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 comment:

  1. alkali

    A nit: unless there's some international difference here I'm not aware of, five bits = US$0.625

    Thursday 2002-09-26 00:39:15
    Brad DeLong
    delong[at]econ[[.]]berkeley[[.]]edu

    For some incomprehensible reason--a desire to disprove the hypothesis of economic rationality?--I feel impelled to both leave words writ in the water of enetation's nonexistent business model and to defend The Guy with the Really Big Zipper Problem...

    Look: what is he going to do? If he allows Iraq to export lots of stuff, Saddam Hussein will take the export earnings and spend $4 on weapons of mass destruction for each $1 spent on infant formula. This is already a guy who has launched two--2--II--that is, two--aggressive wars on two of his five neighbors. To allow him to buy lots of new military toys from the French seems quite daft.

    On the other hand, to declare war, go back to Iraq, and finish the job also seemed--to Clinton from 1993 to 2000--quite daft. It might have been the right thing to do from the perspective of getting formula to Iraqi infants, but it would have been very hard to assemble enough of a political coalition to get it going.

    So what was the guy to do? The only third option would be to put heavy taxes on oil (which Congress would not vote for) so that in half a decade the U.S. could fund its consumption out of domestic production, end the sanctions regime, tell the Europeans, the Saudis, the Iranians, and the Israelis that Saddam Hussein was now there problem, and watch from afar while whatever happened happened.

    None of these options are good ones. This particular pooch was completely and royally screwed when George H.W. Bush decided not to depose Saddam Hussein and not to aid and reinforce the Shia and Kurdish uprisings, but rather to let Saddam Hussein stay in power because that way he would pose a problem for the Iranian Mullahs. Yet more evidence, I think, that realpolitik is the most nutboyish and unrealistic strategy of all. But once that was done, what was Mr. Zipper Problem to do?


    Thursday 2002-09-26 07:17:09
    dsquared

    I'm saving local copies of the enetations comments on my computer at home ...

    Frankly, daft or not, I don't really see that it's the business of the USA to interfere in local oil disputes. I disagree that the Iraq/Kuwait war was an Iraqi war of aggression, and I also disagree that the evidence post-1998 (which I am now talking about as if I was a complete expert despite the fact that I only heard about it two days ago) supports the assertion that 80 cents of the marginal dollar was spent on weapons.

    So what Clinton could have done would be to have not put such low limits on Iraqi oil exports between 1993 and 1998, and exercised a more coherent and less draconian policy on holds and blocks. He could also have allowed the UN Inspectors to get on with their job, rather than compromising their independence by making them spy for the USA

    Thursday 2002-09-26 22:33:14
    Scott Martens
    sm[at]kiera[.]com

    I personally know a former doctor from the emergency room of Baghdad's biggest hospital, who confirms many of the worst things about the Iraqi state, but also talks about having medical equipment smuggled in from Syria because UN sanctions limit Iraq's ability to buy x-ray machines and surgical equipment. The sanctions are hurting, even though Iraq is not strictly starving and there is a lot of new construction. Nor is the worst propaganda about mortality in Iraq likely to be true. The main reason the sanctions hurt so much is because Iraq was once a place where things mostly worked. Iraq's previous relative wealth is a mojor factor in its current dissatisfaction.

    Under other circumstances, this might well be viewed as good thing. Hell hath no fury like a dispossessed middle class. But, similar circumstances in Cambodia - where in the late 50's and early 60's things were pretty good but the late 60's and early 70's were an unmitigated disaster - led to the Khmer Rouge. I think it takes a lot of cynicism to talk about tunring Iraq into a model democracy with a straight face, and I doubt very strongly that a war will have any positive effect on local standards of living for years, so a US occupation not only has to face "nation-building", but also a population that problably won't be any happier than they are now. I have to wonder if the real choice is between an unpopular dictator who understands the limits of his power and the strength of his enemies and may possess weapons of mass destruction, and a new popular regime that may not know or care about the limits of power and may possess weapons of mass destruction. Iraq has - pretty much beyond a shadow of a doubt - nothing to do with 9/11. Can you imagine how much worse it would be if it had been a well-arnmed, basically modern state like Iraq that sheltered Al-Qaeda, instead of an anarcho-feudalist ruin like Afghanistan?

    Weapons of mass destruction aren't that hard to build. Attacking Iraq because it might have the kinds of weapons the US has long claimed to need to protect itself is feeble logic. I think the sanctions regime was, and still is, a pretty poor idea that ultimately serves no meaningful end, but I don't think it's as destructive as Iraq - or western commentators - sometimes claim.

    I can't say I'd find any tears for Saddam Hussein if he was quietly knocked off by pretty much anyone. It would be much cheaper and easier just to tell his successor - whoever it is - that the sanctions would end and he'd get a big, fat loan to squander if he genuflects towards Washington and spits on Saddam's grave. Even waiting for the guy to die - how much longer could he have? 20 years? - and then making that kind of offer has to be so much cheaper and more effective than going to war that I can't see why a frontal attack is even an option.

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