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A Curious Situation

February 19th, 2009 by Bill Brown · 5 Comments · Foreign Affairs

In researching African development for my entry on Ethiopia, I came across a startling fact about a neighboring country that I had never encountered before.

When one thinks of Somalia, one thinks of pirates, the civil war (and Clinton’s disastrous humanitarian intervention in 1993), extreme poverty, and anarchy. From the perspective of the Western democracies, Somalia’s situation is untenable and incomprehensible: it lacks a central government.

The remarkable fact that I mentioned earlier is that it’s doing as well as or better than ever. The dictatorship of Siad Barre was of a Stalinist, socialist bent so it’s not a particularly high threshold to meet, but conventional wisdom—at least among international aid types—is that the more state the better. According to their notions, Somalia should be utter chaos where life is “nasty, brutish, and short.”

But it’s not. Life expectancy is up five years since 1990, the number of physicians per 1000 people has improved, infant mortality is down 24%, and immunization rates are much higher. (Leeson, pp. 12, 16) Such statistics, however, don’t provide the color that makes the case so interesting.

For example, the telecommunications industry is thriving. Service is quick, cheap, and better than neighboring countries. Mobile communications is widely available and Internet cafés abound. Unfettered by regulation and licensing, nearly a dozen companies have sprung up to provide an essential service using the best available equipment at the lowest costs. There are no politically-enforced monopolies as customers are the final arbiters of success.

The airline sector has also markedly improved, going from one national firm with one airplane to 15 firms and 60 aircraft providing domestic and international service. The airlines build and maintain the airports, and are quite focused on safety.

Lacking a central bank, Somalis have taken to using the old currency as the medium of exchange. Since there are no legal tender laws, anyone can print the currency but it has to look exactly like the old Somaliland shilling or no one will accept it. After a period of hyperinflation following the state collapse, the value of the shilling eventually stabilized at the cost of the paper on which it was printed plus a small bit of profit—making a 1000 shilling note worth roughly 4¢. This is suitable for small transactions; larger transactions are conducted using American dollars.

Finally, education has expanded under anarchy. Primary and formal schools have increased dramatically, as have the number of universities. (Leeson, 26) The southern regions have established a network of private schools to standardize curriculum and provide teacher training. Schools are privately funded by tuition, which ranges from $3 to $15 per month depending on grade.

But Somalia is far from a free-market paradise. It ranks comparatively well with its sub-Saharan neighbors but objectively it is among the poorest nations on the planet. It was ravaged by the Barre regime, civil wars, and drought. While it has lacked a central government since 1991, it has not lacked attempts to install one by the international community. The Somalis-in-exile governments backed by soldiers provided by the United Nations or neighbors like Ethiopia or Kenya have failed to seize power, being repelled several times across the 18 years of statelessness by clan-based militias. The current government (elected in Kenya) controls several regions of Somalia but hasn’t survived the recent withdrawal of Ethiopian soldiers.

Justice and law comes from a complex customary law that has persisted since colonial times. It is based on the clan with justice meted out by clan elders and inter-clan disputes resolved by third-party clan elders. It works passably well at keeping some semblance of peace and order, but violence is still quite rampant. And tribal law tends to fracture society and perpetuate a Balkanized identity, anathema to a nationwide legal and security system.

If there’s anything that the Somali experience indicates, it’s that freedom has improved their lot in life. To the degree that they’ve eked out a better quality of life given the lack of formal institutions, they are to be commended. Most laudable is the vigor with which they cling to their newfound freedoms. If they can tie that freedom to individual rights as opposed to clan protections, they can light a fire in their economy that will be a beacon for the rest of Africa.

5 Comments so far ↓

  • Ryan Mulkerin

    I’ve heard many anarcho-capitalist cite Somalia as an example of an anarchist paradise or at least a potential one. I’ll stick with America for now with its largely definable legal structure, thank you.

  • Bill Brown

    Yes, I agree that the libertarians I found hailing Somalia turn a blind eye to the systemic and structural problems in that country. It is a morass of violence, largely due to foreign interventions but also because of the restitution-based system of justice—it allows the initiation of force if you’re willing to pony up some nominal recompense. Islam predominates and there was an attempt to create a central government through the Islamic Courts Union—repulsed through foreign intervention but indicative of the general state of things.

    What intrigues me most by the Somalia example is how it exemplifies the impractical, destructive effects of a vigorous state. It is not a free market—because there’s nothing keeping it free—but it has elements of the self-organization inherent in a free market. If its people can hold on to the freedoms they’ve secured for themselves and form a limited government based on individual rights to finish the security, they will be a truly compelling economic force. The prospects for that happening are quite bleak, given the nature of the Transitional Federal Charter which is an abomination.

  • Myrhaf

    I think the lesson here is that one rich, somewhat free capitalist nation — America — raises the standard of living of the rest of the world. Every scientific and technological advance America achieves eventually filters throughout the world after America’s wealth has made it inexpensive. People in Africa or the remotest, most backward islands of the South Pacific enjoy electricity, novocaine, penecillin, radiation treatments, cell phones, television, scientific advances in agriculture and countless other benefits because the west had the freedom to save and invest capital.

    If the current efflorescence of the state slows down America, the rest of the world will feel the pain even more.

  • madmax

    I agree with Myrhaf. I wonder just how many of the world’s nations that have some technology and wealth are Potemkin Villages. If America should fall what would be the fate of Europe or the Asian world? Would they be as wealthy? Or would they fall ever further? If American companies no longer produce or finance the production of Communication equipment will Somalia all of a sudden start manufacturing them? I think not.

    Also, Lew Rockwell and other anarchists constantly point to Somalia as a model for America to follow. Just Google Lew Rockwell + Somalia + Salad Days to see how ecstatic an anarchist gets over the place.

    Somali shows that if you remove some government intervention than you will get some economic progress. But without the stability and legal system and capital accumulation that only a stable rights-respecting gov’t can provide, a nation is doomed. Plus Somalia is heavily Islamic. That in and of itself dooms them in the end.

  • Bill Brown

    Myrhaf makes a great point–not the point I was trying to make. And another point I could’ve made is that to a statist America under Reagan (or, bizarrely, even Bush the Younger) looks a lot like Somalia.