TCS Daily

Hayek and Iraq

By Max Borders - October 29, 2004 12:00 AM

The study of spontaneous orders has long been the peculiar task of economic theory, although, of course, biology has from its beginning been concerned with that special kind of spontaneous order which we call an organism.
-F. A. von Hayek

Anti-war and pro-war libertarians broke bread recently at a speaker series hosted by the Cato Institute, a free market think tank. Hawks like Deroy Murdock and Ronald Bailey squared off against doves like Charles Pena and Robert Higgs in what amounted to a civil and enlightened debate.

The questions: Was the US justified in going in to Iraq? Should we pull out? Will it work?

The way the two camps viewed the prospects of success in Iraq were especially telling. Anti-war speakers were skeptical of "attempts to impose" a democratic republic on the Iraqis. Pro-war panelists spoke of "removing the impediments" to freedom, commerce and stability. Paradoxically, the careful observer would have found something valuable in a point about which the two sides did not agree, i.e. -- how the insights of Friedrich Hayek apply to the conflict.

Anyone who cares about the success of Iraq would do well to pay attention to both sides' interpretations of Hayek, as each camp's treatment can inform the nation-building project, such as it is. The key Hayekian insights are two sides of the same coin. While Cliff's Notes explanations of "spontaneous order" and "unintended consequences" do neither concept much justice, allow me to be economical here:

Spontaneous order is a complex social order that emerges in an unplanned way from people interacting freely based on their own conceptions of the good life. Such can include commerce, cooperation and highly developed systems of social norms. Spontaneously ordered society is so complex that it is beyond any one person's understanding. If you don't believe it, try to fathom all the processes required for you to read this article right now -- including the manufacture of your PC. Unless you're Michael Dell, we would say you are rationally ignorant about most of these processes.

Unintended consequences are perhaps more familiar. These are the events that crop up unexpectedly as, say, a government tries to regulate or plan some highly complex operation. Frequently such consequences run counter to the intended goal. For instance, if the government made child safety-seats mandatory on airplanes, people could be less likely to fly due to the expense of the extra seat (and thus more likely to drive). The result could be more highway fatalities, including child deaths, since driving is considerably more dangerous than flying.

Skeptics of the Iraq occupation argue, along similar lines, that American ambitions in the region can't be realized due to problems of unintended consequences. Many are also doubtful about the compatibility of liberal democracy and Iraq's cultural baggage -- including the pervasiveness of Islamic nationalism. Unlike Germany and Japan, both of whom had some history of constitutional republicanism however superficial -- the Weimar Republic and the Meiji Imperial Constitution, respectively -- Iraq doesn't have enough of these institutions in their history to make democracy stick. Though Iraq once had a constitution, it too was part of an imposed order, as Britain had redrawn the map of the Middle East in the waning days of its empire (just after WWI).

Optimists about Iraq, however, view the occupation as a different animal. They see at least the potential for introducing the kinds of rule structures that can allow spontaneous order to emerge (what Hayek has called "non-teleological rules" or rules without goals). The question becomes whether those pesky insurgents indicate a wider hostility to the creation of a civil society, or whether they are a fringe group composed mostly of disenfranchised Fedayeen Saddam and terrorists. If the latter is true, the optimists think it may be possible to get both the incentives right and the rules right. This delicate balancing act may require rooting out the insurgent elements -- but otherwise focusing on security and a recipe for political success.

Both the skeptics and the optimists make good points. And with 20/20 hindsight, both camps acknowledge missteps the Coalition has made since 2003. For example, it seems like a clear mistake to have allowed Ba'athists, already comfortably entrenched in the Saddam government, to be cut loose with no paycheck and no day job. These elements might have been the first to respond to the proper incentives, as the Ba'ath Party was less about ideology and more about payoffs and coercion. Recently, however, what was once a simple resentment has been allowed to mutate into a quasi-ideology strong enough to recruit many more of the disaffected. In any case, that misstep has returned to bite the US on the proverbial ass.

But at this point, it's important to be future-looking. As Kamal Nawash of the Free Muslim Coalition said at CATO, "Iraq must succeed." And one good way to look to the future is through a Hayekian lens. The very nature of unintended consequences makes it tough to anticipate problems. Still, to think like an Austrian is to imagine how things could go bad if the wrong incentives are in place, or the rules look too much like central planning. Learning to think more "bottom up" as opposed to "top down" may be tough for bureaucrats and military types, but it's not impossible.

So what kinds of Hayek-type approaches might be suggested to those banking on Iraq's success (including the Iraqis)? Consider these:

Iraqi Oil Shares -- CATO's Donald Rotunda has recommended giving every Iraqi citizen a certain number of oil shares in a one-time deal that could hasten the process of Iraq's becoming prosperous. This would not only help defuse the appearance of the US as an oil-marauding hegemon, but could jumpstart Iraqi entrepreneurship and give each Iraqi the sense of having a stake in the nation's future. (Editor's note: see Lenny Glynn on 'The War-Winning Weapon' for more on this idea.)

Federalism for the Ignorant -- Even though most Iraqis say in polls that they want a strong central government, they don't know what it's like to have strong regional and local governments. Subsidiarity is not only pretty good for addressing Hayekian knowledge problems -- i.e. the difficulty national bureaucracies have due to the fact that 99 percent of knowledge required for solving a problem is local -- but empowering locally will help to instill a stronger sense of community. Federalism, of course, also represents a check on federal power.

Separation of Mosque and State -- While the Iraqi Constitution should probably pay lip-service to Allah and the rest, the best way to preserve order is to keep religion pretty much out of their federal government. Allowing moderate clerics some leeway in local municipalities might be good for providing that atmosphere of Muslim brotherhood most Iraqis desire. But if Turkey is any guide, mosque and state are better left with a two-way restraining order.

Voting is symbolic -- Making that vote happen could do wonders for the psychology of the Iraqi people. Once each has done his part, however insignificant, it can lift the spirit of civic pride in a country that desperately needs it. Notwithstanding that copy of Calculus of Consent on your coffee table, suffrage is still a good first step in shifting cultural norms in the right direction. Be warned, however. Democracy should not be allowed to become errant populism, and political checks on any referendum mentality are crucial to Iraq's survival. (Think California, for example.)

Military Memetics -- There are a lot of soldiers in Iraq. They should know the basics of liberal toleration and the rule of law, and be prepared to talk about these as being universal rather than American. Same goes for aid workers, Iraqi police, and anybody else involved with PR in Iraq. Moreover, advertising political freedom in Iraq through various channels can't hurt, as long as it doesn't come across like Yankee propaganda. (Identify and support Iraqi thought leaders for freedom.)

Terrorist Network Tapping -- The US military is already doing a bit of this. Terrorist and insurgent networks must follow the same laws of organization (hierarchies v. networks) as other organizational forms. Inside recruitment, heavy surveillance of their social organizations and other such clandestine measures may get you to the top nodes (leaders) who are running the terror show. In some cases, the network's structure may be a flatter hierarchy, but coordination and funding more-often-than-not requires leaders and minions.

Be prepared -- Anticipate more obstacles, missteps and other unintended consequences, as any system is likely to be rife with them in transitioning to a more complex, but orderly state. And as Churchill said: "Never, never, never believe any war will be smooth and easy, or that anyone who embarks on the strange voyage can measure the tides and hurricanes he will encounter." The Administration might have said this to the public before going in.

Getting the incentives right -- Free trade agreements with other nations is a must for Iraq to enjoy bottom-up prosperity. And prosperity helps peace. Microlending and other successful stimuli for Iraqi entrepreneurship might help, as well.

However, one should never forget top-down approaches entirely. After all, Hayekian thought isn't a magic bullet:

Martial Law in troubled places -- Leave the brute force plan on the table. Sometimes places like Fallujah demand displays of power and unrelenting engagement to extract insurgent elements.

Clear 1-for-1 exit strategy -- Let the Iraqis see a pullout starting right after the January election in Iraq, as long as the election is moderately successful. The US and Allawi should promise that for every Iraqi police officer trained, one US serviceman will exit the country. If insurgents kill police, more US troops will return to replace them until training Iraqis can resume. (Also, the Iraqi police may have to be heavy-handed for a while, but it doesn't have to be a slippery slope right into Abu Ghraib.)

Pragmatism -- If it works, do it. Unwavering fidelity to any framework or principle can run an operation into a ditch.

Wanna sell your neighbor out? -- Continued combinations of sticks and carrots may help convince people to rat out neighbors or cohorts they suspect of terrorism. A simple system of America's Most Wanted type incentives might be a start. Hey, it worked in getting the Hussein clan.

Hayek would have agreed that a human body is a good example of a spontaneous order. In fact, Hayek credits biology for some influence on his thinking about social-political dynamics and emergent complexity. In fact, due to the micro-rules of DNA, cells have the remarkable ability of self-organization. They can become any number of organs in the body, and often work cooperatively so that the body functions well.

But human bodies can be afflicted with cancers, which are but mutant cells. And often, cancers must be treated using multiple techniques -- whether via surgically removing a tumor, administering chemotherapy, or using radiation. (All of which can put the rest of the body at risk.) Likewise, societies can have dangerous, cancerous elements. And that's what the US and the Iraqis are dealing with right now. Indeed, they're in a difficult treatment phase; and whether or not Iraq will go into remission depends on the severity of both the illness and the cure.

Max Borders recently wrote for TCS about Flying with Libertarian Hawks. He is one of four writers on a new blog called Jujitsui-Generis.


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