How business, doctors and journalists prey on your food anxieties I

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Unbundling nations
Steve H . Hanke is a
professor of Appliad
Ecclomics al
TheJotns Hopkms
On+ers:ty In Baltimnre .
136
hlArMatieas hace been srorking oscrtime to
accommodate the inclusion of 20 nc«countries
in the past Five vears Most of thcse border
adjustments ImN e resulted from the dismcmbermcnt
of former communist countries . The
bloodv events in Chechm°a <strong>and</strong> Bosnia indicate
that the onbm,d!ing of the old cn :pire is far
ti'om over
. This trend is not limited to dze tormer communist
countries, howcvcr . Political separatism
is rampant in Canad-a, Mexico, India <strong>and</strong> _Afriean
countries . Fcen Europe, which is struggling
toward economic integration, Itarbors strong
sep-aratistmoaements in Spain, Inile, Belgium
<strong>and</strong> France .
The driving force behind most separatist
movemena is the dcsire or.' people to have a
reasonably homogenous population in their
general neighborhoods . In mosr parts of the
world, support for the "ntelting pot" is not
very, popular . Political sentiments faworing homogeneitv
ha% e alwavs been around . What's
changed siuce the end of the Cold R'ar is the
spread of democracq <strong>and</strong> eonsequentlr the
freedom to express political preferences . More
democt-acv is likclv to lead m more cotmtt-ies
<strong>and</strong> smaller ones .
It is sometimes said bv those %% ho embrace
the social planning paradigm that smnll couc
tries are disad%anmged . According to the social
planners, large countries can spread [he
costs ofpi.iblic goods-Iegal <strong>and</strong> monetan,
systems <strong>and</strong> the maintenance of national defensc-over
mam, taspayers . Conscyuetttlv,
the average cost of these goods for cach taxpayer
is lo«er in large countries, giring them an
edge over small cormtt-ies . That's the theotv . In
practice, howc%er, the ratio of e%oe~ditures
on public goods to gross national product is
uncorrelated with the size of a couantq . When
exposed to the light of da\, the economies of
scale argument just doesn't hold %caterOther critics of the small is beautiful n'end
in nations claim that manv new states-such as
the Baltic republics-are jus too smatl to be
economicallv viable . The evidcnce contradicts
this assertion . Historicallr- therc has been no
re!ation bcnwecn the growtlt or Ic\ cl of per capita
inCOme <strong>and</strong> the SiZL' of a COUntR', sshether
measured bv populatioti or area . Kenichi Ohmae's
recent book, The Eraei or"the Nation
Statr: The Rise af'Reftimtn! Ecnnamies, conclodes
that the fhture lies «'ith the small, t:ot the
argc, countrics . The Japanese managen .en[
guru supports his dicsis bv sho«ing that, in
toda~-'s glohalized markets, the E,tstest-gros~ing
counuries <strong>and</strong> regions arc actualhthe small
ones that are open to international trade .
Another specious argument that is thrown
up ugainst the estabiishment of small states is the
claim that tltec cannot prosper because of inadequatenatural
resource bases . This is nothing
ntore than em•iror.mental detetminism, Nehich
is dcarh~ \cronglteaded . There is no relationship
betrs'een economic performance attd the presenee
of natural resources %cithin a countn,'s borders
. Indeed, thedsian tigers <strong>and</strong> the citvstate
of Singapore hu% e been the most rapidhgroc
.'iug economics ocer the past 30 rears,
<strong>and</strong> tlte%' don't hare much in d1e wav of natural
resources . These economies e slee., taze ~' _n ~ w'r t at
the}' do well <strong>and</strong> then trade their goods for
contmuditics .
Prosperity doesn't ha~e much, ifanything,
to do with a counttl's size . To promote prosperin',
eren in countries with as fc%N as a million
inhabitants, the chicf ingredicnt is a good gocernmcnt
drat maintains sound monev, the rule
ofla«', open international trade <strong>and</strong> avoicis market
distortions such as escessis°e tax rates <strong>and</strong>
burdensome regulations . In sitort, it's stable,
market-tiicndlp institutions that proride the
necessartingrcdients for economic growth .
Thus it seems clear that the modern developments
ofglobalization <strong>and</strong> democratization
are likeh, to lead to more counMes, not fewer .
Some people think the
proliferation of new, small
countries is a step backward .
In fact it is a by-product of the
spread of economic <strong>and</strong>
political liberty .
These brcakma~states are not throwbacks but a
ware ofthe future, a bc-product of the spread
of economic <strong>and</strong> political libertt . But this
thought is politically incorrect in America,
where secession is a bad %lnrd . What else could
explain Presidcnt George Bush's infan.ous
"chicken I:ieN ~" address iu 1991 . in which he
pledged allegiance to the presenuuon of the
Soriet Union <strong>and</strong> lectured the Ukrainians on
the danger of "suicidal nationalism"? No
doubt President Clinton's flip-flopping on Bosnia
has been simiiarlv itttluenced by bad civics
lessons too uell learned .
Read the Declaration ofIndependence .If
secession kk as good for the colonists in 1776,
«ha is it had for Bosnians or Quebecois in
1995 : M
,: , . A _tKast1 4 .1995
2046673394 rl,
http://legacy.library.ucsf.edu/tid/agf97d00/pdf