WSJ/July 7, 2011
The late great Austrian economist F.A. Hayek would have seen the Arab Spring for the economic revolt it was right from the start. For generations the Arab populations had bartered away their political freedom for economic protection. They rose in rebellion when it dawned on them that the bargain had not worked, that the system of subsidies, and the promise of equality held out by the autocrats, had proven a colossal failure.
What Hayek would call the Arab world's "road to serfdom" began when the old order of merchants and landholders was upended in the 1950s and '60s by a political and military class that assumed supreme power. The officers and ideologues who came to rule Egypt, Syria, Iraq, Libya, Algeria and Yemen were men contemptuous of the marketplace and of economic freedom. As a rule, they hailed from the underclass and had no regard for the sanctity of wealth and property. They had come to level the economic order, and they put the merchant classes, and those who were the mainstay of the free market, to flight.
It was in the 1950s that the foreign minorities who had figured prominently in the economic life of Egypt after the cotton boom of the 1860s, and who had drawn that country into the web of the world economy, would be sent packing. The Jews and the Greeks and the Italians would take with them their skills and habits. The military class, and the Fabian socialists around them, distrusted free trade and the marketplace and were determined to rule over them or without them.
The Egyptian way would help tilt the balance against the private sector in other Arab lands as well. In Iraq, the Jews of the country, on its soil for well over two millennia, were dispossessed and banished in 1950-51. They had mastered the retail trade and were the most active community in the commerce of Baghdad. Some Shiite merchants stepped into their role, but this was short-lived. Military officers and ideologues of the Baath Party from the "Sunni triangle"—men with little going for them save their lust for wealth and power—came into possession of the country and its oil wealth. They, like their counterparts in Egypt, were believers in central planning and "social equality." By the 1980s, Saddam Hussein, a Sunni thug born from crushing poverty, would come to think of the wealth of the country as his own.
In his 1944 masterpiece, "The Road to Serfdom," Hayek wrote that in freedom-crushing totalitarian societies "the worst get on top." In words that described the Europe of his time but also capture the contemporary Arab condition, he wrote:
..."To be a useful assistant in the running of a totalitarian state, it is not enough that a man should be prepared to accept specious justification of vile deeds; he must himself be prepared actively to break every moral rule he has ever known if this seems necessary to achieve the end set for him. Since it is the supreme leader who alone determines the ends, his instruments must have no moral convictions of their own." ...
This well describes the decades-long brutal dictatorship of Syria's Hafez al-Assad, and now his son Bashar's rule. It is said that Hafez began his dynasty with little more than a modest officer's salary. His dominion would beget a family of enormous wealth: The Makhloufs, the in-laws of the House of Assad, came to control crucial sectors of the Syrian economy.
The Alawites, the religious sect to which the Assad clan belongs, had been poor peasants and sharecroppers, but political and military power raised them to new heights. The merchants of Damascus and Aleppo, and the landholders in Homs and Hama, were forced to submit to the new order. They could make their peace with the economy of extortion, cut Alawite officers into long-established businesses, or be swept aside.
But a decade or so ago this ruling bargain—subsidies and economic redistribution in return for popular quiescence—began to unravel. The populations in Arab lands had swelled and it had become virtually impossible to guarantee jobs for the young and poorly educated. Economic nationalism, and the war on the marketplace, had betrayed the Arabs.
They had the highest unemployment levels among developing nations, the highest jobless rate among the young, and the lowest rates of economic participation among women. The Arab political order was living on borrowed time, and on fear of official terror.
Attempts at "reform" were made. But in the arc of the Arab economies, the public sector of one regime became the private sector of the next. Sons, sons-in-law and nephews of the rulers made a seamless transition into the rigged marketplace when "privatization" was forced onto stagnant enterprises.
Of course, this bore no resemblance to market-driven economics in a transparent system. This was crony capitalism of the worst kind, and it was recognized as such by Arab populations. Indeed, this economic plunder was what finally severed the bond between Hosni Mubarak and an Egyptian population known for its timeless patience and stoicism.
The sad truth of Arab social and economic development is that the free-market reforms and economic liberalization that remade East Asia and Latin America bypassed the Arab world. This is the great challenge of the Arab Spring and of the forces that brought it about. The marketplace has had few, if any, Arab defenders. If the tremendous upheaval at play in Arab lands is driven by a desire to capture state power—and the economic prerogatives that come with political power—the revolution will reproduce the failures of the past.
In Yemen, a schoolteacher named Amani Ali, worn out by the poverty and anarchy of that poorest of Arab states, recently gave voice to a sentiment that has been the autocrats' prop: "We don't want change," he said. "We don't want freedom. We want food and safety." True wisdom, and an end to their road to serfdom, will only come w
Arab people make the connection between economic and political liberty.
Mr. Ajami, a senior fellow at Stanford University's Hoover Institution, is co-chairman of Hoover's Working Group on Islamism and the International Order.
Me to some people I know:
Ajami’s lines of reasoning (understanding his is a short op ed) are these: the Arab Spring was an essentially economic revolt; an economic revolt against what?; a grand bargain struck decades ago--masses exchanging political freedom for economic protection in the form of autocracies providing for, and protecting, them; so, in the 50s and 60s in Egypt, Yemen, Syria, Iraq, Libya and Algeria a political and military class came to power ideologically hateful of markets, earned wealth and property; they sundered their country’s market economies such as they were, driving away the merchant class including enterprising Jews; Hayek’s overarching thesis bears relation to this general historical arc—in Ajami’s closing words, “the (“necessary,” my word) connection between economic and political liberty.”; Hayek argued that in totalitarian societies “the worst get on top,” writing as quoted by Ajami:
…"To be a useful assistant in the running of a totalitarian state, it is not enough that a man should be prepared to accept specious justification of vile deeds; he must himself be prepared actively to break every moral rule he has ever known if this seems necessary to achieve the end set for him. Since it is the supreme leader who alone determines the ends, his instruments must have no moral convictions of their own." …
Ajami says these words apply tellingly to Syria in particular and traces briefly why; but what happened over time was a demographic explosion making the grand bargain’s taking care and protection, (“a peculiar Hobbesian bargain,” my words) impossible; anti market centralization, of the kind Hayek inveighed against, proved a disaster—with, for two, world class unemployment and lack of female economic participation on a world scale; all this led to state terror as a mode of social control and led to rulers' "borrowed time;" overarching nepotism, self preserving and self sustaining oligarchy and true crony capitalism flayed attempts at reform; all of this was a reverse Hayekian dystopia, (my words).
Liberalized free market capitalism bypassed the Arab world and forms a great challenge to the Arab Spring.
If state power comes to the fore again, Ajami argues, it will replicate past failures. In the end, to quote Ajami, “True wisdom, and an end to their road to serfdom, will only come when the Arab people make the connection between economic and political liberty.”
Given your critique Bone, and your briefer one Jill, the question emerges whether Ajami’s analysis is too general and therefore flawed in not adequately describing the “grand bargain” occuring in the countries he specifies, before listed. (I’m whistling in the dark here because I don’t know enough to say whether the line you quote of him--"But a decade or so ago this ruling bargain—subsidies and economic redistribution in return for popular quiescence—began to unravel" (in your words) “is kind of nuts.” So let me do what I do best—niggle a bit. )
It seems to me that if Ajamai in his brief op ed is imprecise and less nuanced than he might be about the various timings of the bargains’ declines, and, if, as you say, “I think there is some of that” in his described grand bargain in the countries he listed, then I argue that “reductive” isn’t perhaps le mot juste. Sure, Ajami flattened and corralled an abundance of specifics in aid of a thesis. But the next question is, to my mind, whether he’s flogging--in your, and, more so, in Jill’s critiques--his preferred ideology and ignoring the necessary hard particulars of history in service of his flogging or whether Hayek supplies Ajami with an applicable and telling insight become an illuminating prism through which to see the Arab Spring.
I gotta’ say, no surprise, I vote for the latter alternative.