How Columbus Revolutionized The Global Economy

Authored by Ryan McMaken via Mises Canada,

Columbus Day this year brought with it the usual acrimony, and this Salon article hit the usual talking points by declaring European settlement of the Americas to be “the most massive act of genocide” in world history.

Salon quotes historian David Stannard who writes:

“[O]n average, for every 20 natives alive at the moment of European contact — when the lands of the Americas teemed with numerous tens of millions of people — only one stood in their place when the bloodbath was over.”

Figures like these remain hotly debated, but few disagree that, ultimately, the number of natives was extremely small when compared to the overall size of the Americas.

In other words, the number of people relative to the amount of natural resources in the New World was tiny, and population density in the Americas continues to be low by global standards even today.

While many pundits and historians commonly debate the violent conflicts between tribes and settlers in the popular media, we hear far less from scholars who take a serious look at the economic implications of the relatively underpopulated lands in the Americas.

The Americas are Different

There is a growing scholarship on the economic history of the Americas and on so-called “frontier states.”

Over the past century, scholars have noted that frontier regions in places like the Americas, Australia, and Eastern Russia are, in fact, different economically, politically, and sociologically from other parts of the world where the local ethnic population has — in many cases — occupied the lands for centuries.

This is not the case in the Americas where new groups of people settled on lands once held by completely different groups with different customs, economic practices, and institutions. The movement of peoples onto frontier lands, and the exploitation of natural resources there, has shaped the economic and political realities of today.

This scholarship on frontier settlement arguably began with Frederick Jackson Turner and his “Turner Thesis,” which was first advanced in 1893.

Turner focused primarily on the experience of the United States, but Walter Prescott Webb would attempt to develop these ideas into a more universally applicable set of ideas in his 1951 book The Great Frontier. For Webb, “the great frontier” included not just North America, but also Australia, New Zealand, and South Africa. (Later historians would add Eastern Russia to this list.)

Since then, most historians working on the issues of frontier history have attempted to either build upon the work of Webb and Turner, or to refute them. In either case, however, there is a recognition that frontier states are something different, and that the high period of frontier settlement, from 1500 to 1900, revolutionized the global economy and global demographics.

What is a Frontier State?

Frontier states are - to use a definition employed by political scientist Roberto Foa - “countries that in recent centuries have extended rule over new territories adjacent to their core regions.”

Economist Edward Barbier, in his book, Scarcity and Frontiers, adds that these regions are also characterized by a small labor force relative to the amount of land and natural resources available. That is, frontier areas are notable for experiencing labor shortages which lead to a wide variety of political and demographic outcomes.

Immigration and Slavery

Consider the problem a land owner faces in a frontier setting. He or she sees abundant farm land for crops, or mountain lands for mining. At the same time, there are few people in the area to plant and harvest the crops, or dig the mines. As noted by many historians of the native tribes, of course, the indigenous population had already been decimated by disease and military conflict. Unlike the situation in Africa, India, and East Asia, settlements in the Americas found themselves with large tracts of land inhabited by few people.

The solution to this economic problem, of course, is to bring in more abundant labor. This can be done through several means. First, of all, an owner (whether the owner be a private party or a state organization) can convince settlers to voluntarily move to a new region. A variety of different strategies have been employed in the New World in this regard. In early decades, North American colonies often relied on indentures servants who were held to a period of servitude in exchange for the cost of transporting the immigrant to the New World. The laborer, of course, was drawn by the prospect of obtaining freedom at the end of the contracted period. Later, the US used the Homestead Acts and land-sales schemes to attract settlers to frontier lands. Canada employed similar tactics. In Argentina, on the other hand, the Argentinian state actively subsidized the migration of immigrants from Italy to South America in the late 19th and early 20th centuries. Throughout the Americas, settlers relocated from Europe in a search for relatively cheap lands or as a hoped escape from the social and economic ailments of the Old World.

Today, surnames throughout the Americas remind us of the pan-European flavor of immigration in the region. One need only peruse a list of Latin American heads of state to see names such as Michelle Bachelet, Pedro Kuczynski, Cristina Kirchner, Vicente Fox, and others.

Nor was voluntary migration limited to Europeans. By the 19th century, Chinese laborers attempted to take advantage of labor shortages in California, and Japanese laborers did the same in California, Brazil, and Peru. As slaves were emancipated in Cuba, tens of thousands of Chinese workers were imported to replace them.

In many cases, though, immigration was not sufficient to bring down wages to a level preferred by owners and their government allies. Thus, the politically powerful turned to slavery instead. Naturally, imported slave labor would depress wages for both the slaves themselves and for the existing free population that preceded the slaves. This tactic was especially useful in cases where manual labor was particularly difficult, as in the case of the sugarcane fields of the Caribbean or the cotton plantations of the American South. The greatest importer of slaves, however, was Brazil where slaves would, for a time, greatly outnumber the European-descended population.

What began as a basic labor-shortage “solution” would evolve over time into a major sociological and political issue that colors politics to this day. And, contrary to what many naïve American leftists seem to think, the issue of slavery and racial politics is anything but unique to the United States. It is a characteristic of frontier states across the globe. Moreover, we might note slavery in the Americas was hardly attributable to the settlers being especially inhumane in their practices relative to other societies at the time. What was different in the Americas was this: the relative abundance of land and capital relative to labor made slavery pay much more relative to other parts of the world. There’s a reason the Spanish home country abolished slavery decades before slavery was abolished in Cuba. It simply paid more in the Caribbean.

Effects on Europe

The new lands themselves weren’t the only areas affected, of course. As Webb noted, the Europeans were “transformed” by the settlement of these new lands. This became all the more obvious as Western Europe’s population began to explode in the Early Modern period and into the 19th century. The abundance of land in the Americas created an easy “solution” for European politicians who could simply encourage (either through exhortation or financial subsidization) troublesome social classes to emigrate across the ocean. The British actively shipped criminals to their colonies across the sea, and certainly the large scale movement of laborers from desperately poor places — like southern Italy and Ireland during the 19th century — transformed the demographic and political realities of those regions.

Even in the face of imported slave labor, the relatively low density of workers in the New World allowed for a constant re-adjustment of wages in both Europe and the colonies as the population exodus to the New World increased workers scarcity — and therefore wages — back in the countries of origin.

Meanwhile, those who remained in Europe took advantage of the vast raw materials found in the Americas, including the region’s many fisheries, mining operations, and plantations.

Implications for Today

We continue to see the effects of the New World’s frontier origins in modern politics. Given the relatively recent histories of their populations, the social dynamics of the Americas are quite different from that of Europe.

In spite of recent claims that Europe is being erased by immigration from the Near East and Africa, the fact is that Europe remains far more culturally uniform than is usually the case in any modern post-frontier state. While the United States is, for example, 70-percent European in origin, most European countries remain at least 90 percent “white.” Not even Canada, which is is much more “European” than the US — with only 19 percent of its population listed as “visible minority” — comes close to the sort of cultural uniformity that is today common in the nation states of Europe.

Latin America, of course, is far more diverse still, with Brazil, for example, reporting less than 40 percent of its population as being primarily of European ancestry. The legacy of imported slaves and surviving indigenous populations remains an undeniable factor in Brazilian politics today. Only Russia — itself a recent frontier state — comes close to experiencing a similar situation in ethnic demographics.

Thus, it is “cute” when Europeans lecture Americans (including Latin Americans) about “tolerance” and “openness” when history suggests that it is the denizens of the New World who know far more about such things than the Europeans who stayed home and attempted to exploit those who made the hard journey to frontier lands. It was, after all, the European regimes that exported their political problems to the New World and happily profited from the exploitation of slave labor to supply Europe with sugar and other staples. It was the residents of the Americas themselves who had to deal first-hand with these issues, including broader demographic trends. The fact that the US population quintupled between 1830 and 1900, for example, was certainly no small affair. As historian Jon Grinspan notes, during this period, “at least 18 million immigrants arrived from Europe, more people than had lived in all of America in 1830.” Given the propensity for world war displayed by Europeans over the past century, one can only guess with extreme trepidation how a similarly destabilizing situation would be faced by Europeans in the modern world.

But many other issues in New World political realities are a legacy of its frontier past as well. Foa writes:

Frontier zones are found to have ongoing lower levels of public order and deficient public goods provision. Several theories [may] explain this discrepancy, including internal resettlement, costs of monitoring and enforcement, and the relationship between settlers and the indigenous population.

When American states are criticized for being “low-trust” societies, lacking social cohesion, and experiencing relatively high crime rates, these all stem from the realities of the New World’s lack of cultural uniformity and common history among residents. Non-frontier societies have had centuries to become more uniform and more cohesive. New World societies still have a long way to go.

It’s a safe bet that Columbus had no idea the social and economic revolution he was setting off by beginning Europe’s drive toward the “Great Frontier.” He just wanted to get rich. But, we are still living with the legacy of Europe’s expansion to these new lands today.

US Sanctions Against Venezuela Will Hurt Americans

After fifty years of imposing embargoes and other sanctions, the United States never managed to topple Cuba"s communist regime.

After forty years of the same in Iran, the US met with similar amounts of success.

Ongoing sanctions against North Korea have not toppled to regime there. 

But, some people in Washington won"t let decades of failure dissuade them. 

Last week, Congressman Mike Coffman (R-Colo.) introduced new legislation to bar Americans from importing oil products from Venezuela. The Washington Examiner reports: 

[T]he Protecting Against Tyranny and Responsible Imports Act, or the PATRIA Act ... would target Venezuelan President Nicolas Maduro after he stripped the country"s democratically elected national assembly of its power and authority. According to the bill, the proposed ban on imports would last until the assembly"s power is fully restored.

"The goal is to change the conduct, the character of the Venezuelan government under Maduro. I think the window is closing," Coffman told the Washington Examiner. "They are dependent upon the export of oil really to fund their government, and without that, they can"t pay their security forces."

Experience suggests there is little reason to believe that sanctions will cause the regime to give up in Venezuela. If the regime has less oil money with which to pay the military, the regime can always steal more from the average citizen to make up the difference. In other words, ordinary Venezuelans will suffer more in response to US sanctions. 

Source. 

Moreover, aggressive moves such as these against the Venezuelan regime have tended to only solidify support for the regime among its supporters. Both the current president Maduro, and his predecessor Hugo Chávez, were both successful in building support for themselves on a platform of opposing US meddling in Venezuelan political and economic institutions. 

When the US threatens to intervene in local politics, this only strengthens the resolve and support of the regime"s supporters. 

The US has already been acting in a reckless manner in this regard, as illustrated by President Donald Trump"s recent speculations about invading Venezuela to effect regime change. As noted by Daniel Politi at Slate, American threats directed at the Venezuelan regime do nothing to help the opposition: 

Throughout his power grab that has accompanied Venezuela’s descent into chaos, Maduro has long warned the United States was planning to invade the country. Trump’s words seemed to play straight into his narrative, recalling a time when Washington saw Latin America as its backyard where it could intimidate governments into doing its bidding.

“Maduro must be thrilled right now,” said Mark Feierstein, who was a senior aide on Venezuela to former president Barack Obama. “It"s hard to imagine a more damaging thing for Trump to say.”

Similarly, threatening Venezuela with more sanctions — something that may make the regime even more violent and desperate — do nothing to help the Venezuelan people in general, and only energize the regime"s base. 

Coffman claims the sanctions would be lifted if the Venezuelan regime were to restore the prerogatives and power of the national legislature, which has essentially been disbanded by Maduro. 

In recent months, the Venezuelan regime has rapidly become more dictatorial as forces loyal to Maduro have increasingly clamped down on opposition politicians and essentially ignored the results of recent elections that have brought many opposition leaders to power in the National Assembly. 

The working philosophy here, apparently, is that the imposition of sanctions will force the Venezuelan regime to democratize in response. One would be hard pressed to find examples of similar tactics actually working, however.

More astute observers might also ask why — if Coffman is so committed to democracy — he hasn"t called for similar embargoes of Saudi Arabian oil. The Saudi regime, of course, has been a dictatorship ever since its founding, sponsors international terrorism, and tolerates no religious freedom or freedom of speech. The Saudi regime, for instance, routinely arrests critics of the regime, and the regime"s spokesman has outright denied that elections should be allowed in Saudi Arabia. 

If human rights are of such pressing concern to the Congressman, its unclear why Venezuela is at the top of the sanctions list. 

As with all Trade Sanctions, Americans Suffer 

As with any discussion of sanctions, of course, we need not even consider the strategic futility of sanctions, or the morality of foreign regimes. 

Far from being a matter only of concern to foreigners, US sanctions are built on the cornerstone of limiting the freedoms of Americans.

As I noted earlier in regards to the Cuban embargo: 

[S]upporting an embargo means supporting the government when it fines, prosecutes, and jails peaceful citizens who attempt to engage in truly free trade. Support for an embargo also requires support for a customs bureaucracy that spies on merchants and consumers, and the whole panoply of enforcement programs necessary to punish those who run afoul of the government’s arbitrary pronouncements on what kind of trade is acceptable, and what kind is verboten. Naturally, this is all paid for by the taxpayers...

At their heart, embargoes are nothing but a specific type of prohibition. Sometimes, the government imposes prohibitions on transactions involving certain goods, such as cannabis. Other times, the prohibition extends to all transactions with people in a certain place. The fundamentals are the same, however, in that they prohibit peaceful exchange, with heavy penalties for violators.

In the case of a new embargo against Venezuela, the effect would be to place prohibitions on American importers, and thus drive up prices for oil and energy for all Americans. Government bureaucrats would be dispatched to monitor private industry to make sure they don"t violate the prohibitions. Government agents will impose fines, and make arrests if necessary. The American government will become more powerful at the expense of American consumers and American taxpayers. 

Indeed, this has already been going on with smaller-scale sanctions imposed by the Trump administration against Citgo oil refineries. Thanks to the sanctions, Citgo refineries in the US, which constitute four percent of American fuel capacity, and which employ American workers, are finding it more costly to obtain the oil they need for the refineries. Both domestic and foreign suppliers must scramble to work around the new regulations in order to avoid fines and lawsuits from government regulators who oversee trade. The effect of this will be to put pressure on more marginal employees and on more marginal operations, leading to layoffs and diminished refining capacity. Ultimately, it is Americans who will pay the price.

Why The War Party Loves To Call Foreign Leaders Insane

Authored by Ryan McMaken via The Mises Institute,

When the US government decides it doesn"t like a foreign regime, it"s become something of a tradition for US politicians — with the help of a compliant media — to portray those leaders as irrational, unhinged, or even downright insane. 

This was true of Saddam Hussein, and it was true of Slobodan Milosevic. In both cases, a foreign head of state was condemned as irrational in order to help justify US invasions and bombings of foreign nations that were no threat to the United States. 

The US narrative usually goes something like this — as described by Ronnie Lipschutz: 

Why would so-called rogues — and these are the only countries that, according to Washington, threaten US forces, allies, or interests — choose to [threaten the US]? No rational reason can be given, and so irrational ones are offered instead. They hate us, but for no reason since we have no designs on them. They desire vengeance, but for no reason since we have never offended them. They wish to injure us, for for no reason, since they have only been injured through their interference with our pusuit of order. 

This narrative helps to reinforce the credulous American public"s naive acceptance of the idea that the US government is an untrammeled force for good in the international sphere, and that any opposition to the US must be based on irrational, evil motives. If any other head of state is angry with the United States, it"s simply because he absurdly desires world conquest, or to massacre innocents. Or he may even be insane. 

Why We Must Claim They"re Crazy

But there"s an even more important motivation behind portraying "rogue" nations as being run by crazy people. It allows advocates for war to claim that deterrence via America"s huge nuclear  and conventional arsenals will not work — and thus these leaders present a grave threat to the American public. Lipschutz notes: "if insanity or irrationality are to blame for wars, deterrence cannot work to prevent them."

A rational head of state, of course, would understand that any existential threat to the US could mean total nuclear annihilation for the offender. On the other hand, if the head of state is just insane, then all bets are off. 

It is not surprising, then, that this narrative is being trotted out yet again in the case of North Korea. 

Nuclear deterrence may have worked against Joseph Stalin — who apparently was a super-reasonable and level-headed guy — but Kim Jong-un is just crazy.

Naturally, ultra-hawk John McCain has been at the forefront of this rhetorical effort, calling Kim Jong-un a "crazy fat kid." Later, McCain"s daughter got in on the act, calling Kim a "total absolute maniac." 

These attempts at portraying Kim as immune to deterrence are so common, in fact, that Isaac Fish from Foreign Policy magazine has declared "there is widespread belief in the US that North Korea is so hard to deal with because Kim is insane." Fish, on the other hand, concludes Kim has understandable motives just like most everyone else. 

Certainly, in social media, it"s not uncommon to encounter pro-war commenters who insist — without proffering any evidence — that Kim is simply impervious to nuclear deterrence, and thus must be killed (along with millions of other North Koreans) in a pre-emptive nuclear holocaust. 

Kim is Sane — and Predictable

Those who have actually bothered to study Kim and his regime, however, often take a rather more moderate position. 

Charles Peña begins with the obvious question and provides the obvious answer: "But isn’t Kim Jong-un an unpredictable—even crazy—leader who can’t be deterred? The same was said of Stalin and Mao in their time, yet both those leaders were deterred. Moreover, Kim Jong-un would have to be suicidal to launch a nuclear weapon against the United States since the United States has the ability to retaliate with utter devastation."

David C. Kang also concludes: "Kim Jong-un may be many things, but he is not suicidal. Deterrence will continue to work." 

Contrary to the idea that Kim and the North Koreans are crazed loose cannons, the North Koreans behave exactly as any other regime bent on maintaining its regime. Far from seeking to die in a blaze of glory, Kim wants to go on living as a dictator indefinitely.

As Peña notes, Kim wants "to secure his own survival and that of his regime, much like his father and his father’s father before him. That would certainly explain the executions and assassinations of those who might usurp him, which include family members."

The regime wants to survive — and not be a victim of "regime change" which is exactly why, as Kang writes, "North Korea isn’t unpredictable; rather, it is the most predictable country on earth."

Even Secretary of State Rex Tillerson — perhaps the most reasonable person on Trump"s foreign policy team — admits "He may be ruthless. He may be a murderer. He may be someone who in many respects we would say by our standards is irrational. But he is not insane." 

It"s Rational to Want Nuclear Weapons

But why would the regime want nuclear weapons if not to use them? Kim wants nukes as protection against "regime change" imposed by the US, since, as Pena notes, "Having nuclear weapons would seem to be an effective deterrent against regime change. After all, other dictatorial leaders who gave up their weapons programs—such as Iraq’s Saddam Hussein and Libya’s Muammar el-Qaddafi—paid a high price for those decisions."

Jacob Hornberger has explained how Fidel Castro was one of the first to figure out the need for nuclear weapons as protection against American-sponsored regime change: "[Cuba"s success in the Cuban Missile Crisis] showed that if an independent, recalcitrant Third World regime wants to protect itself from a US national-security-state regime-change operation, the best thing it can do is secure nuclear weapons."

Thus, North Korea"s behavior in this regard has been utterly predictable, rational, and what we would expect from a head of state in his position. 

Kim understands nuclear deterrence perfectly well. He knows that it is the only thing that works against the US"s plans for yet another regime change operation. 

However, in order to justify a first-strike nuclear war or a pre-emptive war against the North Koreans, the John McCains of the world must convince the world that Kim is simply insane and is not subject to deterrence. 

North Korea Is Not Unique

This "he"s crazy!" strategy is then mixed with endless ominous news reports about what new missile Kim"s regime is testing this week, and just how many nuclear warheads he may or may not have. Indeed, the evidence is rather spotty in this regard. For the sake of argument, however, let"s assume that the regime has nuclear warheads, and it has the ability to deliver them to the North American mainland. 

Okay, well, then it"s a good thing nuclear deterrence works. After all, we know for sure that the Chinese regime has many nukes, and the ability to deliver them. In fact, the Chinese have had nuclear capability for decades, and will continue to have it. 

While Russia and the US both have more than 7,000 warheads and enough nuclear firepower to destroy the planet many times over, the French have 300 warheads, and China has 260 warheads.

Source: ICAN and the Arms Control Association.

Why the Silence about Chinese Nuclear Capabilities? 

Moreover, it was just last month that China rolled out new ICBMs, including the DF-31AG, which puts most of the North American mainland within reach — and undoubtedly with far greater precision and reliability than anything the North Koreans have. And yet, all we heard about in the news was about North Korea"s low-rent, often-failing missile system. 

So, the Chinese can almost certainly deliver multiple nuclear warheads to North America. So why aren"t we talking about a pre-emptive strike on Beijing? Why not strike now before the Chinese strike us? Is it just because the Chinese leadership — a faceless entity headed by people whom virtually no American can name — is so eminently sane? The Chinese heads of state are almost certainly sane, but unlike the North Koreans — and like the Americans — they seek expansion. This can be seen in the continued shows of strength by the Chinese state in the South China Sea and elsewhere. So why not talk about a war to stop this quest for global dominance?

In all likelihood, few talk about pre-emptive war on China precisely because it is known that a war against China would be an unmitigated global disaster. North Korea is small enough that the US military establishment can still flatter itself with the idea that it can pull off yet another regime change without having to face a real nuclear arsenal such as that held by China. Sure, Seoul might be totally destroyed, but that is a price the Pentagon is willing to pay. 

Indeed, the vast nuclear capability of the Chinese, not to mention Pakistan"s growing ICBM capability, illustrates the absurdity of the claim that any country that has nuclear weapons is about to use them on the US, and thus requires a pre-emptive war. 

Yes, North Korea is currently involved in efforts to expand its ICBM capability. But we"re only hearing about it because China, Russia, and others already have the capability. They don"t have to fire test missiles into the ocean. They can already nuke North America, and everyone who"s paying attention knows it. We"ve already been down this road with the the Russians, the Chinese, the Indians, the Pakistanis, and others. 

What to Do 

So what is a reasonable response to nuclear proliferation? President Dwight Eisenhower can offer some useful insights here. 

The Soviet Union conducted its first successful nuclear tests in 1949. By the early 1950s, the Soviets were testing air-dropped bombs — which made sense for a country with a sizable air force. By 1956, the Soviets were testing medium-range ballistic missiles. 

What did Eisenhower do? Did he threaten a pre-emptive war with the Soviets? Did he massively increase military spending? 

Source: “US Military Spending in the Cold War Era” by Robert Higgs

No. In fact, during the early fifties, Eisenhower cut military spending, and by the end of Eisenhower"s term, military spending had still not matched the levels built up by Harry Truman during the Korean war. This all occurred while the Soviets expanded their nuclear capability. 

Naturally, if Eisenhower were president today, he"d be denounced by neoconservatives as a Russian tool and a traitor for both his military budget-cutting and his reliance on nuclear deterrence. Fortunately for Eisenhower, however, Lindsay Graham and John McCain were not yet in the Senate. 

The larger point, of course, is that Eisenhower understood that nuclear deterrence works, and that, while it is an unfortunate option in a nuclear-armed world where much is beyond the control of the US military — it is the most reasonable and low-risk option. 

Unfortunately, the current US regime is practicing what looks like the opposite approach. 

With his constant "tough talk" about invading or attacking North Korea, Trump and his aides are courting the type of situation that leads to actual nuclear war. After all, North Korea has to only believe that the country is about to be invaded and the regime annihilated. Constant threats of invasion are just the sort of things that lead to misunderstandings, human error, miscalculation, and disastrous wars. 

Moreover, its unclear that Trump is taking seriously the possibility that China could act to defend the North Korean regime from destruction. As John Mearshimer recently noted, the Chinese regime views North Korea as an essential buffer state against Western encirclement. The Chinese regime is unlikely to sit around and do nothing while the US adds North Korea to its list of Asian client states. 

On the other hand, why talk about any of this when it all can be be dismissed with a wave of the hand, and one need only declare "they"re crazy!" In that case, the possibility of World War III with China and others need not even be weighed. If Kim is "crazy" then prudence dictates we must "do something" before his suicidal insanity takes over and he nukes San Francisco. 

The "he"s crazy!" claim thus acts as a magical talisman of warhawks who can denounce all caution and strategic concern that speaks against "taking out" the bad guy who will bomb us any second. 

It"s easy to see why John McCain is so fond of the tactic.