China, Iran, Africa: where goods cannot cross borders, there are soldiers: how trade cultivates society

Chinais rising - Donald Trump used this fact as a base for his first presidential campaign. There is often warning that the "new world" is multilateral - that duel of powers is coming.

This is nothing new. These are (among other things) the consequences of centuries old mercantilist thinking- let's quote a classic Frédéric Bastiat:

Where goods and services cannot cross borders, soldiers can.

Let's explain principles of international trade, let 's plant them in historical context and let's see where the power of China came fromhow Europe lost exclusive position in Africa and why China is doing so well in Iran:

If not goods, then soldiers

China is negotiating with Iran on an economic-military agreement, as a result of which China will invest $ 25 billion in Iran over the next 400 years, will gain access to oil fields and will be able to deploy in Iran It's soldiers. China will also supply military equipment, share intelligence and more.

This is not a surprising development for an economist. Economics is able to predict this and known for a long time and it is a consequence international isolation of Iran evoked by the United States and the spreading mercantilist thinking that comes from European Union:

  • if you buy from abroad, you may be dependent on their goods, but they in turn depend on your money. Why fight and lose "it" (money or goods, depending on the point of view),
  • when you sell goods abroad, it is the same as in the previous point, just the flows are the opposite,
  • nor the flow of goods (eg import of potatoes from Poland), nor the flow of money (what will we pay for those potatoes) not more important - it is equivalently important. You can't eat from banknotes and Poles can't buy a Skoda or a Euro on the international market without crowns so that they can trade with Germany;
  • the more goods and money fly across borders in both directions, the betterbecause the more people on both sides of the border there are addicted to "the others": war is not in their interest,
  • if someone (or you) prevents you from trading abroad, it means restriction of a country's access to resources. Logically, there is someone in the country who will want to get them differently - either out of necessity or some economic advantage. If you can't buy it for money and you have an army at your disposal, the solution is simple (and only)…;
  • it is also harder to deal with local problems:
    • when there is no harvest in the Czech Republic today, You don't really know it in the supermarket.
    • When there was no harvest in France at a time of fading mercantilism, so agricultural tariffs helped to launch the Great French Revolution.
    • What made the difference? Globalization, ie open international trade. Perhaps the French Revolution could have been avoided if the king had gain food trough war for the plebs, which is how international trade - that addresses surpluses and shortages of goods on a global scale - was done at that time,
  • trade is voluntary, you have to convince othersthat they want to do business with you and people will usually learn that when you are kind, respectful and polite to others, you trade more from it in the long run than if you walk it on the border with the missile force, it is a relatively significant cultivation of behavior and building tolerance for differences,
  • money does not know race, sexual orientation and similar aspects. When the Prince of Saudi Arabia comes to you to give you a billion dollars for some goods you produce, usually - with rare exceptions - the designation of the prince in the head of even the greatest racists changes from:
    • "a fucking arab guy who came to steal Europe from their wives' vaginas"
    • to:
    • "Dear business partner, with whom it is necessary to pay attention to and respect for possible cultural differences when booking a hotel on its way to business meetings„. Even Harvey Milk changed "America" ​​more as a targeted activist that did blockade of homophobic traders than by any political work. When you have to pay a mortgage, you may not really care who is holding hands on the street. Money knows no hatred.

European colonialism and world wars

One of China's best investment instruments in Africa (and indeed everywhere possible) is called the "European single market (the largest market closed by import barriers)".

  • A beautiful example is the era European imperialism / colonization. Countries have worked so hard to prevent cross-border trade between themselves ("protect their farmers / industry / culture / whatever") that the only way to get rich (produce something extra) was simply a matter of fencing and firing out the resources.
    • The pile of wars directly in Europe was eliminated when it was found that the resources could be found outside Europe (beginning of colonization), so war began with the natives,
    • Subsequently, colonies were fought for colonized territory (Europe's representative wars in Africa),
    • at a time when proxy wars were not enough - because the potential of the resources gained by imperialism was exhausted - overseas colonies in Europe were fought (1. sv. war) - it simply took longer for larger countries to reach the limits of their production potential and have to start figuring out how the hell they could in Germany get some of diamonds from British or French mines in Africa.
  • Having closed borders for trade and convincing the population that it is necessary, the only way you, as a politician, can promise to improve living standards, is a war (2. sv. war), as the second option means open borders - and lose the support of all whom you promised never to them no stranger will not compete - it leads you constantly to searching for an external enemy against which you can close yourself. But for World War II, we have a bit better example:
    • when in a country it is forbidden to trade with someone from the outside (for example, another country) in such a way that it affects even those inhabitants who really have nothing to do with any international haggling, then that foreign country set off an explosive under it:
    • ordinary citizen ’does not see his country trying to get a nuclear weapon (Iran), but that, for example, he cannot buy due to sanctions food for his family or some specific medicines for children. Any more eloquent extremist is enough for that (Hitler) and history is happen,
    • when you have been purposefully blocking international exchange for centuries (Europe before World War II), you help to rise up nationalism. Not "national pride" and pride in where we come from, but intolerance of other nations and constant trying of them being discarded - You're not dependent on them and resources are not shared. Than as business partners, you see foreigners as predators. Instead of a win-win situation, there is a win-lose situation where you perceive everything that way one gains only at the expense of the other (Hitler 's Germany and the fight against the Jewish or communist internacionalism),
  • in general blocking international trade makes everyone poorerand when you are poor, and when there are several millions of angry people in one place, states then do stupid things and proclaim different wars and experience different revolutions.

And so: one of China's best investment instruments in Africa (and indeed everywhere possible) is called the "European single market (the largest market closed by import barriers in the world)". Europe had historically exceptional position: the whole of Africa was set up due to colonialism for production to the mother - European - states. Englis whether French is common language there..

What did Europe done after decolonization? It has closed its markets with entry barriers, to which there was no capital in Africa. It helped throw Africa into even higher level of poverty. It pushed Africa to wars and revolutions.

And then China comes in: opened It's market, brought investmentsand began teaching Africans Chinese. The EU? Just still playing on It's internal sandbox and clear-out the position.

Let us replace sanctions with market activism

Sanctions should not replace activism. On the contrary: blanket sanctions are ineffective. They affect the general population, radicalize it, and even if they can lead the country to a revolution, it is quite possible that the new government will be more radical than the previous one.

Market activism is desirable: rather than sanctions, let us not purposefully buy goods from companies that do business in an unacceptable way. Everyone will start to be personally responsible. This is the right and desirable approach: voting by wallet. That international trade is open after all does not mean that everyone has to buy everything from everyone, no - It's the other way! It means market: competition, effort to be a better choice for consumers based on their requirements.

And the consumer has a full right (but not an obligation) to have some social responsibility or some view of international events among their requirements!

How about China or Russia?

The more we close ourselves to China or Russia, the more aggressive policies these countries can afford!

The best strategy is to have an international trade open to all. Many more countries could compete with China, because they would thus gain access to our markets.

But Europe is closing. The single market works like mercantilist France, the whole world is poorer because of this and some markets / countries / exchanges that could develop are not developing. Opening up to everyone in international trade is the same as legalizing drugs: cartels (here, for example, China) loses ground.

I would not limit myself to general sanctions against China: the more we close ourselves to it, the more aggressive the policy - both outdoors and indoors - can afford. After all, without international trade and related globalization (one is not without the other), about some the genocide of the Uighurs we probably wouldn't know at all, as it was with the Holocaust.

This is a nice comparison, by the way: billions of people know about Uyghurs. What would happen to them if no one outside knew about them, because the countries would be closed to each other? As bad as it is now, it can certainly be worse, maybe they didn't have to exist at all. What if there was a genocide in North Korea that we have no idea about?

How to deal with energy-imperialism based on gas or oil? International trade, ie trade with everyone. There is no reason to sanction Russia and put internal political propaganda ammunition in their hands and deprive some of Sergei's handyman of his job. Competition is enough.

People trade

In international trade, this is often lost, so I will remind you in conclusion: although we often talk about whole countries, The business is conducted by specific people and the profits and losses are held by specific people. For example, the fact that Western companies operate in China has lifted almost a billion people out of poverty there. That's great!

PS: most of the text was created as a comment on Facebook to the video in the discussion in Democratic cesspool. Cesspools, thanks for the inspiration!

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