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ALİ BULAÇ a.bulac@todayszaman.com Columnists

How does liberal economy work?


Military investments and expenses constitute 22.5 percent of the entire economic system in the US, which has a gross domestic product (GDP) of over $13 trillion.

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This indicates that the actual engine of the giant system is based on the arms industry. Those who argue that such a system works solely in accordance with market conditions should take a look at the volumes produced by authors who have made naïve references to the liberal philosophy. We have terrifying figures at hand: 95 percent of the 500 wars that were fought in the last two centuries were directly or indirectly incited by Westerners. Nobody can argue that those wars were ignited in an attempt to ensure that the free market will work based on its rules and standards on a global scale. The wars have three major consequences: They transform sociopolitical structures, they ensure scientific breakthroughs and they enable smooth operation of the economy.

Goods and services are reproduced as they are consumed. This general rule of supply and demand will be healthy for the economy as long as it runs smoothly. However, this rule is not independent of individual beliefs, faiths and ambitions disruptive to the order. If you constantly produce arms, you will always have to search for markets that will consume these arms. Nobody would like to produce an item that is not attractive on the market. Sometimes demand is artificially created. The best and simplest way to create demand is to start a war.

The arms industry is an important engine of the economy, but it is also creates trouble for the system because the industry is under the control of a few big corporations. They make profits; however, the people have to pay the bill in times of crises because the funds used in recovery from crises are collected from the people. The visible example of this is the ongoing situation in Iraq after the occupation. The amount of oil seized by the US since the occupation has already exceeded the cost of military expenditures since 2003. What sort of profit measurement should be run at this point is important. This is a visible hypocrisy of American liberalism.

Let us say that the US transmitted the Iraqi oil it seized to its budget, which is impossible to imagine because the major players in this transaction are a few oil corporations. In this process, the state serves as a simple mediator because the private corporations seize the oil and make a profit from the transaction. Likewise, a few corporations produce arms used in killing 1 million people in Iraq. Of course, the army buys the arms and uses them in conflicts. And the corporations hold control over the oil. In this case, the monies spent in the procurement of arms used in the Afghan and Iraqi occupations are going to private corporations. It is obvious that this bill has been paid by the American people. Is it possible to ignore the fact that the global crisis that started in the US is part of this simple game?

And there is more: Arabs had to deal with a bill of $700 billion for the two Gulf wars. The oil stolen is Arab oil, and the Arabs are the new customers of the arms transactions. When the global crisis erupted, Saudi King Abdullah said this was a conspiracy set up against the Arabs. Oil dropped from $145 to $40. When the crisis started, the US recommended that Arabs finance its banks and corporations. And reports now say that Americans are ready to modernize the Saudi naval fleet for a price of $20 billion. Jeffrey Wieringa, an American admiral, said the US also modernized the Saudi naval fleet 30 years ago; because the warships were unable to meet expectations, they need to be replaced. Saudi Arabia is also interested in spy planes; it wants to purchase the P-8 naval spy plane made by Boeing. It is expected that the overall bill will exceed $20 billion. In short, Saudis buy arms they will never use and then they modernize them when they become outdated. There are also arms used in regional wars; in the end, liberal economy works this way.

26 December 2008, Friday
ALİ BULAÇ
Comments on this article

wolf , Dec 26 2008 09:05, Friday
I simply cannot see the point(s) this column is trying to make? Jumping between topics seemingly just scattered in the t...

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