Should the US Try the "Theory of Second Best?"

Brian Beyer's picture
By Brian Beyer at 7:07AM

Yes, we should. And it should be done immediately. Quick withdrawal from Afghanistan would force Karzai and his opium dealing warlords to govern their country by themselves. This would likely result in the collapse of the corrupt government that calls Kabul its home. Sounds vicious, doesn't it? It would paint a far rosier picture than would staying our current course. Peter Leeson and Claudia Williamson argue in a paper that

Many predatory governments do more to damage their citizens’ welfare than to enhance it. In light of this, we show that conditional on failure to satisfy a key institutional condition required for ideal political governance—constrained politics—citizens’ welfare is maximized by departing from the other conditions required for this form of governance: state-supplied law and courts, state-supplied police, and state-supplied public goods. Since departing from these conditions produces anarchy and fulfilling them when government is unconstrained producers predatory political governance, anarchy is a second best.

This isn't just another fairyland dream spouted by academics, either. Practicing the "theory of second best" has produced tangible and puzzling results. The paper uses Somalia as proof that this theory works. Using 18 development indicators (GDP, life expectancy, extreme poverty), when 2000-2005 (no central government/anarchy) is compared to 1985-1990 (central government), Somalia did better in 14 out of 18 indicators with no central government. 

The case to end all US-assisted nation building is made even stronger when Somalia is compared to Sierra Leone, a country that "receives nearly five times the amount of foreign aid that Somalia does and has a smaller population." Somalia fared better in 16 out of 28 indicators when matched up against Sierra Leone.

What is the point of continuing to waste American money, blood, and sweat, if Karzai doesn't clean up his "predatory political governance"? Quite frankly, there is no point because the Afghan people would do better without it. 

The Taliban, however, make this issue a bit more tricky. While they are grudgingly preferred by the population to Karzai and company, they could in fact revert to the "predatory political governance" that was and is detested in Afghanistan. 

Coming from an American taxpayer, I would much rather stop sending my money to a place I will never even step foot near than to continue a Sierra Leone-style black hole of money that produces horrible results. I want to see the Afghan people prosper, and live longer and healthier lives. I do not want to see them suffer and live terribly impoverished. The former is free and the latter is very, very expensive. Take your pick.

This is a really interesting post, Brian.  I'd never heard of this theory, but it also makes sense in light of Bangladesh, which was an extremely interesting side note in one of my international politics classes that I always wanted to learn more about. 

The government there is so corrupt and ineffective that private charities have essentially taken over much of its jurisdiction -- especially in areas like schools and welfare type programs.  As a result, while the government technically still exists, in practice the situation is much like you describe:  government's gone; living conditions dramatically improve. 

Bonnie Kristian's picture

If you get a chance, I would recommend reading the whole paper. It defies the  "conventional wisdom" that governmental framework is needed to make society possible. 

I'm not all that familiar with the situation in Bangladesh. However, I know the government is very involved in the economy and very corrupt. Is it any surprise, then, that their economy is still rather weak?

Brian Beyer's picture

I'd like to read it if I have time.

I don't really know that much about the situation in Bangladesh myself.  It doesn't seem like it's getting a whole lot of attention academically -- there was just this odd little aside in one of my textbooks.  If I go to grad school, though, it's something I'd consider researching, because it seems to be the best (albeit very qualified since the government does still exist and is very corrupt) example of successful non-state governance we have at present.

Bonnie Kristian's picture

Brian, I see and understand your point on pulling out of Afghanistan. But there is one issue on which I disagree; the troops. My mom has been working overseas for about five years now and in Afghanistan for two. This war is her sole source of income. If we were to pull the troops out she wouldn't have a job and she wouldn't be the only one. Now as for trying to free up tax payer money funding the war effort, I say privatize the war effort with a private company- such as Blackwater or Lockhead Martin. This way troops can come home to civilian life, but if they don't have one, like my mother; they can work for a private company that is privately funded. 

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Lantz,

The war effort itself is immoral and counter productive no matter how efficiently the stolen money is used to fund it.  Despite this anecdotal evidence that war is necessary for jobs there is a lot of argumentation that spans back to Bastiat's broken window fallacy that the costs of war are far greater than the benefits of war.

Tom Woods writes in The Neglected Costs of the Warfare State  that the unseen costs of war include massive amounts of research and development lost to the market because the government bids up the cost scientists.  Whole degrees at MIT can only be used in government service (if they work in their field) and more often than not it's directed towards "the war effort" as you so patriotically put it..

Even if you "privatize" the war effort like a good fascist would you still cause more harm than good in what Chalmers Johnson calls "Blowback" in his book about how CIA efforts in countries often lead to unwanted results.  

 

 

George Edwards's picture

I disagree with you as well. There are many people employed by this war, but we should really examine what exactly they're doing. We're paying people to destroy things and then build them back up, e.g., we just took out that village, now let's rebuild it! Shouldn't we be be focusing more on progress rather than regress?

Eventually the troops will have to come home. This means that one way or another, people will lose their jobs. It's inevitable. Unless, of course, you want to have an indefinite occupation. That would be a huge drain on the economy and make us even more hated in the Mid East than we already are. 

I'm well aware that losing a job, especially during a recession, is a terrifying thing. However, a recession with many unemployed does not justify continuing an unjust, illegal war that claims the lives of its fair share of innocents, to provide employment. As you said, "This war is her sole source of income." This war is a life or death situation for many innocent civilians. Worries about staying alive dwarf those of keeping a job.

Brian Beyer's picture

Ok, you guys have made a point. But as fellow Americans or is that too "patriotic"; As fellow men, shouldn't we help the returning military for, if any, a short period of time to find a job? This way we have a stable economy as we fight for the liberties of the American people. After all, we don't want another vietnam on our hands where soldiers come home without a way to support themselves. And please clarify your term "illegal war"?

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I think they should be given the opportunity to come back home and jump right into the "civilian life." They should be given a chance just like everyone else to get a job.

Illegal because it's unconstitutional. I still am yet to see a declaration of war issued by  Congress.

Brian Beyer's picture

If Congress never declared war, then how didn we get there in the first place. Note: I was only in second grade when 9/11 happened, so I don't know how we got there.

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The US hasn't officially or legally gone to war since WWII: Not once since then has Congress declared war as the Constitution requires.  Instead, presidents have simply invaded what they wanted to invade -- all illegally, since they lack a declaration of war.  The War Powers Act let presidents deploy troops without a declaration of war for a short period of time (two or three months), but after that Congress is required to declare war or bring the troops home.  Obviously that has not happened.

So we got to Iraq and Afghanistan because the president illegally decided that's what we were going to do, and we've been there illegally ever since.  And those are only basic legal objections which leave out all the moral, practical, and economic considerations.

Bonnie Kristian's picture

Well maybe we should send a petition to congress to get rid of The War powers Act, so next time America goes to war it will be legal and with th backing of the people.

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