Friday, March 02, 2007

Baghdad Economies

Omar Fadhil writes about his experience in Baghdad, which seems encouraging for now:
Operation “Imposing Law” continues in Baghdad. In contrast with previous operations to secure the city, this one is managing to not only keep the initial momentum, but the operation’s effects seem to be growing as well. . . .
While many Iraqi families are returning to the homes they once were forced to leave, there are also Baghdadis who are reopening their stores, ending the months they spent out of business because of violence and intimidation. Some streets that were virtually deserted a few months ago are slowly showing signs of returning to life.

The reopening stores even include some liquor shops! There are two stores on one street that I used to shop that closed early last year when their owners received death threats from the insurgents and the militias. Yesterday I walked through that street and, to my amazement, I found both stores open and back in business.

Of course the reopening of two liquor stores is no big deal by itself when we are talking about a city where thousands of businesses are still shuttered. I regard this as a further positive sign of a change in Baghdad’s daily life. It means that those shopkeepers are leaving their fear behind, and openly ignoring the threats of militias and insurgents who once ruled the streets and intimidated the people with threats and violence.
I was reading Hayek's The Use of Knowledge in Society recently for one of my courses, and this description of Baghdad's daily life reminds me of Hayek's definition of economy. On Hayek's definition "economy" pretty much refers to the economic life of an individual, and as such, I think it makes at least some sense to associate "economy" with the daily life as people live it and experience it.

The report here that daily economic life in Baghdad is more and more involved with the activities of daily commercial enterprises suggests that increasing numbers of people in Baghdad are feeling greater personal security. It seems to me this is sort of a "leading indicator" that government is being more effective at providing security.

Of course, the economies of daily life are dynamic and today's appearance of growing expectations of security may turn in the future to expectations of deepening insecurity. So, I also like Fadhil's conclusion:
The results of Operation “Imposing Law” are not magical. We didn’t expect them to be magical. The commanders didn’t claim they’d be when the Operation began. Still these latest developments are certainly promising. And let’s not forget that what has been achieved so far was achieved while many thousands of the new troops assigned to Baghdad are yet to arrive.

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