No scenario for escalation inevitable incentives for conflict minimization



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Competitiveness




No impact -- competitiveness theory is flawed.


Krugman 11 – joined The New York Times in 1999 as a columnist on the Op-Ed Page, professor of Economics and International Affairs at Princeton University, became the Ford International Professor of Economics at MIT, one of the founders of the "new trade theory," American Economic Association awarded him the John Bates Clark medal (Paul, “Paul Krugman: Competitiveness deficit not cause of economic collapse,” January 24, 2011, http://www.daytondailynews.com/opinion/columnists/paul-krugman-competitiveness-deficit-not-cause-of-economic-collapse-1062908.html) // CB

Meet the new buzzword, same as the old buzzword. In advance of the State of the Union, President Barack Obama has telegraphed his main theme: competitiveness. The president’s Economic Recovery Advisory Board has been renamed the President’s Council on Jobs and Competitiveness. And in his Saturday radio address, the president declared that “We can out-compete any other nation on Earth.” This may be smart politics. Arguably, Obama has enlisted an old cliche on behalf of a good cause, as a way to sell a much-needed increase in public investment to a public thoroughly indoctrinated in the view that government spending is a bad thing. But let’s not kid ourselves: Talking about “competitiveness” as a goal is fundamentally misleading. At best, it’s a misdiagnosis of our problems. At worst, it could lead to policies based on the false idea that what’s good for corporations is good for America. About that misdiagnosis: What sense does it make to view our current woes as stemming from lack of competitiveness? It’s true that we’d have more jobs if we exported more and imported less. But the same is true of Europe and Japan, which also have depressed economies. And we can’t all export more while importing less, unless we can find another planet to sell to. Yes, we could demand that China shrink its trade surplus — but if confronting China is what Obama is proposing, he should say that plainly. Furthermore, while America is running a trade deficit, this deficit is smaller than it was before the Great Recession began. It would help if we could make it smaller still. But ultimately, we’re in a mess because we had a financial crisis, not because American companies have lost their ability to compete with foreign rivals. But isn’t it at least somewhat useful to think of our nation as if it were America Inc., competing in the global marketplace? No. Consider: A corporate leader who increases profits by slashing his work force is considered successful. Well, that’s more or less what has happened in America recently: Employment is way down, but profits are hitting new records. Who, exactly, considers this economic success? Still, you might say that talk of competitiveness helps Obama quiet claims that he’s anti-business. That’s fine, as long as he realizes that the interests of nominally “American” corporations and the interests of the nation, which were never the same, are now less aligned than ever before. Take the case of General Electric, whose chief executive, Jeffrey Immelt, has just been appointed to head that renamed advisory board. I have nothing against either GE or Immelt. But with fewer than half its workers based in the United States and less than half its revenues coming from U.S. operations, GE’s fortunes have very little to do with U.S. prosperity. By the way: Some have praised Immelt’s appointment on the grounds that at least he represents a company that actually makes things, rather than being yet another financial wheeler-dealer. Sorry to burst this bubble, but these days GE derives more revenue from its financial operations than it does from manufacturing — indeed, GE Capital, which received a government guarantee for its debt, was a major beneficiary of the Wall Street bailout. So what does the administration’s embrace of the rhetoric of competitiveness mean for economic policy? The favorable interpretation, as I said, is that it’s simply packaging for an economic strategy that’s centered on public investment, investment that’s actually about creating jobs now while promoting the nation’s longer-term growth. The unfavorable interpretation is that Obama and his advisers really believe that the economy is ailing because they’ve been too tough on business, and that what America needs now is corporate tax cuts and across-the-board deregulation. My guess is that we’re mainly talking about packaging here. And if the president does propose a serious increase in spending on infrastructure and education, I’ll be pleased. But even if he proposes good policies, the fact that Obama feels the need to wrap these policies in bad metaphors is a sad commentary on the state of our discourse. The financial crisis of 2008 was a teachable moment, an object lesson in what can go wrong if you trust a market economy to regulate itself.

No correlation between competitiveness and growth.


Krugman 94 – joined The New York Times in 1999 as a columnist on the Op-Ed Page, professor of Economics and International Affairs at Princeton University, became the Ford International Professor of Economics at MIT, one of the founders of the "new trade theory," American Economic Association awarded him the John Bates Clark medal (Paul, “Competitiveness: A Dangerous Obsession,” April 1994, http://www.foreignaffairs.com/articles/49684/paul-krugman/competitiveness-a-dangerous-obsession)

In fact, however, trying to define the competitiveness of a nation is much more problematic than defining that of a corporation. The bottom line for a corporation is literally its bottom line: if a corporation cannot afford to pay its workers, suppliers, and bondholders, it will go out of business. So when we say that a corporation is uncompetitive, we mean that its market position is unsustainable -- that unless it improves its performance, it will cease to exist. Countries, on the other hand, do not go out of business. They may be happy or unhappy with their economic performance, but they have no well-defined bottom line. As a result, the concept of national competitiveness is elusive. One might suppose, naively, that the bottom line of a national economy is simply its trade balance, that competitiveness can be measured by the ability of a country to sell more abroad than it buys. But in both theory and practice a trade surplus may be a sign of national weakness, a deficit a sign of strength. For example, Mexico was forced to run huge trade surpluses in the 1980s in order to pay the interest on its foreign debt since international investors refused to lend it any more money; it began to run large trade deficits after 1990 as foreign investors recovered confidence and began to pour in new funds. Would anyone want to describe Mexico as a highly competitive nation during the debt crisis era or describe what has happened since 1990 as a loss in competitiveness? Most writers who worry about the issue at all have therefore tried to define competitiveness as the combination of favorable trade performance and something else. In particular, the most popular definition of competitiveness nowadays runs along the lines of the one given in Council of Economic Advisors Chairman Laura D'Andrea Tyson's Who's Bashing Whom?: competitiveness is "our ability to produce goods and services that meet the test of international competition while our citizens enjoy a standard of living that is both rising and sustainable." This sounds reasonable. If you think about it, however, and test your thoughts against the facts, you will find out that there is much less to this definition than meets the eye. Consider, for a moment, what the definition would mean for an economy that conducted very little international trade, like the United States in the 1950s. For such an economy, the ability to balance its trade is mostly a matter of getting the exchange rate right. But because trade is such a small factor in the economy, the level of the exchange rate is a minor influence on the standard of living. So in an economy with very little international trade, the growth in living standards -- and thus "competitiveness" according to Tyson's definition -- would be determined almost entirely by domestic factors, primarily the rate of productivity growth. That's domestic productivity growth, period -- not productivity growth relative to other countries. In other words, for an economy with very little international trade, "competitiveness" would turn out to be a funny way of saying "productivity" and would have nothing to do with international competition. But surely this changes when trade becomes more important, as indeed it has for all major economies? It certainly could change. Suppose that a country finds that although its productivity is steadily rising, it can succeed in exporting only if it repeatedly devalues its currency, selling its exports ever more cheaply on world markets. Then its standard of living, which depends on its purchasing power over imports as well as domestically produced goods, might actually decline. In the jargon of economists, domestic growth might be outweighed by deteriorating terms of trade. So "competitiveness" could turn out really to be about international competition after all. There is no reason, however, to leave this as a pure speculation; it can easily be checked against the data. Have deteriorating terms of trade in fact been a major drag on the U.S. standard of living? Or has the rate of growth of U.S. real income continued essentially to equal the rate of domestic productivity growth, even though trade is a larger share of income than it used to be? To answer this question, one need only look at the national income accounts data the Commerce Department publishes regularly in the Survey of Current Business. The standard measure of economic growth in the United States is, of course, real gnp -- a measure that divides the value of goods and services produced in the United States by appropriate price indexes to come up with an estimate of real national output. The Commerce Department also, however, publishes something called "command gnp." This is similar to real gnp except that it divides U.S. exports not by the export price index, but by the price index for U.S. imports. That is, exports are valued by what Americans can buy with the money exports bring. Command gnp therefore measures the volume of goods and services the U.S. economy can "command" -- the nation's purchasing power -- rather than the volume it produces.\ And as we have just seen, "competitiveness" means something diFFerent from "productivity" if and only if purchasing power grows significantly more slowly than output. Well, here are the numbers. Over the period 1959-73, a period of vigorous growth in U.S. living standards and few concerns about international competition, real gnp per worker-hour grew 1.85 percent annually, while command gnp per hour grew a bit faster, 1.87 percent. From 1973 to 1990, a period of stagnating living standards, command gnp growth per hour slowed to 0.65 percent. Almost all (91 percent) of that slowdown, however, was explained by a decline in domestic productivity growth: real gnp per hour grew only 0.73 percent. Similar calculations for the European Community and Japan yield similar results. In each case, the growth rate of living standards essentially equals the growth rate of domestic productivity -- not productivity relative to competitors, but simply domestic productivity. Even though world trade is larger than ever before, national living standards are overwhelmingly determined by domestic factors rather than by some competition for world markets. How can this be in our interdependent world? Part of the answer is that the world is not as interdependent as you might think: countries are nothing at all like corporations. Even today, U.S. exports are only 10 percent of the value-added in the economy (which is equal to gnp). That is, the United States is still almost 90 percent an economy that produces goods and services for its own use.
Competitiveness theories are flawed -- countries don’t engage in economic competition.

Krugman 94 – joined The New York Times in 1999 as a columnist on the Op-Ed Page, professor of Economics and International Affairs at Princeton University, became the Ford International Professor of Economics at MIT, one of the founders of the "new trade theory," American Economic Association awarded him the John Bates Clark medal (Paul, “Competitiveness: A Dangerous Obsession,” April 1994, http://www.foreignaffairs.com/articles/49684/paul-krugman/competitiveness-a-dangerous-obsession)

By contrast, even the largest corporation sells hardly any of its output to its own workers; the "exports" of General Motors -- its sales to people who do not work there -- are virtually all of its sales, which are more than 2.5 times the corporation's value-added. Moreover, countries do not compete with each other the way corporations do. Coke and Pepsi are almost purely rivals: only a negligible fraction of Coca-Cola's sales go to Pepsi workers, only a negligible fraction of the goods Coca-Cola workers buy are Pepsi products. So if Pepsi is successful, it tends to be at Coke's expense. But the major industrial countries, while they sell products that compete with each other, are also each other's main export markets and each other's main suppliers of useful imports. If the European economy does well, it need not be at U.S. expense; indeed, if anything a successful European economy is likely to help the U.S. economy by providing it with larger markets and selling it goods of superior quality at lower prices. International trade, then, is not a zero-sum game. When productivity rises in Japan, the main result is a rise in Japanese real wages; American or European wages are in principle at least as likely to rise as to fall, and in practice seem to be virtually unaffected. It would be possible to belabor the point, but the moral is clear: while competitive problems could arise in principle, as a practical, empirical matter the major nations of the world are not to any significant degree in economic competition with each other. Of course, there is always a rivalry for status and power -- countries that grow faster will see their political rank rise. So it is always interesting to compare countries. But asserting that Japanese growth diminishes U.S. status is very different from saying that it reduces the U.S. standard of living -- and it is the latter that the rhetoric of competitiveness asserts. One can, of course, take the position that words mean what we want them to mean, that all are free, if they wish, to use the term "competitiveness" as a poetic way of saying productivity, without actually implying that international competition has anything to do with it. But few writers on competitiveness would accept this view. They believe that the facts tell a very different story, that we live, as Lester Thurow put it in his best-selling book, Head to Head, in a world of "win-lose" competition between the leading economies. How is this belief possible?



Their internal link is just meaningless rhetoric.


Krugman 94 – joined The New York Times in 1999 as a columnist on the Op-Ed Page, professor of Economics and International Affairs at Princeton University, became the Ford International Professor of Economics at MIT, one of the founders of the "new trade theory," American Economic Association awarded him the John Bates Clark medal (Paul, “Competitiveness: A Dangerous Obsession,” April 1994, http://www.foreignaffairs.com/articles/49684/paul-krugman/competitiveness-a-dangerous-obsession)

First, competitive images are exciting, and thrills sell tickets. The subtitle of Lester Thurow's huge best-seller, Head to Head, is "The Coming Economic Battle among Japan, Europe, and America"; the jacket proclaims that "the decisive war of the century has begun . . . and America may already have decided to lose." Suppose that the subtitle had described the real situation: "The coming struggle in which each big economy will succeed or fail based on its own efforts, pretty much independently of how well the others do." Would Thurow have sold a tenth as many books? Second, the idea that U.S. economic difficulties hinge crucially on our failures in international competition somewhat paradoxically makes those difficulties seem easier to solve. The productivity of the average American worker is determined by a complex array of factors, most of them unreachable by any likely government policy. So if you accept the reality that our "competitive" problem is really a domestic productivity problem pure and simple, you are unlikely to be optimistic about any dramatic turnaround. But if you can convince yourself that the problem is really one of failures in international competition that -- imports are pushing workers out of high-wage jobs, or subsidized foreign competition is driving the United States out of the high value-added sectors -- then the answers to economic malaise may seem to you to involve simple things like subsidizing high technology and being tough on Japan. Finally, many of the world's leaders have found the competitive metaphor extremely useful as a political device. The rhetoric of competitiveness turns out to provide a good way either to justify hard choices or to avoid them. The example of Delors in Copenhagen shows the usefulness of competitive metaphors as an evasion. Dealors had to say something at the Ec summit; yet to say anything that addressed the real roots of European unemployment would have involved huge political risks. By turning the discussion to essentially irrelevant but plausible-sounding questions of competitiveness, he bought himself some time to come up with a better answer (which to some extent he provided in December's white paper on the European economy -- a paper that still, however, retained "com petitiveness" in its rifle). By contrast, the well-received presentation of Bill Clinton's initial economic program in February 1993 showed the usefulness of competitive rhetoric as a motivation for tough policies. Clinton proposed a set of painful spending cuts and tax increases to reduce the Federal deficit. Why? The real reasons for cutting the deficit are disappointingly undramatic: the deficit siphons off funds that might otherwise have been productively invested, and thereby exerts a steady if small drag on U.S. economic growth. But Clinton was able instead to offer a stirring patriotic appeal, calling on the nation to act now in order to make the economy competitive in the global markets with the implication that dire economic consequences would follow if the United States does not. Many people who know that "competitiveness" is a largely meaningless concept have been willing to indulge competitive rhetoric precisely because they believe they can harness it in the service of good policies. An overblown fear of the Soviet Union was used in the 1950s to justify the building of the interstate highway system and the expansion of math and science education. Cannot the unjustified fears about foreign competition similarly be turned to good, used to justify serious efforts to reduce the budget deficit, rebuild infrastructure, and so on?

A2 Krugman ’94 Outdated




Not outdated -- economic theories still apply.


Krugman 11 – joined The New York Times in 1999 as a columnist on the Op-Ed Page, professor of Economics and International Affairs at Princeton University, became the Ford International Professor of Economics at MIT, one of the founders of the "new trade theory," American Economic Association awarded him the John Bates Clark medal (Paul, “Competitiveness,” January 22, 2011, http://krugman.blogs.nytimes.com/2011/01/22/competitiveness/) // CB

But the idea that broader economic performance is about being better than other countries at something or other — that a company country is like a corporation –is just wrong. I wrote about this at length a long time ago, and everything I said then still holds true.* The hopeful interpretation of Obama’s embrace of the idea that he’s the CEO of America Inc. is that it might help fend off right-wing attacks on government action as a whole, helping him sell the need for public investment of various kinds. On the other hand, as Robert Reich says, this could all too easily turn into a validation of the claim that what’s good for corporations is good for America, which is even less true now than it used to be. All in all, it’s kind of sad. And the less said about Jeffrey Immelt’s vacuous op-ed, the better. *Side note: the usual suspects are going to look at the opening of this piece and say “Ha! Krugman used to think that unemployment benefits cause unemployment! He used to be down on Europe!” So, two points: UI can raise the unemployment rate at which inflation begins to rise — but that’s not our problem now; and over the 17 years since that article was published, a number of European countries have undertaken reforms that substantially improved their job performance.




Econ Leadership




Economic leadership fails -- US isn’t using it effectively, and a litany of domestic failures prevent it from being successful anyway.

Suominen, 7-6-12


[Kati, resident fellow at the German Marshall Fund of the United States in Washington, “America the Absent,” http://www.foreignpolicy.com/articles/2012/07/06/america_the_absent]

The release of another weak U.S. jobs report this Friday, July 6 -- which showed the economy adding only 80,000 jobs in June and the unemployment rate holding steady at 8.2 percent -- raises some serious red flags. It's just one of many signs these days that the world economy is once again on the brink of an abyss. Nearly four years after the collapse of Lehman Brothers, U.S. growth is flailing, central banks are racing to cut interest rates, and several European nations have plunged back into recession. Instead of powering the 21st-century world economy, export-dependent emerging markets remain hostage to the transatlantic economic morass. We should be out of this by now. The missing ingredient? U.S. leadership. In the 20th century, beginning with the creation of the Bretton Woods system in 1944, America's great contribution was to champion an economic paradigm and set of institutions that promoted open markets and economic stability around the world. The successive Groups of Five, Seven, and Eight, first formed in the early 1970s, helped coordinate macroeconomic policies among the world's leading economies and combat global financial imbalances that burdened U.S. trade politics. The International Monetary Fund (IMF) spread the Washington Consensus across Asia and Latin America, and shepherded economies in transition toward capitalism. Eight multilateral trade rounds brought down barriers to global commerce, culminating in the establishment of the World Trade Organization (WTO) in 1995. Meanwhile, a wave of bank deregulation and financial liberalization began in the United States and proliferated around the world, making credit more available and affordable while propelling consumption and entrepreneurship the world over. The U.S. dollar, the world's venerable reserve currency, economized global transactions and fueled international trade. Central bank independence spread from Washington to the world and helped usher in the Great Moderation, which has produced a quarter-century of low and steady inflation around the world. Globalization was not wished into being: It was the U.S.-led order that generated prosperity unimaginable only a few decades ago. Since 1980, global GDP has quadrupled, world trade has grown more than sixfold, the stock of foreign direct investment has shot up by 20 times, and portfolio capital flows have surged to almost $200 trillion annually, roughly four times the size of the global economy. Economic reforms and global economic integration helped vibrant emerging markets emerge: The "Asian Tigers" (Hong Kong, Singapore, South Korea, and Taiwan) that boomed in the 1980s were joined in the 1990s by the awakening giants of Brazil, China, and India. It was the United States that quarterbacked the play, brokering differences among nations and providing the right mix of global public goods: a universal reserve currency, an open-trade regime, deep financial markets, and vigorous economic growth. Trade liberalization alone paid off handsomely, adding $1 trillion annually to the postwar U.S. economy. Talk about American decline notwithstanding, the economic order created by the United States persists. In fact, at first blush, it appears to have only been reinforced in the past few years. New institutions such as the G-20, a forum for the world's leading economies, and the Financial Stability Board, a watchdog for the international financial system, are but sequels to U.S.-created entities: the Group of Five and the Financial Stability Forum. Investors still view America as a financial safe haven, and the dollar remains the world's lead currency. Open markets have survived, and 1930s-style protectionism has not materialized. The WTO continues to resolve trade disputes and recently welcomed Russia as its 154th member, while the mission and resources of the Bretton Woods twins -- the World Bank and IMF -- have only expanded. No country has pulled out of these institutions; instead, emerging nations such as China and India are demanding greater power at the table. Countries have opted in, not out, of the American-led order, reflecting a reality of global governance: There are no rival orders that can yet match this one's promise of mutual economic gains. Still, while the American order is peerless, it is also imperiled. The deepening European debt crisis, discord over national policies to restore growth, and the all-but-dead Doha Development Round of WTO negotiations speak to the failures of the global economy's existing instruments to manage 21st-century challenges. Instead of coordinating policies, leading countries are trapped in a prisoner's dilemma, elbowing for an edge in world trade and jockeying for power on the world stage. Tensions simmer over issues such as exchange-rate manipulation, capital controls, creeping protectionism, and financial nationalism. Right at the moment when we most need to shore up the troubled global economic order, America -- the architect of this very order -- is failing to lead. Even as the United States remains pivotal to global growth, U.S. corporations -- the engines of the American economy -- are stifled by taxes, regulations, and policy uncertainty. Gaping fiscal deficits in the United States are undermining the dollar, exacerbating trade deficits, and undercutting U.S. economic dynamism and credibility in world affairs, but political posturing has obstructed the country's path to solvency. Earlier this week, the IMF warned that if political deadlock takes America to the so-called fiscal cliff of automatic tax hikes and spending cuts in January 2013, it could have a devastating impact on the U.S. and world economies. No wonder America's image as the global economic superpower is receding around the world. Europe's travails, meanwhile, are reducing U.S. companies' exports and overseas profits, threatening America's recovery. And yet Congress has balked at boosting the IMF's resources to fight the eurozone crisis while the Obama administration has deflected responsibility, framing the crisis as Europe's to manage. It has fallen to countries such as Brazil, China, India, Mexico, and Russia to instead build the firewall that will shield the rest of the world from Europe. The welcome momentum in negotiations between the United States and Pacific Rim countries on the Trans-Pacific Partnership free trade agreement does not undo over three years of drift in U.S. trade policy that has jeopardized the very global trading system that the United States built and powered in the postwar era. The only trade deals that the Obama administration has passed -- with Colombia, Panama, and South Korea -- were launched and negotiated by the Bush administration. The world is now facing a triple threat of global economic instability, divisions among top powers, and a global leadership vacuum. This perfect storm could produce a world disorder of mercurial financial markets, widening global imbalances, spreading state capitalism, and beggar-thy-neighbor protectionism -- a scenario with a sorry past and few safe exits. In the late 1940s, a new world order arose because of American strength, vision, and leadership, not because global governance was in vogue. Leadership was never easy: Resistance from allies, protectionist pressures at home, and resource-draining wars all stood in the way. But capitalism spread, trade and financial markets were liberalized, and emerging-market crises were defeated. Global economic integration forged ahead. Today, American leadership is again essential. China prioritizes mercantilism over multilateralism, and emerging nations have yet to fully step up to the plate when it comes to global governance, while Europe and Japan are neither able nor willing to lead. In placing their faith in multilateralism, liberal institutionalists often fail to realize that the world economic order is built on American primacy and power, and Washington's willingness to project it. To lead abroad, the United States must reform at home by imposing ironclad fiscal discipline, cutting taxes and red tape for businesses, and locking in long-term policies -- summoning the private sector to reform schools and rebuild infrastructure, for instance -- that harness the productivity of America's future generations. Abroad, the United States needs to focus on pre-empting instability and integrating the global economy. It should push the IMF to address financial risks before they mushroom into catastrophes, revise the multilateral trade regime to allow for fast deals among a critical mass of members rather than agonizing, decade-long talks requiring the consent of the full membership, and work toward unfettered global financial markets -- all the while deepening access to U.S. goods, services, and investment around the world. A Trans-Pacific Partnership agreement and a transatlantic free trade pact are low-hanging fruits that can jump-start global growth without any new stimulus dollars. The quintessential challenge facing U.S. policymakers is to convince other nations to buy into a rules-based order rather than respond to the siren calls of currency wars and capital controls. For example, with most emerging economies uneasy about Beijing's trade and foreign policies, Washington must incentivize others to take the high ground and strengthen investor protections, enforce intellectual property rights, and adhere to trade rules. With others playing by the rules of the game, a misbehaving China would be turned into a pariah. A stable, integrated, and growing world economy serves our national interests. But such a world is America's to make.

Resource Wars




No resource wars -- scarcity doesn’t cause war.


Victor 08-a professor of law at Stanford Law School and the director of the Program on Energy and Sustainable Development. He is also a senior fellow at the Council on Foreign Relations, where he directed a task force on energy security. A frequent writer on natural resources policy(David G., “Smoke and Mirrors”, The National Interest, January 2, 2008, http://nationalinterest.org/article/smoke-and-mirrors-1924)//sjl

MY ARGUMENT is that classic resource wars-hot conflicts driven by a struggle to grab resources-are increasingly rare. Even where resources play a role, they are rarely the root cause of bloodshed. Rather, the root cause usually lies in various failures of governance. That argument-in both its classic form and in its more nuanced incarnation-is hardly a straw man, as Thomas Homer-Dixon asserts. Setting aside hyperbole, the punditry increasingly points to resources as a cause of war. And so do social scientists and policy analysts, even with their more nuanced views. I've triggered this debate because conventional wisdom puts too much emphasis on resources as a cause of conflict. Getting the story right has big implications for social scientists trying to unravel cause-and-effect and often even larger implications for public policy. Michael Klare is right to underscore Saddam Hussein's invasion of Kuwait, the only classic resource conflict in recent memory. That episode highlights two of the reasons why classic resource wars are becoming rare-they're expensive and rarely work. (And even in Kuwait's case, many other forces also spurred the invasion. Notably, Iraq felt insecure with its only access to the sea a narrow strip of land sandwiched between Kuwait on one side and its archenemy Iran on the other.) In the end, Saddam lost resources on the order of $100 billion (plus his country and then his head) in his quest for Kuwait's 1.5 million barrels per day of combined oil and gas output. By contrast, Exxon paid $80 billion to get Mobil's 1.7 million barrels per day of oil and gas production-a merger that has held and flourished. As the bulging sovereign wealth funds are discovering, it is easier to get resources through the stock exchange than the gun barrel.



Resource wars are highly unlikely and never escalate.

Salehyan, ‘8


[Idean, Prof. Pol. Sci. -- North Texas, Journal of Peace Research, “From Climate Change to Conflict? No Consensus Yet”, 45:3, Sage, DOI: 10.1177/0022343308088812]

A few caveats are in order here. It is important to note, again, that the most severe effects of climate change are likely to be felt in the future, and the future is inherently uncertain.4 While fundamental shifts in the environment are not inconceivable, our best bet for predicting what is to come is to look at what has transpired in the past. Since it is frequently argued that climate change will lead to resource scarcities and exacerbate inequality, it is possible to draw upon past evidence regarding these factors to develop a sense of how conflicts might unfold given changes in the Earth’s atmosphere. Additionally, I do not take issue with the claim that climate change will present considerable challenges for human societies and ecosystems more generally. Humanitarian crises stemming, in part, from climate change have the potential to be severe, and steps must be taken quickly to attenuate such contingencies. Rather, my purpose here is to underscore the point that environmental processes, by themselves, cannot explain why, where, and when fighting will occur; rather, the interaction between environmental and political systems is critical for understanding organized armed violence. First, the deterministic view has poor predictive power as to where and when conflicts will break out. For every potential example of an environmental catastrophe or resource shortfall that leads to violence, there are many more counter-examples in which conflict never occurs. But popular accounts typically do not look at the dogs that do not bark. Darfur is frequently cited as a case where desertification led to food scarcity, water scarcity, and famine, in turn leading to civil war and ethnic cleansing.5 Yet, food scarcity and hunger are problems endemic to many countries – particularly in sub-Saharan Africa – but similar problems elsewhere have not led to large-scale violence. According to the Food and Agriculture Organization of the United Nations, food shortages and malnutrition affect more than a third of the population in Malawi, Zambia, the Comoros, North Korea, and Tanzania,6 although none of these countries have experienced fullblown civil war and state failure. Hurricanes, coastal flooding, and droughts – which are all likely to intensify as the climate warms – are frequent occurrences which rarely lead to violence. The Asian Tsunami of 2004, although caused by an oceanic earthquake, led to severe loss of life and property, flooding, population displacement, and resource scarcity, but it did not trigger new wars in Southeast Asia. Large-scale migration has the potential to provoke conflict in receiving areas (see Reuveny, 2007; Salehyan & Gleditsch, 2006), yet most migration flows do not lead to conflict, and, in this regard, social integration and citizenship policies are particularly important (Gleditsch, Nordås & Salehyan, 2007). In short, resource scarcity, natural disasters, and long-term climatic shifts are ubiquitous, while armed conflict is rare; therefore, environmental conditions, by themselves, cannot predict violent outbreaks. Second, even if local skirmishes over access to resources arise, these do not always escalate to open warfare and state collapse. While interpersonal violence is more or less common and may intensify under resource pressures, sustained armed conflict on a massive scale is difficult to conduct. Meier, Bond & Bond (2007) show that, under certain circumstances, environmental conditions have led to cattle raiding among pastoralists in East Africa, but these conflicts rarely escalate to sustained violence. Martin (2005) presents evidence from Ethiopia that, while a large refugee influx and population pressures led to localized conflict over natural resources, effective resource management regimes were able to ameliorate these tensions. Both of these studies emphasize the role of local dispute-resolution regimes and institutions – not just the response of central governments – in preventing resource conflicts from spinning out of control. Martin’s analysis also points to the importance of international organizations, notably the UN High Commissioner for Refugees, in implementing effective policies governing refugee camps. Therefore, local hostilities need not escalate to serious armed conflict and can be managed if there is the political will to do so.
Empirics prove.

Salehyan 07-PHD from UCSD in Political Science, now a professor of Politcal science at the University of North Texas(Idean, “The new myth about climate change”, foreignpolicy.com, August 14, 2007, http://www.foreignpolicy.com/articles/2007/08/13/the_new_myth_about_climate_change)//sjl

Furthermore, if famine and drought led to the crisis in Darfur, why have scores of environmental catastrophes failed to set off armed conflict elsewhere? For instance, the U.N. World Food Programme warns that 5 million people in Malawi have been experiencing chronic food shortages for several years. But famine-wracked Malawi has yet to experience a major civil war. Similarly, the Asian tsunami in 2004 killed hundreds of thousands of people, generated millions of environmental refugees, and led to severe shortages of shelter, food, clean water, and electricity. Yet the tsunami, one of the most extreme catastrophes in recent history, did not lead to an outbreak of resource wars. Clearly then, there is much more to armed conflict than resource scarcity and natural disasters.

Resource Wars – Food




Famine doesn’t cause war -- it makes people too hungry to fight.

Barnett, ‘00


[Jon, Australian Research Council fellow and Senior Lecturer in Development Studies @ Melbourne U. School of Social and Environmental Enquiry, Review of International Studies, “Destabilizing the environment-conflict Thesis”, 26:271-288, Cambridge Journals Online]

Considerable attention has been paid to the links between population, the environment and conflict. The standard argument is that population growth will overextend the natural resources of the immediate environs, leading to deprivation which, it is assumed, will lead to conflict and instability either directly through competition for scarce resources, or indirectly through the generation of ‘environmental refugees’. For example, according to Myers: ‘so great are the stresses generated by too many people making too many demands on their natural-resource stocks and their institutional support systems, that the pressures often create first-rate breeding grounds for conflict’.37 The ways in which population growth leads to environmental degradation are reasonably well known. However, the particular ways in which this leads to conflict are difficult to prove. In the absence of proof there is a negative style of argumentation, and there are blanket assertions and abrogations; for example: ‘the relationship is rarely causative in a direct fashion’, but ‘we may surmise that conflict would not arise so readily, nor would it prove so acute, if the associated factor of population growth were occurring at a more manageable rate’.38 It is possible though, that rather than inducing warfare, overpopulation and famine reduce the capacity of a people to wage war. Indeed, it is less the case that famines in Africa in recent decades have produced ‘first rate breeding grounds for conflict’; the more important, pressing, and avoidable product is widespread malnutrition and large loss of life.




Trade




Trade is resilient.


Chicago Tribune, ‘8

[“After Doha,” 8-9, http://www.chicagotribune.com/news/opinion/chi-0809edit2aug09,0,7859688.story]



Even people involved daily in ongoing international trade aren't reacting much differently. They're buying and selling goods across borders and oceans, dealing with the logistical complications of high oil prices, currency fluctuations, the price of labor, unit cost, quality control and the like. This doesn't mean that a successful completion of the Doha talks wouldn't have mattered. It's a big deal that for the first time in half a century, global trade talks have failed. The Doha talks—seven years in negotiation—would have slashed farm subsidies and further opened markets for manufactured goods and services. But with or without Doha, countries will continue to trade aggressively. The benefits and opportunities are just too great. International trade expanded from 40 percent of the world economy in 1990 to more than 55 percent by 2004, according to the World Bank. The fastest growing countries—among them China, Vietnam, Ireland—were those that expanded their trade. Countries left behind, including much of sub-Saharan Africa, traded the least. Even with the current slowdown in the international economy, the WTO predicts that trade will still grow 4.5 percent this year. (That will be down from 8.5 percent in 2006 and 5.5 percent last year.)

Trade doesn’t solve war.

Gelpi & Greico, ‘5


[Christopher, Associate Professor of Political Science -- Duke, Joseph, Professor of Political Science -- Duke, “Democracy, Interdependence, and the Sources of the Liberal Peace,” Journal of Peace Research]

As we have already emphasized, increasing levels of trade between an autocratic and democratic country are unlikely to constrain the former from initiating militarized disputes against the latter. As depicted in Figure 1, our analysis indicates that an increase in trade dependence by an autocratic challenger on a democratic target from zero to 5% of the former's GDP would increase the probability of the challenger’s dispute initiation from about 0.31% to 0.29%. Thus, the overall probability of dispute initiation by an autocratic country against a democracy is fairly high (given the rarity of disputes) at 23 nearly .3% per country per year. Moreover, increased trade does little or nothing to alter that risk. Increases in trade dependence also have little effect on the likelihood that one autocracy will initiate a conflict with another. In this instance, the probability of dispute initiation remains constant at 0.33% regardless of the challenger’s level of trade dependence.

Trade – Protectionism




No protectionism and no impact on trade -- multiple international checks.

Dadush et al., ‘11


[Uri, senior associate and director in Carnegie’s new International Economics Program, currently focuses on trends in the global economy and the global financial crisis, previously served as the World Bank’s director of international trade and before that as director of economic policy. He also served as the director of the Bank’s world economy group, leading the preparation of the Bank’s flagship reports on the international economy, Shimelse Ali, economist, Carnegie’s International Economics Program, Rachel Esplin Odell, junior fellow in Carnegie’s Asia Program, Carnegie Endowment for International Peace, “Is Protectionism Dying?”, May, http://www.carnegieendowment.org/files/is_protectionism_dying.pdf]

Despite a limited increase in the incidence of protectionist measures during the recent financial and economic crisis, the effects on global trade appear small—the world, remarkably, did not resort to protectionism. In addition to the concerted stimulus measures, financial rescues, and the strengthening of lender-of-last-resort facilities that restricted the duration and depth of the economic downturn, the World Trade Organization’s disciplines, enforceable through its dispute settlement mechanism, no doubt played an important role in staving off trade protection. But this is only one part of the story. The increased resistance to protectionism is the result of a complex, mutually reinforcing set of legal and structural changes in the world economy that have made a return to protection more costly and disruptive and have established new vested interests in open markets. These changes include: • National disciplines: Along with autonomous liberalization and a generally robust rule of law in the largest trading countries—which improve the confidence of importers and exporters—national trade tribunals help prevent protectionism by providing a mechanism whereby individual firms can contest protectionist measures that impact their company. Many national governments have also developed explicit or implicit mechanisms for countering protectionism and ensuring that trade policy reflects the general interest. • Regional and bilateral agreements: In addition to codifying further tariff reductions, regional trade agreements—now covering over half of world trade—contain provisions establishing dispute settlement mechanisms that parties can use to contest violations of the agreement and thereby defend against protectionism. Furthermore, such agreements have often established regular high-level dialogues on trade disputes, treaty implementation, and further liberalization, providing a mechanism for resolving serious violations of the agreement even if its formal juridical mechanisms are not utilized. • “Facts on the ground”: The political resistance to backsliding on liberalization is stronger because trade has become more prevalent and inextricably woven into production and consumption patterns. The change in the political economy of protectionism is manifested in the increased interest of retailers and consumers in imports, the internationalization of production, and the rise of intrafirm trade. Limiting trade in any one sector not only hurts those consumers, retailers, and firms that depend on imports for inputs, but also has repercussions for firms that operate both vertically (within a sector) and horizontally (across sectors) that depend on complex global production chains.

Protectionism is not relevant to war -- other factors outweigh.


Hulsman et al., ‘3

[John, PhD, Research fellow in European affairs at the Heritage Foundatiion’s Davis Institute, Joshua Bridwell and Eric Hamilton, “The Myth of Interdependence,” August 20, http://nationalinterest.org/article/the-myth-of-interdependence-2412]



As realization of this phenomenon increases, it is disturbingly common for analysts to develop false conclusions based upon a superficial understanding of globalization. Perhaps the most prevalent and beguiling mirage of all is the notion of a universal "interdependence." Implicit in the arguments of interdependence proponents is the premise that interdependence affects all nations to roughly the same extent --that it acts as a blanket phenomenon, restraining all that are involved to the same degree. Clearly this is not true. Consider this hypothetical. Would Australian foreign policy have been affected if it had strenuously opposed America's efforts in Iraq? Would Canberra have been likely to abrogate the ANZUS treaty because of its people's opposition to the Iraq war? Hardly, as Australia undoubtedly benefits from the American military alliance serving as life insurance in the volatile Asian region. Would it be likely to impose an embargo on the U.S.? Nonsense, as it greatly benefits from trade with America. In fact the opposite is true: it has long been a goal of Australian foreign policy to secure a free trade agreement (FTA) with Washington --Iraq war or no. Would Australia refuse to continue closely sharing intelligence with America? Impossible, as the Bali bombing illustrated that Canberra is a major target of Al-Qaeda, along with the United States. Or would certain Australian diplomats simply snub Americans at cocktail parties? For in the end, that is what "disapproval" with America often amounts to. While interdependence does mean that there is always mutual vulnerability, in the case of the U.S. and Australia (and indeed in every case), this is not the salient feature of the relationship. Rather, Australia's far greater dependence on the U.S. conditions foreign policy decision-making at the highest levels --but not necessarily the other way around. The Wilsonian habit of misunderstanding the nature of interdependence is far from an esoteric error. For despite what many foreign policy practitioners believe, policy outputs flow naturally from first principle intellectual assumptions. By overrating the universal impact of interdependence theory, Wilsonians naturally see the present order as fundamentally multipolar, and devise policies to fit this ‘reality.' Unfortunately, the real world does not correspond to their assessment, thus dooming their policy initiatives to failure. In the turbulence of a changing world order, one particular paradigm has been almost totally neglected. Ironically, we have abandoned realism-the one doctrine that can best navigate our role in the uni-multipolar world we find ourselves in. For, if we hold that the attempt to remake our global history of conflict and chaos into a hopeful future of peaceful order is but an illusion, then we must accept the anarchic nature of our world and attempt to live in it as best we can. Specifically, we must create policies that recognize and place our national interest above all other priorities. This reality is largely reinforced by the current nature of interdependence. The Wilsonian view suggests it binds all states with equivalent strength, while the realist outlook allows that interdependence in the economic arena is very much part and parcel of the modern world, but does not in fact affect all states equally. As illustrated by the U.S.-Australia hypothetical, a power hierarchy characterizes interdependence. Countries that possess the preponderance of power are able to significantly influence the policy outcomes of weaker states (assuming such states do not perceive overriding security/geopolitical concerns). Such will it ever be.




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