Of Enemies Abroad, And At Home

We are now being told that the election of Donald Trump represents a virulent strain of tyrannical fascism in American politics, which was before lying under the surface but is now unapologetically out in the open. Certain agitators and political commentators are claiming that they don’t feel safe in a world where Trump is president, implying that there may be physical threats against their life, property or lifestyle under his regime. The conclusion is that Trump is to blame for a politics of potentially open, physical violence across partisan lines.

But if this is what Trump represents, Trump is the necessary response to an earlier dynamic, not the initiator of it. You see, the Left has been successful in its quest to control politically-acceptable speech. The world of man can be controlled by arms, or by words and ideas. If certain words and ideas can not be uttered, then the people who believe in them have no choice but to take up arms in their support. What choice but violence does a person have to convince another of his views, if his views are considered unutterable in society?

We are also told that Trump is committing what amounts to treason in warring with political factions in his own country while buddying up to autocrats in other countries, such as Russia. If the right way, and the only way, to conduct a political strategy is to play by your opponent’s rules, then this criticism may have merit. But politics is war by other means, a game of domination and annihilation. If you are a globalist after global control, you might call a truce here and there with domestic factions to enhance your projection of power outside your borders.

But what if you are a “nationalist” or “patriot”, like Mr. Trump?

If your primary political concern is dominance within your own borders, it is clear who your enemies and your friends are. Your enemies are any domestic political factions which question, criticize or otherwise restrain your full use of power inside your borders. And your friends are any parties, inside or outside your borders, that can either help you defeat your domestic opponents in some way, or who can agree to some kind of truce that lets you focus on defeating your opponents at home.

Make no mistake about it– Mr. Trump is in a war for his political (and potentially even vital) life, such is the nature of politics which has no rules but that which each opponent might individually observe. And looking at the world as he claims to, it seems not only not treasonous, but completely rational, to find friends where they can be found in order to quell the domestic disturbance represented by the Democrats and the American Left. And we can sense the truth of this proposition in observing that while critics of Mr. Trump argue that he should make peace with his domestic opponents to fight external enemies, these critics are not suggesting these opponents make peace with Mr. Trump, nor are these opponents themselves voluntarily laying down arms against Mr. Trump for the time being to take them up against the Great Alien Menace. Actions speak louder than words here.

And what about the spat with the domestic spy agencies? Ignoring the fact that they were un-American and not to be trusted under the Bush regime, and were clearly un-American and autistically-focused on studying the communication patterns of those people they nominally serve under the Obama regime (and when did these people face election and change under any of the last three administrations?), they are supposed to be answerable to the Congress, which supervises them, and the President, who leads the nation they serve.

To raise the claim that Mr. Trump is playing a “dangerous game” in challenging their methods, claim and authority, is to belie the very corruption his opposition to these organizations so far engenders– this may be a hard metaphor for many to understand these days, but it would be as if the appointed chief executive of the owner of a company was playing a dangerous game in challenging the actions and attitudes of the company’s hired employees. This argument has the theoretical cause-effect relationship of American civics exactly reversed.

In case anyone needs reminding these days, why is it exactly that the American intelligence “community” (note: for their to be a community, there by definition must be some who are inside it and some who are outside, that is, citizens of the domain and barbarians at the gates…) is to be considered trustworthy?

Have they demonstrated gross competence at their appointed tasks? Anyone who has not forgotten the failures of September 11th, 2001, must puzzle at the question.

Have they any kind of record of their activities and thinking that is examinable by the public? No, only the Congress and the President have access to that information (if the intelligence agencies are honest in presenting it in the first place!) and there is a clear principal-agent problem in electoral politics presented by these defined secrets.

And what kind of people are they who join these secret cabals, whose jobs seem to consist of lying for a living, trafficking in arms and illicit substances and occasionally murdering people deemed to be strategic problems for themselves or the government they represent?

Well, just that– liars, murderers, professional criminals and reckless thrill-seekers.

A better question than “Why should they be trusted?” is “Why should they be tolerated in a society that claims to have an open government?” Speaking of tyranny and autocratic rule, is there any model more noble in form than the modern spook cartels?

The Nationalization of Commerce

To have production goods in the economic sense, ie, to make them serve one’s own economic purposes, it is not necessary to have them physically in the way that one must have consumption goods if one is to use them up or use them lastingly. To drink coffee I do not need to own a coffee plantation in Brazil, an ocean steamer, and a coffee roasting plant, though all these means of production must be used to bring a cup of coffee to my table. Sufficient that others own these means of production and employ them for me. In the society which divides labor no one is exclusive owner of the means of production, either of the material things or of the personal element, capacity to work. All means of production render services to everyone who buys and sells on the market.

~Ludwig von Mises, [amazon text=Socialism&asin=0913966630] [PDF], pg. 41

We often hear international events described in an economic context, such as a “war for oil.” So I often used to wonder why people thought it was important which country’s government controlled various resources around the globe. As the quote from Mises above demonstrates, one need not own or control a resource for one’s self to make economic benefit of it. Just like I can make beneficial use of the capital of Amazon by purchasing goods and services from it without owning Amazon’s capital myself, a country of people, like the US, can benefit from the oil “belonging” to another country, Iraq, without militarily dominating or conquering them.

In fact, the oil in Iraq isn’t of much value to the people in Iraq if they don’t sell it to other people outside of Iraq.  A place like Iraq is so rich in oil resources that there is far more oil there than the people of Iraq will ever conceivably need or use. Meanwhile, they’re relatively poor in other valuable goods, such as foodstuffs which can’t be grown in their arid landscapes, or manufactured computer electronics, which they might lack the local expertise or even capital structure to produce on their own. By trading their oil for these goods, they’re better off, their trading partners are better off, and each gets the benefit of the other’s “means of production” without politically controlling them.

So how can we make sense of things like a “war for oil”? If not the economics of the market, where do these claims for the need for national governments to control resources and commercial transactions stem from?

I can think of three related phenomena:

  • the need for tax revenues by States
  • the need for war material by States
  • the need for direct revenues by States

The first idea is probably the primary driver of the argument for control. Except in special cases, most States at most times are only capable of levying taxes on the assets and incomes of their own citizens. For example, the government of Spain can not tax the citizens of France. Now, they may attempt to enforce laws which allow them to tax the citizens or companies of France operating within their own political boundaries, ie, a French citizen working in Madrid, or a French company operating a factory in Valencia. But the Spanish government is unable to tax a French citizen working in Paris, or a French company operating in Singapore.

But all governments, all the time, desire more tax revenues rather than less. So how to generate tax revenue on economic activity occurring outside a State’s political boundaries? By affecting a change of control of the assets or income streams of “foreign” entities, either by treaty or by war, a State can come to mulct a greater sphere of economic activity than simply that which exists within its outstanding political boundaries.

An Iraqi oil company operating wells in Iraq does not generate tax revenues for the US Treasury. But a US oil company operating wells in Iraq does generate tax revenues for the US Treasury. While in a broad economic sense it doesn’t matter to a US citizen (or an Iraqi citizen) which company controls the oil well, in a political sense it matters a great deal because it means a difference in where the tax revenues go (we’re simplifying our analysis here by assuming a similar level of technical competence, reinvestment rate, tax rate, corruption/wastage rate, etc., regardless of which national operates the well). The need for greater tax revenues incentivizes all states to prefer economic assets and trade flows to be controlled by their own citizenry and companies.

The second idea is reserved for the specific instance of war and highlights the strategic value of the national identity of an entity exploiting a resource. For example, most civil aeronautics legislation in most countries of the world contains a clause which restricts the foreign ownership of “local” commercial airlines operating large passenger aircraft inside the country. An airline like Virgin America, whose routes are primarily between locations in the US, might be restricted from being majority owned by a foreign national entity. The reason for this is that in the event of war, it is of strategic value to the United States government to be able to “mobilize” commercial passenger aircraft and commandeer them for transporting troops, supplies, etc. If these aircraft were majority owned by a foreign national, they might be able to legally escape them from the United States, or bring suit by their government for an act of theft. It could even lead to a declaration of war by the foreign national government. The need for war material, then, means it is extremely important for a State to have these assets owned by their own nationals to avoid strategic complications during a war. Otherwise, what would it matter what percent of an aircraft is owned by a foreigner?

The final idea is simply a reframing of the first. In some countries, the tradition or institution of direct taxation is weak or non-existent, and the State funds itself by actively controlling economic assets and using the revenues to fund its general budget. For example, Venezuela has a national oil company, as does Saudi Arabia– a large part of the State’s budget comes from the oil revenues generated by direct control of these companies. In that case, the State has a strong incentive to try to directly control economic assets to fund its operations; instead of being concerned about its national companies exploring and operating oil wells in “foreign” jurisdictions, then, it itself is concerned with such activity.

I call these ideas the “nationalization of commerce”, because it helps to explain the political reasons why the national identity of various commercial entities is important, when clearly there is no economic reason. I believe the nationalization of commerce also helps us understand why it is so rare for a State to participate in a true free trade arrangement– agreeing to free trade means letting the market dictate which national commercial entities are most successful at owning and operating assets and determining trade flows, which means the States involved have to adjust to accepting whatever tax revenue might come of such patterns which might develop within their political boundaries, and nothing more.