Democracy and Development

Monks in Burma.bmp 

By Nick Li


In my last post I suggested that economic development would be the key to a creating a stable democracy in Burma, and that as such attempts to cripple the country with economic sanctions would be counter-productive. In this article I will review and summarize some of the arguments that support this view, so I do not once again come across as a paid apologist for Beijing and other autocratic regimes (which I am beginning to feel like more and more, except for the paid part). Continue reading

Political Economy of Myanmar/Burma Part 2 – what can the international community do?


By Nick Li

In my last article I discussed some of the features of Burmese society that I thought had not received enough emphasis by other commentators. Three key features are: photo_lg_myanmar.jpg

(1)The military dominates the economy, and is large enough to create a powerful "middle-class" constituency for the status quo.

(2)The protests this year were initially economically motivated – only after the brutal crackdown did political demands surface.

(3)The importance of China is overemphasized. India and Thailand are equally important trading partners, and Singapore, South Korea, Malaysia and Japan all have significant investment (and combined imports equal to China).

So what steps can the international community take to alleviate the suffering of the Burmese people? The types of actions available can be categorized, in order of severity under the following:

(1)Military intervention (2)Economic Sanctions (3)Engagement

Continue reading

The political economy of Myanmar/Burma – Part One


By Nick Li


The dust has settled on the "Saffron" Rebellion in Myanmar/Burma – hereafter Burma, though I don’t think we should make so much politics out of name changes (should we care whether a democratic government or a despotic government decides Mumbai is better than Bombay or Yangon is better than Rangoon?) With events in that country no longer making headlines, it is time for some sober analysis. Continue reading

Rules of the Game


By Richard Norman


A new book, God and Glory: Britain, America, and the Making of the Modern World, by Walter Russell Mead was discussed a couple of weeks ago by the author at the Council on Foreign Relations (video here). A summary quote:

I want to say quickly that in the book I don’t argue that Britain or America triumphed because they were purely laissez faire. In fact, what I’ve said is that they have an ability to have incredible intense competition but also rules and clear regulators. They’ve managed to mix it. It’s very interesting: almost every sport that’s played today around the world is played under rules developed in either Britain or the U.S. in the nineteenth century. And the idea in developing rules–whether it’s the Marquis of Queensberry rules in boxing or the tennis rules or soccer–is that they wanted a combination. They wanted rules, but they wanted the rules not to suppress competition but to encourage the keenest possible competition. So the idea that rules are antithetical to competition is not part of this Anglo-American genius.

Continue reading

Ron Paul and the Federal Reserve, Part Two


By Nick Li


 Although Ron Paul may have been right on some points (see previous post), there is also room for criticism. Here follows a critique of some of Ron Paul’s positions relating to his plan to abolish the Federal Reserve and restore America to the gold standard. The following five positions will be commented on:

(a) The Federal Reserve causes boom and bust cycles, while the Gold Standard would stabilize the economy.

(b) The Federal Reserve and fiat money cause inflation that erodes the value of money. This causes disincentives to save.

(c) The Federal Reserve causes financial crises and asset bubbles by intervening in markets – markets are self-regulating, so the gold standard, which is hands-off, would lead to an end of financial crises.

(d) By lowering interest rates when the government increases spending, the Federal Reserve accommodates the government actions and allows it to continue to borrow beyond its means. With a Gold Standard, the government would be forced into fiscal discipline.

(e) The Federal Reserve policy harms the average American and benefits those in a position to take advantage of the cycles in monetary policy. The main beneficiaries are those who receive access to artificially inflated money and/or credit before the inflationary effects of the policy impact the entire economy. Continue reading

Ron Paul and the Federal Reserve, Part One


By Nick Li


Apologies for 1948’s recent lack of postings! Ron Paul, the Congressman from Texas running in the Republican Presidential Primary, has been in the news a lot – winning four of the five Republican debates so far according to straw polls and coming fourth in fund-raising due to overwhelming internet support. I support a lot of his positions, and his brand of consistent libertarianism is very seductive – anti-interventionist foreign policy, giving more freedom to people (e.g. gay marriage, legalize drugs) while putting checks on government power (banning torture, warantless wiretaps and eavesdropping, a single mandatory ID-card) – even to those of us on the left. Continue reading

Venezuela in 1948 and today


By Nick Li


1948 was a momentous year in world history. In line with the mission statement for this blog I thought it would be interesting to consider the importance of 1948 for one particular country that generates more than its fair share of news, Venezuela. It turns out that a few facts and a little historical context goes a long way towards explaining why Hugo Chavez is so popular in Venezuela, and why claims that he has been the worst disaster ever to hit Venezuela are exaggerated. Continue reading

Where do they stand on trade issues? (Part 3 of 3)


By Nick Li

US Presidential Candidates


18191860.jpgThe U.S. has seen a rhetorical swing towards protectionism in the past few years, thanks to large trade deficits, continued economic weakness in the "Rust Belt" and the hard work of the next generation populists like Lou Dobbs (for a hilarious display of jingoism gone awry, check out his recent campaign to prevent a Chinese sculptor from doing part of the Martin Luther King Memorial in Washington, D.C.). While Bill Clinton ratified NAFTA in 1994 (the North American Free Trade Agreement), Hillary Clinton recently voted against CAFTA (the Central American Free Trade Agreement), indicating how far the pendulum has swung in the last decade for the American left. Continue reading

Where do they stand on trade issues? (Part 2 of 3)


By Nick Li

Gordon Brown

gordonManchG_435x600.jpgIt seems clear that Gordon Brown will continue to talk a good game on trade, like his predecessor. In terms of rhetoric, Britain has been true to her 19th century roots as the leading free-trade nation. However, the constraints imposed by requiring a common negotiating position with the rest of the EU imply that, like much of Blair’s rhetoric about social and global justice, we should not expect much more than well-intentioned hot-air. Apparently, the U.K. government puts its full support behind EU trade negotiator Peter Mandelson, who continues to push for reciprocity from developing countries and to see the trade negotiations as a zero sum game . This is unfortunate, because with its economy being more service and knowledge based and less dependent on low-wage manufacturing or agriculture, Britain should be aggresively pushing for liberalization within the EU and making David Ricardo proud. Brown’s statement to the IMF last year and his interview with Time magazine , excerpt below, provide a glimpse at his thinking. Continue reading

Where do they stand on trade issues? (Part 1 of 3)

Sarkozy - 021.jpg 

By Nick Li

With a new President in France, new Prime Minister coming soon to the U.K., and a slate of U.S. Presidential hopefuls already campaigning in full force, I thought it would be interesting to delve a little bit into what we might expect from the next round of globalization.



Should we expect anything different from France? Does it even matter? Otto’s recent post shows that Sarkozy, in his own words, will not bring much change to France’s trade policies. The thrust of his campaign message seems to be that globalization will inevitably have some winners and losers and that France needs to do more to take advantage of globalization and be one of the "winners." France must "protect" without being "protectionist." Continue reading