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Syria and economics


ZPB II

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"Follow the money" is one of those old adages that seems to turn out true more often than not. Human rights abuse happens on a daily basis globally, yet some conflicts are brought to limelight. Usually interesting coincidences turn up. Oil contracts in Iraq, mineral prospects in Afghanistan and the oil trade between Libya, Italy and France.

I was pondering about the economic connection with Syria and thought about this. Shale oil and gas has been booming in the continental US. Striking Syria might taunt Iran into shutting down the strait of Hormuz and in general cause instability in the region, affecting oil trade and production, driving up prices immensely.

Now, it seems to me that the shale oil business on continental soil would profit tremendously from this scenario. I'll be looking at US shale oil company stock and expect to see radical shifts in the next 24 hours.

EDIT: In retrospect I removed the link to the stock portfolio since it was a commercial site in the end.

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I'm aiming at keeping this thread about economics instead of politics as to sidestep most of the touchy argument fuel, seeing what happened to the video thread. Though I do acknowledge that the two topics are interlocking. I won't protest if the thread gets locked but I am curious about people's views on the financial angle.

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*crickets*

ZPB - may I call you ZPB? - I think the pertinent link isn't the oil industry (though it certainly is part of it.) I think a more helpful discussion looks at the advisability of having a privately owned arms manufacturing industry and its influence on the political leadership of a nation. It's a discussion we're going to have to have, whether before or after a very large number of people get killed for profit (you see the moral problem here.) I suspect that if the US, the UK and France nationalised their arms industries the problem would vanish overnight.

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Sorry, I haven't been checking this as often as I would like. ZPB is more than fine!

I didn't fully grasp the point about rationing and the black market. I was thinking of this as a manifestation of the lobbying power of the allegedly free market when a certain critical mass is reached.

How would things change if the arms industry was nationalised? I may be cynical, but I'm not seeing all that many countries with altruistic aims. I always thought the "We're the good guys" rhetoric is just a part of domestic politics, since it tends to fall apart on closer inspection. One might even joke that the arms industry is already nationalised due to the very close lobbyist ties. Maybe the arms industry could be held responsible if it was secured to national entities de jure instead of going through offshore loops. I'm still having a hard time figuring out what kind of entity could keep this business in control.

Trying to find actual answers to a problem of this scale is hard if not impossible. It feels much easier to hop along for the ride and grab as much cash as humanly possible and spend it on cars, boats and women. Everyone else seems to be doing it.

In the end, I consider the root of this problem lying in the fact that technological evolution has far surpassed the pace of "natural" evolution. We still have the territorial instincts of cavemen but our clubs have grown remarkably larger. Doesn't globalization mean that everyone gets to have the same problems?

If I sound too much like a hippie, that's because I spent most of my afternoon wrestling big sweaty men and having my head banged against the floor. I suspect it may affect higher cognitive functions. Otherwise a fine hobby. Have no fear, I'm still more than xenophobic enough to not start hugging the entire world. But it'd be damn nice if we could stop starting wars over resources and focus on something useful. Then again, war has this tendency to accelerate technological advancement if it doesn't lead to the total annihilation of the participants. Perhaps near self-destruction is a necessary step in human evolution, trial and error as such.

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Just because they say you are paranoid, does not mean they are not out to get you!

However, in this case, too many bangs on the head can cause paranoia!

Cannot see how any Western nation can extract a win situation in the Syria mess. Best to tut-tut and leave them to it. I thought the USA wasn't the world policeman anyway! Maybe Cameron is playing to his local al-Qaeda constituents!

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The comment on rationing was a snipe at those intent on starting an illegal war for profit, and those who'd be happy to profit in the second intention. (Illegal? Well, yes. Syria isn't a signatory to the Geneva Convention on Chemical Weapons. "Punishing" it for it's lack of "norm" is akin to bashing gays: it is illegal. And this is the case whether or not I trust the US Intelligence community to inform me accurately as to the circumstances of chemical weapons use in Syria.) The moment a major war starts, all of the industries party to supporting a warring state are nationalised to some degree: commodities are rationed, war bonds are issued and armaments production is tailored to the army's needs and the populace's ability to fund the purchases. The Press is limited to publishing fluff and propaganda. So the "War is good for the economy" meme is only true while the war remains a limited affair. Anyone betting on the outcome of a trilateral US/UK/French strike on Syria is either an idiot (plenty of those around) or doesn't care either way (the people who own armaments factories, banks, oil companies and press.) The idea that Mr Putin is a bluffer was tested quite thoroughly in Georgia and I don't see that he's in a worse position now: attacking Syria leads to a major war. It also leads to a collapse in the world economy and a decidedly worse standard of living for anyone left alive.

How does nationalising the armaments industry help? Michael warns about the probability of mission creep in the scope and effect of government: mate, that boat has sailed.

In order to develop my thesis, I'm going to have to postulate the existence of some mythical (or at least, unseen for a while now) creatures: democracy, a free press, rational people behaving in a rational fashion, rule of law, a moral justification for action. We'll start with those.

Ok. Lets have a look at stuff.

A democracy is designed so that the populace is represented by elected officials - generally, a populace is intent on getting through life experiencing as little pain as it can possibly manage. Should those elected officials fail in their allotted task, they are removed (relatively peaceably) from power and another lot given a go. The idea here is that power is shifted or "transitioned" without the bloodshed and economic waste that relatively frequently accompanies such circumstances in a non-democratic societal setup. Everyone benefits, with the possible exception of egomaniacal psychopaths. The elected officials are also (not, note, only) tasked with ensuring the continued peaceful existence of the populace they purport to represent: that is, they are responsible for maintaining national security. In recognition of this, they are granted the power to direct an army.

Provided the rule of law is allowed to exist as a description of a social contract (i.e. is applicable to every individual member of the society), a well designed democracy lets those in power be held accountable to the populace: their actions and decisions are able to be examined and analysed, their performance is judged by the populace they (claim to) represent. In an effort to control the undoubted tendency of bureaucracies to amass power to themselves, there is a division of powers: everyone keeping an eye on everyone else. If the free press is capable of informing the populace as to the current state of affairs, the populace is more capable of judging actions and decisions by it's executive according to the current moral and legal norms of the nation as a whole.

A privately owned arms industry makes profits for its owners through the sale of weapons, stuff that kills people. As with any manufacturing industry, it is in its interests to have a set of circumstances where its products are being consumed (morality doesn't enter into the equation, legality does.) Where there is scope for it to influence the populace and the executive, it will do so. The decision to use the weapons lies with the executive, representing the populace - this is where morality enters the equation. If profits from sales can be re-invested in such a way as to garner influence in the populace and the executive, they will be. If there exists a state of moral lassitude, incapability of law enforcement and a press mostly owned by the same individuals who own the armaments factories, the populace, effectively disenfranchised, can be ignored (their moral judgement is irrelevant to the decision making process) and the promulgation of wars for profit ensues.

A state owned armaments industry puts the profit motive into another sphere: it must be run at the taxpayers' expense (it is anyway), the taxpayer gets a say in how much they're willing to pay for their security and there is less drive to influence the populace and the executive to start wars. The problems associated with irrational behaviour still exist (they always will), but the system is designed in such a fashion as to lay the responsibility for killing other people with the entire populace. In this way, it is hoped that wars will be less frequent.

There are bound to be some big holes in this, but, as I said, its a discussion we need to have. Go to it.

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Well the good news is that democracy has worked in the UK - this time. Shame that Blair got away with it last time.

I always think we actually have a problem with democracy, and an implicit assumption that is is the best form of government. Even the phrase the "least worst form" is a convenient cop-out to explain the huge running sores in many system of "democracy".

Unfortunately the two nations that shout the loudest about democracy are also two of the biggest examples of what is wrong with most democracies. In the UK a party with a majority of the votes has not existed for decades. So when Cameron claims to speak for Britain he is a man that 11 million wanted and 18million did not.

What kind of legitimacy is that?

As for the US the level of corruption and special interests being served is also not that clever.

Now in China there is every chance a party big-wig will be executed for corruption and I suspect the vast majority of non-politicians the world over will think is a very good idea. The Chineses system also bring stabilit with a large amount of consensus and long enough terms - 10 years that pandering to short term populist goals can be avoided.

ANYWAY - a group only has to start a revolt claiming to be a new democratic force and the Wests leaders leap in to encourage [misleadingly] the revolution. Of course I should add this only applies if you are not a pro-Western dictator.

I think most civilians prefer health and stability to fictitious possible improvements under "democracy".

My brother was in Syria on holiday around three years ago and everyone seemed happy and I have also seen a very nice series on the school system. As in most revolutions a tiny minority start the action and with sympathisers and well engineered incidents a widr conflagration can be started.

Perhaps the West would have more authority if the democracy that we preach as so wonderful actually was nearer the good end of the spectrum and less the cosy sewing up of the voting system.

The revitalising of democracy is required :

The politics of Switzerland take place in the framework of a multi-party federal parliamentary democratic republic, whereby the Federal Council of Switzerland is the head of government. Executive power is exercised by the government and the federal administration and is not concentrated in any one person. Federal legislative power is vested in both the government and the two chambers of the Federal Assembly of Switzerland. The judiciary is independent of the executive and the legislature. For any change in the constitution, a referendum is mandatory; for any change in a law, a referendum can be requested. Through referenda, citizens may challenge any law voted by federal parliament and through initiatives introduce amendments to the federal constitution, making Switzerland the closest state in the world to a direct democracy.

http://en.wikipedia.org/wiki/Politics_of_Switzerland

http://swiss-government-politics.all-about-switzerland.info/

http://www.eurozine.com/articles/2013-02-26-james-en.html

For power-hungry politicians this simply will not be very attractive as power is so diffused : ) A lot to recommend it then ....... and what did we offer Iraq? A bodge.

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Well the good news is that democracy has worked in the UK - this time. Shame that Blair got away with it last time.

I always think we actually have a problem with democracy, and an implicit assumption that is is the best form of government. Even the phrase the "least worst form" is a convenient cop-out to explain the huge running sores in many system of "democracy".

Unfortunately the two nations that shout the loudest about democracy are also two of the biggest examples of what is wrong with most democracies. In the UK a party with a majority of the votes has not existed for decades. So when Cameron claims to speak for Britain he is a man that 11 million wanted and 18million did not.

What kind of legitimacy is that?

As for the US the level of corruption and special interests being served is also not that clever.

Now in China there is every chance a party big-wig will be executed for corruption and I suspect the vast majority of non-politicians the world over will think is a very good idea. The Chineses system also bring stabilit with a large amount of consensus and long enough terms - 10 years that pandering to short term populist goals can be avoided.

ANYWAY - a group only has to start a revolt claiming to be a new democratic force and the Wests leaders leap in to encourage [misleadingly] the revolution. Of course I should add this only applies if you are not a pro-Western dictator.

I think most civilians prefer health and stability to fictitious possible improvements under "democracy".

My brother was in Syria on holiday around three years ago and everyone seemed happy and I have also seen a very nice series on the school system. As in most revolutions a tiny minority start the action and with sympathisers and well engineered incidents a widr conflagration can be started.

Perhaps the West would have more authority if the democracy that we preach as so wonderful actually was nearer the good end of the spectrum and less the cosy sewing up of the voting system.

The revitalising of democracy is required :

http://en.wikipedia.org/wiki/Politics_of_Switzerland

http://swiss-government-politics.all-about-switzerland.info/

http://www.eurozine.com/articles/2013-02-26-james-en.html

For power-hungry politicians this simply will not be very attractive as power is so diffused : ) A lot to recommend it then ....... and what did we offer Iraq? A bodge.

Go hang out in Beijing and take a deep breath- then go try to buy safe baby milk for your child. We may have our faults aplenty, but I wouldn't trade my life plus a million bucks to go live in China.

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Quality discussion! Talk of democracy and my entire argument cut down at its knees reduced by two jabs on China.

In case anyone is interested:

http://urbanpeek.com/2013/04/13/top-10-cities-with-the-worlds-worst-air/

or more fully

http://www.who.int/phe/health_topics/outdoorair/databases/en/

Unfortunately I cannot see a corollary between democracy and other forms of government.

As to corruption in public services the US has is 19th with 18 more honest countries - curiously eleven of them are constitutional monarchies.

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Diesel, I agree that the Swiss have the closest thing to a representative democracy around. A relatively small, highly educated populace with access to modern communications is in a good position to maintain this form of government.

The constitutional monarchies enjoy a hierarchy of decision making that lets the majority of the populace get on with their individual roles whilst remaining confident that the future is unlikely to present unsurvivable challenges - this is true of any organisation or group. Anyone at the head of an organisation understands (or should understand) that an individual lacks the capability and resources to develop the specialised knowledge of current affairs required to make consistently sensible decisions affecting the organisation as a whole: this is a function of the limited capability of an individual with regards to the complexity and breadth of understanding required, so we have developed systems that allow experts in different fields to provide specialised information to decision makers. The weight of tradition that accompanies a monarchy, a family's reign, lends itself to an analysis of historical fact and the development of systems of behaviour that aims to avoid past mistakes: the monarch is conscious of the historical fact that this is a matter of survival and so is a duty they will undertake.

The advances of our understanding of the universe require that decisions be made without reference to historical analysis, a position we all find ourselves in: we develop opinions on the likely course of events and act in accordance with those opinions. In a large organisation this process of making informed decisions and developing justifiable opinions requires the development of a communications system that relays information up the decision making hierarchy as well as down - a simpler political model requires less of the bottom-up communication. The more efficient the system, the higher the quality of the information informing decisions and opinions. Some of the information available to leaders cannot be made openly available for analysis by the remainder of the organisation, in which case trust between the elements of the hierarchy needs to exist and be fostered. If you abuse trust, you find yourself in the unhappy position of being incapable of leading; obviously this is something a leader cannot afford. A leader can, if s/he so chooses, expend the accrued "capital" of the trust extant in a successful organisation in order to compel actions that don't make sense according to the greater populace's understanding of events. Without this foundation of trust, the leadership systems are dis-regarded by the elements of the organisation and it fails. If the decision is one that improves the lot of the organisation as a whole, the trust is returned and the leadership by those particular individuals continues. In a constitutional monarchy, if the decision turns out to be a bad one, the elected representative is removed from power and the trust required to compel action is replaced anew. The structure of a constitutional monarchy lets the populace voice its' displeasure at the abuse of trust by booting the decision maker out of power, whilst at the same time letting the system of government continue, the monarch being the final repository of trust and, to some extent, the wellspring of it. For a republic, the Constitution is the repository of trust. In either case, should the abuse of trust continue under the new leadership, the likelihood of the system failing increases. (IMHO, YMMV, hoots-toots-och-aye, etc)

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I'm aiming at keeping this thread about economics instead of politics as to sidestep most of the touchy argument fuel, seeing what happened to the video thread. Though I do acknowledge that the two topics are interlocking. I won't protest if the thread gets locked but I am curious about people's views on the financial angle.

On a side note, do you think i am going to get banned if i open another video thread? Surely i would state in the opening post that political issues and conspiracy theorys are not to be disucssed, only the military aspects of the conflict. I really liked the video thread and it inspired me to do 3 scenarios based on the Syrian Civil War, so i find it to be kind of a pity that it got closed.

Anyways, here are my 2 cents on the economical situation in Syria:

the civil war is the worst thing that could have happened to Syrias economy. The best thing for Syria (from an economical point of view) would be if there was peace from tomorrow on and a stable, intact government was rebuilding the country, independent of said governments political ideology.

IMO basically what a large scale, violent internal conflict does to any countrys economy is putting it on a stand-still, at best. In the worst case the economy breaks down completely after a couple of years (many african country serve as prove for that, take Somalia, for example). I think that this is part of the rebels long term strategy, BTW. Assad wont be able to maintain his expansive high-tech war machines without an intact economy for more than a couple of years of constant fighting. The rebels, on the other hand, can replace their personell losses quite easy, and they do not rely on expansive & maintenance-intesive weapon systems so much. Additionally, the decreasing quality of life of the syrian people that goes hand in hand with Syrias cumulatively failing economy is going to increase the rebels ability to find new recruits among the unemployed and frustrated. So in the end, the predictable economical breakdown of Syria is going to ultimately lead to a rebel victory on the battlefield. Prove for the prediction of said breakdown can be seen in Syria recently asking Russia for a credit of several billions.

But that beeing said, i am not an expert on neither finances nor economy, so dont take my prediction of a rebel victory based on Syrias failing economy to seriously.

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agusto, while it is possible that the rebels will win a war of attrition in Syria, I would count it unlikely. Highly unlikely: the populace is embroiled in a civil war and is most likely pissed at both sides.

Syria was a stable nation until relatively recently; as an ally of Iran it became the junior partner in the weaker coalition, engaged in trying to survive as the enemy of the US. Russia and China can do little more than veto every UN proposal to "legalise" the intervention of the US led coalition. It could well be that all we're seeing is geopolitical action to secure energy routes into Europe, with Russia removed from control, but Germany certainly isn't behaving as though this is a strategic goal (if wars for loot were profitable, trade would never have developed, nor civilisation). Which means that the aim is to teach the Iranians some sort of lesson, something along the lines of "We can bomb you."

About as puerile as it gets, with the price of this lesson (as if they didn't already know) the lives of a few hundred thousand more men, women and children. There is a sickness in the West and it manifests itself in the behaviour of its leaders: they represent "a clear and present danger" to human civilisation.

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Yeah, well, stable for a dictatorship. Stable enough that Kerry dined out with Assad in Damascus before this current mess started. I'd expect a period of about a generation between coup attempts with that political model (time enough to breed the next generation of cannon fodder).

Regardless of the moral position that Assad occupies, the big ask is whether the West is morally justified in enforcing the change of regime, (with all the concomitant misery, at home and abroad, of that exercise) when we haven't the resources to ensure that the outcome is any better. The idea that advanced societies appear fully developed upon the demise of a dictator is wishful thinking, at best. At worst, it is an attempt to justify the murderous impulse of someone who believes that there is no point in having the world's best military unless you use it (the idea is that you have a good enough military to ensure that you don't have to use it.)

The delicious irony of agusto's suggestion is that you could argue that the US bankrupted itself with the Vietnam war (they had to abandon the gold standard) and most likely has done so again with its last set of adventures. $16 trillion debt?

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Back to the economics:

India is selling its UST to buy commodities following a collapse in the value of its local currency (caused in the main by a need for foreign investors to repatriate their money). This leads to a spike in yields, meaning that the US Treasury has to offer better rates to get people to lend it money. Which means that it has to find more money to finance its debts. Can you see where this is heading?

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India - worlds largest democracy - basket case economy.

China - stable if undemocratic government - worlds third largest economy

US - worlds 2nd largest economy - democracy - worlds largest debtor

War is not going to help the US in any way other than increase debt but get some quid pro quo arms sales from interested parties. So economically speaking the public pays and shareholders come out ahead.

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