Thursday, November 8, 2007

End war by raising the opportunity cost of fighting

NY Times reports that war is unlikely in Kurdistan (northern Iraq) because they are making too much money.

...despite bellicose Turkish threats, an all-out armed conflict may be less likely than is widely understood: the growing prosperity of this region is largely Turkish in origin.

In other words, while Turkey has been traditionally wary of the Kurds of Iraq, it is heavily invested here, an offshoot of its own rising wealth. Iraqi Kurdistan is also a robust export market for Turkish farmers and factory owners, who would suffer if that trade were curtailed.

This parallels what happened in Ireland: low taxes increased prosperity and now everyone is too busy making money to fight.

thanks to Laura for pointing this out.


  1. Huh? Ireland's economic advance was based on massive subsidies from the EU. Northern Ireland, where most of the fighting occured based it's economy on massive subsidy from the rest of the UK.

    Why do you pick out low taxes (which only occured for short intervals) as determinant?

  2. I think that you have probably got the causation wrong: when people decided to coordinate, prosperity increased. Prosperity is diagnostic of reducing tension, but is not causal.

  3. Tom Friedman's 2006 update of his 2005 book "The World is Flat" describes this phenomenon as "The Dell Theory of Conflict Prevention"

    The theory states: "No two countries that are both part of a major global supply chain, like Dell's, will ever fight a war against each other as long as they are both part of the same global supply chain. Because people embedded in major global supply chains don't want to fight old-time wars anymore. They want to make just-in-time deliveries of goods and services-and enjoy the rising standards of living that come with that."