Foreign Policy Handbook 2

“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 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


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.”

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Jeremy Davis



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


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

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Point/ Counterpoint | Young Americans for Liberty | The Foreign Policy Handbook | Issue II | May 2010



"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.

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Craig Dixon


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.”



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



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.

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Greek riots after the fall of the Euro, May 2010

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Did You Know? Three people died in riots in Greece this month after the euro

collapsed in this birthplace of democracy.



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.”




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



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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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



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.


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

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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.”

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The Falkland Island War: Two Democracies at War

War of 1812: Two Democracies at War



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



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




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?



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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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



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!



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.


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

Foreign Policy Handbook 2

Documents

Transcript of Foreign Policy Handbook 2