Sunday, September 7, 2008

It's The Money Stupid!

Trade beads 500 BC
Ancent Chinese Money
Gold Dubloons

"It's the money stupid" has been a refrain, made popular by politicians in recent years. I first heard this term decades ago when a history professor in describing the motivation behind the Age of Discovery exclaimed that, "It was the money, that rich white guys sought, when they expanded across the globe." That quote as politically incorrect as it would be interpreted today, is at the core of what makes the world function. Money, the token of value that allows for easy trade transactions, is also the primary tool of peace.

Examples of societies who gravitated to trade and in turn creating methods of currency, stand out in contrast to those societies whom, only relied on total warfare to restock their community pantry.

Robert Wright the author of The Moral Animal, pointed out that societies that cooperated and avoided conflict thrived, where societies that were constantly at war with their neighbors eventually were cut off from all contact and withered. And Jared Diamond, in the Pulitzer Prize-winning Guns, Germs, and Steel (1998), gave further support that societies became less violent when they learned through trade, that those they trade become quasi-kin, with whom conflict needed to be resolved quickly, in order to maintain the all important life sustaining trade.
This week I was reminded of the these two books, and the words spoken by that long ago, history professor about it being the "Money" that makes the World what it is today.

The trigger for that recollection, came when I perused Tom Barnett's column this week. He writes to remind us of a future that is linked to interconnection through trade and in turn, "Money." The product of ecomomic interconnectivity is security and the advancement of civilization, by connecting as many people on the planet to each other through mutually beneficial arraignments. Thus, reducing the likely hood of total war conflict.

Tom writes:
Think about what made America the world's most stable and prosperous democracy for almost a century and a half: the middle class ideology that emerged when we knit together our sectional economies into a continental juggernaut following the Civil War. That class consciousness wasn't born when the victorious North imposed itself on the prostrate South but when the ambitious East integrated the frontier West.

Today's globalization echoes American experience as West networks East and East integrates South, reducing global poverty at speeds never before seen in human history. This international liberal trade order, modeled on our "uniting states," is America's greatest gift to the world.

Read the whole article:

Looking back one week the theme of money and the economic activity to make it is the theme of an earlier column by Barnett.
He begins:

With American combat troops now slated to depart Iraq by 2011, our intervention moves into its final phase, with the crucial goal being the expansion of economic opportunity for ordinary citizens.
When international business looks at oil-rich Iraq, it sees plenty of opportunity. What it doesn't see in many instances, despite rising security, are sufficient local counterparties - both private and public - to make the necessary deals happen.

As America moves on, we must leverage that example to lock in our hard-fought security gains with follow-on economic progress in connecting Iraq to globalization's juggernaut.

Read the whole article:

Adding more to the theme today of it being "It's the money stupid," are two posts by Steve DeAngelis, Enterra Solutions blog.

Steve writes:

The news coming out of Afghanistan over the past several months has been mostly bad. Violence is up and development progress has been stymied by the security situation. For most Americans, Afghanistan was the right conflict to undertake following the terrorist attacks of 9/11. The fact that progress has been spotty and that the Taliban seems to be gaining strength in their Pakistani sanctuaries has generated calls for an Afghani surge comparable to the one that made a difference in Iraq.

As tense as U.S./Afghan relations might be at the moment, even the Afghans understand the importance of creating a secure environment to foster a better future. Sustainable development requires a stable and secure environment. President of the World Bank Group, Robert B. Zoellick, recently provided his thoughts on how to proceed in Afghanistan ["The Key to Rebuilding Afghanistan," Washington Post, 22 August 2008].

Read the whole story at"

And turning to another example of ecomomic progress being the catalsys for permanent change is this post by Steve DeAngelis about North Korea.

North Korea looks to be once again a country in trouble that cannot even feed its own people [see "U.N. says North Korea needs $503 million in food aid," by Ben Blanchard, Washington Post, 2 September 2008]. I have repeatedly asserted that historically economic progress precedes political progress. Impoverished people are much more tolerant of repressive governments if they believe they hold the key to a better economic future.

Anyone that has followed the Beijing Olympic Games has to have been struck by the Western character of the Chinese audience. I don't know if the Chinese government issued grooming and dress standards for ticket holders, but gone were the drab military-style outfits that characterized the awful days of the Cultural Revolution. The Chinese audience was genuinely polite to the achievements of foreign athletes and just as clearly thrilled with the achievements of their own athletes. There was nothing staged about that. Economics has clearly changed China for the better and its citizens are the beneficiaries of most of those changes. That is exactly the kind of changes that the South Koreans would like to see in the North.

Once globalization washes over walls of North Korea's isolation, it will help bring millions of people living there out of poverty. It will do it one job at a time, but it will succeed.

The whole post:

In reflection of today's links about money, often touted as the root to all evil. I have another take. Money and economic interaction is the essence of kinship that binds people together. Individuals and societies may falter and fail to see this truth for moments in time, but those who recognized this truth will endure.


Shawn in Tokyo said...

Hi HG,

I wrote sometime ago about Kaesong at my site--just search for Kaesong or look under Case Studies. Steve linked it below over 2 years ago--time really flies:

Hope all is well!

historyguy99 said...

Hi Shawn,

Thanks for the comment and the link.

All is great.