Let the Markets Rule; Globalization Did Not Cause September 11
Byline: Helle Dale, THE WASHINGTON TIMES
Writing about politics without knowing anything about economics, a friend of mine once memorably put it, is a bit like standing on your head and waving your arms. While it is very difficult to do, the exercise does not make a whole lot of sense. Nevertheless, an amazing number of people have attempted this feat and continue to do so, at their peril.
With the benefit of hindsight, for instance, who could have doubted the outcome of the Cold War, considering the relative size of the American and Soviet economies? President Ronald Reagan once asked his advisers - when informed that the Soviets had more troops, more tanks, more missiles, more everything than the United States - "Isn't there something we have more of?" "Money," came the answer. "Then we will fight them with money," Mr. Reagan is said to have replied.
At the beginning of the series, the authors pose two very good questions: "As the terrible events of September 11th drove the world deeper into a recession, new questions emerged about the perils of the new world economy. Can our now deeply interconnected world surmount a global downturn and rise above other crises? And is global terrorism the dark side of the promise of globalization?"
Based on Messrs. Yergin and Stanislaw's own analysis in the first part of the series, the answer would clearly have to be "yes" to the first question. The initial segment, "The Battle of Ideas," demonstrates how in the 20th-century-long struggle between government intervention (as represented by British economist John Maynard Keynes) and free market economics (as advocated by Austrian economist Friedrich von Hayek), capitalism and market forces won the day, from the United States to Europe to the former Soviet Union.
For one thing, last year's recession has since been downgraded to something less than that as productivity and other economic indicators rebounded in the last quarter of 2001. Even the spectacularly awful destruction of the World Trade Center did not have any lasting effect on the U.S. economy, engine of world growth. Given the relative resources of the United States and its allies, on the one hand, and the terrorists and their state sponsors, on the other, can anyone seriously doubt that the terrorists will be defeated or contained? …