Economics and similar, for the sleep-deprived

A subtle change has been made to the comments links, so they no longer pop up. Does this in any way help with the problem about comments not appearing on permalinked posts, readers?

Update: seemingly not

Update: Oh yeah!

Wednesday, September 25, 2002

Deep in my heart, I know I'm right

Well, it looks like I have materially misled readers on the subject of Iraq, and that the actual figure for oil exports is about four times what I said it was. I knew that the policy of never checking politically convenient facts would come back to bite me at some point, so I am perfectly content to admit that the oil exports permitted to Iraq amount to the princely sum of $1.25 per Iraqi per day (based on UN deductions of 40%) rather than the miserly 36 cents per Iraqi per day which I had claimed.

Having been so comprehensively found out by two contributors to my unfailingly excellent comments system, it would be churlish and unseemly to complain that $1.25 per day isn't all that much to live on either. So, that's what I'm going to do. Five bits is not enough to live on, full stop.

But, brainier readers will object, oil exports, gross of the UN deductions, are at about their pre-1991 levels, and the Iraqis weren't starving to death then, were they? Which is true, but which rather points up how misleading a comparison that is. Basically, in 1990 there existed in Iraq, alongside the oil sector, something which might be called "the rest of the economy". And these days, in many senses, there isn't. It got bombed to hell in the Gulf War, and it's been impossible to rebuild it in the intervening period because oil exports have been limited for most of the period to sums much closer to my original $4bn figure, the vast majority of which has had to be spent on food and medical supplies.

In actual fact, the CIA Factbook suggests that Iraqi GDP is around $2500 per capita at PPP rates, which would be around $6.8/day -- not a hell of a lot, but a long way above the World Bank poverty levels. But that's ignoring a further point, which as I mention in the comments to the original article, I should have been aware of earlier.

The point is that, it's really just not on for me to make the claim that one "can't live on" 36 cents a day. Even if that were the right figure, the fact that there are Iraqis today means that they are living on what they get. It was (oh ye benefits of hindsight) silly of me to suggest that the amount of money available to the Iraqi economy was not enough to buy food for its people. But, I call at this point on Amartya Sen, the greatest economist since the war (and if you want to argue about that, go for it in the comments; you will lose). In his groundbreaking work on famines, Sen points out that famines are never purely the result of shortages; they are economic catastrophes rather than ecological ones. Typically, the presence of a famine (or whatever the word might be for the pattern of deprivations visible in Iraq) is a sign that the price mechanism has broken down; that people who need the resources most are unable to get them. And the economy of Iraq has taken more of a battering than most in recent years, for reasons more or less entirely traceable to the blockade (see here for details of how significant this effect has been, and also here within that site for some suggestions that due to the regime of "holds" and "blocks" on items like fertiliser and medical supplies which could conceivably have military uses, the actual money available to Iraq is much less than the headline sum). Normal economic activity is not possible in Iraq under current conditions, so starvation and other equally nasty means of reaching premature death is inevitable. This fundamentally has nothing to do with the Iraqi military; even if Iraq were, per impossibile to pretend that it wasn't under constant bombardment and imminent threat of invasion and reduce the size of its Army to Swiss levels, it would still suffer from widespread unemployment and starvation, because in economic terms, there's no "there" there. The proof of the pudding, of course, is in the failure of the "change from within" strategy; surely to God, if history is any guide, then if anyone really believed that Hussein was starving his population in order to build himself palaces, they'd have revolted by now? The great mass of Iraqi people appears to believe that their misfortunes are the fault of the West, and they're right.

Of course, the main effect of Prof DeLong's critique is to weaken my support for an immediate shooting war (since the ongoing blockade isn't as hopelessly destructive as I'd thought) but to reinforce my case that Clinton is still culpable for hundreds of thousands of deaths in Iraq, possibly more. Most of the blockade period took place on his watch; while there might have been decent reasons for imposing it in the first place, nobody at the UN had really expected it to be kept in place as long as it was. The oil-for-food regime wasn't materially improved until 1998 and wasn't lifted until 1999, both times at the insistence of France and Russia and in the face of opposition from the USA and UK. So, like the quintessential internet kook that I am, I concede all important points of fact while maintaining all my substantive views.

1 comments this item posted by the management 9/25/2002 09:30:00 AM

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