The Doug Noll Show

My guest today is Jay Lillie, international lawyer, author and speaker. Jay caught my attention with his ideas about developing freedom in oppressed countries through business. His thesis was that business creates freedom, not politics. Then Jay sent me a copy of his second novel Pacific Rebound, which I thoroughly enjoyed. Jay practiced with a large Wall Street law firm for many years as an international lawyer. He represented American companies in eastern and central Europe, Australia, New Zealand, and Asia. Over the years, Jay developed some ideas about business and freedom.Jay tell us how he represented an American pharmaceutical company in negotiations with the governments of Hungary and Czechoslovakia when those nations were still under the Russian thumb. He spent time behind the Iron Curtain, and got to know some very talented people well enough to see how much they envied the freedom hisclients had. In addition, he found time to take up writing. His first novel, Havana Passage Later, came about when he looked at Cuba and realized it was American law that was keeping us from doing the same there, Jay wrote essays and articles drawing the comparison to the fall of the Berlin Wall. It fell on deaf ears, so he put it in novel form – at least that was fun. That’s Havana Passage – Washington, Havana, and Miami, rather than Washington, Moscow, and Prague.

Jay has started businesses in Japan for U.S. clients and done years of work in Australia, New Zealand and Southeast Asia. He tell us that there’s not much better evidence for the notion that free markets breed individual freedom than in this area of the world. We talk about China as an emerging business nation. Jay observes that the Chinese have been very astute business people for hundreds, if not thousands of years. China will take its time if the people let it. It won’t happen overnight there as it did in Japan and Southeast Asia. The Chinese are born business oriented, but they have some very basic infrastructure to put in place over a vast population and geographical expanse.

One major constraint on freedom is poverty. The response to poverty varies from country to country. Populism is a common response, as shown by Hugo Chavez in Venezuela. Populism is the free market’s greatest enemy. Eventually, Populism decays into and an East Germany, or a Cuba, and the slide is already happening in Venezuela. Free markets will pull us out eventually if we concentrate less on giving things away and more on elementary and high school education. China, Korea, and other Asian cultures are way ahead of us in preparing the young for a successful future. If you want the details of how we’re losing the competition from fifth grade on, read Alan Greenspan’s new book, or walk across the campus at Caltech and MIT.

Jay and I talk about Cuba. A secret poll was taken in Cuba several years ago and somehow secreted out to New York. It asked ordinary Cubans to rank from a list what they wanted most in life. It included all the things you can imagine, like the right to vote, freedom of religion, freedom to travel, etc. By far the first choice among these people, who haven’t had a glimpse of liberty in 50 years, was being able to choose what they do to make a living. The awakening can be any form of business which an oppressed people experience first hand, but it’s they’re own small business effort that builds the infrastructure, and it’s impossible without freedom of choice. Tourism is probably the exception for businesses that help foment local industry in police states. There’s plenty of that in Cuba, but what they need are engineers, builders, inventors, accountants and entrepreneurs, on the ground in their community and providing a local template for success. (They already have plenty of lawyers.)

Doug’s guest is James Miskel, Ph.D., an international security expert working in the field of post-conflict peacemaking and peacebuilidng. Jim describes the evolution of international peacemaking as it evolved from the 1970s forward In the 1970s, most of the conflicts were between adjoining nations. Typically, the UN would broker a ceasefire and send in a multinational peacekeeping force to secure the borders of the two countries. The important element was that the peacekeeping force was present with the mutual consent of the warring parties. The primary role of the peacekeeping force was to assure that th terms of the ceasefire were maintained by all sides.

In the 1990s, peacekeeping evolved into nation building. The UN and other international groups began to assist war-torn countries to re-establish a civil society through the rule of law, civil administration of government, and government service infrastructure. In the mid-1990s, international peace missions become actively involved in the affairs of countries experiencing civil war or insurrection. Thus, the scope of peacekeeping and peace building expanded dramatically.

Jim describes some of the 16 current peacekeeping missions in place around the world. The largest peacekeeping force, 17,000 strong, is active in the Democratic Republic of the Congo. In total, there are 75,000 soldiers from the UN, NATO, the EU, and the African Union acting as peacekeepers around the world.

Much of the civil wars and civil insurrections of the past 20 years, particularly in Africa, have been caused by unscrupulous leaders who have stirred up tribal and clan hatreds. In many cases, these animosities did not exist beforehand. These have been difficult situations because civil society has been nearly destroyed. Thus, post-conflict reconstruction is a major focus of peace building. The situations are additionally challenging because the new government typically has little expertise in the rule of law, the judiciairy is non-existent, and therefore, contract and property rights are nonexistent. Without assurances of contract and property rights, foreign investors are unwilling to enter post-conflict countries. And, Jim says, without critical foreign investment, local economies cannot grow.

Jim says that the great danger of the 21st century may be in the mega-cities developing in near Asia. Some urban populations are nearing 15 to 20 million people. Most of the population growth is coming from migration, not from births. The cities themselves are unable to provide basic infrastructure services such as law enforcement, sanitation, and education. This forces the national governments to focus on the urban problems. The outlying regions are ignored, causing further lack of economic and civic development. As the regional and national governments fail to meet the needs of the urban citizens, the seed for further civil war, insurrection, terrorism, and unrest will be planted.