April 26, 2006
Freedom, Pragmatism, Optimism
Okay, so it's not up there with "Democracy, Whiskey, Sexy." But I have been questioned for putting all three together. Allow me to defend.
I created this blog category early in the life of ThreeSources. "Freedom on the March" was a centering concept around here and it united me, AlexC and JohnGalt. We watched Afghanistan hold elections, saw positive signals from Egypt, Kuwait, Lebanon, the Ukraine, and eventually, Iraq. Close to 100 million additional people are living under a government they voted for when compared to President Bush's inauguration day.
The annual reports from the Heritage/WSJ Index of Economic Freedom show improvement (although the United States has fallen back, thanks to Sarbanes-Oxley and other regulations). Yes, I am pretty happy with the advance of freedom in the world, although it is frequently messy.
The underreported story of the year is the business growth in Iraq and Afghanistan, Cars, mobile phones, and satellite TV are hot consumer items, and the rebuilding efforts are attracting those who can think big. The Wall Street Journal features a a guest editorial today (paid link) that highlights Afghanistan's attraction as "A Virgin Market."
KABUL -- The recent Yale graduate I was chatting with at a party here spoke Chinese and had lived in China, the seeming epicenter of all things capitalist. "Why did you decide to come to Afghanistan?" I asked. He stared at me. "This is the largest rebuilding and development effort in the history of the world. Who wouldn't want to be here?"After decades of conflict and the crippling legacies of communism and fundamentalism, Afghanistan is finally open for business. The signs are everywhere, from Kabul's traffic jams to Mazar-i-Sharif's building boom; from the opening of a Coca-Cola bottling plant to the country's first private university, the American University of Afghanistan, offering programs in business administration and information technology.
According to the World Bank, Afghanistan is ranked 16th among 145 countries for ease of opening an enterprise. The Afghan Investment Support Agency, the one-stop shop for investing in Afghanistan with streamlined business registration, reports that 754 foreign companies have registered investments of $1.3 billion in Afghanistan; some well-known names include Siemens (rehabilitating dams) and Serena Hotels (Kabul's first five-star). There are 13 private banks, including Standard Chartered Bank, Commerzbank-affiliated Kabul Bank, and ING-managed Afghanistan International BInternational Bank. A third mobile phone company, Lebanon's Investcom, will launch service in Kabul in June, having paid $40 million for its 15-year operating license. At least $100 million will be invested in cement manufacturing in 2006.
I believe the move towards freedom is inexorable. It may go in fits and starts, but it cannot be stopped. Hear me out:
1) Free economies always outperform non-free economies. That's a core belief to me and I could provide examples well into the night.
2) The more powerful economy -- over time -- will win an armed conflict. Like the Union in the US Civil War, they can persevere through mistakes and setbacks. Their opposition may have much going for it but they can rarely outlast a wealthier adversary.
3) Another core belief is that free societies innovate, learn, and adapt better than centralized, command-and-control. Professor Reynolds links to Strategypage for his underreported story of the war: the adaptation on troops using the Internet. Flight 93 is a testimony to free people adapting and using technology in war.
I'm talking glacial, continental drift time frames and rates here. Buffy would remind us that pain and hard times lie ahead. But I am still confident.