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Does the Coase theorem hold even for Saddam Hussein?
Less than a month before the U.S. invasion of Iraq, Saddam Hussein signaled that he was willing to go into exile as long as he could take with him $1 billion and information on weapons of mass destruction, according to a report of a Feb. 22, 2003, meeting between President Bushand his Spanish counterpart published by a Spanish newspaper yesterday.
Here is the story; admittedly it is hard to judge the truthfulness of this report but in probabilistic terms it does not raise my estimate of whether the Coase theorem applies to President Bush.
Posted by Tyler Cowen on September 27, 2007 at 07:53 AM in Political Science | Permalink
Comments
Even if this offer was taken up by Bush, the US would likely have faced the same problems in governing the country as it facing toady. Remember that the actual war with Iraqi forces was quite smooth and over in a matter of days.
Posted by: sa at Sep 27, 2007 8:40:01 AM
Actually, the problems might have been worse; the insurgency could have been substantially better funded.
In any event, exile was not a solution that would work, given the changes in international human rights law and universal jurisdiction; Saddam could not have escaped punishment for his violations of international human rights law.
Posted by: Thomas at Sep 27, 2007 9:02:39 AM
According to Coase himself, the "Coase Theorem" does not hold for anything in the real world. It only holds where transacting is costless, and transacting in the real world is never costless.
Posted by: dan cole at Sep 27, 2007 9:12:43 AM
The first two authors assume that Iraq without Saddam would have required occupation, and could not have, say, been a deal with the remaining Baath party. This alternate history stuff is tricky ...
Posted by: odograph at Sep 27, 2007 9:22:19 AM
What "information on WMD" did he want to keep? I can imagine a Coasian monetary deal, but I can't imagine the US agreeing to leave him with any transferable WMD technology, or him thinking the US would.
That detail makes me think this is either made up, or just an attempt to stall for time designed to prevent the US from accepting it.
Posted by: DK at Sep 27, 2007 10:44:21 AM
What "information on WMD"? I am shocked, I am shocked... I read in the New York Times Saddam had no WMD!!!
Posted by: Tobia Mill at Sep 27, 2007 10:49:12 AM
I'm with TM - the question of why Saddam would want to keep his WMD information is far more interesting than the application of the Coase theorem.
Posted by: Rich Berger at Sep 27, 2007 12:30:02 PM
Ya mean we didn't even have to put up the billion dollars?
Bush should go back to the Harvard Business School and teach this as a case study.
Posted by: John Kunze at Sep 27, 2007 1:18:36 PM
I can't understand how the Coase Theorem got into this, but the bit about the WMD information has to be a blow to the 'Bush lied us into war' meme.
Posted by: Patrick R. Sullivan at Sep 27, 2007 1:25:45 PM
The Coase Theorem says that if someone harasses me, I'll pay them to away.
I never do.
If you don't understand this, congratulations: you're an economist.
Posted by: Person at Sep 27, 2007 1:27:51 PM
Oops, that should be "pay them to go away."
I guess non-economists might have misunderstood that too ;-)
Posted by: Person at Sep 27, 2007 2:18:04 PM
"...but the bit about the WMD information has to be a blow to the 'Bush lied us into war' meme."
Because Saddam Hussein would never bluff about WMD in hopes of raising his "value" or world perception of his power?
Yes, what a death-blow to the WMD skeptics.
DU
Posted by: The Mechanical Eye at Sep 27, 2007 3:18:41 PM
There were rumors that Saddam was considering this and a lot of famous people lobbied him to this end. However at the end of the day, he preferred to go down in history as the man who stood up to Western aggression rather than the man who was willing to accept a bribe to resign his office. Recall in Bush's final speech he used terms that if he left Iraq their would be no invasion. Presumably Saddam would have been very wealthy in exile.
Posted by: HCP at Sep 27, 2007 4:09:48 PM
in probabilistic terms it does not raise my estimate of whether the Coase theorem applies to President Bush.
Shrug. You should try reading the article. Bush in the discussion with Aznar also strongly indicated that he would like such a possibility because he wanted to avoid war, and mentioned it because (he claimed) he wanted it to happen.
Because Saddam Hussein would never bluff about WMD in hopes of raising his "value" or world perception of his power?
Yes, what a death-blow to the WMD skeptics.
He did not say it was a death-blow to the WMD skeptics, only to those who believed that Bush "lied us into war." If you believe that "lied us into war" includes "honestly believed that Hussein had WMDs, but was wrong," then, yeah, those would be the same thing. However, I believe that there is a distinction between lying and being mistaken.
Posted by: John Thacker at Sep 27, 2007 10:43:43 PM
This is an interesting application of Coase.
My reading of the situation is that it was not efficient for such a deal to go through. In other words, there were large welfare gains from Saddam being executed.
The Coase Theorem says that wouldn't have mattered whether Saddam had the legal right to stay alive, or whether we had the legal right to kill him.
Coasean reasoning says that if had the legal right to go into exile and not be killed, then we could have bribed him not to do so, and that he would have accepted such a bribe. [Remember - if his death is efficient, our gains from his death exceed his losses].
On the other hand, if we had the legal right to kill him, there would be no bribe sufficiently large that he could pay us to stop us executing him.
So, he was doomed either way.
On the other hand, if killing him wasn't efficient, then the report suggests that Saddam had it all wrong. He should have been offering to pay *us* to keep him alive, not the other way around as the report suggests.
If Saddam had read Coase, he might have known this and could still be alive today.
Poor old Saddam.
Posted by: Alex Robson at Sep 28, 2007 1:14:00 AM
Oh brother. Clearly none of the commenters here bothered to read
the Juan Cole report on this Spanish newspaper story. Cole
speculates that the WMD papers Saddam wanted to take out were ones
showing how various earlier administrations, including that of Bush
Sr., and Rumsfeld in the Reagan administration, had aided the Iraqi
development of "WMD," in particular chemical weapons used against
Iran (which we did, folks (and I put those " there because only
nukes are really weapons of mass destruction anyway)).
So, the point was for Saddam to protect himself with documents that
could be used to blackmail Bush et al, if they chose to come after
him. This is certainly more credible than the various fantastic
comments here somehow suggesting that there really were WMD after
all and that the "skeptics" somehow should be embarrassed.
Cole points out that if these charges against Bush are correct,
then he is indeed a war criminal deserving of far worse than
impeachment. For a billion bucks we could have avoided a million
dead (not to mention wasting a trillion or two bucks).
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