Ed Driscoll

NO PAIN, NO GAIN: Robert

NO PAIN, NO GAIN: Robert Ellison, a reader of The New Criterion’s Weblog, writes:

The genius of capitalism is that it harnesses the natural force created by the inverse correlation of risk and reward. Risk more (by investing and hiring, for example), and your potential reward rises. Risk nothing, and you can be sure to reap no reward.

A year ago, the Bush administration offered a risk/reward game to America’s allies over Iraq: make war, and reap the rewards of increased security and Iraqi liberty. Some nations refused the risk. The Bush administration has now announced that non-players will not reap the ancillary reward of American-financed contracts for the re-building of Iraq.

The administration’s claim that the policy is driven by national security is, of course, a lie. But the policy is nonetheless a sound one that reinforces rather than harms free and fair trade, because it reinforces the capitalist risk/reward calculus. To include France, Russia, and Germany in the contract competition would be to spread risk-free reward.

Of course, expecting the nations who make up the EU to understand risk and reward–or capitalism in generalis asking too much, isn’t it?

UPDATE: Meanwhile, Bush is asking Europe to forgive Iraq’s debt. This sounds like another of Bush’s patented “making them an offer they can’t accept” deals…