, the most earnest men co-operated with us were those who constantly advocated Free Trade, not merely on account of the material which it would bring to the community, but for the far loftier motive of securing permanent peace between nations.
I have been accused of looking too much to material interests…I believe that the physical gain will be the smallest gain to humanity from the success of this principle. I look farther; I see in the Free-Trade principle that which shall act on the moral world as the principle of gravitation in the universe, drawing men together, thrusting aside the antagonism of race, and creed, and language, and uniting us in the bonds of eternal peace…I believe that the effect will be to change the face of the world, so as to introduce a system of government entirely distinct from that which now prevails. I believe that the desire and the motive for large and mighty empires; for gigantic armies and great navies…will die away; I believe that such things will cease to be necessary, or to be used when man becomes one family, and freely exchanges the fruits of one’s labor with his brother man. I believe that…the speculative philosopher of a thousand years hence will date the greatest revolution that ever happened in the world’s history from the triumph of the principle which we have met here to advocate.
I would not step across the street just now to increase our trade for the mere sake of commercial gain…But to improve moral and political relations of France and England, by bringing them into greater intercourse and greater dependence, I would walk barefoot from Calais to Paris.
…our principle, which if carried out, the Free-Traders believe would bring peace and harmony among the nations.
…whilst we are in a state of profound peace, it is for you, the taxpayers, to decide whether you will run the risk of war, and keep your money in your pockets, or allow an additional number of men in red coats to live in idleness under the pretense of protecting you.
Richard Cobden knew that at the center of free trade was freedom; freedom that required sharply limiting government, and which produced justice by preventing government sponsored theft by one group from others.
He knew that free trade broke down the powers of privilege and barriers against people’s progress, and replaced them with a system of mutually beneficial relations among all those who participated. In a world still far from that ideal, we should remember that wisdom from the “Apostle of Free Trade.”
This article was previously published at Mises.org.
“We are on the eve of great changes” Richard Cobden told Parliament in February 1846. He was correct. Britain stood poised to embark on a period of growth unparalleled in its history, which would, in a few short years, bring it wealth and power not seen since ancient Rome. A major reason for this was Britain’s path breaking adoption of free trade, and the man behind that as much as any other was Richard Cobden.
By the late 1830s it was apparent that the Whig government led by Earl Grey and then Viscount Melbourne had exhausted itself in the passage of the Reform Act of 1832. This had given the vote to propertied males, enfranchising many of those made rich by the Industrial Revolution. The Radical faction within the Whig Party sought a new cause with which to restore the momentum which had carried the 1832 Act and settled on repeal of the Corn Laws.
The Corn Laws was a catch all name for the thicket of tariffs which had been erected to keep foreign wheat out of Britain. Justified on the deathless grounds of ‘food security’, these laws also had the handy effect of benefiting the landowning classes, many of whom sat in the Commons and Lords as Tories.
The Corn Laws, as with any tariff, had the effect of making the product in question and associated goods more expensive. The burden of this was borne disproportionately by the members of the emerging working class in burgeoning industrial centres such as Manchester and Leeds who spent a large percentage of their incomes on food. By extension, they raised labour costs. And blocking foreign producers from selling in Britain prevented them from earning the money to buy the output of the new industries.
Out of this shared interest between workers and bosses (and other factions such as dissenting churchmen) came the Anti-Corn Law League, established in Manchester in 1838. One of its founders and leading lights was Richard Cobden.
Cobden was born the son of a poor Sussex farmer in 1804 and started his own textile printing business in 1828. It quickly became a success and in 1832 Cobden moved to Manchester, the centre of the booming British textile industry.
Immersed in the city’s Radical politics Cobden quickly became active. He was instrumental in the shift from broad based reform agitation to a single issue focus which had led to the creation of the League, noting that “the English people cannot be made to take up more than one question at a time with enthusiasm”. Throughout the campaign Cobden would hold to the principle of single minded focus on full and immediate repeal of the Corn Laws.
He became a prolific writer, and in his work he revealed the broader purpose behind the activities of the League. In Cobden’s mind free trade and peace were linked, he wrote in 1842 that “Free Trade by perfecting the intercourse and securing the dependence of countries one upon another must inevitably snatch the power from the governments to plunge their people into wars”.
With the Corn Laws Cobden and the League faced a problem of concentrated interest. While the benefits of repeal were spread across society, the costs were concentrated. Each person in Britain might benefit by a few pounds a year from repeal (though that was no small sum to impoverished workers) but those relatively few people who would be adversely affected by repeal stood to lose far more. The landowners were incentivised to act more strenuously in fighting against repeal than individual consumers were in fighting for it.
Partly because of this the League was frustrated during its first two years. Copying the tactics of the campaign for the 1832 Reform Act and the contemporary Chartists, the League attempted a strategy of mass agitation with open meetings and lectures. These suffered from frequent attacks by Chartists who resented any reforming competition, after one meeting Cobden wrote: “The Chartist leaders attacked us on the platform at the head of their deluded followers. We were nearly the victims of physical force; I lost my hat, and all but had my head split open with the leg of a stool”. The failure of this strategy left the League short of money. Attempts to petition Parliament were heavily defeated and the League members were frequently tempted away into movements for wider reform.
In 1841 Cobden convinced the League to change strategy. He wrote to a fellow member “You will perhaps smile at my venturing thus summarily to set aside all your present formidable demonstrations as useless; but I found my conviction on the present construction of the House of Commons, which forbids us hoping for success. That House must be changed before we can get justice”
From now on the League would seek to make Parliament its battleground, starting with a by election in Walsall in February 1841. The Tories allied with their Chartist arch enemies in an effort to defeat the League which still came a close second. Cobden’s strategy had been a success, the Morning Chronicle noting that “one consequence of the contest at Walsall is that the Corn Laws are, and must henceforth be, throughout England, a hustings question”. With a general election approaching the Whig leaders adopted a stronger free trade stance.
The election of summer 1841 saw the Whigs defeated by Robert Peel’s Conservatives, heirs to the Tories, and seemingly dashed hopes of Corn Law repeal for the foreseeable future. But the situation was brighter than it might have appeared. The election saw a number of League members returned to Parliament including Cobden, now widely recognised as the League’s leader, who was elected MP for Stockport. Also, by the end of the year, ‘operative’ associations attached to the League, mostly consisting of working class supporters, had organised to protect League meetings from the violence of the Chartists. But perhaps more importantly, in Peel, Britain now had as Prime Minister one of the most remarkable statesmen in her history.
With Britain in economic depression Peel deliberated before finally announcing his budget in February 1842. Despite his Tory lineage, Peel recognised that the Conservatives must learn to accommodate themselves to changing circumstances if the wilder, revolutionary wing of the Chartists was to be held at bay. Given the revolutions across Europe in 1848, this was no minor threat. Peel’s Tamworth Manifesto of 1834, as close to a foundational act as the modern Conservative Party has, had been an act of reconciliation with the passage of the 1832 Reform Act.
Peel’s fiscal proposals were in this tradition, proposing a drastic tariff reduction with revenues to be made up by a new income tax. The moves were warmly welcomed by liberals and, while it represented a significant vindication of the League’s arguments, it also brought danger. As Cobden predicted “The greatest evil that could befall us would be a bona fide concession – The middle classes are a compromising set”.
After some debate about strategy (during which Cobden squashed a move to declare a general strike by factory owners) the League stepped up its propaganda. Millions of leaflets, posters, handbills, and newspapers were distributed with the aim of reaching every voter in Britain, though that was only about 600,000 people at the time.
But despite all this activity the League found it needed an event, a shift in circumstances beyond its control, to provide proof of its arguments and swing opinion behind them. That came in 1845 when the potato crop failed. Particularly in Ireland, where much of the population depended on potatoes, this caused great suffering, culminating in a famine which killed an estimated one million people.
Cheap food was needed and quickly. Faced with this unfolding catastrophe, supporters of the Corn Laws were helpless. A further vital, final, factor was Peel’s reaction. Acting on humanitarian grounds and the perennial desire of Conservative Party leaders to pick fights with their backbenchers (in this case the land owning Tories) in order to prove they are ‘different’, Peel moved for full repeal in 1845. In May 1846 repeal was passed and the Anti-Corn Law League wound itself up.
The benefits for Britain were immense and immediate. The effects of famine receded and a wider program of free trade enacted. Between 1815 and 1842 Britain’s exports edged up from £47,250,000 to £50,000,000. By 1870 they had rocketed to £200,000,000.
How had Richard Cobden and the League managed to defeat the special interests in favour of keeping the Corn Laws?
First, and most importantly, they were right. Free trade became the orthodoxy to such an extent that we can forget that while the League was working its ideas were one strand of a lively discourse. There was a long tradition of bad economics arguing for protection and Friedrich List was giving these old doctrines a new outing even as the League was campaigning.
Second, their strategy of exclusive focus on Corn Law repeal was a success. Cobden refused to be, and refused to let the League become, distracted by any other reform or campaign. This ensured that while the Chartists got nothing from a long list of demands the League actually got more than its comparatively modest aims with Britain quickly embracing free trade generally.
Third, they were tactically flexible. There were three fronts to their activities. First, were the mass meetings. These were of limited success largely owing to the competition, both ideological and physical, of the rival Chartists. The second front was education. Here the League had more success, sending literally tons of propaganda out every week. They pitched to all sections of society, sending lurid drawings of emaciated families to lowbrow readers and helping found The Economist for the highbrow. Third, and most effective, was the Parliamentary front. It was arguably the fact that the League engaged here while the Chartists didn’t that guaranteed the success of the League relative to the Chartists.
The fourth factor was, as Harold Macmillan put it, events, or, more broadly, circumstance. Without Peel’s transformation of the Tory Party into the Conservative Party and its concomitant embrace of free trade, the League would have had to wait until at least 1848 and the possible election of the Whigs who, under Lord John Russell, had finally adopted full repeal as a policy. And without the famine in Ireland it is doubtful whether either party could have carried repeal in as full a form as eventually happened.
To a large extent however, this event is not so exogenous. It could be, and was, painted as the predicted outcome of the bad policies of the Corn Laws.
As a result, when circumstances combined in 1845-1846 in the advents of Peel and the potato blight, thanks to Cobden and the League the arguments for free trade were widely enough known to be accepted as a viable possibility. The lesson is to have rigorous, well tested arguments. Pick a definite, achievable aim then work hard to spread and publicise your views until they become the ‘white noise’ of the debate. Then position yourself to take advantage of changing circumstances and move quickly when circumstances change.
When Richard Cobden died in 1865 the French foreign minister wrote that he was “in our eyes the representative of those sentiments and those cosmopolitan principles before which national frontiers and rivalries disappear; whilst essentially of his country, he was still more of his time; he knew what mutual relations could accomplish in our day for the prosperity of peoples. Cobden, if I may be permitted to say so, was an international man”.
At the end of three successful years The Cobden Centre can continue to draw on its namesakes rich example as it looks forward to furthering his goals of peace and prosperity.
In this video treatise Professor Pavel Yakovlev from Learn Liberty expounds the benefits of the ‘Capitalist Peace Theory’ arguing that free trade leads to prosperity and world peace. For this theory to flourish we could do well to heed Richard Cobden’s advice that “people should have more to do with each other and governments less”.
The tarriffs and duties that used to hamper free trade have been usurped by more sinister barriers delivered to us by unelected bureaucrats in Brussels and Whitehall. Tens of thousands of regulations emanating from Brussels have eroded our global competitiveness. In the UK we implement around 3000 such dictates a year piling the burden of red tape on business. Martin Beckford in this Telegrapharticle from October 2010 cites a research paper which “calculated that between 1997 and 2009 the number of EU regulations and EU-related Statutory Instruments varied from 2,296 a year to 3,497.”
In short Professor Yakovlev is 100% right about the benefits of free trade but we ignore the ‘herd of elephants in the room’ that is red tape at our peril.
A view from America, previously published at Forbes.com
This column debuted a year ago and proceeded to make a troubling announcement: World peace has broken out. The political implications of world peace are dramatic — but difficult to credit.
A year later, however, the Annunciation of the Peace has turned into something of a cottage industry. The AP’s Seth Borenstein reports:
We’ve never had it this peaceful. That’s the thesis of three new books, including one by prominent Harvard psychologist Steven Pinker. Statistics reveal dramatic reductions in war deaths, family violence, racism, rape, murder and all sorts of mayhem. In his book, Pinker writes: ‘The decline of violence may be the most significant and least appreciated development in the history of our species.’
The reduction in world mayhem seems alien. TV news and newspapers present freighted drama, not dry facts. That obscures the trend. Also, a dramatic peace trend sounds implausible to those habituated to war.
But scholars of such matters observe that the number of war battlefield deaths has dropped by a factor of 1,000, falling from 500 per 100,000 in prehistoric times, to 60-70 in the 19th and 20th century (notwithstanding epic wars) to… less than one such death per 300,000 now in the 21st. Genocide deaths have dropped by well over a factor of 1000 from 1942 to 2008.
The number of republics has quintupled in just 65 years; the number of authoritarian regimes has dropped from 90, 35 years ago, to 25. In England, murder fell by a factor of 100 from the Middle Ages until today. The trends are much broader than this and although a single nuclear exchange or terrorist incident could skew the numbers, even such a horrific tragedy, Heaven forbid, would not skew the secular trend.
In short, it is becoming nearly irrefutable that peace has broken out. To proponents of human flourishing in liberty, dignity and prosperity, this is wonderful news. To the political class, not so much.
Government is obviously composed of common and unsanctified men, and is thus a legitimate object of criticism and even contempt. If your own party is in power, things may be assumed to be moving safely enough; but if the opposition is in, then clearly all safety and honor have fled the State. … ….
In a republic the men who hold office are indistinguishable from the mass. Very few of them possess the slightest personal dignity with which they could endow their political role; even if they ever thought of such a thing. And they have no class distinction to give them glamour. In a republic the Government is obeyed grumblingly, because it has no bedazzlements or sanctities to gild it. …
The moment war is declared, however, the mass of the people, through some spiritual alchemy, become convinced that they have willed and executed the deed themselves. They then, with the exception of a few malcontents, proceed to allow themselves to be regimented, coerced, deranged in all the environments of their lives….
The citizen throws off his contempt and indifference to Government, identifies himself with its purposes, revives all his military memories and symbols, and the State once more walks, an august presence, through the imaginations of men.…
All of which goes to show that the State represents all the autocratic, arbitrary, coercive, belligerent forces within a social group, it is a sort of complexus of everything most distasteful to the modern free creative spirit, the feeling for life, liberty, and the pursuit of happiness. War is the health of the State.…The rulers soon learn to capitalize the reverence which the State produces in the majority, and turn it into a general resistance toward a lessening of their privileges.”