How I Learned About Economics by Watching People Try to Kill Each Other
By P.J. O'Rourke
Stansberry Research newsletter readers understand economics. That's why they read Stansberry newsletters. Many readers took Econ in college (and had to unlearn what they were taught). Some were students at a tougher school, the Academy of Experience. Others learned from the hardest-grading professor of all, the personal-investment balance sheet.
I followed a different route. I was a foreign correspondent for 20 years, first for Rolling Stone, then for the Atlantic Monthly.
I filed stories from 40-some countries, none of them the nice ones. I reported on wars, revolutions, coups, riots, civil disturbances, persecutions, oppressions, and other human unpleasantness. My job as a journalist was, basically, to watch people trying to kill each other.
I didn't realize it at the time, but watching people try to kill each other teaches a lot of important economic lessons.
Lesson 1: The Power of the Economic Impulse
The first time I went to a war zone was in 1984 during the Lebanese Civil War.
I flew to Beirut. Just stepping off the airplane showed me how the country was tearing itself apart.
The airport windows were shattered. The fronds were blown off the palm trees in the parking lot. The surrounding streets were pitch dark; all the lamp posts had been run over by tanks. The taxi I got into looked like it had been used by Steve McQueen for a POW breakout attempt in The Great Escape.
Getting into the city from the airport meant negotiating a dozen checkpoints controlled by different militias from Lebanon's various warring factions. At each checkpoint militiamen would brandish their weapons and shout at me, "Bassboat!" "Passboot!" "Pisspot!" What they wanted was my passport, the one English word that every militiaman knew and none could say.
I finally got to the Commodore Hotel, the unofficial HQ of the foreign press in Lebanon. The bell clerk, attempting humor, asked, "Would you like a room on the car-bomb side of the hotel or the mortar-shell side?" I had to empty the mini bar to get to sleep.
The Lebanese Civil War lasted from 1975 until 1990. It started as a conflict between the Christian Lebanese, who were the majority of the politicians, and the Muslim Lebanese, who were the majority of the population.
In 1975 and 1976, Beirut – "The Paris of the Middle East" – with its cafes, nightclubs, luxury hotels, and beachfront corniche, was reduced to rubble. Thousands of people died. The country's government collapsed. And – the Mideast being the Mideast – things got worse after that.
The Sunni Muslim Lebanese began fighting the Shi'a Muslim Lebanese. The Islamic fundamentalist Lebanese began fighting the Islamic secularist Lebanese. The Palestinian refugees living in Lebanon began fighting the Druze, a Lebanese sect that's an offshoot of Islam. Then Syria invaded one end of Lebanon, and Israel invaded another.
There's not room here to explain it all. There's not room anywhere to explain it all. But by the time I got to Lebanon, the place was really a mess.
Economics was the last thing on my mind. I was reporting on war and the political, religious, and ethnic issues that led to the fighting. At the time, it didn't occur to me that Lebanon even had an economy.
Of course, Lebanon did have an economy. Otherwise all the Lebanese who weren't dead from the civil war would have been dead from starvation and exposure.
Actually, looking back on it, Lebanon had a remarkable economy. In the midst of murderous chaos, the Lebanese economy continued to function. Considering the circumstances, you could even say it thrived.
True, the war led to runaway inflation, as wars do. The Lebanese pound was worth three to the dollar in 1975. By 1992, $1 bought 2,500 pounds. But this didn't bother the Lebanese. They conducted business in U.S. dollars, British pounds, French francs, or whatever hard currency came to hand. Children selling cigarettes in the street could give you that day's international exchange rate.
Beirut was loud, but not with the din of battle. The city's electrical grid had been destroyed, so every business and home had a portable gasoline generator on the sidewalk with extension cords snaking every which way. The generators were noisy enough to drown out all but the loudest gunfire.
Fuel seemed as plentiful as ammunition. Traffic was heavy, and the driving was erratic. It always is in the Mideast. But more so when the stoplights don't work, the traffic cops are in hiding, and drivers are dodging sniper fire.
Shops were open, including those selling things you wouldn't think would have a wartime market. Few journalists returned from Beirut without an acre of Persian carpets – bought at "special war price."
The Commodore Hotel did a brisk business, especially its bar where the press corps sought treatment for post- (and pre-post-) traumatic stress disorder.
Lebanon produces good wine. Chateau Musar, vintage 1975, was in great demand – in such great demand that an amazing number of bottles of Musar '75 were for sale – so many that the Chateau Musar vineyard must occupy most of Lebanon's land area and 1975 must have lasted for 10 years.
The Muslim militia controlling the neighborhood around the Commodore opposed alcohol and invaded bars and sprayed the wine racks and liquor shelves with machine-gun fire. But I presume some kind of deal was made. The Commodore's bar was invaded once, for form's sake. But no bottles of Musar '75 were machine-gunned, just Coke and Fanta.
And Lebanon's national airline, Middle East Airlines, flew almost without interruption throughout the war. MEA lost one airplane to a bomb in 1976. After that, I presume some kind of deal was made.
Where the money came from for all this economic activity, I don't know. And I'm not even counting that highly capital-intensive economic activity called war. (Though I do know that when I visited Lebanon's fertile agricultural area, the Beqaa Valley, the fields were full as far as the eye could see with lush, tall, green marijuana plants.)
The Lebanese Civil War caused terrible losses. More than 250,000 people were killed or wounded – 10% of the pre-war population. Nearly a million people were displaced. Property damage was incalculable. But one thing the Lebanese did not lose was their economic impulse.
While I was working on my article about the civil war, I went to the southern suburbs of Beirut to interview people about the political, religious, and ethnic issues that led to the fighting. I was stopped at a Hezbollah checkpoint (the same Hezbollah that's still fighting in Syria now).
Hezbollah's checkpoints were manned (I should say "boyed") by 14- and 15-year-olds with AK-47s. They twirled their weapons around, poked them in the dirt, and scratched their ears with the muzzle sights. Gun-safety merit badges must go begging in the Lebanese Boy Scouts.
"Bassboat!" shouted the adolescent at this checkpoint. When he saw my American passport he was furious. He stuck the AK-47's barrel inches from my nose.
I thought about how small the hole is where the bullet comes out, yet what a big difference it would make in my social life.
The teenager spoke some English. He subjected me to a 20-minute tirade about "Great American Satan Devil." I was berated at gunpoint for how America had caused war, famine, injustice, poverty, and Zionism all over the world.
At last, the boy had finished his rant. He lowered his gun and gave me back my passport. Then he said, in a normal tone of voice, "As soon as I am getting my Green Card, I am going to Dearborn, Michigan to study dentist school."
God bless the power of the economic impulse. Today, that kid's probably a wealthy orthodontist living in Bloomfield Hills. And I'll bet he votes Republican.
Regards,
P.J. O'Rourke