History - (Part V)

A Conflict of Interest

Economist Ludwig von Mises identified three features of government intervention in the domestic economy: (1) unintended consequences, (2) negative consequences from the policymakers' standpoint, and (3) proliferation of new interventions as correctives for past interventions. The same applies in foreign policy. All foreign policies bring results not intended by those who author the policies. And some of those results are regretted by the policymakers. Further, the undesirable consequences are frequently grounds for further intervention. The primary source of unintended consequences in foreign policy is the irresponsibility that attends the subsidization of client states. Elementary economics would teach that a subsidized agent will probably behave differently than one who must bear all the costs of his actions. Throughout the postwar period, Israel has been reasonably sure that it will be kept militarily superior to its Arab opponents, and that its treasury will be replenished, almost regardless of what it does. Even its "miscalculation" in the 1956 Suez intervention did not bring about a cutoff of U.S. aid. Such an arrangement makes irresponsibility inevitable. Conversely, the Palestinian conclusion that no compromise can possibly change the official U.S. attitude also is conducive to irresponsibility--and indiscriminate violence. A policy that helps to create, repress, and demoralize hundreds of thousands of refugees and second-class citizens will inevitably breed demagogues and their attendant horrors. Thus, U.S. policy in the Middle East has been complicitous in fostering recklessness and atrocities on all sides.

However, it is important to avoid naivetÇ. Not all consequences are unintended, and not all unintended consequences are regretted by the policymakers. Unexpected crises can serve their interests because they "necessitate" further intervention, confirm the warnings used to justify the policies to the people, and thus strengthen the consensus for the overall policy. For example, the appearance of growing Soviet influence in the Middle East, the result of policies followed by the U.S. government, need not have really upset the policymakers.(222) Egypt's turning to the Soviets for arms and financing of the High Aswan Dam in the 1950s was a convenient pretext for the intensification of policies that John Foster Dulles was already pursuing. Similarly, the Soviet invasion of Afghanistan provided an occasion for the United States to flex its rhetorical muscles (the Carter Doctrine) and to establish the Central Command and draft registration. It has been noted that Saddam Hussein's invasion of Kuwait saved the U.S. military budget from deep cuts by Congress. Thomas Paine recognized long ago that "taxes were not raised to carry on wars, . . . wars were raised to carry on taxes."(223)

On the other hand, apparent victories for U.S. policy can reasonably be reinterpreted as, in reality, setbacks for the policymakers because the victories might undermine the consensus. When Sadat expelled the Soviets from Egypt, it must have crossed the policymakers' minds that a few more "victories" like that could put them out of business. How long would the taxpayers put up with annual military budgets of hundreds of billions of dollars if they stopped believing in a Soviet threat? That is not to deny the existence of disagreements within the policymaking elite, or of hawkish and dovish wings in the establishment. Yet the essence of U.S.-Soviet rivalry in the Middle East (and elsewhere) may best be captured in the title of a book by the late Walter Karp on the relationship between Republicans and Democrats, Indispensable Enemies.(224)

Thus, much of the critical literature on U.S. foreign policy--the literature that says the policy has been self-defeating--is flawed. It implies that the policymakers have persisted irrationally in a course that is contrary to their interests. That is implausible. They undoubtedly followed the best course they could, given their objectives and contraints. A policy calculated to be truly pro-Palestinian or equitable to both the Arabs and the Israelis would have been inconsistent with the requirements of U.S. hegemony. In other words, if one accepts that U.S. political leaders should maintain a particular world order, then one is logically drawn to the sort of policy that has been pursued since World War II. A thorough rejection of those policies requires a rejection of the objectives they were designed to achieve.

The error too often committed in judging foreign policy is to identify the interests of the political and specially connected corporate leaders with the "national interest," or better, the interests of the people who constitute the United States. In fact, there is a conflict of interest between the politicized elite and the great bulk of the people. The Manchester school of Cobden and Bright recognized that clash between the "tax-payers" and the "tax-eaters." As Cobden, in calling for strict noninterventionism and complete free trade, put it:

Warlike governments can find resources [for war] only in the savings of merchants, manufacturers, farmers, and renters, and we appeal to them, in the name of humanity and their own interest, to refuse to lend their aid to a barbarous system which paralyzes trade, ruins industry, destroys capital, stops work, and waxes fat through the blood and the arms of their brothers.(225)

His contemporary, French economist FrÇdÇric Bastiat, added, "Political economy shows that, even if we consider only the victorious people, wars are always waged in the interest of the few at the expense of the many."(226)

The American people have not been well served by U.S. foreign policy in the Middle East. They have been forced to pay billions of dollars to foreign governments, and that has cost them untold opportunities for better lives afforded by an undistorted consumer economy. Even when the foreign "aid" was used to buy American-made products, it was merely a politically contrived transfer from the taxpayers to politically connected corporate interests. U.S. policy has put the American people at risk of war several times, including the risk of nuclear war with the Soviet Union. American lives have been lost--in Israel's attack on the USS Liberty during the 1967 war, in Beirut, and through desperate acts of terrorism. The people have even gotten a bad deal on oil. The true cost of oil includes not only the per barrel or per gallon price but also the cost of the overgrown military establishment and foreign aid budget. That cost is hidden, because it is not overtly added to the price at the pump, but it is real all the same. That fact was recognized in a 1953 statement by the Texas Independent Producers and Royalty Owners Association, which said:

Although Middle East oil is so abundant that it can be developed at a fraction of the cost of our own, it is far from "cheap." On the contrary, Middle East oil may already be the most expensive in the world market today when consideration is given to the fact that vast amounts of public funds are spent on the defense mechanism which is intended largely to protect American interests in the Middle Eastern oil fields.(227)

The statement goes on to note that the real price would multiply immeasurably if the policy began costing American lives--a point that is even more relevant today. How, in the absence of hegemonic U.S. policy, could Americans and their large capitalist economy have achieved energy security and prosperity? The answer is the free market, in which entrepreneurs earn profit by correctly anticipating consumer demand, as well as the uncertain future, and make provisions for both. The belief that government planning is necessary to provide for the people's energy needs is a species of what economist F. A. Hayek calls "the fatal conceit" and a failure to understand the nature of the market's self-regulating, spontaneous order. In other words, political and military noninterventionism in the Middle East would have cost the policy and corporate elites the chance to serve their special interests, but it would have left the people free to pursue their private complementary interests in the market's cooperative and competitive environment.(228)

To put it bluntly, a power- and privilege-seeking elite has profited at the expense of the people. Classical liberals have long warned that that was the danger inherent in foreign policy. In that area, above all others, the government can insist on the unquestioning faith of the people and dull their natural suspicion of government. In domestic affairs a leader who proposed massive spending or risky policies on the grounds that the rest of us do not have all the facts would be ridiculed. Yet that approach is standard in foreign policy. The result, as the classical liberals warned, has been government run amok.

In 1796 George Washington, in his farewell address, offered advice that now seems aimed directly at those who constructed the foreign policy we have suffered with for the past 45 years:

Excessive partiality for one foreign nation and exces sive dislike of another, cause those whom they actuate to see danger only on one side, and serve to veil and even second the arts of influence on the other. Real Patriots, who may resist the intriegues [sic] of the favorite, are liable to become suspected and odious; while its tools and dupes usurp the applause and confidence of the people, to surrender their interests.(229)

By any standard, the relationship between the United States and Israel has been extraordinary. Criticism of any other American ally does not cost a person an elective or appointed position in government. Criticism of any other American ally does not bring accusations of being a hater of the dominant religious group in the allied nation. Both of those things happen, almost routinely, to anyone who criticizes Israel. Elected U.S. officials who have cast a single vote against an Israeli position have seen major opposition mounted by Israel's American supporters. The rare journalist who points out unattractive facts about Israeli conduct is likely to be smeared as an anti-Semite. The chilling effect that has had on public debate is too obvious to need elaboration.(230)

As for the standard rejoinder that Israel has been the staunchest U.S. ally in the Middle East, one is reminded of the one-liner about lawyers: if we didn't have them, we wouldn't need them. The U.S. relationship with Israel produces the very adversaries that are pointed to as justifying the close relationship.

We have allowed our leaders to violate George Washington's sage advice, and it has cost us dearly. For Washington, "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."(231) We must rediscover the wisdom of our first president.

After the first full-blown U.S. imperialist adventure, the Spanish-American War, classical liberal William Graham Sumner, surveying the results, concluded that, despite its military victory, the United States in fact had been conquered by Spain. By that he meant that the traditions of the American republic were being undermined by the imperial values of the Spanish Empire.

The question of imperialism is the question of whether we are going to give the lie to the origin of our own national existence by establishing a colonial system of the old Spanish type, even if we have to sacrifice our existing civil and political system to do it. I submit that it is a strange incongruity to utter grand platitudes about the blessings of liberty, etc., . . . and to begin by . . . throwing the Constitution into the gutter here at home. If you take away the Constitution, what is American liberty and all the rest? Nothing but a lot of phrases.(232)

Sumner feared for the future, as we all must.

Now what will hasten the day when our present advantages will wear out and when we shall come down to the conditions of the older and densely populated nations? The answer is: war, debt, taxation, diplomacy, a grand governmental system, pomp, glory, a big army and navy, lavish expenditure, political jobbery--in a word, imperialism. In the old days the democratic masses of this country, who knew little about our modern doctrines of social philosophy, had a sound instinct on these matters, and it is no small ground of political disquietude to see it decline. They resisted every appeal to their vanity in the way of pomp and glory which they knew must be paid for. They dreaded a public debt and a standing army.(233)

As we witness the jingoistic celebrations of the U.S. military's victory over Iraq, it is clear that great energy must now be directed to the revival of that "sound instinct." It is a matter of life and death--literally.

Notes

I wish to acknowledge my immeasurable intellectual debt to Leonard P. Liggio, Noam Chomsky, Rabbi Elmer Berger, and my grandfather, the late Samuel Richman.

1. President Bush had a similar reaction in 1989 when the United States invaded Panama. He dismissed previous U.S. support for Gen. Manuel Noriega as "just history."

2. The word "terrorism" is used here with a certain reluctance because of its invidious ideological taint. Terrorism, to judge by standard usage, is something only the adversaries of the United States and its allies can engage in. The conduct of American or allied personnel, no matter how violent, by definition cannot qualify as terrorism. For the sake of perspective, it is worth noting that the number of victims of what is usually thought of as Arab terrorism is minuscule compared with the number of civilian victims of the chief U.S. ally in the Middle East. Israel, whose conduct is never described as terrorism.

3. For a discussion of Western betrayal of the Arabs after World War I, see David Fromkin, A Peace to End All Peace: The Fall of the Ottoman Empire and the Creation of the Modern Middle East (New York: Avon Books, 1989); and George Lenczowski, The Middle East in World Affairs, 3d ed. (Ithaca, N.Y.: Cornell University Press, 1962), pp. 67-98. Regarding Franklin Roosevelt's promises to the Arabs, see Richard H. Curtiss, A Changing Image: American Perceptions of the Arab-Israeli Dispute Washi- ngton: American Educational Trust, 1986). Roosevelt's record on Pales- tine was curious; one might even say cynical. Seven years before his meeting with Saudi king Ibn Saud in 1945, he said, regarding Britain's limits on Jewish immigration into Palestine: "I was at Versailles and I know that the British made no secret of the fact they promised Palestine to the Jews. Why are they now reneging on their promise?" Quoted in Peter Grose, Israel in the Mind of America (New York: Knopf, 1983), p. 134. But in 1945 Roosevelt assured the king that nothing would be done to Palestine without his being consulted. In the late 1930s, Roosevelt also came up with the idea of having the United States, Great Britain, France, and wealthy Western Jews finance the transfer of all the Pales- tinian Arabs to Iraq. The British responded that no amount of money would induce the Palestinians to move. Roosevelt raised the idea with Chaim Weizmann, the Zionist leader, who said things were not so simple, although neither man dismissed the idea. Grose, pp. 138-39.

4. Foreign Relations of the United States (Washington: Government Printing Office, 1945), vol. 8, p. 45.

5. For details on how that occurred, see Harvey O'Connor, World Crisis in Oil (New York: Monthly Review Press, 1962), pp. 271-365. The American concession in Saudi Arabia started with a grant by King Saud to Standard Oil of California, which took on Texaco as a partner to form Caltex Oil. O'Connor, p. 326. After World War II, Aramco (Arab-American Oil Co.) was owned by Standard Oil of New Jersey, Mobil, Socal (all Rockefeller companies), and Texaco. The cooperation between the U.S. government and the oil industry was often covert. In the 1950s the CIA agreed to subsidize, at taxpayers' expense of course, American oil firms so they could be assured of underbidding the Soviet Union on a Syrian oil refinery. Wilbur Crane Eveland, Ropes of Sand: America's Failure in the Middle East (New York: W. W. Norton, 1980), p. 195.

6. The United States started moving in on French and British interests in Saudi Arabia during the war. Direct lend-lease aid to King Saud was Franklin Roosevelt's way of keeping American concessions from falling into British hands.

7. Michael B. Stoff, Oil War, and American Securitv: The Search for a National Policy on Foreign Oil, 1941-1947 (New Haven, Conn.: Yale University Press, 1980), p. 197ff.; Anthony Sampson, The Seven Sisters: The Great Oil Companies and the World They Shaped (New York: Viking, 1975), p. 101ff.

8. The U.S. Senate Committee on Energy and Natural Resources, chaired in 1977 by Sen. Henry Jackson, spelled that out in Access to Oil--The United States Relationship with Saudi Arabia and Iran (Washington: Government Printing Office, 1977). The report pointed out that "threats to the continuous flow of oil through the Gulf would so endanger the Western and Japanese economies as to be grounds for general war" (p. 83).

9. Ibid., p. 84.

10. Robert W. Tucker, "The Purposes of American Power," Foreiqn Affairs 59, no. 2 (Winter 1980-81): 253.

11. Ibid., p. 256. Years earlier, in 1944, Secretary of the Navy James Forrestal had said: The prestige and hence the influence of the United States is in part related to the wealth of the government and its nation in terms of oil resources, foreign as well as domestic. It is assumed, therefore, that the bargaining power of the United States in international conferences involving vital materials like oil and such problems as aviation, shipping, island bases, and international security agreements relating to the disposition of armed forces and facilities, will depend in some degree upon the retention by the United States of such oil resources. Quoted in Leonard P. Liggio, "Oil and American Foreign Policy," Libertarian Review (July-August 1979): 65.

12. That was part of a global strategy that saw the Third World as a source of raw materials and a market for finished goods, but only under the direction of pro-American, even if brutal, rulers. The analysis of the cynical motives of the political leaders was first formulated by classical liberals--that is, advocates of free-market (as opposed to state) capitalism such as Thomas Paine, Charles Dunoyer, Charles Comte, Augustin Thierry, Richard Cobden, John Bright, Lysander Spooner, and Herbert Spencer. See E. K. Bramsted and K. J. Melhuish, eds., Western Liberalism: A History in Documents from Locke to Croce (London: Lonaman, 1978); Edmund Silberner, The Problem of War in Nineteenth Centurv Economic Thouaht (1947; New York: Garland Publishing, 1972). As Bright put it in 1859:

The more you examine this matter the more you will come to the conclusion which I have arrived at, that this foreign policy [of Britain's], . . . this excessive love for the "balance of power," is neither more nor less than a gigantic system of out-door relief for the aristocracy of Great Britain. . . . What are we to say of a nation which lives under a perpetual delusion that it is about to be attacked?