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The Lighthouse is the weekly email newsletter of the Independent Institute.
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Volume 6, Issue 20: May 17, 2004

  1. The Case for a Partitioned Iraq
  2. "The Voluntary City: Restoring Urban Life in Crisis Times" -- Transcript Now Available
  3. Mad Cow Testing versus the USDA

1) The Case for a Partitioned Iraq

The assassination of Iraqi Governing Council President Izzedine Salim and the continuing fallout from the revelations of prisoner abuse at Abu Ghraib, suggest that the United States will need to drastically change its strategy if it is to restore peace and stability to Iraq. The best course of action may be for the United States to rapidly withdraw its troops and allow complete and genuine sovereignty, as opposed to creating sovereignty in name only, according to Ivan Eland, director of the Center on Peace & Liberty at the Independent Institute.

U.S. troop withdrawal and transfer of real sovereignty would likely lead to what the White House has long sought to avoid -- the partitioning of Iraq into separate Sunni, Shia and Kurdish regions -- but it could help solve Iraqi's toughest security problems.

"If the United States withdrew its forces and each group was allowed to govern itself in its own country or autonomous region, the incentives for violence -- against the foreign invader and against other Iraqi groups -- would rapidly decline," writes Eland in his latest weekly op-ed.

"The Sunnis would no longer fight the invader or be apprehensive about paybacks from the Shia. The Kurds would keep the autonomy that they have had for more than a decade. Al-Sadr could no longer justify his violence in the name of repelling the crusading invaders and might be forced to negotiate with the revered Ayatollah al-Sistani for a position in any government serving Shia areas."

Eland notes that while the partitioning of Iraq appears to be the best option available, it is not without downsides. For example, Iraqis may create governments unlike (or hostile to) Western democracies; Turkey may act negatively toward Kurdish autonomy; Iran may exercise a large influence over Iraq's Shia population, possibly worsening tensions between Shiites and Sunnis; and the contentious question of how to distribute profits from Iraq's oil industry could create more unrest. But these hypothetical risks must be weighed against the more apparent risks associated with the U.S. strategy of "staying the course," Eland argues.

"Allowing Iraqis rapid and complete self-determination is not a panacea," Eland concludes. "But this solution does allow the Bush administration the only viable way to declare victory and extricate itself from the Iraqi tar baby, while at the same time offering the Iraqis the best chance to have a peaceful and prosperous future."

See "Think the Unthinkable: Partition Iraq," by Ivan Eland (5/17/04)

Center on Peace & Liberty

OnPower.org -- Gulf War II: War with Iraq

PUTTING "DEFENSE" BACK INTO U.S. DEFENSE POLICY: Rethinking U.S. Security in the Post-Cold War World, by Ivan Eland

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2) "The Voluntary City: Restoring Urban Life in Crisis Times" -- Transcript Now Available


How can American communities best meet the new challenges of a crumbling infrastructure, high crime, and ineffective and overburdened social services? According to the three urban experts assembled at the Feb. 4th Independent Policy Forum, they can begin by rediscovering the diverse institutions of civil society that people have created throughout history.

Urban planning professor Peter Gordon (University of Southern California; co-editor of THE VOLUNTARY CITY: Choice, Community and Civil Society) began by describing a diverse range of historical examples of institutions of civil society. "Before there was a welfare state, there were safety nets," he said. "Before there were cities, there were rules of property. Before there was municipal zoning, there were rules of property. Before there were public schools, there was education. Before there was modern government, there was infrastructure, and so forth."

Gordon then explained that when people are left with minimal top-down rules mandated by governments, they establish six pillars of civil society. They specialize in production, exchange and create wealth (as conventional economics emphasizes), create dispute-resolution procedures such as the common law, form communities, establish charitable mutual-aid associations and safety nets, supply goods and services that many people assume only governments can supply, and create social capital.

On both empirical and theoretical grounds, Gordon concluded, there is reason to be optimistic about the potential of a resurgent civil society to improve urban life by creating what he and the other speakers called "the voluntary city" -- a place where civil society, voluntarism and free private enterprise have created responsive institutions in place of the ineffective policies of dysfunctional, crisis-prone governments.

Next, economist Fred Foldvary (Santa Clara University) argued that California's fiscal mess, and that of the rest of the country, could be permanently fixed if political institutions are fundamentally restructured. "Our city problems such as crime, pollution, poverty and congestion all occur because we’re not following the laws of ethics and economics that create liberty and prosperity," Foldvary said.

"Sound public finance would not just bring revenue, it would also solve social problems. Untaxing labor raises wages and reduces poverty. Untaxing capital creates more and better jobs. Restitution for negatives like pollution reduces that problem. Private transit and tolls reduce congestion. So privatizing, or at least decentralizing, governance will reduce transfer-seeking and provide more effective services, such as better security."

Economist Daniel Klein (also of Santa Clara University) explained that profit-and-loss incentives are not the only mechanism that motivates individuals to contribute to an enterprise. "Esteem" mechanisms, such as the desire to be liked and respected in one's community, historically played a big role in getting people to contribute to charitable community activities, as Adam Smith explained in his book, THE THEORY OF MORAL SENTIMENTS.

Esteem mechanisms, Klein explained, contributed to the vast network of private toll roads in 19th-century America, comprised of 2500 to 3200 private toll roads covering 30,000 to 52,000 miles. The roads were funded not by coercive taxation but by the voluntary contributions of community members who often expected little, if any, financial return. Klein's research shows that toll-road campaigns garnered support through private and public meetings, personal correspondence, newspaper editorials and letters to the editor, creation of new clubs and associations, door-to-door or person-to-person solicitations, endorsements of prominent people, and the mobilization of churches and other groups.

During the Q&A session Gordon, Foldvary and Klein also discussed the role of contingency contracts in fundraising, contemporary private toll roads, voter apathy and voting with one's feet, the rise of condominium associates and proprietary communities, and balancing the California state budget.

A transcript of "The Voluntary City: Restoring Urban Life in Crisis Times," featuring Peter Gordon, Fred Foldvary and Daniel Klein (2/4/04)

Order THE VOLUNTARY CITY: Choice, Community and Civil Society, edited by David Beito, Peter Gordon, and Alexander Tabarrok.

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3) Mad Cow Testing versus the USDA

The United States Department of Agriculture requires meat suppliers and vendors to subject their products to the agency's inspection ostensibly for the sake of consumers' health. However, the USDA's prohibition of private testing for mad cow disease -- by a company that seeks to export its beef products to the tightly regulated Japanese market -- suggests ulterior motives, according to Anthony Gregory, policy intern at the Independent Institute.

As a result of the USDA's prohibition, the company, Creekstone Farms, which spent half a million dollars to build a mad cow testing facility to comply with Japan's regulations, "loses $200,000 in sales every day, and it has already been forced to lay off fifty workers," Gregory writes.

"Americans who believe that the USDA protects consumers from tainted beef might find themselves scratching their heads. Why would the USDA interfere with a business taking extra precautions to prove the safety of its product to its customers?"

Throughout its history the USDA has favored some meatpackers at the expense of their rivals, according to Gregory. For example, the agency helped small meatpackers compete against larger rivals that were using new refrigeration techniques. Later, it helped larger meatpackers convince consumers that their products were safer than depicted in Upton Sinclair's novel, THE JUNGLE, which had grossly misrepresented the condition of slaughterhouses.

In the case of the Creekstone testing ban, the USDA is simply continuing its century-long policy of protecting less-able competitors from the industry's more innovative companies.

Concludes Gregory: "Government frequently derails the efforts of businesses to improve their products, while rewarding favored businesses with its rubberstamp of approval. That the USDA will not allow Creekstone Farms to test for mad cow disease demonstrates that the agency would rather protect the status quo than the physical health of consumers or the economic health of America’s small farmers."

See "The USDA and Cow Disease Madness," by Anthony Gregory (5/17/04)

Also see, "We Can Do Better than Government Inspection of Meat," by E. C. Pasour, Jr. (May 1998)

Order AGRICULTURE AND THE STATE: Marketing Processes and Bureaucracy, by E. C. Pasour, Jr.

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