Romancing The Afghan Dragon
By Aetius Romulous
10 November, 2009
Capitalism is based on the free exchange of goods between people, where each has a unique value he attaches to the good being traded. Where the trade is advantageous to both the exchange occurs, a market is made, and capitalism is created out of thin air.
Such is the market for heroin, a product of simple manufacture from the opium of the poppy plant, 70% of which is grown in the ideal conditions of Afghanistan. Heroin is a narcotic, a substance that is a personal and individual consumer good - it is consumed in very small amounts by individual end users based on the unique value each attaches to it. For a very substantial part of the human world, heroin has enough value to create a lively and fluid global market with a value added chain that stretches from a strung out junkie in Portland Oregon - the end user in more ways than one - to the father of 15 scraping out an existence under biblical conditions a half a globe, and many worlds away.
That value chain, the capitalism that allows it, and the inherent contradiction between free markets and liberal democracy, are at the root of the quagmire that is Afghanistan.
Afghanistan is the political creation of an era long past, with a climate and land suitable for almost nothing. Human beings have eked out enough of an existence to sustain a "civilization" there stretching back to the earliest days of recorded time. Sparsely populated and spread thin across the barren landscape, a pragmatic people got on by reaching an accommodation with reality. They still do.
The industrial era was a boon(doggle?) for humanity, but particularly cruel to the unassuming subsistence societies of Afghanistan. Competing western states - flush with infant nationalism's and burgeoning global interests - closed in and around the scattered tribal extended families of the Pashtu, Tajic, Uzbek, and a multitude of others. English aristocrats crayoned out borders to fit their scattered global interests, and Afghanistan the nation state was born, ephemeral as it was, existing only in the minds of those who wanted - or needed - to see it.
One of those British interests was the opening of the small Afghan opium trade to international markets. Properly irrigated, the plains of southern Afghanistan made for the perfect strategic location for Britain's huge opium business with the Far East, specifically China. The British found that it was possible to block Russian expansion, provide a land buffer to India, and use the otherwise useless real estate of Afghanistan for mercantilist design. It was thinking like that which sustained one of the world's truly great empires.
Thus was born in Afghanistan the opium business, a gift of free markets and capitalism. Still operating from fields established along British engineered irrigation systems, the opium trade has grown with international changes in global markets and geopolitics. Suffering from the loss of the Eastern markets at the close of the British era, and then arriving again at the opening of American markets in the American era, Afghanistan has clung doggedly to a pragmatic crop throughout. Opium alone can provide enough surplus for an Afghani farmer - bereft of capital - to feed and clothe himself and his family in near prehistoric conditions. Ideology, rhetoric, and politics never fed a single child, a deep set cultural understanding of the practical Afghani.
A full two thirds of the entire economy of modern Afghanistan is based on the opium business, every tribal family depending entirely on its markets in some way. Only once since its inception has the British installed opium system collapsed. In the decade preceding the rein of the Taliban, both opium market prices and Afghani hectares under production remained stable under the controlled market philosophy of the Soviets, who put the markets to work for the collective under a sweeping series of agrarian reforms. However, on the ascension of The Taliban regime, religious dogma collapsed the opium trade in Afghanistan by a full 97% by 2001, wiping out the Afghan economy in a single stroke. Dogma turned out to be a poor source of calories, and subsequently, the Taliban regime collapsed like a house of cards.
With the introduction of the world's greatest capitalists to Afghanistan, opium production not only returned, but thrived. Under the Americans, the combination of access to the massive US heroin market, a vicious "War on Drugs" that kept prices high, and international finance structures to handle the money, Afghani production soared from the anaemic Taliban era where only 8 thousand hectares were under production, to a prodigious 193 thousand hectares in 2007. Clearly a triumph for free markets and capitalism, as the best the Soviets could manage was 91 thousand hectares in 1999.
Left to its own devices, Afghanistan is a very stable place. It has a simple, agrarian market economy which functions seamlessly with its diffuse, decentralised tribal hierarchy. It is a system so simple it confounds the minds of western thinkers, where they attempt to think about it at all. More often than not they don't, and the simple existence of the Afghani is shackled with the problems of the complex western world. The humble Afghani can lay legitimate claim to the bitter epithet, "nasty, brutish, and short".
The nut of the thing is this; there is no Afghani "state", and what social cohesion that does exist, exists because of the agrarian nature of the Afghan economy and its most rational economic resource, opium. Afghanistan has two thirds of its national productive capacity invested in a sole commodity, and it is precisely because Afghanistan has this singular productive capacity, that markets exist to fill that capacity. Smack addled high school kids in Toledo (Spain or Ohio) keep the economy of Afghanistan afloat, and allow the meanest of existence for some 70 million of the planets most wretched people. A symbiotic convenience of human agony.
Onto this landscape walked a series of successive geopolitical interests - Empires, Communism, the Soviet Union, the Cold War, Fundamental Islam, democracy, and chaos. Not one of which is indigenous to the local populations, and not one of which understood the primitive simplicity of the local economies, or even cared to.
In Afghanistan, a farmer raises poppy plants over any other for three principle reasons. First, there is a ready and liquid market for the product. Second, opium is not capital intensive, and what capital is necessary is provided by each farmer's purchaser. Finally, opium is community intensive, and well suited to the social structure of the local tribal systems. Growing Poppy plants and harvesting their opium is a delicate, touchy feely process that is very labour intensive, not unlike rice production in many ways. Large Afghani clans - where schooling reduces the labour necessary to increase the family surplus - are ideally suited for the maximum production of opium.
The clan/farmers raise their crops and sell them to the regional "Strong Man" - sometimes warlord, sometimes politician, most times...both. The Strong Man guarantees the purchase of the farmer's entire marketable crop, provides seed capital and security, and demands in return loyalty and a price that will sustain the farmer and the system. Given their visceral connection to an entire regional population, these "drug lords" are de facto law and order in their regions. The "State", for its part has a different, western, democratic liberal set of laws. Under this set, drugs are illegal. This effectively nullifies the respect for these laws in the local Afghan communities. However, it also leaves the local strong men in monopoly position, and awards to that monopoly the entire contract for opium in his region.
Not coincidentally, the local Strong Man is rich, relative to his suppliers. That is because it is his job to shoulder the risk of getting that product out to market as efficiently as possible. Without air, rail, or sea available, prodigious quantities of heavy opium must be moved across hundreds of miles of the earth's most formidable, natural landscape. Once the cargo reaches the border at either Pakistan or Iran, the opium must transit a series of modern, strong state systems that both provide the demand and prosecute the supply at the same time. The penalty for drug trafficking in or through Iran is either death, or profit.
Afghani farmers earned about 1.2 billion dollars in 2002, a whopping 17% of the nations GDP, ostensibly the amount drug agents paid for harvested crop. Sadly, there are a lot of opium farmers on small family plots, and despite the size of the aggregate crop, it still means subsistence to the farmer. The drug lords are not in resources however - they are up on the next floor in distribution. There, a much smaller group collect a further 1.3 billion dollars, the lions share going to the strongest and the fittest.
The local Strong Man then, counts as a cost of doing business the employment of large, personal armies armed to the teeth with the latest in lethal weaponry. Each member of these armies is drawn from the landless and otherwise surplus population, and is entirely dependent on the Strong Man, for whom each would gladly die, as they often do. Each understands his place in the chain that holds the opium business together, each a member of a community that depends on their selfless instinct. Without the beneficent local drug lord/strong man, whole populations of tightly knit families will suffer and die.
In modern history, the Soviets tried to supplant this system with their own understanding of an efficient central state. The drug lords were pissed, and their farmers starving. A genuine rural, agricultural revolt began. Radical Islam took up the cause, as did regional interests in Pakistan, India, China, and Iran, as well as the interest of the United States of America. The Soviets wilted and left, the Americans not long after. This left Afghanistan an open battle ground between powerful drug lords, a shattered state, and a kaleidoscope of international proxies backed by regional interests for control of the national apparatus, such as it was. Among this group was the predominantly Pakistani based Pashtu Taliban, the eventual winners. They attempted to break the back of their indigenous rivals by destroying the opium business on which they depended. This meant even more agony for the now long suffering locals who loved Allah, but one supposes, loved food more.
Of course, the young Taliban regime had international relations issues as well, fundamental missteps which brought about their eventual downfall. The Afghani drug lords, who were beaten and sidelined when their international support went home, were only too happy to now get paid for doing it all over again. With virtually no popular support, the Taliban were strangers in a strange land, their collapse so swift and complete they were able to slip away in the night to their sole sponsor Pakistan, unbowed and undefeated.
The Afghani farmer, the local economy, and the greater part of the population were back in business.
State apparatus was never anything more than a heavily armed aristocracy in Afghanistan. A gilded tribe that traded access to the nations pathetic and few urban areas in exchange for bribes. With traditional pomp and circumstance, the old order was reinstalled, this time with the full backing and support of the western world. In exchange, the western world demanded liberal democracy, law, and order. As queer a set of ideas as that sounded to the humble subsistence farmer of Afghanistan, anything was alright with him as long as he could sell his crop and feed his children. Which of course he could not, according to the new state laws that made drugs illegal, and every farmer a criminal.
Neither the Soviets nor the Taliban were completely at ease with the raw capitalist system of the opium business, and were for the most part incorruptible. The Americans were a breath of fresh air. State democracy provided ample opportunities to "advance" individual interest, and American capitalism celebrated the accumulation of wealth. Drug lords and tribal chiefs were born to work a flakey system like democracy the world over, and in Afghanistan they soon learned to maximize their opportunities by bringing in record amounts of opium, and having themselves invited into government. Farm gate prices stabilized, and as the Americans turned their attention to Iraq, opium production settled in at over twice the rate of the Soviet era. Good Times.
Western interests, and American interests in particular, demand an Afghani state that is malleable and responsive to their needs. This requires at least the tacit support of the rural population, which is pretty much everybody in Afghanistan. That support was always tenuous, as it always is for foreign occupiers, and it is in the interest of the local opium system to keep it that way. Control of the sad nation's economy rests with the drug lords, regardless of any number of elections or federal departments. It is the nature of markets that they constantly strive to reduce externalities, and in the opium markets, that means open warfare where needs be.
Struggles continue between the American backed Northern Alliance of deadly Warlords, the corrupt apparatus of state that quickly shrank to the daylight hours of urban areas, the competing Warlords of the Taliban friendly Pashtu, American led Western forces, Pakistani supported groups of various stripe, and indigenous groups of local Afghani with little better to do than fight.
The failure of the west to control the economy of Afghanistan ensured the impossibility of advancing their political, moral, and cultural agendas. A gap the size of the Khyber Pass opened up between the economics and the politics, and into this gap flooded the competing geopolitical interests of the region. Specifically, a new generation of more practical Taliban, a reconstituted umbrella of loosely confederated interests, now much more willing to accept the economics of the region in exchange for control of the state.
The Taliban and their supporters all realize the impossibility of the American position, completely at odds as it is with the economy. Free market democracy would have to embrace the drug business and suborn politics to it. Ham handed western attempts at buying off the population with schools, roads, and Coca-Cola only ignores the issue. American attempts at sustaining liberal democracy against the grain of an essential and illegal economic system is futile, electoral corruption the only possible result, permanent damage to the worlds third great social system in as many tries the effect. Communism, Fundamentalism, and Democracy all failed the acid test of unfettered capitalism and free markets.
You hear it over and over again in every similar situation - the common person simply wants security for him and his family (in this part of the world, it is always "him"). That is a universal given. But when the Afghani pleads for security, it is not just from death from the sky, but more so for the security of his market economy and the stability of his food source - opium. The only way to provide this security is to embrace the opium business and protect it, something tribal Warlords can do with a compliant state government of any persuasion - a circle western ideologues have absolutely no chance of squaring.
We in the west are embarking on a tortured debate on the future of our interests in the Afghanistan debacle. This involves the consideration of an exponential multitude of geopolitical interests, military chest thumping, and inane ideological babbling. Virtually all of it pointless unless the economic interests of a subsistence economy (where opium is the reserve currency and store of value) are satisfied. No viable solution to anybodies problems are possible unless the liberal democracies of the west can come to grips with the forces of free markets in Afghanistan they allegedly represent.
More than anywhere else in the world, Afghanistan represents the collision of democracy, liberalism, free markets...and ideological hypocrisy. Heroin is destroying millions of satisfied customers, the supply chain enriching a rope line of banks, small businessmen, entrepreneurs, and farmers. The resource point is a single place on earth where the stability of a deadly crop alone dictates the fortunes of empires past, present, and future. Destroy the crop and suffer generations of endless war, suffering, and potential nuclear events. Embrace the crop, and bankrupt one hundred years of moral sermonizing in the teeth of a culture itching to destroy another pillar of western imperialism.
More soldiers... ?
Aetius Romulous, Historian, Economist, Accountant, Writer, and blood sucking CEO.Born at the wrong end of the Baby Boom Generation - too late to enjoy the ride, too early to have missed it, and stuck in the middle with the mess. Aetius writes and blogs from his frozen perch atop the earth in Canada, spending the useful capital of a life not finished making sandwiches and fomenting revolution. It's a living.