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Free Markets the Advised Course – Just Not For Americans

October 28, 2009

Vali Nasr Daily Show

If you could trade with a mortal enemy, would you do it “without preconditions”? Would you do it if the government of your trading partner deploys snipers against it own domestic protesters? Could you be certain you’d even get paid?

In a book published by State Department adviser Vali Nasr, a professor at Tufts University, trading without preconditions is precisely the course prescribed.

Last Tuesday night, PBS talk show host Tavis Smiley conducted an interview with Vali Nasr, now a US State Department adviser to Richard Holbrooke, himself a special State Department adviser on Pakistan and Afghanistan. Nasr was on the program to hawk his book, Forces of Fortune: The Rise of the New Muslim Middle Class and What it Will Mean for Our World.

The central thesis of Nasr’s book is that the Muslim world is changing, as evidenced by a growing middle class in Muslim countries.

Nasr believes where authoritarian Muslim governments have previously maintained a small middle class and closed economies, a new prosperous middle class is emerging in Muslim countries and is demanding access to global markets as well as the political and social liberalization that will inevitably follow.

Nasr believes that free markets will ultimately open up and stabilize Muslim countries.

Smiley was good enough to point out that the decline of the US middle class is an “interesting irony”, as he put it, in light of the fact that a growing Muslim middle class will be far more adept at bringing positive changes to a previously closed society.

As Jon Stewart joked in a September 22 interview of Nasr: “It’s so interesting that in the Muslim world, the middle class is now rising just as we here in the United States have decided to destroy ours”.

To Smiley, Nasr diplomatically offered this response:

“… stability, prosperity, and democracy needs a large middle class tied to the market. So, its decline in America is not a good thing and its absence in the Muslim world is not a good thing either.

“So, the Muslim world needs much more of that middle class that the United States has had for a very long time, and the United States needs to preserve that middle class in order to be able to maintain the stability of its democracy and the prosperity of its society.”

Nasr’s criticism of Muslim nations is that initiatives to aid the middle class must come from the middle class, not from “above,” as he put it.

To be fair, Nasr mentioned in the Jon Stewart interview that it is not recommended to open all closed economies, and that it is not advisable to open the toughest ones first. Presumably that would include Iran.

The Overseas Private Investment Corporation announced last Friday the formation of a new technology fund tasked to provide capital for technology businesses overseas for a variety of technology products, including information technology, telecommunications and pharmaceutical products, almost as if on cue.

“Without preconditions” may not be an acceptable standard for diplomatic relations when it comes to the use of private monies for investment.

The Obama administration has shown some incredible ineptness regarding domestic economic matters, and thus is apparently willing to try internationally the things we know will work, while shunning those very solutions at home.

  1. Jenifer S.. permalink
    October 28, 2009 8:37 pm

    As I understand it, Game Theory has something to say about this. Apparently — and I hope someone with a better understanding of mathematics corrects my meager understanding — when there is an ongoing series of interactions, the best way to handle a cheater is to allow a single chance, then reward honest interaction and punish cheating. Perhaps that is the basis of Mr. Nasr’s position. As for me, I agree with Mr. Covert that we’ve given these bad actors quite enough first chances, and now it is time to punish their past cheating rather than give them yet another chance. That only teaches them that bad actions are rewarded not punished.

  2. Steve White permalink
    October 28, 2009 9:05 pm

    It’s an interesting point. We’d like to think that a rising middle class would make a country more ‘liberal’ (small case L) and open. It certainly happened in countries like South Korea and Taiwan, countries that have cultures very different from the West. But will it happen in a Muslim country, particularly an Arabic Muslim country? While the Arabs have had a millennium of contact with the West, that contact has been strife, conflict, war and rejection.

    It isn’t clear to me that Mr. Nasr is correct, given the vast differences in culture, but I would like him to be.

  3. October 29, 2009 7:59 am

    It is painfully obvious that any Muslim middle class will act in the same way as the Muslim royal class and upper class i.e. in the same affiliation to the Quranic cult which advocates the killing of Jews and Kuffars and still with a willingness to lie and cheat to achieve Islamic world domination.

  4. The Inquisitor permalink
    October 29, 2009 8:40 am

    A robust middle class is the sign of good health, not its cause as Nasr seems to think. Free markets are the cause of economic health and a robust middle class. I seriously doubt that the Muslim Middle East will have free markets any time soon.

    As for trading with these countries, fine, but only on the basis that there are no tax funded guarantees. If you don’t get paid you eat the loss or your private insurer does, not my tax dollars. In fact that should be the rule for all trade.

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