An Economist’s Case Against an Interventionist Foreign Policy
Outside Commentary, Outside Analysis, Iran, Iraq, Afghanistan

David Henderson is a research fellow with the Hoover Institution and an associate professor of economics in the Graduate School of Business and Public Policy at the Naval Postgraduate School. Henderson is neither liberal or conservative, though the natural inclination would be to align him more with the conservative camp, if for no other reason than that he is a free market economist who works for the Hoover Institute, a well-known conservative think tank.
I say this, because in reading David’s article below, a skeptic might be inclined to think he’s just another typical “anti-American” liberal (not me, but there are folks who feel that way). I can assure you — and David Henderson’s credentials can back me up — that this is not the case. If his Hoover Institute affiliation isn’t enough to make that point, a look at his book The Joy of Freedom would seal the deal. Here’s a link to reviews of that book — a glowing tribute to the free market and limited government.
Anyway, on to the piece, which highlights a handful of examples of how U.S. intervention in the affairs of other nations has had unfortunate unintended consequences– for the U.S. Meaning that often when we venture abroad to try and solve what appears to be a problem for the U.S., we set in motion an even bigger problem that we will have to deal with at some point.
An Economist’s Case Against an Interventionist Foreign Policy
David R. Henderson
Antiwar.com
November 14, 2005
I’ve been an economist over half my life. The more I’ve learned, the more I’ve seen what a powerful insight economist Ludwig von Mises had over 60 years ago when he pointed out that virtually every government intervention leads to unintended consequences that then lead to further interventions. So, for example, Nixon’s 1973 price controls on gasoline caused us to waste hundreds of millions of dollars in time lining up for gas. That led the U.S. government to dictate the fuel economy of cars. The fuel economy laws caused auto companies to make lighter cars, causing a few extra thousand deaths a year. (For more on this, see Chapter 2 of my book The Joy of Freedom: An Economist’s Odyssey.) The gasoline lines also caused people to be more sympathetic to intervening in the Middle East.
In foreign policy also, when government intervenes, it creates problems that it tries to solve by intervening further. Take Iraq… please, as the late Henny Youngman would have said. How did we get to the point where the Bush government invaded Iraq? Let’s take a trip down memory lane.
In 1963, the CIA helped a young Iraqi ally who, along with other plotters, overthrew General Adbul Qassim. You may have heard of this young Iraqi ally; he’s been in the news lately. His name is Saddam Hussein. Five years later, the CIA backed another coup that made Hussein deputy to the new military ruler. Then, in 1979, Hussein took his turn as dictator.
Hussein proceeded to wage a long and costly war on Iran. Although many people, correctly, point to this war as evidence of Hussein’s evil, they rarely mention one highly relevant fact: the Reagan administration supported this invasion with billions of dollars in export credits and with satellite intelligence. Saddam Hussein was evil for initiating and fighting that war. How, then, should we evaluate the U.S. government officials who actively supported him?
But my main purpose here is not to question the morality of war. Rather, it is to point out how one intervention leads to another. The U.S. government supported a man who eventually took over Iraq’s government and who later became, in the eyes of the U.S. government, the enemy. The U.S. government’s interventions of the 1960s led, indirectly but inexorably, to its current intervention.
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