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Issue 2 of Foreign Policy Handbook
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“When you want to fool the world, tell the truth.”
YOUNG AMERICANS for LIBERTY
YALIBERTY.ORG/FPH
Issue II | May 2010
The War on Terror and Sun Tzu:
Is American Strategy Sound?
Craig Dixon
Elliot Engstrom
The European Union:
Eurocrats and the Eurosphere
Law or Hoax? Disproving
Democratic Peace Theory
Roy Antoun
Why Conservatives
Should Hate Our
Foreign Policy Wesley Messamore
The Next Threat to American
Sovereignty: China
Marissa Yturralde-Giannotta
The Young Americans for Liberty’s
Foreign Policy
Handbook
May 2010
The War on Terror and Sun Tzu:
Is American Strategy Sound?
―The problem, is that, America no longer seeks
to end conflicts. America is attempting to build
nations; America has protracted campaigns
that are dulling the morale of both Middle-
Eastern citizens, and our own citizens... and
giving our enemies tangible weaknesses to ex-
ploit.‖
CONTINUED P. 5
Why Conservatives
Should
Hate
Our Foreign Policy
READ MORE P. 10
Law or Hoax?
Disproving Democratic Peace Theory
READ MORE P. 13
Craig Dixon
FEATURED | Young Americans for Liberty | The Foreign Policy Handbook | Issue II | May 2010
Wesley Messamore
Roy Antoun
Young Americans for Liberty | http://www.yaliberty.org | May 2010
Contents
YAL MISSION STATEMENT
The mission of Young Americans for Liberty (YAL) is to train, educate, and mobilize youth activists committed to
"winning on principle." Our goal is to cast the leaders of tomorrow and reclaim the policies, candidates, and direction
of our government.
YAL STATEMENT OF PRINCIPLES
We are the Young Americans for Liberty (YAL). As Americans we recognize the God-given natural rights of life, liberty,
and property set forth by our Founding Fathers. Our country was created to protect the freedoms of the individual
and directed by we the people.
We recognize that freedom deserves responsibility and therefore we hold ourselves to a high moral character and con-
duct. Integrity emphasizes our stance towards action. Principle defines our outlook towards government. Peace and
prosperity drives our ambitions towards our countrymen.
We inherit a corrupt, coercive world that has lost respect for voluntary action. Our government has failed and
dragged our country into moral decay. The political class dominates the agenda with a violent, callous, controlling
grip. And, for this we do not stand.
Executive Director
Jeff Frazee
Editor in Chief
Roy Antoun
Contributors
Wesley Messamore
Nelson Chase
Jeremy Davis
Daniel Suraci
Brandon DeMeo
Craig Dixon
Elliot Engstrom
Marissa Yturralde-Giannotta
Why Does NATO Still Exist?
By Jeremy Davis
The War on Terror and Sun Tzu: Is American Strategy Sound?
By Craig Dixon
The European Union: Eurocrats and the Eurosphere
By Elliot Engstrom
The Next Threat to American Sovereignty: China
By Marissa Yturralde-Giannotta
Why Conservatives Should Hate Our Foreign Policy
By Wesley Messamore
Who Controls Our Foreign Policy?
By Brandon DeMeo
Law or Hoax? Disproving Democratic Peace Theory
By Roy Antoun
Explanations for Continued Terrorism: Globalization and Lack of Democracy
By Marissa Yturralde-Giannotta
Epic Fail: How International Financial Institutions Are the Causes of World Problems
By Daniel Suraci
3
5
7
9
10
12
13
16
19
[email protected] | P.O. Box 2751 Arlington, VA 22202 1
Letter From the Editor Dear Reader,
As the Realist theory on foreign policy evolved
through history and the emergence of International Institutions
posed a challenge to international individualism, the Neo-
Realist theory was born. Not to be confused with neoconserva-
tism, Neo-Realism is competent international relations theory,
not a misunderstanding of history applied to foreign policy. Ken
Waltz, known as the godfather of Neo-Realism, acknowledges
that international institutions exist; however, states join them
only for self interest, not because they believe collective action
works; and those that do believe that the collective is in any
fashion effective, normatively see defeat or failure in the near
future.
Collective action and international institutions have
been attempted for centuries. One can argue that standards such as the Napoleonic Code
were primitive forms of international institutions; it was a contest of legitimacy to unite several
European nation-states together under one common law. Not only did it fail, but it set a
precedent for future international institutions. The Napoleonic Code of the early 19th century
angered several European societies that truly believed in their own state sovereignty. .
The League of Nations’ utter failure after the First World War proved yet again the
irregularities of collectivism. The rule of a few to dictate the policies of many gave us Benito
Mussolini and, lest we forget, Adolph Hitler. States will forever operate within the framework
of their defined borders. They operate to ensure themselves power and security, even if it
comes at the expense of others. As Machiavelli warned, those states that are too generous
often empower those around them while weakening themselves. And that is precisely why
collective action and international institutions inevitably fail.
As of the past two decades, the United Nations and its numerous sanction-induced
capabilities have angered government that propped up Saddam Hussein and Mahmoud
Ahmadinejad. The United Nations was used as a laughable venue for war when the U.S. in-
vaded Iraq. And although the U.N. has wonderful humanitarian intentions, its legitimacy as a
tool to prevent war is comparable to that of a white flag with angry words written on it.
Roy M. Antoun
Want to write for the Foreign Policy Handbook?
Contact [email protected]
Find us on the web:
http://yaliberty.org
Find us on Facebook
http://facebook.com/yaliberty
Follow us on Twitter
http://twitter.com/yaliberty
“Of the Youth, by the Youth, for the Youth”
The objective of the Foreign Policy Handbook is to rationally discuss the faults in American
foreign policy and offer practical, liberty-minded solutions. Over the past century, our elected
leaders have collectively corrupted U.S. foreign relations into a hotbed of backfiring interven-
tionism. It is the job of the youth to mobilize and inform, because it is we who will be paying
the price in blood and gold.
While views expressed in the articles do not represent all the members of YAL, they do express
the views of the respective authors. Young Americans for Liberty does not support or oppose
any candidate for office.
http://www.yaliberty.org/FPH
Young Americans for Liberty | http://www.yaliberty.org | May 2010 [email protected] | P.O. Box 2751 Arlington, VA 22202 2
Commentary | Young Americans for Liberty | The Foreign Policy Handbook | Issue II | May 2010
Why Does NATO Still Exist?
When it was ratified on April 9, 1949 in
Washington D.C., the North Atlantic Treaty brought
into effect one of the largest mili-
tary alliance among nations in his-
tory. NATO’s purpose from the start was to sway the
balance of power in favor of one of the two super-
powers at the time, the United States, in contrast to
the other world superpower, the Soviet Union. Lord
Ismay, NATO’s first Secretary
General once said that the organi-
zation’s primary goals were ―to
keep the Russians out, the Ameri-
cans in, and the Germans down.‖
NATO has since been proved a Cold War relic
that should have seen its demise with the fall of the
Soviet Union in 1991. Unfortunately, just as other
governmental bureaucracies linger long after their
stated usefulness, so too did NATO overstay its wel-
come.
Today, NATO remains nearly two decades
after the decline of its stated adversaries in the
members of the Warsaw pact and the Soviet Em-
pire. In the time since the soviet downfall, NATO
has constantly been trying to redefine its mission in
order to justify its continual existence – mission
creep.
Without the threat of a Soviet Russian attack
long dead, NATO has now reestablished its mission
in such broad terms that almost any perceived
threat to any of its members constitutes a general
response. The organization describes its current
mission in that: ―As the nature of threats changes,
so must the methods of preserving peace. NATO is
reorienting its defense capabilities toward today’s
threats. It is adapting its forces and developing new,
multinational approaches to deal with terrorism,
failed states and other security threats such as
weapons of mass destruction.‖
And while most scholars in the field of inter-
national relations could not perceive a world with-
out NATO’s involvement, many ardent critics of
NATO’s mere existence have been questioning the
very purpose of the organization, both then and
now, and the consequences it brings. Senator
Robert A. Taft, an old right Republican, was a suspi-
cious critic of NATO and thought that a post WWII
military alliance with European nations was a threat
to the security of the United States. As one of the
few voices of the day challenging imperialism and
internationalism, Robert Taft
wasn’t comfortable in dedicating
American soldiers to the affairs of
European conflicts and felt that
the build up of a large interna-
tional army would be a cause of
war with the Soviet Union rather than a deterrent.
He believed that an alliance such as NATO
would serve as an unnecessary means of provoking
the Soviets into war and thusly voted against its
ratification in the U.S. Senate.
Our involvement in such international or-
ganizations and alliances like NATO have led to fuel
the perpetual imperialistic machine that has become
our foreign policy; a foreign policy in which was
warned against by many of our republic’s founders.
In his farewell address, outgoing president George
Washington famously concluded that ―The great
rule of conduct for us in regard to foreign nations is
in extending our commercial relations, to have with
them as little political connection as possible.‖ He
also went on to state that ―It is our true policy to
“And linking ourselves to the
quarrels of Europe is exactly
what we have done.”
Pho
to co
urtesy
of N
AT
O
Jeremy Davis
Young Americans for Liberty | http://www.yaliberty.org | May 2010 [email protected] | P.O. Box 2751 Arlington, VA 22202 3
Commentary | Young Americans for Liberty | The Foreign Policy Handbook | Issue II | May 2010
steer clear of permanent alliances with any portion
of the foreign world; so far, I mean, as we are now at
liberty to do it; for let me not be understood as ca-
pable of patronizing infidelity to existing engage-
ments.‖ Thomas Jefferson reflected a similar belief
in his support for a non-interventionist foreign pol-
icy when he said "I am for free commerce with all
nations, political connection with none, and little or
no diplomatic establishment. And I am not for link-
ing ourselves by new treaties with the quarrels of
Europe, entering that field of slaughter to preserve
their balance, or joining in the confederacy of Kings
to war against the principles of liberty."
And linking ourselves to the quarrels of
Europe is exactly what we have done.
Supporters of NATO and those who would
justify its continued existence or the further involve-
ment of the United States would be quick to brush
aside the wisdom of Washington and Jefferson.
More modern opponents to NATO such as
Congressman Ron Paul defend the vision of the
founder’s foreign policy and the dedication to re-
fraining ourselves from entering entangling alli-
ances. In opposing NATO’s involvement in Yugosla-
via and Kosovo in the 1990’s, Paul stated that
―Without the Soviet enemy to justify the European
military machine, NATO had to find enemies and
humanitarian missions to justify its existence. The
centuries-old ethnic hatreds found in Yugoslavia
and the militant leaders on all sides have served this
purpose well.‖ NATO exists because the U.S. allows
it to exist. It burdens our foreign policy both diplo-
matically and economically as it selectively pro-
motes nation-building schemes that drain the budg-
ets of member nations.
Despite all the philosophical, moral, and
practical justifications for why NATO should cease
to exist, NATO survives today because those inter-
ested in maintaining it seek its benefits through im-
perialism and feeding corporatist needs through ex-
pansion in arm sales to newly added members of the
organization.
It survives because the military industrial
complex that President Eisenhower warned Ameri-
cans of calls for it; and expanding NATO provides
the breathing room it needs to flourish.
Today, NATO represents nothing more than
an outdated, wasteful, imperialistic organization
driven by a lust for military domination and re-
mains a full fledged danger to American liberty.
Did You Know? A report on Sunday, February 21 revealed that a NATO air-
strike killed 27 civilians in one of the worst charades of non-
combatant deaths in Afghanistan.
FEATURED
This Month
The War on Terror and Sun Tzu: Is American Strategy Sound?
By Craig Dixon
Why Conservatives Should Hate Our Foreign Policy
By Wesley Messamore
Law or Hoax? Disproving Democratic Peace Theory
By Roy Antoun
Last Month’s Issue
How to Solve the Middle East Problem
Roy Antoun
Obama’s Nuclear Policy is Just More Hyped Up “Change”
Wesley Messamore
Pho
to co
urtesy
of N
AT
O
Young Americans for Liberty | http://www.yaliberty.org | May 2010 [email protected] | P.O. Box 2751 Arlington, VA 22202 4
Point/ Counterpoint | Young Americans for Liberty | The Foreign Policy Handbook | Issue II | May 2010
The War on Terror and Sun Tzu:
Is American Strategy Sound?
"Again, if the campaign is protracted, the resources
of the State will not be equal to the strain. Now,
when your weapons are dulled,
your ardour damped, your
strength exhausted and your treasure spent, other
chieftains will spring up to take advantage of your
extremity. Then no man, however wise, will be able
to avert the consequences that must ensue."
-Sun Tzu, The Art of War, 6th Century B.C.
America's 'War on Terror' began in 2001 in
the aftermath of the September 11th attacks. In
2003 the war expanded into Iraq. Nine years later,
conventional U.S. forces remain in both countries,
with the blood-soaked conflict now spilling over the
borders into Pakistan. Anti-American sentiment in
the Middle-East continues to grow, with emerging
threats in other nations beginning to manifest. No
bastions of liberty have taken hold in the region,
and the institution of democracy remains precari-
ous.
This is the world America finds herself in to-
day, a world in which the threat of Islamofascism
remains... and is growing. The question to ask is
whether or not direct intervention (different from
surgical military engagement) by U.S. forces is fuel-
ing those flames.
Often, sentiment is expressed by other politi-
cal factions, both 'left' and 'right', that libertarians
are too soft on war; it is said that libertarians fail to
understand the necessary-evil of using military
force to diffuse threats to liberty and safety. It must
escape both political camps that libertarian rebels
birthed the United States of America from the fires
of war against the British Empire.
Few Americans, libertarians included, will
disagree that when there is clear and present danger
to the security of American citizens, it is the role of
the United States military to engage and diffuse
those threats. However, libertarians also believe
that these engagements should be quick, hard, and
decisive... and then they should end.
The problem, is that, America no longer
seeks to end conflicts. America is attempting to
build nations; America has protracted campaigns
that are dulling the morale of both Middle-Eastern
citizens, and our own citizens... and giving our ene-
mies tangible weaknesses to exploit.
The foreign policy of today is the one George
W. Bush spoke out against when running for the of-
fice of President (before pulling a 180 in practice of
office); "I think one way for us to end up viewed as
the ugly American is to go around the world saying
'we do it this way, so should you'." One can also look
at Senator John McCain's opposition to nation
building in Somalia, which is in direct contradiction
to his advocation of long-term presence in the Mid-
dle-East; "For us to get into nation-building and
[securing] law and order, I think is a tragic and ter-
rible mistake."
A mistake indeed. Since invasion of these
Middle-Eastern countries, the world has witnessed
the rise of popular extremist clerics like Sayyid Mu-
qtada al-Sadr, a resurgent Taliban and Al-Qaeda,
domestic acts of terror like the incident at Fort
Hood, and growing Anti-American sentiment
around the world.
According to Sun Tzu, it is strategically un-
sound to have our conventional military forces en-
gaged in the long-term affairs of other nations.
Pho
to co
urtesy
of T
he W
ashin
gto
n P
ost
Craig Dixon
Young Americans for Liberty | http://www.yaliberty.org | May 2010 [email protected] | P.O. Box 2751 Arlington, VA 22202 5
Point/ Counterpoint | Young Americans for Liberty | The Foreign Policy Handbook | Issue II | May 2010
Given the failure of every contemporary attempt
thus far, the above quotations have been affirmed
quite decidedly.
Furthermore, subversive engagement, for
strategic advantage, has also proven to be an abject
failure time and time again. Like monetary inter-
vention, heavy intervention into foreign affairs often
produces undesired consequences. While the con-
cepts of liberty and democracy struggle to take hold
in Iraq, it must be noted that in the 1950s, secular
democracy had already entered the region. In 1953,
Operation AJAX, a CIA-led action, deposed the only
true democratic government Iran has ever seen.
Prime Minister Mohammad Mossadegh was over-
thrown at the behest of U.K. industrial interests who
were angry over Iran's nationalization of their oil
fields.
The years that followed created a power vac-
uum... which the CIA sought to fill. The attempt
failed. The repressive monarch of Mohammad Reza
Shah poured gasoline onto Anti-American flames
and paved the way for the Islamic
Revolution of the 1970s. Had
Mossadegh's secular government
remained in power, one must
wonder if the nuclear threat of a
militant Iranian state would even
exist.
The asymmetrical warfare be-
tween conventional U.S. forces
and insurgents who blend into crowds is not allevi-
ating the war between islamofascism and the West.
Thus far, it is merely politicizing the Middle-Eastern
culture into one more favorable to the sentiments of
militant Islam. The longer the U.S. forces remain
present in the civil, social, and cultural affairs of
these nations, the more opportunities the U.S. pro-
vides to stir up new hatreds and expose new weak-
nesses that opposing political forces will seek to ex-
ploit.
All interventionist actions have conse-
quences, those that craft western foreign policy
would be wise to begin taking into account the po-
litical, social, and cultural ramifications of such in-
terventions.
When a culture takes a reactionary stance to
intervention, this is what libertarians are referring
to when they use the term 'blowback'. There is no
assertion from the libertarian camp that America as
a nation is at fault for terrorism, only that her mili-
tary strategies are so unsound as to allow it to
thrive.
This same principle applies not only to
American foreign policy, but to foreign policy of
every sovereign governing body and international
organization. Governments that intervene militarily
and on a persistent basis into foreign cultures will
always generate resentment and tension.
The Treaty of Versailles is often cited as the
spark for the Nazi ascension in post-Weimar Ger-
many; undoubtedly, the heavy debt burdens im-
posed on Germany by the treaty were a contributing
factor to the Republic's demise.
Governing bodies
like the United Nations
push 'do-gooder' interven-
tion world-wide on the self-
proclaimed behalf of 'world
peace' and 'human pro-
gress'... but what have the
implications been? Perpet-
ual American involvement
in foreign conflicts. Most of the U.N.'s "peace-
keeping" programs have turned into global security
missions of nation-building thus perpetuating inter-
ventionist policy. The U.N.'s "peace-keeping" role
has itself become one, long, protracted military
campaign, dragging the U.S. along for the ride.
Since the fall of the Berlin Wall, the U.S. has
become involved in numerous interventionist op-
erations in conjunction with U.N., from Bosnia to
Somalia, and others. The United Nations has acted
less as a forum for airing grievances and promoting
peace, and more as a self-appointed World Police.
“Governments that intervene
militarily and on a persis-
tent basis into foreign cul-
tures will always generate
resentment and tension.”
Young Americans for Liberty | http://www.yaliberty.org | May 2010 [email protected] | P.O. Box 2751 Arlington, VA 22202 6
Commentary | Young Americans for Liberty | The Foreign Policy Handbook | Issue II | May 2010
As the U.N. continues to pursue its own avenues for
perpetual intervention, the U.S. remains embattled
in Iraq and Afghanistan.
Recently, a leaked video clip captured footage
of U.S. forces mistakenly attacking and killing sev-
eral Iraqi Reuters reporters; the reporters were mis-
taken as insurgent forces. During the chaos, two
Iraqi children were injured. Their father, who was
attempting to help the wounded reporters, died in
the attack.
The children were recently featured on Al-
Jazeera speaking out about the incident; "Why did
they shoot us? Didn't they see we were only chil-
dren? The Americans wanted to kill us. Me, my
brother, and my father."
Hopefully, those two children grow up to be
business owners, journalists, doctors, or teachers...
lest they succumb to the blood-lust for revenge. If
they do give in, America will have traded a handful
of civilian journalists for two insurgents... and that
does not seem to be in line with America's objectives
of ending the threat of Islamofascism.
The European Union: Eurocrats and the Eurosphere
During the 19th and early 20th centuries,
European governments came under attack for their
colonial policies in the African
continent. One of the primary
claims made by pan-Africanists and other anti-
European individuals was that such European poli-
cies denied the peoples of Africa the right of self-
determination. For example, the Declaration of
Rights of the Negro Peoples of the World, drafted at
a 1920 convention of the Universal Negro Improve-
ment Association led by Marcus Garby, stated, ―We
believe in the self-determination of all peoples.‖
Through policies ranging from direct rule via mili-
tary force to indirect rule via forced economic de-
pendency, European governments were holding Af-
rican countries back from determining their own
course.
While the modern ―third world‖ certainly is
not free from the tethers of traditional western pow-
ers, the situation has greatly improved from what it
was a century ago. However, modern European
governments are now directly denying the right of
self-determination not to the peoples of other conti-
nents, but to the peoples of Europe itself. Consider-
ing the rhetoric surrounding the European Union,
such as a commitment to ―sustainable development‖
and the goals of ―peace, prosperity and freedom‖ for
the people of Europe, this is a sad irony indeed.
Did You Know? Good prevailed and evil lost after the first issue of Foreign Policy
Handbook. That’s why we got rid of the image of Karl Marx on
the “left” side of our header and replaced him with a Realist and
Liberty :)
Elliot Engstrom
Young Americans for Liberty | http://www.yaliberty.org | May 2010 [email protected] | P.O. Box 2751 Arlington, VA 22202 7
Commentary | Young Americans for Liberty | The Foreign Policy Handbook | Issue II | May 2010
For a people to be able to determine their
own course, they must have the power to elect to of-
fice – and remove from office – the individuals who
make policy concerning trade, currency, banking,
borders, transportation laws, and a variety of other
issues. However, the European Union is entirely
undemocratic in nature. The vast majority of deci-
sions are made by the EU Commission, which is led
by unelected commissioners and an appointed bu-
reaucracy. The democratic element, the EU Parlia-
ment, has very few powers and very little influence.
The final element of the European political system,
the European Council, meets behind closed doors
and typically makes secretive deals about which lit-
tle is known. The incentive to care about the con-
cerns of individual European citizens is marginal
compared to the incentive to serve the needs of the
EU political machine itself. The recent Lisbon
Treaty, which itself is in many ways a de facto Euro-
pean Constitution, is just one more example of this
lack of respect for the concerns of individual Euro-
peans. Sadly, this lack of respect for the right of self
-determination is only one of the many problems
with the modern European Union.
As has recently been seen with Greece, the
European economic system has made European citi-
zens economically liable for the decisions of people
with which they have absolutely no relations. Not
only is there a moral argument against this that
could frame this policy as tantamount to theft on a
massive scale, but such international economic de-
pendence also decreases the incentive for individual
nation-states to be economically responsible. In the
same way that American corporations will take
greater risks when they know that the Federal Re-
serve and United States Treasury will bail them out,
so will the less economically prominent members of
the EU take greater risks and run larger deficits –
cleverly disguised with the help of firms like Gold-
man-Sachs – if they know that they have economic
giants like the UK and Germany to bail them out
when things go awry.
A final problem with the EU is the massive
amount of power that it wields, a power that is
greater than ever originally intended when the EU
was formed on the foundation of the European
Community. The
European Commu-
nity was an eco-
nomic organization
solely to be active in
those areas that
seemed to mutually
benefit the member
states, but now the
EU is expanding
into areas that would better be handled by individ-
ual nation-states due to factors like European diver-
sity and the different types of situations encoun-
tered in different European countries. The Maas-
tricht Treaty of 1992 began this leviathan-esque
growth, and led to the existence of such policies as
the Common Foreign and Security Policy and the
Justice and Home Affairs Policy. While an effort of
this size can only summon so much evidence to its
side, the ultimate goal is to encourage readers to in-
vestigate the ever-increasing scope of EU power for
themselves. Such a study will likely reveal that the
European Union is doing far more damage than
good.
Pho
to co
urtesy
of E
uro
pean
Week
ly.O
rg
Greek riots after the fall of the Euro, May 2010
Pho
to co
urtesy
of M
ashable.C
om
Did You Know? Three people died in riots in Greece this month after the euro
collapsed in this birthplace of democracy.
Young Americans for Liberty | http://www.yaliberty.org | May 2010 [email protected] | P.O. Box 2751 Arlington, VA 22202 8
Commentary | Young Americans for Liberty | The Foreign Policy Handbook | Issue II | May 2010
The Next Threat to American Sovereignty:
Sovereignty, the supremacy of political power
a nation has over its own actions, seems to be in
threat. Since the
collapse of the So-
viet Union in 1991, the United States has experi-
enced absolute hegemony in a uni-polar world.
However, as globalization intertwines markets and
cultures, our neighbors to the East are gaining eco-
nomic traction. As China continues to grow eco-
nomically while America seems
to be experiencing the Japanese
stagnation trend, sovereignty is
becoming weakened. This eco-
nomic trend will inevitably
compromise American political
sovereignty, ultimately creating
a new world order.
A national debt reaching over $12 trillion,
caused by extreme government spending, accounts
for the reason why American economic sovereignty
is being compromised. Major problems in govern-
ment waste, bailouts to private corporations, and a
trillion dollar overseas expenditure are causing the
debt to skyrocket. During the Obama Administra-
tion alone, the national debt has risen over $1.5 tril-
lion and continues to climb. Many economists re-
flect this trend in the weakening U.S. dollar, the re-
serve currency around the world. When compared
to the Chinese yuan, the U.S. dollar comes out
strong. However, China has left the Yuan low
mainly for an export advantage.
China is aware that if they keep their cur-
rency at a lower rate than their consumers, in this
case the U.S., they can sell more products and
goods, giving them an economic advantage. At the
same time, China recognizes the weakening dollar
and is trying to usurp it for other alternative de-
nominations. In a New York Times article, Professor
Roubini warns this troubling fact as China is pre-
paring to have its currency be ―means of payment in
bilateral trade.‖ China has made light of its position
towards the US dollar during the G20 summit, in
which it called for a new international trade cur-
rency.
To help support American spending, China
has become the largest creditor of the world, lend-
ing $1 trillion in bonds to the United States alone.
However, as time passes and America consumes
more, China is becoming increasingly worried about
its largest debtor nation. In March of 2009, Premier
Win Jinbao demanded that China be guaranteed the
safety of American markets. These two factors point
out the crucial lack of sover-
eignty America is losing. In the
first point, China owning
treasuries and having the abil-
ity to become the creditor of
American spending shows the
vulnerability of American sustainability. To cover
expenditures, America depends on foreign states to
credit its markets, as well as the Federal Reserve to
create them.
China, thus, is beginning to create an eco-
nomic upper-hand for itself. As the dollar weakens
and China becomes worried about the safety the
Obama administration cannot provide, China has
the power to sell (or dump) the treasuries. Secondly,
China’s ―demand‖ for safe markets strongly portrays
the former point, as China’s role in the world be-
comes stronger. American political decisions, espe-
cially towards the international community, are
largely provided on the basis of its hegemony.
China’s confidence to demand anything from the
“China possesses one
thing the United States
doesn’t: human capital.”
Marissa Yturralde-Giannotta
Young Americans for Liberty | http://www.yaliberty.org | May 2010 [email protected] | P.O. Box 2751 Arlington, VA 22202 9
Commentary | Young Americans for Liberty | The Foreign Policy Handbook | Issue II | May 2010
United States dramatically shows the decline in U.S.
power.
Moreover, to further illustrate this point,
China possesses one thing the United States doesn’t:
human capital. In a country with over 1 billion peo-
ple and remarkable economic growth, the Chinese
middle class will inevitably keep getting larger.
Once the Chinese are able to obtain purchasing
power, they can produce and sell products to their
own domestic arena, leaving the country’s depend-
ence on American consumerism. This remains the
looming problem in many economists’ minds, as the
future of America is held largely with the Chinese.
For the United States, the uni-polar world
will inevitably come to a close in the next century, as
nations such as China, India, and Brazil become
growing players in the international world. Ameri-
can sovereignty has already been compromised eco-
nomically and once the US is affected dramatically
by its weakening economic sovereignty, decisions
based on international circumstances will have to
carter to a more bi-polar political world. It is our
government of over-regulation and over-taxation
that causes the private sector to loose more jobs due
to rising costs. Government policies can change to
create an economic and political change in this
country. If DC wants to remain in its position and
retain its sovereignty, it must change its economic
policies.
Why Conservatives Should
Hate
Our Foreign Policy
Let’s take a moment to examine some main-
stays of conservative thought: three total non-
negotiables in the con-
servative worldview from
old standard-bearers like William F. Buckley, right
on down to the present-day Tea Party movement.
Number one: conservatives do not like wel-
fare programs. They destroy productive capital, re-
distribute wealth, and sadly perpetuate poverty.
Number two: conservatives positively hate corpo-
rate bailouts (which are really just corporate wel-
fare). They also destroy productive capital, redis-
tribute wealth, and incentivize risky behavior. Num-
ber three: conservatives do not take kindly to the
expansion of Federal authority over the states. It
consolidates power in too few hands, it leaves deci-
sion-making to distant bureaucrats who don’t un-
derstand a state or city’s local needs, and it’s usually
just plain unconstitutional, violating the tenth
amendment.
How does this apply to America’s present for-
eign policy? It commits all three sins against conser-
vative principles- and does so more extravagantly
than perhaps any other government program or pol-
icy. If American conservatives are averse to the re-
distribution of wealth from some Americans to oth-
ers, how much more should they oppose the redis-
tribution of wealth right out of this country into the
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Wesley Messamore
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Commentary | Young Americans for Liberty | The Foreign Policy Handbook | Issue II | May 2010
hands of the people of other countries? Aside from
more overt forms of foreign welfare, even our mili-
tary policy often amounts to little more than welfare
for the people of other countries. When our compas-
sionate conservative president, George W. Bush
bragged about the humanitarian nature of Opera-
tion Iraqi Freedom- he was bragging about expand-
ing our welfare state to include recipients in other
countries. Can conservatives honestly approve?
As for bailouts, or corporate welfare- the
number one factor that galvanized America’s resur-
gent liberty movement over the last two years- our
foreign and military policy are fraught with it. The
terrible thing is how sneaky it is. If a lobbyist con-
vinces Congress to bail out their company with tax-
payer money, Americans can clearly see and oppose
this policy as corporate welfare. But what if the lob-
byist gets Congress to award his company a contract
for services the government can convince taxpayers
that it needs? Then the lobbyist and his company
can get away with the taxpayer’s money without in-
citing the taxpayer’s rage. But this is still corporate
welfare and it happens all the time- frequently in
the defense budget (which is one reason why de-
fense accounts for so much of the federal budget). Is
it so hard to believe that not all our defense dollars
actually make us more safe? That our politicians
just might be lying to us and spending that money
to make their friends and lobbyists and donors
wealthier at your expense?
Finally- the more involved our federal gov-
ernment becomes in a foreign policy of never-
ending troop deployments, peace-keeping missions,
wars, occupations, permanent treaties and strategic
alliances (like NATO and the UN), the more deci-
sions it necessarily makes for the several states
whether those decisions are best for each individual
state or not. Concentrating so much power in the
hands of the federal government should make any
conservative wary, and our present foreign policy
does just that. It ensures that our federal govern-
ment takes more and more money from states and
decides how it should be spent, makes more and
more decisions in one distant city (Washington
D.C.) that affect everybody else, and has rawer, un-
checked power over the states and the people re-
spectively. Conservatives should not be happy with
this state of affairs at all. While they may cheer the
government’s decision to indefinitely detain poten-
tial terrorists without charges because it might
make us more safe, conservatives would do well to
remember that our government’s Department of
Homeland Security considers them potential terror-
ists.
It should be clear from our examination of
these three mainstays of conservative thought, that
conservatives (even more than socialist progres-
sives) should be outraged at our present foreign pol-
icy.
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Be the change in the Washington Machine
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Commentary | Young Americans for Liberty | The Foreign Policy Handbook | Issue II | May 2010
Who Controls Our Foreign Policy?
Many different groups influence foreign pol-
icy in the United States. The purpose of this article
is not to discuss in depth how each of the groups
that will be mentioned affect
foreign policy, but to men-
tion some major ones who do, and some resources
to study them further. This subject is often contro-
versial. I suggest studying them through the lens of
a skeptic, but with an open mind.
The first group is the Council on Foreign Re-
lations (CFR). They are ―an independent, nonparti-
san membership organization, think tank, and pub-
lisher,‖ according to the official CFR website. Their
members include media personalities, globalist ce-
lebrities, and powerful politicians and bureaucrats,
among others. Their members have exerted much
influence on our foreign policy since their founding
in 1921. While the CFR has no clear, discernable
agenda, it is their individual members who influ-
ence foreign policy, not the group itself.
The best book I have come across in re-
searching the CFR is The Shadows of Power: The
Council on Foreign Relations and the American De-
cline, by James Perloff. It basically asserts the CFR
is a ―hidden oligarchy‖ of sorts, and even if you do
not agree with its conclusions, you will likely find it
a riveting read, and will learn a lot about the CFR in
the process. It should be noted the CFR has some
members which may be considered promoters of the
cause of liberty, such as Amity Shlaes, author of The
Forgotten Man, a free-market account of the Great
Depression, which I recommend reading. Shlaes is a
senior fellow with the organization.
Two other groups which, along with the CFR,
are often accused of abetting in a globalist conspir-
acy are the Trilateral Commission (TC) and the
Bilderberg Group. I have yet to come across any lit-
erature which defends the two groups against accu-
sations made against them, which is mainly that
they are working towards globalism and against
American sovereignty. One book that offers insight
into both groups is The True Story of the Bilderberg
Group, the North American Union Edition, by
Daniel Estulin. While it is hard to prove or disprove
some of Estulin’s accusations, he does provide a
very in-depth look into the history of both groups,
as well as some attendee lists, which you may find
surprising. No one can deny both groups exert mas-
sive power over American foreign policy. President
Jimmy Carter was a Trilateral Commission member
himself, and President Bill Clinton attended a
Bilderberg Group meeting before becoming the De-
mocratic nominee in 1992. Remember that bizarre
moment during the 2008 election where President
Obama’s plane took off with a bunch of angry re-
porters inside, and no then-Senator Obama? Many
allege that President Obama was actually attending
the 2008 Bilderberg Group meeting in Chantilly,
Virginia.
The American Israeli Public Affairs Commit-
tee (AIPAC), which calls itself ―America’s pro-Israel
lobby‖ on its website, is influential in obtaining US
government support for the Israeli government. AI-
PAC makes the interests of the Israeli government
paramount. For further study on AIPAC from a lib-
ertarian angle I highly recommend the antiwar.com
articles which pertain to them. Grant Smith wrote
an excellent article on how AIPAC spies on Ameri-
Brandon DeMeo
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Commentary | Young Americans for Liberty | The Foreign Policy Handbook | Issue II | May 2010
cans. Philip Giraldi, whose writings often appear on
the Campaign for Liberty website, wrote an article
on antiwar.com entitled ―The Best Congress AIPAC
Can Buy,‖ which I consider a good starting point for
studying the negative effects of AIPAC on our for-
eign policy.
While these are not the only groups which
influence our foreign policy, they are four of the
most important. Clearly, our interventionist foreign
policy is due in part to influences by groups which
have other goals in mind than national security.
That is the inherent danger in these groups; they do
not put America and its citizens and its military men
and women first. They put their special interests
first.
Law or Hoax? Disproving Democratic Peace Theory
Many academics and so-called politicians of-
ten argue that Democratic Peace Theory (DPT) is
close to becoming international relations law. While
many Libertarians and liberty-
minded individuals uphold the
mantras of free markets, advocating nation-building
for the sake of free trade is the philosophical equiva-
lent of Adam Smith resurrecting from his grave and
agreeing with Vladimir Lenin on the science of his-
tory; it’s blind neoconservatism at best. Nation-
building-Democratic-Caliphates violate state sover-
eignty and induce blowback. DPT suggests that no
two democracies ever go to war with one another
because, as Kant professed in Perpetual Peace, peo-
ple in an electoral system will never vote for a leader
who is willing to send them to war. He wrote,
“If the consent of the citizens is required in order to decide
that war should be declared (and in this constitution it can-
not but be the case), nothing is more natural than that they
would be very cautious in commencing such a poor game,
decreeing for themselves all the calamities of war.”
Many fail to recall the evolution of democ-
racy over the course of history. Democracies weren’t
born overnight, neither were they byproducts of
some divine intervention or gift from god. Repre-
sentative governments evolved from thousands of
years of feudal, oppressive systems that dictated so-
cial law and restricted the free flow of capital by
means of serfdom, slavery, religion, excess taxes,
social control, and divine right. The Enlightenment
was a product of Feudalism, and even then, the
teachings of Locke, Hume, and Voltaire took an-
other hundred years to be partially implemented
into European society. By the early 1800s, Napoleon
Bonaparte transformed the French Republic into
the French Consulate which had three voting bodies
and plural suffrage. France, under Napoleon, had
administrative departments, established higher
education, a tax code, infrastructure systems, and a
central bank. It had all the ingredients to make an
E.U. eurocrat believe that Napoleon was the missing
link. And so did England. England had a parliament
with dual Houses, a House of Lords and a House of
Commons. The United States had a functioning
Constitution and a representative body as well. Yet,
France and England went to war for the better part
of the early 1800’s, and England and the United
States went to war within the same timeframe.
As Democracies evolved through revolution
and radical political reform, they also grew hege-
monic. Britain, with a representative Parliament,
developed an empire that covered one-third of the
globe. The English mantra soon changed to, ―The
Pho
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Roy Antoun
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Commentary | Young Americans for Liberty | The Foreign Policy Handbook | Issue II | May 2010
sun never sets on the English Empire.‖ France ex-
panded into the Middle East and North Africa after
establishing its Republic in the late 19th century.
Germany developed colonies through wars in South
Africa; the United States established protectorates
in Cuba, the Philippines, and the list expanded over
time. Even recently, Americans reelected President
George W. Bush in 2004 on the terms that he would
continue the colloquial ―War on Terror‖. Democra-
cies are not naturally peaceful; rather, they are a by-
product of whatever cultural elites sell it to be, in
this case, hegemonic. If the president woke up one
morning and decided that democracies operating on
non-Western standards would henceforth become
enemies of the U.S., it is almost guaranteed that, if
sold properly, culture will follow
along with the self-professed elite.
But this isn’t a matter ―if‖ the
president will do this – he already
has, hence, our distaste for states
such as Egypt, Iran, Palestine, and
Venezuela.
However, Democracies not only go to war
with other states but also go to war with each other.
The War of 1812, fought between the United States
and parliamentary England, was the first example of
how two representational states were capable of
warring against one another. The Franco-Prussian
War of 1870-71 was fought between the French Re-
public and a parliamentarian, representative Prus-
sia. India and Pakistan, two parliamentarian gov-
ernments went to war with one another in the Indo-
Pakistani war of 1965. The Falkland Island War of
1982 was fought between Britain and Argentina, of
which both had representative
governments. Although many may
argue that these listed countries
were not ―Democracies‖ in today’s
Western standards, the listed
countries had wide representation
of some fashion or another with an electoral body
not limited to just aristocratic members of society.
Democratic Peace Theory is also a Western
invention. Democracy within itself is a Western in-
vention and has been crafted by Western thinkers.
Immanuel Kant, author of Perpetual Peace, resided
in present-day Germany where the theory was first
devised. By ―Western‖ I am eluding to the Hunting-
tonian concept of the Cold War-Western World
which consisted of the United States, Canada, and
Europe, minus South America and Russia; ―drug
lords‖ and ―commies‖ need not apply when neocon-
servatives reign the American Empire. This inven-
tion does not suggest, however, that culture is in-
nately democratic; cultures are whatever their elites
make them to be and are always prone to change.
Rather, Democracies have the dangerous potential
and tendency to be hegemonic, especially when its
elected leaders wish to promote those ―democratic
values‖ abroad. And hence, Democratic Peace The-
“Governments go to war with one another; people do not.”
Pho
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The Falkland Island War: Two Democracies at War
War of 1812: Two Democracies at War
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Commentary | Young Americans for Liberty | The Foreign Policy Handbook | Issue II | May 2010
ory is born on this concept: if the world desires to be
free, then democracies are obliged to make the
world free for the sake of perpetual peace. But per-
petual peace inevitably relies on perpetual war. As
cultures change, governments change. Democracy is
never permanent and neither is any form of govern-
ment. The only thing perpetual is the theory. Play-
ing ―world police‖, or a real life version of RISK,
with the intentions of preserving democratic values
eventually drains economies for the military en-
forcement of said values. To ensure ―freedom‖, the
U.S. has fought over five major wars in the past cen-
tury which have only resulted in perpetual conflict
today.
In an age where state governments dictate
social and economic policy, Democratic Peace The-
ory will be put to a much greater test. The theory
also suggests that states which trade with one an-
other are less likely to go to war due to fiscal de-
pendency. This is perhaps doubly more dangerous
than Engels’s prediction of a global communist
revolution. States that traded with one another
throughout history have always gone to war, pre-
cisely for economic reasons. The Anglo-Dutch Wars,
the War of 1812, and the World Wars, just to name a
few, were sparked by states that already established
trade with one another or were angered over debt
and mismanaged bureaucratic economies. Interven-
tion in the marketplace, like interventionism in for-
eign policy, gave the Nazi Party the parliamentary
majority in Germany and fascism in Italy. Democ-
racy is not permanent and that is the major flaw in
Democratic Peace Theory. Even if they were, gov-
ernment will always find new reasons to conduct
war.
Governments go to war with one another;
people do not. Senator George McGovern once
stated, ―I’m fed up to the ears with old men dream-
ing up wars for young men to die in.‖ He was refer-
encing how the ―old men‖ elected into office often
send young men to war and never vice versa. Why?
Because individuals are simply incapable of waging
war whereas the military-industrial complex is.
Nonintervention and open markets, however,
are a safer alternative to seeking a more peaceful
world. Democracies are, in essence, premature re-
publics. Allowing nations to determine their own
paths to republicanism (which is how most Euro-
pean nation-states and the U.S. formed their gov-
ernments) is far safer than the nation-building man-
tras of Democratic Peace Theory. Although this al-
ternative does not eliminate the possibility of war, it
most certainly reduces it.
When governments become indebted to one
another either fiscally or ideologically, they become
vulnerable to war and discontent. When private
businesses become indebted to one another, they’re
forced, under the rule of law, to settle matters le-
gally because they have no militaries. But govern-
ments do and that is precisely what makes them so
dangerous and volatile. That is why democracies are
essentially hazardous without the rule of law. That
is why people have established republics; when peo-
ple stray from republican forms of government and
adherence to law becomes moot even on an interna-
tional level, states become prone to war and conflict.
Democratic Peace Theory is flawed and obsolete for
these reasons. Democracy or not, so long as people
allow the growth of the state, war will forever be the
health of the state.
For an interesting read, pick up Ivan Eland’s The Empire Has No Clothes
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Commentary | Young Americans for Liberty | The Foreign Policy Handbook | Issue II | May 2010
Explanations for Continued Terrorism: Globalization and Lack of Democracy
Historical: Bin Ladin’s Al-Qaeda
On September 11th, 2001, a day in which al-
most all Americans remember vividly, the images of
two towers collaps-
ing in the midst of
New York City, united a country in unprecedented
ways. The passion and patriotism that exploded af-
ter the traumatic events integrated the efforts of bi-
partisanship across Washington. Democrats and
Republicans alike came together in a time of great
weakness in our nation’s history. As America would
begin a war on the Middle East, the Arab World was
preparing to continue one. Eight years and almost
$700 billion later we still face the same challenges
we did on September 12th, 2001. Since the attacks
on the World Trade Center our efforts to reduce na-
tional security threats and bring vengeance on ter-
rorist have failed. Our tactic and understanding of
terrorism have been essential to the failure of what
many would say a ―no win‖ war.
To explain why battling terrorism has failed,
we first must understand the motives of our ene-
mies. In other words, we must try to learn why they
feel they need to go to extreme measures to kill ―the
west.‖— this first comes with the understanding of
Middle Eastern history. The aftermaths of Septem-
ber 11th didn’t give the public much time to ponder
why they attacked ―us‖ before President Bush an-
nounced the nation. The President stated that Al-
Qaeda’s motive for the attacks were solely based on
the hatred of ―our freedoms, our democracy and our
wealth.‖ As a result, the nation believed this conclu-
sion. Bin Ladin, used this for his advantage to re-
cruit more members into one of the largest terrorist
organizations in the world. In this paper, I will ex-
plain how globalization and a ―lack of democracy,‖
have been used efficiently by terrorist organization
such as Al-Qaeda.
In a speech made right after the attacks, Bin
Ladin stated the reasons and justifications for his
actions. In what would become his 9/11 Speech,
Ladin stated that the Middle East, ever since the
forced break up of the Ottoman Empire after World
War 1, has been left weak and only governed by
western states. Arab nations under the control of
mainly British mandate powers, never fully reached
sovereignty. They could never govern themselves
the way they wanted to in their own holy land.
Moreover, Bin Ladin illustrated that military inva-
sions particularly from the United States have done
nothing but harm to the Arab nations. He elaborates
on Afghanistan’s participation, headed by the
United States, to end the Cold War. The US gave Al-
Qaeda equipment to defeat the Soviets and subse-
quently radicalize them for our own national secu-
rity interests at the time. A few years later, the US
had sided with Iraq’s former and late dictator Sad-
dam Hussein during the Iraq-Iran war. We then
changed diplomatic ties with Iraq and put trade
sanctions that caused many to die of starvation and
other related diseases. Additionally, Bin Ladin used
the Arab-Israeli conflict in Palestine. Palestine has
been unable to achieve territorial and judicial sover-
eignty while Israel gained independence in the
1960s with Western support. Economic and military
Marissa Yturralde-Giannotta
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Commentary | Young Americans for Liberty | The Foreign Policy Handbook | Issue II | May 2010
aid from the US has been used in Israel against Pal-
estinians when trying to achieve self-determination.
The power Israel has been able to secure is largely
due and maintained by the West, particularly the
United States. Bin Ladin strongly advocated for the
ending of this aid and the US participation in Arab-
Israeli conflicts.
The Power of Globalization: Explanation #1.
While many states (Iran, Syria etc), even
those who disagreed with the United States, showed
initial sympathy for the attacks, the public was still
unconvinced of the war
the United States was
about to wage in their
land. Globalization, or in-
tegrated global communi-
cation, has played a cru-
cial part in terrorism. The
transfer of images, includ-
ing video and photos,
gives a live feed to the
events happening in the
Arab region. In this case,
these images are shown on
many television sets and
computer screens accessible
to many Arabs. In Arab eyes, the chaos and destruc-
tion occurring is directly correlated to U.S. occupa-
tion in the region. Thus it is easy to connect that Bin
Ladin, in a wicked sense, becomes a ―freedom
fighter‖ to many Arab people. In some form, some
Arab people and even some states (indiscreetly) har-
bored a sense of satisfaction that America was now
tasting what the Arab world was tasting for years.
Even if it is right or wrong, Arabs directly point the
blame to the United States. Many critics of the Iraq
War, including, Congressman Ron Paul, point out
that globalization is the main reason for continued
resentment towards the United States that inevita-
bly breeds terrorism. With our foreign policy being
displayed on all different kinds of mediums in the
region, we no longer possess soft power or adora-
tion that most of the world did towards the United
States.
The globalization theory also states that the
―have-nots‖, or the impoverished, are encouraged to
take steps against the unjust actions occurring in
their state. Globalization creates a sense of rejection
to the world’s progression that many of these ―have-
nots‖ possess. This, however, is not consistent with
the findings as seen with terrorist organizations. Al-
though it does encourage a population to take ac-
tion, most impoverished are not concerned with a
radical political agenda
that Bin Ladin is trying to
sell. Instead they become
indifferent or in many
cases oblivious to the
events happening in in-
ternational politics and/
or history. Because there
is a significant population
living in rural and/or im-
poverished in the Middle
East, access to daily news
does not reach a percent-
age of the people. Rather,
the impoverished are
solely concerned with the tasks of daily life than
some political agenda. Because globalization leads
to prosperity and modernization, only the upper
class, those who have leisure time, and/or those
considered intellectual, develop such feelings. Thus,
most terrorists, despite popular belief, are actually
the cultured of the Middle East who have accessibil-
ity to world events rather than poor uneducated ru-
ral ―have-nots.‖
Political Power Vacuum: Explanation #2.
The years after 9/11, many in DC were con-
vinced that a lack of democracy was one of the di-
rect causes of terrorism. This theory, constantly
used by neo-conservatives and other politicians, as-
Photo courtesy of OldAmericanCentury.Org
Can democracy be hegemonic?
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Commentary | Young Americans for Liberty | The Foreign Policy Handbook | Issue II | May 2010
serts that totalitarian states harbor more terrorists
because of the lack of individual rights, or in essence
democracy. Individual rights and liberties, including
those in the Bill of Rights, provide protection of the
individual from the government. The government,
therefore, has checks and balances from the collec-
tive society. A totalitarian regime (a state that lacks
democracy), they advocate, leads to mass dissent
and rebellion within the population, or in this case,
breeds terrorism. Thus, the United States views a
lack of democracy, especially within the Arab States,
as an environment in which terrorism can easily
spread because of the discontent dwelling in the
public.
The problem with this theory is that empiri-
cal evidence disproves its conclusion. While there is
political dissent in totalitarian regimes, most are
eradicated quick and efficiently. The totalitarian re-
gime in Iraq exemplifies this notion. Saddam Hus-
sein’s regime would publically show its aggression
towards any dissenter. Furthermore, totalitarian re-
gimes act as big brothers in the society, heavily
monitoring culture; therefore, there is no room for
ideas to develop or assemble under heavily moni-
tored societies (totalitarians, authoritarian). There
has been no evidence to support that Iraq was har-
boring terrorists or that terrorist activities were be-
ing conducted under the radar of the totalitarian re-
gime. Rather, because of the power vacuum that has
occurred, terrorism has grown in Iraq and has al-
lowed much mobility within the terrorist organiza-
tion to assemble and recruit. Without a legitimate
government with actual policing force, an environ-
ment is created where terrorists are allowed to con-
tinue their work and move throughout borders to
influence and gather more recruits. For the United
States, this means the supply-side of terrorism is
still not being addressed.
Explaining the reasons for terrorism is by no
means a justification towards it. Rather, by explain-
ing the reasons on how terrorism is created, main-
tained, and manifested it allows the United States to
battle terrorism efficiently with potentially less loss
of life. However, seeing the continued resentment
the Arab people have towards the United States, il-
lustrates that American foreign policy regarding the
region needs some viable change or more blowback
will undoubtedly occur. Its important to highlight
the historical reasons for the cause of this resent-
ment as seen in the Arab eyes. Globalization ampli-
fies the resentment and a lack of democracy mobi-
lizes it. Although these are not the sole two reasons
for the continuation of terrorism, they are impor-
tant to the understanding how terrorism is still able
to act discreetly, going through weak government
infrastructure and becoming transnational (and
now transcontinental with terrorism recruiting in
Europe) organizations. As previously mentioned, to
have the United States efficiently battle terrorism to
stop further loss of innocent lives, there must be a
study of the supply-side of terrorism and how Bin
Ladin and others alike have been using it to their
advantage.
YALIBERTY.ORG/FPH
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Commentary | Young Americans for Liberty | The Foreign Policy Handbook | Issue II | May 2010
Epic Fail: How International Financial Institutions
Are the Causes of World Problems
The International Monetary Fund (―IMF‖),
along with the World Bank, was created in 1944 at
the infamous Bretton Woods
Conference. The conference
is most commonly known for creating the dollar as
the reserve currency of the world after massive in-
flation during World War II destroyed most coun-
tries' currencies.
At conception, the IMF and World Bank were
understood to have been created in order to reestab-
lish the ravaged world after World War II. The
World Bank had the goal of ―economic and social
progress‖, while the IMF was to allow for currency
exchange and act as a lender of last resorts for in-
debted nations. Before World War II, the world
used an international gold standard for money.
Now, without a gold standard, the stated reasons for
creating the IMF was to make foreign currencies
available freely and sufficiently to promote trade.
Throughout the 1960s, the IMF and World
Bank both became more powerful. Now the IMF
also functions to ―stop trade deficits‖. Nearly every
United Nations member is a member of both the
World Bank and IMF and they are funded almost
entirely by membership fees. Or in other words, tax
dollars.
Most IMF and World Bank loans are given
with stipulations. The money must be used in a cer-
tain way or certain policies must be implemented to
the liking of the IMF. Often this involves currency
devaluation or other monetary manipulations. At
other times, it involves erecting trade barriers or re-
moving them. In this way, the IMF and World Bank
effectively bribe politicians of countries to enforce
policies that these unaccountable technocrats see
fit. Whether these policies are wise or not is not the
issue but rather the perverse incentives created by
the institutions to destroy the democratic process in
the countries to which the IMF and World Bank of-
fer loans. Worse yet, after these stipulations are
made, if the government seeks forgiveness of debt,
often it comes with only more stipulations. Lastly,
this sort of massive loans to governments instead of
credit-worthy private sector businesses encourages
only central planning, which has been shown to fail
consistently.
Furthermore, there is no democratic process
for the citizens of the countries giving the loan. The
IMF and World Bank is giving loans completely
while completely unaccountable to the people whose
money they are using for them. This ends in the us-
age of
Ameri-
can tax-
payers
in a va-
riety of
ways that they would not approve. The IMF and
World bank have funded various dictators over the
years from Argentina to Zaire, many with poor hu-
man rights records. Even though the loans are
“With the advent of this fiat currency, it allows massive arbitrary inflation of the global money supply.”
Daniel Suraci
Young Americans for Liberty | http://www.yaliberty.org | May 2010 [email protected] | P.O. Box 2751 Arlington, VA 22202 19
Commentary | Young Americans for Liberty | The Foreign Policy Handbook | Issue II | May 2010
given with stipulations, money is fungible. This
means that when an international financial institu-
tion gives one million dollars to a dictator for
―infrastructure projects‖ or ―food, blankets and ne-
cessities‖, that is one million dollars he can use for
bullets, propaganda, etc instead of supplying those
basic needs.
John Perkins, author of Confessions of an
Economic Hit Man, levels another critique at the
IMF and World Bank: that they are similar tools of
corporate welfare. When a government creates an
infrastructure project, they must hire a company.
This tends to be a large American corporation which
effectively lobbies for the job. The companies hire
economists to use econometrics to show massive
growth and sustainability, even where it does not
exist. The governments then take out a massive
loan from the World Bank, and then use it to buy
the labor of an American company. In this way, the
World Bank acts as simply a roundabout subsidy for
American businesses.
The IMF has one decree which should bother
Americans after the financial collapse of the past
years: the ability to bailout indebted nations. Much
of the same rationale for why domestic bailouts for
companies are bad are the same for countries. Pri-
marily, (1) moral hazard and (2) preserving a status
quo that has failed. Bankruptcy is a time not only
for companies to organize but countries as well. By
preventing this reorganization, the IMF prevents a
country from resolving the mistakes which led it to
its collapse. The IMF has created its own fiat cur-
rency called Special Drawing Rights (―SDR‖) which
allow it to effectively give any country however
much money the IMF sees fit. Granted they are
supposedly bound by their reserves, but in the end,
they can forgive the debt. The IMF cannot go bank-
rupt.
With the advent of this fiat currency, it allows
massive arbitrary inflation of the global money sup-
ply. While before, when the international standard
was gold, the money supply was limited by the finite
nature of gold. Now, the total money supply is kept
in check merely by technocrats. Obviously, the ef-
fect of this will be much more localized as the well
connected in each country are paid with an arbitrary
amount of SDR , it acts in the same way that a Fed-
eral Reserve increase in the money supply does do-
mestically. Again though, the IMF's inflation is cre-
ated far from the reaches of any democratic process
within the country's constituents.
Lastly, the IMF and World Bank present a
legal problem and not simply policy ones. Where is
the Constitutional authority to use federal tax
money to fund international institutions? Even
though the executive is given the authority to create
treaties, Congress must sign them, and can only en-
force provisions pursuant to their enumerated pow-
ers under the Constitution.
The IMF and World Bank show the failure of
central planning and of bureaucracies over and
over. In only this brief survey of the macroeco-
nomic problems created by the IMF and World
Bank, they cause financial, monetary, legal, political
and economic problems. This does not begin to
touch on the actual effects felt in the microeconomic
affairs of the average citizen in the countries
touched by these institutions. The IMF and World
Bank are unjustifiable, and serve only to waste re-
sources. As Dr. Ron Paul stated, ―The IMF is a relic
In Next Month’s Issue of
Foreign Policy Handbook
In Depth Look at Greece & the Federal Reserve
Why Google Made the Right Decision
Will Afghanistan ever end? Wargaming!
Young Americans for Liberty | http://www.yaliberty.org | May 2010 [email protected] | P.O. Box 2751 Arlington, VA 22202 20
Commentary | Young Americans for Liberty | The Foreign Policy Handbook | Issue II | May 2010
of an era when power-hungry bureaucrats and de-
luded economists believed they could micromanage
the world's economy.‖ Today, it is time to move on
from such delusion.
Young Americans for Liberty | http://www.yaliberty.org | May 2010 [email protected] | P.O. Box 2751 Arlington, VA 22202 21
Suggested Reading By the FPH Team
“Anyone who has ever looked into
the glazed eyes of a soldier dying
on the battlefield will think hard
before starting a war.”
- Otto von Bismarck