Friday, December 30, 2005

Trading With the Devil in the Hope of Changing Hell

(originally posted on on November 11, 2005)

Conventional foreign affairs and international trade dogma has long assumed that economic liberalization undermines repressive regimes. For countries like Canada and the United States, this has been the justification for not only continuing but increasing trade with countries such as Vietnam and China. "Economic development and increased trade with and exposure to liberal democracies," it is argued, "inevitably leads to an improvement in freedom and human rights."

In the September/October 2005 edition of Foreign Affairs, Bruce Bueno de Mesquita and George W. Downs point out, however, that recent events suggest that "savvy autocrats have learned how to cut the cord between growth and freedom, enjoying the benefits of the former without the risks of the latter." The key, they say, is in how these regimes embrace economic reforms that increase the provision of public goods, thereby improving the lives of the people (and suppressing the desire for democracy as seen as a means to prosperity, such as was one of the driving forces behind the collapse of the Iron Curtain), while at the same time limiting the provision of "coordination goods." Coordination goods are those public goods that critically affect the ability of political opponents to communicate and coordinate but which have relatively little impact on economic growth. They include such things as free speech and the ability to organize and demonstrate peacefully, freedom from arbitrary arrest, the right to nondiscrimination of the basis of religion, race, ethnicity or sex, freedom from physical abuse and the right to travel domestically and abroad. Communications systems like the Internet, telephone, postal and courier services, a diverse and largely unregulated press and other forms of media are coordination goods that are withheld by repressive regimes who wish to cling to power. Restricting broad access to higher education and graduate training is also often seen as necessary.

Bueno de Mesquita and Downs point out that by adopting the strategy of suppressing coordination goods which are necessary to organize societal reform, while increasing access to public goods, repressive countries have been able to delay revolutionary tendencies, insuring their continued survival. Hence, this has become the strategy of choice by governments in countries like China, Russia, Venezuela, and Vietnam.

Sadly, political leaders in the West are being fooled by it. Their dogma that improved trade equals improved rights is woefully out-of-date. So how should we respond? The answer is not, I would argue, to be found in boycotting goods manufactured in countries like China or in lobbying our governments to completely eliminate the trade of public goods to repressive regimes. This is unlikely to happen and shoots at the wrong target. Nor should we allow our politicians to point to improved housing, health care, clothing and other basic human needs in such countries and seek to equate these with improved human rights. These can be improved without any progress being made in individual or minority rights.
An appropriate response is to restrict trade with such countries, especially in the areas of coordination goods. Companies should not be allowed to do business in China if their services lead to a continued suppression in these key areas.

A prime example is the recent revelation that Yahoo, Microsoft, Google, Cisco and other major Internet service and equipment providers have been found to be helping Chinese authorities monitor and censor content available to China's 100 million Internet users. Last September, because of information provided to the Chinese government by Yahoo, Shi Tao, a 37-year-old journalist and democracy advocate was sentenced to 10 years in prison. Chinese Internet specialists say Google and Yahoo regularly exclude sensitive political or religious information from searches conducted by users in mainland China. Microsoft's MSN restricts the content of weblogs it hosts in China. These companies say that they must abide by laws and regulations of countries where they operate. That being the case, restrictions should be placed on such companies as to where they are allowed to operate. Additionally, the sale of surveillance equipment and technology that can be used to suppress freedom of speech and religious expression should be curtailed.

Another appropriate response would be to link international aid to such repressive regimes to improvements in higher education, basic civil liberties, human rights and freedom of expression, including religious and press freedom. Even modest reforms would make it easier for citizens in these countries to coordinate and communicate with each other in such a way as to promote the growth of political freedom.

I would recommend that anyone wanting to read more on this subject purchase the article "Development and Democracy" by Bruce Bueno de Mesquita and George W. Downs. It is available for $5.95 USD at

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