Tuesday, 11 November 2014

The Revenge of Geopolitics and the Retreat of a Liberal Order (II)

Yes, no matter what lack of seriousness with its lack of foresight might think, whatever perfidious counter-revolutionaries might say! The destiny of the republic is not yet fixed, and the vigilance of the people’s representatives is more than ever necessary.

It is not the pomp of denominations, not victory, nor riches nor fleeting enthusiasm that constitute the republic; it is the wisdom of laws and especially the goodness of mores; it is the purity and the stability of the maxims of government.

The laws are to be made, the maxims of government to be assured, and the mores to be regenerated. If one of these things is missing there is in a state naught but errors, pride, passions, factions, ambitions and cupidity. Far from repressing vices the republic would then only allow them freer expansion, and vice necessarily returns us to tyranny. Whoever is not master of himself is made to be the slave of others. This a truth that applies to peoples as well as individuals.

Speech given from the tribune of the Convention
(May 26, 1794)
Maximilien Robespierre 1758 - 1794

Societies, without a doubt, are complex entities. A serious analysis of any social order requires a comprehensive understanding of its unique historical, religious and economic arrangements and how these arrangements have shaped the national psyche of a particular society. Since, there has not emerged a unified global society with unified norms and attitudes, how different societies interact with each other, is the crux of conducting foreign relations. That is how the empires of the past behaved. That is how the present nation states behave or ought to behave. It is that behavior of conducting foreign relations among states with different norms and traditions is the context through which one must analyze the concept of order or disorder and how that relates to the geopolitical paradigm and power politics in world affairs.

One of the most challenging tasks of assessing and understanding the international order is to shun ideological walls and norms. Theories and ideologies are not fully capable of capturing the rapidly changing realities on the ground. Understanding the complexities of the contemporary global order through established paradigms serve little or no purpose. What is truly required is a comprehensive understanding of social, economic and political environment of different players in the international arena and how those elements have shaped their unique national psyche through which each actor comprehends the international order. A seasoned statesman knows this reality in his soul. Boethius (480 - 525) knew that reality so did Metternich (1773 -1859). George Kennan (1904 - 2005) is also in that league of extraordinary masters of diplomatic craft. I do not have to tell you that the likes of these statesmen are rare commodity in contemporary times. Foresight and wisdom have given away to sound bites and charlatans.

States, regardless of their political, economic and social arrangements, are not an eternal entity. Their survival requires constant assessment of their existence through coercion, diplomacy and war. States that are in suspicious and dangerous neighborhoods are in a perpetual state of vigilance and guard. When states are not governed in their entirety, the regional and international order is bound to disintegrate. Order must be at the forefront of legitimacy and governing. That, in short, is an essence of geopolitics. Geopolitics, in that sense, has always been a lurking element all things international affairs. Order, regardless of its ideological roots, is closely linked with the affairs of geopolitics.

After the readjustment of the global system in 1990s, the world was eager for a stable order. The fear of nuclear conflict between the two giants dominated the post-World War II global order. The surrender of communism and central economic planning was a proof enough, among the elites in academia and government that the history will continue to happen; but not in a grand fashion as it had been. Capitalism and the liberal order, as the thinking went, had no workable alternative. The collapse of the Soviet Union had settled that question for eternity.  The liberal economic and political order was within reach for many nations. Yet, the shrinking of the Soviet map did not materialize that scenario. Even though the evil empire had vanished; what did not disappear is the search for a global order and mutual equilibrium among major nations. Yes, the "end" of the Cold War did not cause the mushroom cloud, but no new global architecture that reflects the rapidly changing realities of power in influence, both in the realm of economics and politics, has emerged in its wake.

The much celebrated yet partial settlement of the Cold War marked an unrequited beginning still without an end with perpetual turmoil in the global system. The ongoing rivalry between the EU (NATO) and Russia over Ukraine, which led Moscow to seize Crimea; the intensifying competition between China and Japan in East Asia; or the subsuming of sectarian conflict into international rivalries and civil wars in the Middle East are some of the stark realities of this global disorder. Of course, the ongoing disorder in Iraq and Afghanistan will continue to create chaos in already tormented region. The ill-defined and much vaunted policy of military intervention, in some fashion, is a result of a failed attempt by the West to create a global order based on western values of economic and political liberalism, in other societies. Liberty, justice and laws, as concepts, are defined in a particular historical and social context and how one society defines these concepts may not be compatible with the other.

The 19th - century world was managed by few key powers overseeing their colonies, and the 20th - century by power blocks. But the complexities and interconnectedness of the 21st century, are far too fastidious for even a lone superpower like the U.S to manage. Disorder in the global system has taken a new meaning where no region of the world is immune to any crisis happening far away from its shores. The intensity of the connected world is the reality of our modern times; but so is the speed of the crisis spreading from one region of the world to the other. The twin realities of contemporary global order demand a serious thinking and foresight of an epic proportion from contemporary statesmen. The absence of international cohesion on major global issues is an immediate challenge.

The contemporary global order has number of influential states but no single entity is truly strong enough, that can implement the norms of international legitimacy at the global level. The current global challenges are way too complex and big to be managed by one entity alone. Yes, there is a massive interdependence with global economy and supply chains, but only limited global political systems. An effective global interdependence that protects and preserves the state legitimacy, is essential in a world, where there is no higher authority to manage the disputes and mitigate the conflicts. In the geopolitical marketplace, legitimacy is based on effectiveness.

The modern era is facing a predicament which has created a perpetual paradox of competing interests among nations on a global scale never experienced in history. The balance of power has no center and nowhere this paradox is more visible than the situation of the global economic system where the ongoing economic crisis has shown the weaknesses in the global collective response to rising unemployment and debt levels in many nations. The disparity of wealth distribution among and between nation states has created a feeling of what some have referred to the betrayal of the liberal economic order. The economic disparity in any society is nothing new. It had existed in ancient Greece. It had existed in Imperial Rome. It existed even pre-Capitalism. But what is new is the awareness of it across the board. Slums in Latin America, Africa and Asia are fully aware of the richness in their own societies and others. The economic anxiety in many nations has created an unstable political environment for the governing structure at the state level which translates into the global level. The age of revolution may be over; age of resentment has not passed.

These political and economic realities of  modern global order transcend traditional physical boundaries of each state and there is no way of knowing how one disaster in one corner of the globe will impact another. The barrage of joint declarations and fancy communique, by the participants in any number of international matters, are not enough to show the international solidarity. A common global cohesion must emerge to tackle the global challenges. Yet, the capacity of international diplomacy to create the Renaissance idea of forging an international community is not in sight. Yet, the issues of crucial importance from global capitalism to political and military interventions are creating a havoc on the global order.

What is clear is that the traditional approaches in conducting foreign relations, based on realism or idealism, have little to offer in our contemporary global situation. For the US, the traditional debate about engagement and isolationism has also run its course. One of the advantages of thinking in geopolitical framework is to advance the national agenda based on the following questions: What are the national strategic goals; how are they related to international order or disorder and what is the most prudent path to achieve them in a volatile world? Those were the questions in 1648 for the Treaty (peace) of Westphalia; 1814 for the Congress of Vienna and in 1945 for the Potsdam Conference. These questions are staring at our statesmen and women in contemporary times for answers and strategies. The road ahead to answer these questions must avoid a linear thinking as a reflective tool.

In a world where nations and societies, no matter how deeply connected, practice and preach different virtues from justice to war to equality to economics, an emergence of geopolitics is a natural outcome. How to manage these different virtues in a competing global system is the true revenge of geopolitics.

Friday, 10 October 2014

The True meaning of a Nobel Prize....

To bring a change, a real change, one must be a leader, visionary and courageous soul. One must inspire to be a good and decent human being. It is not an easy road. One must shun all the noise and follow the true path of redemption and positive change. Malala Yousafzai, winner of the 2014 Nobel Peace Prize, is in many ways, a symbol of true social change. Her winning shows that you do not need an army or lethal weapons to take on the ideology of hate, extremism and bigotry. As a young woman from Pakistan, Malala knows the value of education especially for girls. Her thirst for knowledge frightens those who are afraid of enlightenment and social progress. Her voice sends shivers to the followers of extremism and violence. But above all, Malala stands tall in front of those who still consider a woman to be a lower entity.

No amount of army and bomb power will create suitable conditions for a true progressive change in any society as long as women in that society are kept outside the social arena and discourse. The change must come from within and the last true hope for a society which preaches hate, violence and extremism, women are that hope.

Thursday, 11 September 2014

The Revenge of Geopolitics and the Retreat of a Liberal Order

A history which aspires to traverse long periods of time, or to be universal, must indeed forego the attempt to give individuals representation of the past as it actually existed. It must foreshorten its pictures by abstractions; and this includes not merely the omission of events and deeds, but whatever is involved in the fact that Thought is, after all, the most trenchant epitomist.

G.W.F Hegel
The Philosophy of History (Introduction)

One could attest, without any hesitation that, conventional wisdom is a relentless enemy of thought-provoking prose and analysis. A serious analysis strategically avoids making predictions and forecasting. It detests ideological labels and it certainly loathes the compartmentalization of values and vision. It does, however, lay out a clear and concise assessment of a given event or a situation and builds on a solid foundation of historical understanding of an epic proportion and fully crafted conceptual framework. It may sound a trivial labor but it is not. Because of that reason and that reason alone, certain occupations and expertise have no conceptual ability to grasp the beauty of a serious analysis. It is for this reason, that one must realize, the task of forecasting in a social science realm is a dangerous path. Events and social order do not work in a linear fashion. They have no set mechanism to operate from and within. The human world has a unique and cruel way of punishing the followers of a linear thinking when it comes to analyzing the grand questions of social order, justice, power and how nations rise and decline. It was the result of a linear thinking, which, at the end of the cold war, celebrated the triumph of a liberal order at the global level. The surrender of communism and central economic planning was a proof enough, among the elites in academia and government, that the history will continue to happen; but not in a grand fashion as it had been. Capitalism and the liberal order, as the thinking went, had no workable alternative. The collapse of the Soviet Union had settled that question for eternity. Yet, the shrinking of the Soviet map did not materialize that scenario. Even though the evil empire had vanished; what did not disappear is the search for a global order and mutual equilibrium among major nations.

States, regardless of their political, economic and social arrangements, are not an eternal entity. Their survival requires constant assessment of their existence through coercion, diplomacy and sometimes war. States, that are in suspicious and dangerous neighborhoods, are in a perpetual state of vigilance and guard. That, in a nutshell, is an essence of geopolitics and it has made a spectacular comeback for the last few years. Of course, the idea of a comeback of a geopolitics is a surprise to many in the western world. But, in societies where tribal loyalties and territorial integration are paramount interests, the idea of geopolitics is very much alive and has taken a much broader role in defining their core strategic interests. The promised land of a global liberal order, after the fall the Berlin Wall, is lost in the realities of raw politics of global power and regional domination. This is the new reality and must be seen that way. Additionally, this is the lens through which one must analyze, understand and assess the ongoing situation in Ukraine, how Russia is managing the conflict, the overall analysis of the relationship between the west and Russia; the ongoing bloody turmoil in the Middle East; the brewing troubles in the Indian ocean and the attempt to consolidate power by Shia minority over large Sunni population in the Islamic world. The global order has returned to its central question of managing the geostrategic interests in a world of suspicion and control.

The end of history narrative after 1991, followed by the events in Europe created a false sense of purpose and security from the Western perspective. In a linear thinking manner, many observers conflated the temporary geopolitical conditions of the post-Cold war world with the more final outcome of the struggle between liberal democracy and Soviet communism. That was, in essence "the end of history." The prevailing discourse in the west, was that the geopolitics had no place in liberal order, and the peace dividends were finally here to be enjoyed by all law-abiding nations. Recent events from Asia to Europe have demonstrated otherwise. The revenge of geopolitics is enhanced by two major factors, and they are both related.

The first factor has to do with the global order where many nations do want to participate, but by the same token, advance fiercely their desire to protect their internal institutions. By not being able to control the global environment as they wish, states are constantly looking around to at least control the immediate neighborhoods to develop a buffer zone for their own security from international threats. Protection and preservation of state legitimacy are essential in a world where there is no higher authority to manage the disputes and mitigate the conflicts. How to be a part of a broader international order without giving an inch of its sovereignty, states are facing what I call "the legitimacy paradox". When feel threatened in their own backyard, it is natural for a nation-state to advance its own security, including annexing a part of another nation with strong historical and cultural ties. That is how the Crimea case must be understood and analyzed. The broken Western promise of not expanding the NATO alliance to Russian borders has also played its role in escalating the ongoing situation. Each nation views the concept of security from its own vantage point, and that leads to competing interests in the context of the geopolitical framework.  

The second factor corresponds to an effective global mechanism, or lack thereof, through which major powers such as the current members of the security council balance the global and national interest based on some common ground. Because each nation has a unique history of assessing its own economic, social and political security, it is extremely challenging to develop a common theme on major global challenges. It is the contemporary situation, in regards to managing the foreign relations, when one talks about the global order. 

In the above described factors, what is clear that the possibility of a large conflict is very remote (though in some regions this remains a possibility). Yet, what is clear in the context of geopolitics, is the intensification of regional hegemony through interference in other nations by using the proxy groups to either destabilize or weaken the competing actors in the regional sphere to gain control and influence. Syria, Iraq and Afghanistan illustrate this point.

Without any decisive global arbiter, it seems that this "re-emergence" of geopolitics, is not some temporary arrangement. What is also crucial to realize that with no one unilaterally deciding the course of the events, each nation is in the process of adjusting its global posture even the US. After two prolonged wars (which are still going on) along with the fiscal situation, the US is facing an internal functional fatigue and external challenges and this unique combination is testing the limits of its influence across the globe and that is creating its own challenges within many regions.

What is clear is that the traditional approaches in conducting foreign relations, based on realism or idealism, have little to offer in our contemporary global situation. For the US, the traditional debate about engagement and isolationism has also run its course. One of the advantages of thinking in geopolitical framework is to advance the national agenda based on the following questions: What are the national strategic goals; how are they related to international order or disorder and what is the most prudent path to achieve them in a volatile world? Those were the questions in 1648 for the Treaty (peace) of Westphalia; 1814 for the Congress of Vienna and in 1945 for the Potsdam Conference. These questions are staring at our statesmen and women in contemporary times for answers and strategies. The road ahead to answer these questions must avoid a linear thinking as a reflective tool.

In a world where nations and societies, no matter how deeply connected, practice and preach different virtues from justice to war to equality to economics, the existence of geopolitics is a natural outcome. How to manage these different virtues in a competing global system is the true revenge of geopolitics.

Tuesday, 5 August 2014

The Leviathan Dilemma and the Nature of Legitimacy in Modern Times

Nature has treated man less like a mother than a step–dame. She has cast him into mortal life with a body naked, fragile, and infirm; and with a mind agitated by troubles, depressed by fears, broken by labours, and exposed to passions. In this mind, however, there lies hid, and as it were buried, a certain divine spark of genius and intellect; and the soul should impute much of its present infirmity to the dulness contracted from its earthly vehicle.

Third Book of Cicero's Commonwealth 
On the Republic (51 BC)

Irrespective of a cultural, geographical or historical burdens, all societies, primitive or modern, revolve around a crucial question of governance and how it drives its legitimacy and consent. Beyond doubt, one must admit that it is with absolute legitimacy, a true authority is established and exercised; regardless of the political and social arrangements of the polis. A true authority with absolute legitimacy is quite different from totalitarianism. A mature debate and argument must make that crucial distinction between authority and totality in the context of Leviathan. The confusion regarding authority and totality has deep implications on the populace and social mind frame.

The core question was and remain to understand and analyze the relationship between legitimacy and authority from Socrates to John Rawls. In so many ways, one can attest that, the governing question continues to haunt the global political community - not always in a most tranquil and civil manner and many times in a bloody way. Divers cultures, social norms, economic relations and institutions shaped the questions of governing in different forms in different societies. However, the central point was and continues to be, to assess and analyze the relationship between those who govern and those who are governed. That in a nutshell is the story of politics and political discourse since the time immemorial. Of course, the concept of power is an integral part of a legitimacy and governing equation. The power relations in any society do play a significant role in terms of defining the key players and their attitude towards the legitimacy and consent equation. Power, as a tool, either political and economic, does define the political and economic atmosphere; for better or worse.

In a world of instant communication and 24- hour news cycle, events, mostly involving the war, occurring in distant lands, are broadcast in living rooms all across the globe (Gaza, Iraq, Syria, Ukraine, Argentina etc). The live images along with a non-stop "commentary" has become a force of its own and this has major implications on the regime apparatus. The impingement of an event, either political or non-political, in a modern world, does not confine to defined borders alone. The news travels and travels far, and the ripple effect can modify the ability of a state to manage or mitigate the shock. Management of the crisis (sudden  or perpetual) and the creation of a national confidence through a clear vision and road map to attain that vision is the hallmark of the awesome leadership and spectacular governing legitimacy.

Within this context, one can unequivocally declare that the political structure in the majority of the nations today is facing the chronic and perpetual governing and the legitimacy crises. The erosion of a confidence in governance is, in fact, a result of a legitimacy crisis. It appears that both the political leadership, and the institutional structure in many contemporary societies are stuck in a perpetual failing and are unable to find the way out. The ability of a Leviathan to deliver and protect basic economic and political needs is coming under increased strain and pressure as the challenges mount and resources shrink. One must not succumb to a temptation to declare that the building of a large defense apparatus on a borrowed money, or the deep level of surveillance or intrusiveness on its citizens, is a sign of a well-functioning and priority-driven Leviathan. It is not. We must always, but seldom do, distinguish between reality and rhetoric; a true wisdom and a conventional wisdom.

Up until the Treaty of Westphalia in 1684, empires were the natural entities of the global polity. They were the natural outcome of social and economic factors since the dawn of the age of agriculture and plantation. The creation of the state came about due to the disintegration and mismanagement of the affairs of the empires. The security of a collective identity of diverse groups in one single empire was also a crucial factor. But as the economic structure changed and the taxes mounted due to a constant search for new territories, diverse cultures felt no attachment to Pax Romana or Byzantine rule. In the end, it was the system of economic management and the tax collection, which paved the way for a modern state to emerge. The resources drained the ability of an empire to control, politically and economically, the masses, which were of many different identities. State was an identity stamp for diverse groups of people. One could say that the disintegration of the empire is still relevant as we see the chaos in Syria, Iraq and Gaza.

In 1919, the economist Alfred Marshall remarked: "the state is the most precious of human possessions, and no care can be too great to be spent on enabling it to do its work in the best way.” Marshal, one of the founders of modern economics and a mentor to John Maynard Keynes, this truth was self-evident. Marshall strongly believed that the best way to solve the central paradox of capitalism -- the existence of poverty among plenty -- was to improve the quality of the state. And the finest way to improve the quality of the state was to produce the best ideas. That is why Marshall read political theorists as well as economists, John Locke as well as Adam Smith, confident that studying politics might lead not only to a fuller understanding of the state but also to practical steps to improve governance.

In the classical sense and method, the idea of legitimacy in the context of governance for the Leviathan, rested upon the well-functioning economy and the protection and safety of the citizens of the state; both politically and economically. With all of its shortcomings and tragedies, a sufficiently working Leviathan was perceived as a last resort to tame the harshness of the market economy and social chaos. No other entity was and is capable of providing a political stability - a much needed requirement for a capitalism to flourish and thrive. The rule of law with limitations on excessive abuse is the basic requirement for a Leviathan to be a legitimate entity. One must be cognitive of this requirement in order to fully grasp the modern challenges facing the Leviathan.

Without a doubt, not all done by the state was perfect or proper, but it did provide a platform to counter the anxieties of the days. The lingering fear of economic and unemployment anxieties were the social nightmares of that time and the state apparatus was the only tool which could curb the further deterioration. Nowhere it was truer than during the Depression of 1930s. One could go on to argue about the causes and the main actors of that economic misery. But, one cannot deny the social and economic change which was to emerge due to the intervention from the Leviathan to mitigate the horrific impact of the Depression on the entire society. In fact, the legitimacy of both the market and state were questioned during that time. Capitalism's own survival was at stake. The economic intervention by the state was a natural outcome. Yet, the voices of contempt regarding state's intervention in the matters of economy carried on with their ideological assault. Eloquence is no substitute for hunger, poverty, unemployment and destitution. A true and strong democracy is only possible when citizens live well and economic order is capable of providing equal opportunity to all. A genuine progressive society must reach beyond the shallow labels of left and right. Alas! an elusive goal in a hyper-partisan political atmosphere in our contemporary affairs. 

The legitimacy question is still valid today as the ongoing economic crisis marches on. It is, like always, the anxiety of economic and political insecurity which has given rise to a feeling of illegitimacy of a Leviathan. In many parts of the world,  many instead see government as the root of many of the problems that plague their societies and express their contempt in protest movements and elections that sometimes seem more anti-government than pro-reform. In Brazil and Turkey in recent years, huge numbers of protesters have marched in the streets against the corruption and incompetence of their rulers. In Italy, since 2011, three prime ministers have found themselves defenestrated, and in last year’s national elections, voters awarded the largest share of votes to a party led by a former comedian. In may’s elections for the European Parliament, millions of British, Dutch, and French voters, frustrated with their countries’ political elites, chose to support right-wing nationalist parties -- just as legions of Indian voters turned to Narendra Modi during elections this past spring. In November, Americans will trudge to the polls more full of anger than hope. Presently, the governments of all kind are scrambling for short-term solutions to help them through to the next business cycle, the next election, the next political transition. One must see the trend in all these happenings. The governing and legitimacy crisis is the reality of modern times. And, once again, it is the anxiety of economic hardship and survival at the center of the legitimacy crisis. It always has.

This crisis of legitimacy has been brewing for decades, but it has become acute in the last few years for two reasons. First factor deals with the finances of the state and how it shapes its ability to govern. The 2008 financial crisis and the subsequent global recession led to an explosion in public debt. The somber destruction of the job market in major economies drained the tax revenues which created its own challenges. It is in the realm of unemployment where the legitimacy of the Leviathan is the weakest and extremely crucial.

History has shown over and over the impact of unemployment on social order. The persistence inequality, especially in the realm of finance, poses a formidable challenge to the legitimacy of a Leviathan. In the imperial times, the masses believed that it was the divine destiny which had showered her blessings on the few. Empires felt no need to justify the concentration of power and wealth. This was the legacy of circumstances to ideas. It was not the case with the state apparatus. Legitimacy through the collective sharing and governance, at least in the liberal order, was the prerequisite of a well-functioning Leviathan. But the path of the legitimacy of the Leviathan especially during the economic turmoil , has always produced ugly results. The 1930s Nazi Germany is the most recent example of this reality. Before the crash of 1930s, 1.25 million people were unemployed in Germany. By the end of 1930 the figure had reached nearly 4 million, 15.3 per cent of the population. With the drop in demand for labor, wages also fell and those with full-time work had to survive on lower incomes. Hitler, who was considered a fool in 1928 when he predicted economic disaster, was now seen in a different light. People began to say that if he was clever enough to predict the depression maybe he also knew how to solve it. The rest, as they say, is history.

We are, as of this writing, facing an unprecedented unemployment problem. Scores of people in every corner of the globe lack a sufficient employment with decent salaries and benefits. And those who are lucky enough to have a steady paycheck, are looking over their shoulders to see when will the axe fall. It is said, unemployment is a temporary phenomenon; a sort of natural result of a market economy. Yet, data after data points to highly skilled individuals who are struggling to secure a decent way to survive. As the economic anxiety grows, the pressure on the state grows as well. The left-right divide may provide some fancy discussion about the pros and cons of state intervention; the reality is bigger than that. The provision and financing of the public good, a hallmark of the state existence, is in serious jeopardy as the costs continue to rise and the tax revenues continue to decline. This challenge has a limited policy options.

The second factor which has caused some serious damage to the legitimacy of a Leviathan is the structure and function of its institutions - both political and economic. The last thirty years have seen a rapid change from technology to demographics to power relations between nations and the speed of that transformation has altered the way, citizens were used to view their institutions. The traditional authority of the state within its borders is coming under increasing pressure from outside its borders. It is no longer the issue of a conflict between labor and management in a traditional manner. Capital has become an immensely mobile and can and, does fly on a whim, to a more friendly jurisdiction. Consequently, the tax policy is competing with the cheap labor from developing nations where the hunger for jobs is the only policy and option society has. In short, the authority of the Leviathan is challenged from outside and it is creating a doubt about its legitimacy and consent in an unprecedented way from within. There is no way to counter the forces of 21st century with 19th century institutions. The existing institutional design is not well-equipped to deal with the forces of a new world. The demography alone as a factor in nations like India, Pakistan, Nigeria and Bangladesh, where the general economic conditions are poor, the institutional issue in the context of legitimacy and consent of the state, will be very crucial in days to come.

All the above plus the rise of the social and electronic media has created quite a complex situation for the governing class in many parts of the world. The intense connectivity among masses has created its own norms and principles which might or might not be compatible with the existing governing norms and principles. Moreover, for the first time ever in the history of the world, the most challenging issues are global in nature. Issues such as climate change, financial market vulnerabilities, and cyber-risks to global terrorism, weapons proliferation, and traditional competition for power are truly testing the limits of the state power - the most visible and powerful actor in any governing model regardless of the political climate in any given society.

Because of the global nature of the issues, the policy options available to nations, to manage these issues, are very limited and in many cases counterproductive in nature (QE for example). Within this context, the traditional responsibility of the state, which is to govern locally, is increasingly under pressure. As pressure on the state apparatus continues to grow, to provide a local greater public good for its citizens in a very global climate, the options to provide the local greater public good (political and economic security at the minimum) continue to shrink along with the financial capacity of the state. The ability to govern is facing some serious challenges and not all of those challenges are emerging at home. More and more, international events are defining the local debate- whether we realize it or not.

It is never easy to substitute conventional wisdom with serious discourse. But one thing is tolerably certain. The economic and social anxieties simmer for a long time before their colossal eruption. Social anger in a very connected world can be very dangerous to the entire social order. And, the first causality of any social anger is always the Leviathan.

Thursday, 17 July 2014

Few words about the War and Gaza....

War is the ultimate human tragedy. The killings, mayhem, destruction and violence create their own string of violence. In an environment where reason and compromise are tossed aside and where the complete elimination of the other side is the goal, the human endeavor of a highest goal and maturity ceases to exist. Even with all the sound of death and chaos, there is a silence. The silence of an agonizing torture and a slow death of of a human spirit. The impact of a mortal shells and the hell from the sky do not ask for the permission to identify the real target for whom the bullets are intended. Very few wars have clear winners and clear losers. Most only have losers. Gaza is the latter.

Friday, 13 June 2014

Few words about Iraq and Afghanistan - has the journey accomplished its goals?

 This missive was written in 2011 and reflects accurately regarding what is happening in Iraq today. Afghanistan's fate is not different, either.

For a Military campaign. which divided the global community, killed 4500 American soldiers and countless Iraqi’s and cost the US taxpayer more than $800 billion dollars, the ceremony to end the US involvement in Iraq was small and had no grandiose look. I watched the ceremony on Al-Jazeera and my mind raced back to 2003 when I was asked by a senior Canadian official if the war would happen and I had said yes. Moreover, I also, said that the US would not find anything because Saddam was telling the truth. He had destroyed the Nuclear weapons program as he said on many occasions but I knew that the war would go ahead. Saddam was brutal but not stupid. He knew that his army will not have a living chance to fight with the US army and that is why he told Dan Rather of CBC in February 2003 that he did not want the war and the US should not attack Iraq because there were no weapons in Iraq.

But now, here we are almost a decade in Iraq and Afghanistan with no clear answer and claim to victory. The Shia-Sunni divide which under Saddam was at least controlled, is now the reality of politics in Baghdad and a day to day life in Iraq. This sectarian divide will continue to define the Iraqi society and for this reason, Iraq has a very bloody road ahead.  Talibans - who were supposed to be an extinct species, are back in full force and are planning to open an office in Qatar. President Karzai has not been able to control the crony system in Kabul and Iran is very much involved in the Iraqi affairs. To a critical eye, those are not the benchmark for a victory by any standard.

The US withdrawal from Iraq is something Iran was patiently waiting for. The current Iraqi administration is in more tunes with Tehran than Washington and that is not a good news for the US administration. The last thing the US wants is the Iraqi government who is taking marching orders from Tehran. That was not supposed to happen. But that is now the reality in the region.

In Afghanistan, the situation is the same. President Karzai who is close to the Saudi Royal family, is talking with Talibans and by involving Saudi Arabia, President Karzai is trying to undermine the growing Iranian influence in the region. Moreover, the relationship between Kabul and Islamabad is at the lowest point. Pakistan has blocked the NATO supplies at the border with Afghanistan to show Pakistan’s protest to the US over the killing of Pakistan’s 27 soldiers by the US drone. President Obama tried to make a personal appeal to both President Karzai and President Zardari of Pakistan to re-start the negotiation and allow the NATO supplies to go to Afghanistan but they both refused. (President Zardari did not even take Obama’s phone call). 

The US wrote the introduction for Iraq and Afghanistan after September 11, 2001. The rest of the chapters will be written by the regional powers and what they will write might not make the US very happy in the long run. But that is the cost you pay when know how to get in but do not have an exit strategy.

Two qualities are indispensable: first, an intellect that, even in the darkest hour, retains some glimmerings of the inner light which leads to truth; and second, the courage to follow this faint light wherever it may lead.

Karl Von Clausewitz
June 1, 1780 – November 16, 1831

Tuesday, 27 May 2014

The Piketty Moment and the Confused narrative about Inequality, Power and Redistribution

The wealth of nations depends upon an infinite variety of causes. Situation, soil, climate, the nature of the productions, the nature of the government, the genius of the citizens, the degree of information they possess, the state of commerce, of arts, of industry, these circumstances and many more, too complex, minute, or adventitious to admit of a particular specification, occasion differences hardly conceivable in the relative opulence and riches of different countries. The consequence clearly is that there can be no common measure of national wealth, and, of course, no general or stationary rule by which the ability of a state to pay taxes can be determined. The attempt, therefore, to regulate the contributions of the members of a confederacy by any such rule, cannot fail to be productive of glaring inequality and extreme oppression.

This inequality would itself be sufficient in America to work the eventual destruction of the Union, if any mode of enforcing a compliance with its requisitions could be devised. The suffering States would not long consent to remain associated upon a principle which distributes the public burdens with so unequal hand, and which was calculated to impoverish and oppress the citizens of some States, while those of others would scarcely be conscious of the small proportion of the weight they were required to sustain. This, however, is an evil inseparable from the principles of quotas and requisitions.

The Federalist Papers No. 21
Other Defects of the Present Confederation
Alexander Hamilton
December 12, 1787

There is no doubt that the logic dictates that the mass hysteria is a terrible emotion. It does not contribute anything meaningful to anything. In fact, it does pollute the fabric of a civilized dialogue and healthy disagreement through immature outbursts; low level attacks mostly personal and immature judgement on serious matters of the society. The barrage of conventional wisdom driven analysis in regard to explaining and defending ideas is a brutal way to trivialize grave issues and substantive ideas about politics, economics, ideology and social order. This, in a nutshell, is a level of debate regarding Thomas Piketty's new book, Capital in the Twenty-First Century. The book has created a shouting storm among academics and policy makers,and sad truth is that the majority of the debate is conducted through some type of ideological prism (right, left, centre, up, down) and that, in my assessment, is the biggest scandal around the debate on this book and its main topic, inequality and capitalism. When one undertakes a Herculean task of studying and reflecting on the gigantic questions surrounding inequality, capitalism and social order, one must invariably be driven by the reality on the ground, data, and facts, and not rhetoric and sound bite. In a world of savvy journalism and social media, the serious and thought-provoking debate is losing its appeal. It seems that we live in an age where men and women of all social disciplines, and all political faiths, seek the comfortable and the accepted. The man of controversy is looked upon as a disturbing influence on the so-called normal discourse. The ideological divide picks and chooses from the accepted wisdom. Even today, Adam Smith's Wealth of Nation finds support from all ideological angles. Still, professor Piketty's capital has created a huge storm of responses and rebuttals from all corners of the ideological prism. There have been few noteworthy responses to professor Piketty's book; yet the majority of the discussion regarding this book and inequality remains obvious and superficial. Inequality is a too serious of an issue to be treated in that manner. It deserves an analysis which shuns all labels of ideological understanding and political biases.

Any work, either academic or otherwise, regarding great questions concerning inequality, capitalism and social order, must be judged based on its claims, theory, findings, and analysis. In general, the books on economics, do not generate public sensation and loud response from all corners of the discourse. Yet, this one has. Professor Piketty, it seems, has touched a nerve of the global public discourse. But one cannot deny that the subject of inequality and how it relates to Capitalism is a reflection of our times. The general economic anxiety in the world and the social nervousness regarding the level of living standards and the erosion of the social contract are the ripe ingredients to initiate the debate about the inequality, capitalism and social order. Nevertheless, it is not a new occurring. One must be well-versed in history to realize that during economic uncertainty and challenges, the issue of inequality makes a comeback. Mass deprivation and poverty are never the topic of du jour; only when the crisis of economic confidence hit the entire society. An honest and critical reflection is the only positive outcome of the crisis. 

One could say with utmost certainty that the Central Point of the history of economic thought deals with the ills and benefits of the wealth and the accumulation of wealth; individually, and socially. The free exchange of goods and services and money making as a practice and how it shapes the social order, are all parts of the larger question of wealth and wealth accumulation. The Greeks dealt with those questions with eloquence and intense inquiry, so, did the Romans. The Bible has its own verdict (mostly negative) on the wealth and wealth accumulation. The Medieval and Renaissance world had lots to say about the wealth and wealth accumulation. Although the central premise of Enlightenment was to celebrate the power of reason; yet in the background it was the issue of wealth and its accumulation. Yet, it was Marx, whose critical eruption about the capitalism, is the holy grail of capitalist critique. If capitalism has an eternal critic, it is none other than Marx. Every economic and financial crisis brings Marx back in the collective discourse to re-analyze and re-understand capitalist economic order and the crisis of capitalism. Quite cleverly, professor Piketty's book also contains the word Capital. Imitation, as it is said, is the highest form of flattery. Marx's critique of Capitalism remains the holy ground for those who pursue the path of scholarship, which provides the critical view of the capitalism and how it shapes the society, politics of any given society, which worships the Gods of capitalism.

But one must ponder, why a book and especially a book dealing with the subject of economics, wealth and inequality, would get such a response? It is an ambitious and big book with an impressive amount of data, equations and, charts. The author has attempted to provide a political economy theory of everything capitalism and how it changes the dynamics of the society. The language is also quite difficult for those who do not know the subject. But that is not why this book has touched a nerve at a large scale. The central reason for this very noisy reception on this book has to do with the issue of inequality and redistribution and how to properly assess the trajectory of growth in the modern economic era where there are huge uncertainties regarding jobs, pensions and rising debts. As a subject of inquiry, inequality can be exhausting and taxing on those who are desperate to understand this complex puzzle of human society. That is why, it is only during the economic turmoil, that the subject of inequality and redistribution surfaces with vigour and enthusiasm. One could also add the concept of power when one truly wishes to understand the link between capitalism, inequality and social order. Power, as a concept, has never penetrated into broader economic discipline and that is one of the essential elements one must recognize to ask: how and what role does the power play in regard to inequality and what are the implications for the entire political, economic and social order.

Inequality, as a scale, is part of a human history. Inequality in physical appearance; intelligence (emotional and mind) and strong physical abilities are some of the most stark examples of an uneven world. In social, political and economic affairs, inequality predates capitalism. Yet, what one must acknowledge that the human affairs (social and economic) and political arrangements do determine the rules of social and economic principles in a society and how those principles are implemented, is the true hallmark of the rise or decline of an inequality - regardless of the economic system the societal practices. Power, it turns out, is the outcome of human affairs and political arrangements. It is the unevenness of power and authority and how this plays out on a broader social affair, poses the long - term threat to any society. Inequality is one of those threats.

Power, specifically, is the true scale to assess the concept of inequality - financial or non-financial. If the human affairs and political arrangements favour a certain group or individuals, social order runs the risk of chaos and anarchy. The outcome of human affairs and political arrangement is a "system" and as long as "system" is believed to be rigged in favour of those who have created it, masses would consider the existence of  inequality and unfair system. Financial crisis may distribute wealth; Inequality in political affairs faces no crisis -unless of course through a revolution. That is why, it is through the political eloquence and power, wealthy defend their spoils. Redistribution of financial assets may be tolerated; redistribution of power is another matter and that applies to all societies. At some point, when the social tensions are high, no one pays any attention to capital-to-income-ratio. Desperation at a mass scale and the distrust in the system is the true threat to stable order. The age of revolution may be over; the age of social rage not. Inequality in that context is the real inequality. 

Capitalism has gone through various transformations since the Industrial Revolution and, Power, as a concept played an instrumental role in shaping the capitalist economic system. In modern times, the Western hemisphere, after two bloody wars and the Great Depression, came to create a system which combined the liberal democratic political and economic order whose main belief was simple: by working hard, one can get ahead in life and reap the benefits of the market economy. The creation of the Welfare State was an essential part of that post-war economic structure. This equation had an awesome impact on the economies of Europe, the US, Australia, Japan and Canada. It is not that the post-war era eliminated inequality. Yet, the new economic and political order created a set of rules of the system which rested on the idea of meritocracy, hard work and skill building. With the right mix of college degree and hard work, one had a chance to have a decent life. The affluent were still there so were the wealthy. But because the economic system generated enough work and decent living, the majority of the people, especially in liberal democracies, trusted their system to be fair and just in regard to economic security and employment opportunities. Wealth did get accumulated at the top; but so did the economic growth and employment opportunities. 

In that manner, one could conclude that it is that belief in the system which is under threat and has been for a long time in a global age of economic uncertainty and prospects of not having an access to decent employment opportunities. Moreover, the fiscal strains on the affairs of the Welfare state have further created doubts on the economic and political system of many liberal democracies.The reality of stagnant incomes and employment anxiety even after acquiring an education and skills, has created an anger and a belief that the system is rigged and favours those who are at the top of the food chain. This belief is widespread in the western liberal democracies. The mistrust in the overall system and how it rewards certain individuals is also materializing in other emerging economies. The institutions of the authority and how they are used is the largest inequality issue. That and that alone must be the preoccupation of those are in the decision making authority. Without addressing this lurking threat, the income inequality will continue to climb with no end in sight.

As people live longer and access to health care improves, labour market is getting crowded and crowded, creating further pressure on many societies, to create employment and generate enough jobs to avoid their own Arab spring. The entry of India and China in the global labour force has pushed the wages down further, particularly in the western economies; eroding any gains made through productivity and technology. In other words, it is an issue of wages and unemployment and not so much wealth inequality and distribution. Yes, the economic growth has lifted many in the world out of poverty. Yet, many are still trap in the vicious cycle of poverty and economic destitute. This is a lethal mix in any society - even in those who promise the economic reward after paying your dues. It is the stagnant economic order and power inequality, which is the real danger to the long-term stability of any system. That and that alone must be the preoccupation of those who are in the decision making authority. Without addressing this lurking threat, the income inequality will continue to climb with no end in sight.

One of the chief drawbacks of the book capital is that it avoids discussing politics and power. In fact, in the real world, politics do matter and the vested interests do play an essential role to enhance the wealth and also, inequality. It is because of this shortcoming, the prescription offered by professor Piketty to reduce the inequality has no chance to be put into practice. A global tax on wealth does not exist and will not exist in reality. The capital remains very mobile and the speed of its mobility will only intensify. The absence of a supranational authority on the affairs of the global economy is the reality on the ground. Economic models are terrible tools to really assess and measure the real world economy. They do baffle the untrained eye; yet, they do not deceive those who live in the real economy and are well versed in the history of economics, politics and power. Linear thinking serves no real purpose when one attempts to understand the link between economy, society and power.

I once wrote: Inequality is the biggest social shame. Unemployment is the other. A stable social order is only possible when the citizens are confident that they have an access to equal economic opportunities to thrive and prosper. Rising inequality and decreasing upward mobility are threats to stable social order. Within this context, the real challenge for government policy in the advanced capitalist world and, also in the following fashion: how to maintain a rate of economic dynamism that will provide increasing benefits for all while still managing to pay for the social welfare programs required to make citizens' lives bearable under conditions of increasing inequality and insecurity. There is no doubt that different countries will approach this challenge in different ways, since their priorities, traditions, institutions, demographics and economic characteristics vary. But a logical starting point might be the rejection of both the politics of privilege and the politics of resentment and the adoption of clear-eyed view of what capitalism actually involves, as opposed to the idealization of its worshippers and the demonization of its critics.