"I wanted to write one more book--and I wanted it to be about the future," Margaret Thatcher declares on the back cover of her final work, Statecraft: Strategies for a Changing World.

Thatcher focuses on potential outcomes of contemporary issues in international affairs, Statecraft is less about the future than of the eternal importance of capitalism and individual freedom to the world.

As the title suggests, Thatcher focuses primarily on nation-states and, specifically, what policies Western nation-states should adopt to maintain international security. She espouses her own blend of realpolitik and principled idealism. Ideally, Thatcher sees democracy and free market capitalism as the preferred structures for all nations. It's through this lens--freedom--which she analyzes international issues. Consequently, the self-interest of Western nations in conducting foreign policy is to advance the causes of freedom.

Thatcher's three most relevant arguments in Statecraft: One, Cold War history is being revised to bury the fact that the West was ultimately triumphant. Two, international law and human rights have become forces for limiting freedom not advancing it. And three, capitalism is under attack, but it remains the primary force for individual freedom in the world.

Thatcher explains in detail how the elite are revising Cold War history. According to Thatcher, academics and politicians in the West and elsewhere diminish the role of Ronald Reagan in bringing about the demise of the Soviet Union. Reagan's defense buildup that bankrupted the Soviets is being conveniently forgotten. Consequently, Western countries do not recognize the importance of military expenditure. Even during peacetime, Western countries must invest in the military to deter future conflict.

The elites also make dubious claims that neither ideology communist totalitarianism nor Western individualism prevailed. A convergence of the two ideologies has supplanted both: democratic socialism. As Thatcher explains, democratic socialism allows for political freedom, but suppresses economic freedom and highly regulates economic markets, thus limiting overall individual freedom.

The second important argument that Thatcher advances is that international law and human rights are often used to curb freedom not advance it. Thatcher points to the undemocratic nature of international organizations including the International Criminal Court and the European Union. These organizations are comprised of unelected officials with little accountability to national electorates. The EU is expanding human rights into economic territory to guarantee basic living and working standards. This ultimately limits the economic freedom of businesses and other individuals in society. For its part, the ICC claims unlimited jurisdiction, which limits national sovereignty and will also likely lead to a vast expansion of the Court’s power through broad interpretation of human rights law.

Thatcher also argues persuasively that capitalism is under attack in Europe and within international organizations. Thatcher notes the high tax rates, redistribution policies, and onerous market regulations in Europe. For their part, international organizations have an international redistributive agenda, to pilfer from wealthier nations and give to poorer nations. Yet, free markets alone hold the key to economic progress and to improve living standards in the third world.

Thatcher dedicates an entire chapter to free market capitalism. The most important prerequisites for capitalism are the rule of law and property rights. According to Thatcher, unless third world governments develop institutions to meet these prerequisites they will not progress economically. In European countries, institutions exist but markets are hindered with high tax rates and heavy regulations. Thatcher concludes that, "Capitalism can work well only if the fiscal and regulatory burdens on individuals and businesses are light."

Thatcher makes many relevant and persuasive arguments, but overall, she is too ideological and her suggestions for statecraft fail to fully consider national self-interest.

Thatcher's analysis is ideological and places too much emphasis on abstract principles, free-market capitalism and democracy. What is a nation to do if it finds that its self-interest is to support contrary principles? For example, free market democracies are not always the best allies to choose when pursuing national interests.

Patrick J. Buchanan writes in Where the Right Went Wrong:

"In the Cold War we welcomed as allies Chiang Kai-Shek, President Diem, Salazar, Franco, Somoza, the shah, Suharto, Sygman Rhee, Park Chung Hee and the Korean generals, Greek colonels, militarists in Brazil, Argentina, and Turkey, President Marcos, and General Pinochet--because these autocrats proved more reliable friends and allies than democratists like Nehru, Olaf Palme, Willy Brandt, and Pierre Trudeau."

It is true that democratic nations that engage in international trade are less likely to start conflict. But, there are times that it is in a nation-state's self interest to ally with a non-democratic country that shares a similar interest. On the surface, Thatcher would agree, as Britain allied with undemocratic regimes during the Cold War.

Where Thatcher falls short in her analysis is delineating where this threshold lies. When is it in the West's interest to promote democracy and free markets and when is it in the West's interests to ally and support undemocratic regimes? Statecraft is more about improving international security through abstract means than through national power. Thatcher fails to address this dilemma adequately.

Admirably, Thatcher is not deluded into thinking that the West can remake the world or eliminate power politics and competition between states. She is also hesitant to promote intervention solely for humanitarian causes. She does not naively think that the world has reached “The End of History.”

Thus, Margaret Thatcher’s treatise on international security is wide in scope and addresses many of the contemporary issues that nation-states face or will face in the future. Thatcher is both an idealist and a realist. She falls short in developing a framework to assess when it is in a Western nation’s interests to promote democracy and free markets and when it is not. Thatcher rightly asserts that free-markets and democratic governance liberate individuals and lead to a freer, more prosperous, and more peaceful world. But in the end, not all nation-states choose this path.

Article by Ryan Olivett

Statecraft: Strategies for a Changing World by Margaret Thatcher

Where the Right Went Wrong: How Neoconservatives Subverted the Reagan Revolution and Hijacked the Bush Prsidency by Patrick J. Buchanan

"Don't expect miracles" ran one headline, referring to the Obama administration's comments about their massive stimulus experiment. Apparently the Obama team wants to lower Americans' expectations of the bill that Obama has pledged to sign tomorrow.

The truth is, I demand a miracle from this bill. I'm talking about a Praise Jesus! miracle. Because the amount of money that this bill is going to cost tax payers, $787 billion, is a high price to pay for mediocre results.

According to estimates from the Wall Street Journal, the annual deficit in 2009 will be nearly 14% of the US gross domestic product with the stimulus package.

The Obama administration hopes that the stimulus will create 3.5 million jobs. However, the chief economist at Moody's Economy.com, Mark Zandi, believes that the administration's hopes are too optimistic. He estimates that the stimulus will only add 2 to 2.5 million jobs, lowering unemployment by 1 to 1.5%.

You're right Barack, that's certainly no miracle. And I'm not sure that even 3.5 million jobs are worth the massive increase in federal deficits.

In the long run, sustained budget deficits will likely dampen overall economic growth. Budget deficits dampen long term economic growth because they raise interest rates.

Increased government spending decreases national saving which increases interest rates. In turn, investment in the economy decreases because of higher interest rates. Essentially, it costs more to invest so fewer companies do it.

Lower investment consequently leads to lower productivity growth and lower economic growth in the future.

US deficits are already on track to expand substantially without massive stimulus spending.

Government spending will vastly increase in the coming years because the US population is aging. As the Baby Boomers continue to retire and accept medicare and social security benefits, government costs in these areas will soar.

Together, the stimulus spending and rising costs for medicare and social security will heavily depress future economic growth.

Absent divine intervention, the stimulus will not stimulate any miracles. It will most likely produce mediocre, short-term results and worsen the dismal long-term potential for the US economy.

The miracle I should be demanding is that the President won't sign the bill tomorrow. But that's not going to happen. So I guess I will just take the President's advice: I won't expect any miracles--now or in the future.

Article by Ryan Olivett

Links:

Congressional Budget Office

Alternative Stimulus Package

The Becker-Posner Blog

NYT: Greg Mankiw

Deficit Spending

Instead of ensuring a strong America for our posterity, our posterity is ensured a feeble future. Leaders elected to promote the interests of the American people have committed treason. Our officials in Washington seem not to work for us, but rather for various other countries around the world. US national interests are not being promoted. This is especially evident from the war in Iraq. Iraq is draining the US treasury, engendering terrorism, and marring our national image.

Bone dry is the US treasury. However the Bush administration continues to squeeze out every last sweet drop. Foreign borrowing has allowed us to spend beyond our means, the US budget deficit skyrocketing. In 2006 the deficit was $248.2 billion dollars. Tack that onto the US total foreign debt at $4.8 trillion. Although overspending is rampant in all sectors of government, the Iraq War has cost Americans almost $500 billion so far and may double to $1 trillion according to some estimates. Since the largest economy in the world cannot foot the bill it is financing it, leaving the premium plus interest to future generations. Most stunning of all is that America and its future citizens are paying for the liberation of another country—the burden born solely on America.

Since the onset of the Iraq War terrorism has taken on the properties of fissionable material. Iraq was once devoid of terrorist cells, despite the false assertion of ties to Al-Qaeda. Saddam’s reign imposed a balance of power in the country preventing terrorist insurrection. The American assault liberated pent-up aggression, unleashing havoc in Iraq. Terrorists in Iraq include volunteers from neighboring countries and a vast number of Sunni insurgents who are alienated from Iraqi society and the Shia-controlled government. There are more terrorists today than prior to the invasion in Iraq and elsewhere. According to the National Intelligence Estimate leaked to the New York Times, the Iraq War has exacerbated the threat, enlarging the global jihad movement by galvanizing Muslims to hate America—rightfully or not. This chain reaction of hatred will have to be quelled by future Americans.

Anti-Americanism is spreading about as fast as terrorist cells metastasize. It seems that going it alone was not worth the cost in tax dollars, human lives, or American prestige. Our former European allies have long abandoned the republic that saved them from fascism. Similarly even our staunch supporter in Saudi Arabia has recently altered its rhetoric from highly supportive to somewhat critical. Our key allies—ones we support even though they finance and harbor terrorists—have been infected by Anti-Americanism. Throughout the world Anti-Americanism is spreading and it will take a long time to regain the world’s trust—trust that is integral to American positioning and negotiation abroad—just one more ill Americans will have to cure in the future.

The solution is simple: revive realism; put America first. A realist foreign policy avoids costly crusades that weaken the nation. Democracy is an abstract concept that should be spread by example not American blood. Americans died for our democracy, we should not have to die for the Iraqi’s too. Military force and American lives should only be used to preserve the nation. America must not wait for the future to solve its problems. America must act now to reverse its course. America must demand that its leaders put American self-interest at the forefront of foreign policy.

The gasping has begun. 2008 marks the 25^th anniversary of U2’s legendary Under a Blood Red Sky concert at Red Rocks amphitheater in Colorado. Fans are already frantically trying to woo U2 to return. If U2 refuses, Red Rocks plans to recreate the event with a tribute band and video of the original. Why would fans want to recreate the same event in the same way? It appears that to be a U2 fan you must appreciate songs that all sound exactly the same.

But it’s not only U2’s songs that sound identical. Bono’s tirades are wearing thin as well. At the conclusion of the G8 summit last month, industrialized countries committed $60 billion to African development. The US promised to foot half the bill-- $30 billion. Immediately African aid campaigners and, of course, Bono bellyached and blasted the amount as ungenerous.

Contrary to Bono’s ranting, foreign aid has proven to be a massive failure. American elites like Bono, other celebrities, and government bureaucrats, demand that American taxpayers’ wealth be converted into aid for foreign nations. As a result, an enormous amount of aid is sent overseas without any signs of progress. It seems that while the African masses suffer from starvation, American elites suffer from asphyxia.

Washington bureaucrats and foreign aid crusaders are suffocating from a lack of innovative ideas on third world development. The two consistent delusions: that foreign aid is successful and the insistence that aid be transferred to foreign governments.

Foreign aid rarely accomplishes development goals. In the last forty years the U.S. has poured $480 billion into developing nations; $51.2 billion went to sub-Saharan Africa, according to the Heritage Foundation. For Africans, however, there has been little progress.

The World Bank estimates that between 1990 and 2004 the number of poor sub-Saharan Africans increased by almost 60 million. Africans still die at a rate almost 15 times that of Americans. Sub-Saharan Africans’ yearly income is still a meager $746 and, according to UNICEF, 45 percent still live on less than $1 per day.

Zimbabwe, for example, received an average of around $440 million in aid per year between 1980 and 1999, according to the OECD. In 1980 average annual income was $950. By 2003 it had plummeted to $400. When the government initiated “land reform” by seizing private land from farmers, it sent the economy into a tailspin. Today Zimbabwe has the highest inflation in the world and a negative growth rate.

These dismal results beg the question: Where does all the aid go?

It goes directly to corrupt governments. Governments in Africa are the most corrupt on the planet. The Sub-Saharan region is ranked dead last for freedom from corruption in the Wall Street Journal’s Index of Economic Freedom.

The Kenyan government, for example, estimates that between 1990 and 1997, one third of public funds were embezzled by the former president’s regime. If the Bush administration pilfered a third of the U.S. budget it would equal $900 billion. Our country could not function under that level of corruption no matter how much aid we received.

While U.S. foreign aid has had little positive effect in Africa, the story is the same in Latin America and the Middle East. Across the world foreign aid from U.S. taxpayers is squandered in far-away lands by crooked dictators.

There is hope.

Foreign aid can be resuscitated by a breath of fresh, innovative ideas. But—innovation does not come from government. For several reasons private organizations are better suited for foreign development.

One, private organizations are flexible to change approaches more easily than the vast foreign aid bureaucracy. Two, private organizations work from the bottom, up—empowering the masses, not subsidizing tyrants. Three, private groups specialize in different developmental areas— by geography, or in health, economics, education, etcetera. Bureaucracy lacks the amount of specialized knowledge required for development. Four, private organizations are accountable to their boards and their donors for progress. Bureaucracy is accountable to no one.

There are many innovative private organizations that confirm this. One example is the Grameen Bank, a microfinance organization started in Bangladesh. With microfinance, poor individuals borrow small amounts of money to start businesses. According to a 1998 World Bank study, 10,000 Bangladeshi loan recipients were escaping poverty per month. Microfinance fosters entrepreneurship and self-empowerment.

Another example is Village Care, a group with an office in Colorado that specializes in rural Africa. Village Care empowers individuals from the bottom, up, forming partnerships and promoting education in villages. Village Care measures progress through census-like, scientific surveys to assess improvements in health, education, and village economies. Due to its success, Village Care has spread throughout Kenya and Nigeria.

Whether or not Bono and the boys return to Colorado next year is still indefinite, but one thing is certain: government foreign aid has failed. Bono does not disparage private aid, but he preaches fruitless government aid as gospel. The delusions that foreign aid is successful and that it should be given to foreign governments is asphyxiating American elites who don’t understand the remedy; U.S. aid must be completely imparted to private organizations. How many aid programs must fail before Bono and other elites understand?

Ryan Olivett, a senior at Colorado State University studying economics and political science, is an intern at the Independence Institute in Golden, CO and has traveled to Africa four times for development work.