December 27, 2004

by Reb Yudel
Paying the Market Piper in Iraq

Today's example of why I read John Robb's Weblog:

One of the things that really bothers me about America's new security regime is that it ignores economic realities. The current world order isn't run by nation-states. It's run by Adam Smith (aka global markets).

The history of the last 20 years will focus on the radical expansion of these markets to encompass 3 billion people. It was the tipping point for capitalism.

However, markets are harsh rulers. They punish non-economic behavior with a sharp slap of the invisible hand. There isn't any special immunity for the US.

So, when we spend $150 in direct security costs for every barrel exported by Iraq, we invite the slap. The cost of Iraq's security isn't reflected in the price of oil, nor is the $5 per barrel of naval security we pay for every barrel of oil from the Persian Gulf.

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