Tuesday, August 09, 2005

Sanctions are Counter-Productive

Iraq "Oil-for-Food" is just one example

The purpose of Workers of the World Relax is to try to bring rationality to our overly complex, politicized world through the use of economics as an analytical tool. For example a recent news story is that the person - who was responsible for the United Nation's program allowing the government of Iraq to trade some of its oil reserves for food - has resigned his UN post after his behaviour on the job has been questioned. (Iraq was being economically sanctioned by the UN after invading and occupying nieghboring Kuwait in 1990)

Ok, lets deconstruct:

1) The government of Iraq was wrong in occupying another country; the member countries of the UN said ok then... Lets sanction by not allowing trade with Iraq. The problem with this arguement is that the trade restrictions hurt the PEOPLE of the country (Iraqis in this case) not the GOVERNMENT of the country (whose bad behavior was rightly to be condemned). But as we shall see, by the UN giving the goverment of Iraq sole discretion over its trade, UN sanctions are the complete opposite of what is intended.

By restricting trade of foodstuffs or electronic goods or clothing or anything it is the people that suffer. The people have to do without or buy from the black market or otherwise pay more ... The government leaders will always be able to get what they need as can circumvent government customs services, but the restriction of free, normalized trade hurts the people, and again, it is not the people whose behaviour is to be sanctioned.

Trade sanctions give more power to a corrupt, unaccountable government, not less. Free trade builds a non-government power-base. The people need cheaper goods that trade brings; the more wealthy, entrenched goverment people do not need the more cheaper goods as have more disposable income as a percentage of their income. Sanctions only reinforce this power disequilibrium.

2) To ask that the UN who is after all made up of human-beings, like all organizations, be expected to not exercise power is naive. (This writer believes that the only UN role should be to provide a peaceful sanctuary, venue, for world governments to talk out their disputes and nothing more. Remember, government can do no good, but only can prevent harm). Policemen and bureaucrats might be considered underpaid and under-appreciated, why should not bribes or a cut of the deal be part of business as usual. Why should the Iraq "oil-for-food" case be any different?

The idea then is to minimize the influence that coercive powers can have over our lives. Let us move beyond outdated counter-productive UN trade sanctions and indeed encourage wealth and freedom through free trade, "sanctioned" or not.