Topic: Economics
The Economics of Random Stuff: John Stossel and the War in Iraq Stossel's interesting idea on the War in Iraq and the current oil situation.by Jeff Peters
(conservative)
Tuesday, August 5, 2008
Several months ago I had the privilege to eat dinner and converse with John Stossel along with several of my fellow Republicans at the University of Chicago. Stossel is one of probably two libertarian minded hosts of mainstream media television shows. I remember asking this fine chap about his views of the War in Iraq and the oil situation. He held a very interesting view of the issue I see as very delicate and dangerous.
He said we shouldn't be in Iraq and the intentions of freeing the Iraqi people were bogus. I reminded him that 60% of declared World oil reserves are in the Middle East and the dangers of allowing terrorists to control our main source of oil. Stossel responded by saying that in the future those who control the oil would have to sell it to someone.
There is an important neoclassical-economics theme and controversy behind this view that I find to be very interesting. It's the concept of utility preferences and profit maximization of the self-interested consumer.
I have explained in the introduction of the series, The Economics of Random Stuff, that the models in neoclassical economics can also be used as analogies. Although it may be true that terrorists are ultimately like any other human being, they want to live a more comfortable life of the highest level of utility, it is not clear whether their goal of maximum utility is congruent to the corporate mogul of the United States. The question then is: do terrorists favor the kind of profit that we like? Do they necessarily want money? In other words are their preferences similar to ours?
If the analogy system works then my answer to that question is: NO. Their optimal point, or the point where terrorists receive maximum utility, will probably be the elimination of the United States and the West - for whatever reason they see fit.
To me it seems that profit for the Terrorists that hate us is the elimination of the United States and its influence on the Western world. They value controlling oil used by the Western world to benefit their ultimate goal - which is not money-profit maximization but terrorist-influence maximization.
My model assumes that preferences remain stable over time - which means that terrorists won't develop a money-profit maximizing preference once they get a hold of those oil reserves and rigs. However, we all know that when someone puts money under our noses, we get excited.
This emotion theme follows from an idea brought up by young Chicago Economist John List. In some of List's work he suggests people have emotional goods amongst their preferences.
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I would have to say that they are the profit people, Where is it where they have build an indoor skiing slope in the middle of a stinkin desert. They want the profits and they are willing to sell to us. Now We have the unique situation of being mostly cristians without a huge portion of muslums unlike most other places in the world. Which makes their motives different, in many places it is the case where they are trying to insitute their own laws into place, but in the United States this is not the Case they dont have the numbers or means. I think that if we ask them what really makes them mad(attacking them, giving money to their enemies, just being very involved in their politics) they might be more of a easy ally being a trade partner, that benefits both nations.
Plus even today the power is in money which will be making for both goals if they get the money so they can compete with the united states
Posted By: Christopher Espinal
Date: 2008-08-06 07:13:42
"I think that if we ask them what really makes them mad(attacking them, giving money to their enemies, just being very involved in their politics) they might be more of a easy ally being a trade partner, that benefits both nations."
Perhaps this is true. Figuring out if this is true is probably where the difficulty lies.
I consider terrorism a form of insanity. A terrorist's idea of "comfort" may be in the next life, if his chosen profession is suicide bombing. Terrorists may not react the same way in consumer-based models, say, for chosing a brand of cat food.
Eliminating the US and Western culture could be achieved more cost-effectively through other means, than controlling oil fields. If I were them, I would encourage overstaying visas, and advocating Sharia law over our Constitution. Setting an oil field on fire hurts them as much as us. But their cost is comparatively low, since the benefit will be received in heaven.
As the price of fuel increases, entrepenuers, such as T. Boone Pickens, will be motivated to enter the market with alternative energy sources, or we will drill for oil and mine more coal and natural gas within our borders. In a way, it caused us to innovate and diversify our engery supplies.
In the long-run, the less we rely on the Middle East for our energy, the more secure we'll get here.
Now you got me interested in your other article! I'd like to learn more of these models. My gut feeling (no models required) is that we shouldn't stay in Iraq longer than necessary. Republicans need to get back to balancing the budget and moving towards smaller government again. This war has been a distraction from those things.
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