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Volume 7, Issue 12: March 21, 2005

  1. U.S. Threatens Sanctions against India-Pakistan "Peace Pipeline"
  2. Iraq War Deja Vu
  3. Gross Domestic Product, Imports, and All That
  4. Olive W. Garvey Fellowship Competition

1) U.S. Threatens Sanctions against India-Pakistan "Peace Pipeline"

The Bush administration says it would like to promote peace between India and Pakistan -- two countries that reportedly have come close to turning their dispute over Kashmir into a nuclear exchange. At the same time, the administration is threatening to impose economic sanctions in the region (and against large American contractors), because of a natural gas pipeline planned to run through India, Pakistan, and Iran.

The threat is ironic because it is so counterproductive to the cause of peace, according to Ivan Eland, senior fellow and director of the Independent Institute's Center on Peace & Liberty. In his latest op-ed, Eland argues that the "peace pipeline," as some have called it, would reduce the incentive for India and Pakistan to go war. But because it would also help Iran, it is opposed by the Bush administration, which under the Iran-Libya Sanctions Act can penalize any American company that invests more than $20 million per year in Iran's energy sector.

"A less jingoistic and more enlightened administration," writes Eland, "would realize that through free commerce among the rival groups in this region, this pipeline would help poor countries to develop economically, and at the same time reduce the likelihood of conflict and enhance U.S. security in the process."

Concludes Eland: "The Bush administration's refusal to look at the big picture and realize that free commerce is also the best national security policy is puzzling and troubling. The administration has realized the danger to the world of nuclear war in South Asia and has supported the Indo-Pakistani peace process. Simultaneously, however, it is also trying to block the peace pipeline, which would foster economic cooperation between the two bitter adversaries, in order to carry out a petty vendetta against an Iranian regime that poses only a limited threat to U.S. security. Clearer thinking about U.S. security is needed."

Also see "The Diffusion of Prosperity and Peace by Globalization," by Erich Weede (THE INDEPENDENT REVIEW, Fall 2004)

To purchase THE EMPIRE HAS NO CLOTHES: U.S. Foreign Policy Exposed, by Ivan Eland, see

To purchase PUTTING "DEFENSE" BACK IN U.S. DEFENSE POLICY, by Ivan Eland, see

"The Way Out of Iraq: Decentralizing the Iraqi Government," by Ivan Eland

Center on Peace & Liberty

For more on the relationship between peace and commerce, see Prof. Alex Robson's $10,000-prize-winning essay for the 2003 Garvey Fellowship Competition at For the other winning essays, see

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2) Iraq War Deja Vu

The present's uncanny ability to repeat the past can be disarming -- and disheartening. The Iraq War resembles in many ways the Spanish-American War, for example, although he policymakers of today have failed to learn important lessons offered by history.

In fact, as Independent Institute Senior Fellow Robert Higgs notes in two new articles, a reasonably accurate narrative of the Iraq War can be generated simply by substituting a few obvious words from a book on two wars that were watersheds for the United States.

The parallels are striking. William McKinley becomes George Bush; Spain becomes Saddam; the annexationists of the turn of the 20th century become today's neoconservatives; Cuba's anti-Spanish guerillas become the Kurdish and Shiite opponents of Saddam; Filipino insurgents, fighting the U.S. occupation of their land, become the insurgents of the Sunni Triangle; and the battle cry "Remember the Maine!" becomes "Remember 9/11!"

In addition, although many commentators have shown the parallels between the foreign-policy rhetoric of George W. Bush and that of Woodrow Wilson, Higgs reveals the striking similarities between the events that their rhetoric produced. One is tempted to add a disclaimer, similar to those that follow many feature films, noting that any resemblance with past events is merely a coincidence.

"Those who forget history are condemned to repeat it," said philosopher George Santayana. What the sage didn't mention is that to see events unfold today, often one need only to press the rewind button on History.

See "Plus Ça Change . . . A Template for the U.S. War in Iraq," by Robert Higgs (3/10/05)

Also see, "In Seeking War, George W. Bush Held True to Form," by Robert Higgs (3/11/05)

To purchase AGAINST LEVIATHAN: Government Power and a Free Society, by Robert Higgs, see

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3) Gross Domestic Product, Imports, and All That

Learning the true economic significance behind today's headlines can be a challenge. As any economics student can tell you, some of the most common economics jargon can be hard to grasp. As if grasping the terminology were not difficult enough, try putting economic statistics in their proper context.

Fortunately, a little confusion recently in Canada's FINANCIAL POST has given Independent Institute Research Fellow Pierre Lemieux a good excuse to expound on the relationship between a country's Gross Domestic Product and its imports. A large GDP is not the same as a healthy economy, Lemieux tells us.

"Presenting imports as a subtraction from GDP conveys the wrong impression -- that they are bad for the economy. In fact, from the point of view of welfare -- of which GDP, even conceptually, is only a very rough approximation -- imports are not a cost but a benefit, just as, in economic life, production is the cost and consumption the benefit."

Want more? Then see "When It Comes to GDP, 2 - 1 = 2," by Pierre Lemieux (FINANCIAL POST, 3/17/05)

Also see, "The Ongoing Growth of Government in the Economically Advanced Countries," by Robert Higgs (Independent Institute Working Paper #48, 10/3/03)

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4) Olive W. Garvey Fellowship Competition

Applications for the 2005 Olive W. Garvey Fellowship essay contest are now available online! College students (undergraduates and as well as grad students, including law students) and junior faculty members are encouraged to apply. The essay topic is the following quotation by Nobel economist F. A. Hayek: "The great aim of the struggle for liberty has been equality before the law. "

Six winners will be announced in September and awarded prizes ranging from $1,000 to $10,000. The deadline is May 1, 2005. Owing to the funder's desire to promote the study of liberty among younger scholars, entrants must be no older than 35 years. For complete details about the contest, including eligibility requirements, a bibliography, and examples of past winning essays, please see

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