Natural Selection and Foreign Policies

It is the mechanism that imposes a collective of conditions and pressures that applies significant adversity on individuals or groups within the bounds of the said system. Those with the potential to evolve and prevail are the ones that do not cease to exist. In some cases they even thrive in the said environment. Those who are unfit, meaning those that do not have the potential to transcend current limits and weaknesses are consigned to extinction. This is what is meant by survival of the fittest. Nature itself singles out those that will survive and those that will not.

In the power play of nations, the idea of natural selection is also a reality. Part of this Darwinian concept is the idea that the fitter an organism, there is the greater likelihood that it will dominate the environment it is in. It would be elevated to the status of prey. Lesser creatures will either be prey to those who are greater, or they will evolve and be predators themselves. When examining this environment it is apparent that it is similar to the interaction of foreign policies of modern states.

When the foreign policy of a certain country is forced by circumstance to yield to that of another more powerful state, there is a political kind of predation. Foreign policies are closely reflective of the scheme of natural selection. An example of this is in terms of how countries aligned themselves in terms of which world power. The usual and rational choice for lesser nations is to attach themselves to more powerful states. There are many motivations behind this. However, they all belong to the realm of survival. Countries behave like their people.

In the realm on international relations and foreign policy, lesser states act like prey, they find ways to survive in an environment of many voracious predators. They usually try to establish a symbiotic relationship with one to keep themselves safe from others. This is the basis of many modern-day alliances. As for world powers, they act like predators. They are at the pinnacle of existence and hold a significant amount of power of life and death on many other lesser entities. They remain as such until such that they are also singled out for extinction. A dominant power lasts only so long as no other power exists that exceeds it or that the adversity of the environment does not overcome it.

Foreign policies are nothing more than active manifestations of states to influence their way to survival. If they fail, they fall prey to the many predators in the international arena. Equally enough these predatory entities live off the weaker creatures in the international community. It takes a significant degree of political maneuvering for a country to survive in the international politics of today. This is not unlike the development of a creature in its pursuit of means to evade eradication and to thrive in a hostile environment.

View article source

Bernanke Blames China For Currency Policies - Forbes

When Ben Bernanke talks, the world stops to listen. Early Friday morning, the Fed chairman spoke at a European Central Banking Conference in Frankfurt, where he defended his policy of quantitative easing and accused China and other emerging markets for undervaluing their currencies and causing global imbalances. Bernanke also called for more fiscal stimulus but for being mindful of the deficit.
Bernanke seemed to lay blame for the so-called "currency wars" on China and other fast-growing emerging economies. "Currency undervaluation by surplus countries is inhibiting needed international adjustment and creating spillover effects that would not exist if exchange rates better reflected market fundamentals," said Bernanke in Frankfurt on Friday.
Speaking to Europe's central bankers, the chairman of the Federal Reserve attributed the large capital inflows experienced by emerging economies to their foreign exchange policy, which he considered to be incompletely adjusted. Investors, in part seeking "return differentials that favor emerging markets" are actually being drawn by "additional returns [from] expected exchange rate appreciation," said Bernanke.
China was a clear target in Bernanke's speech. The Chinese, along with finance ministers from countries such as Germany and Brazil, have accused the U.S. of deliberately depreciating its currency to the detriment of the global recovery. The policy of reserve accumulation, which is the means by which surplus countries manipulate their currency, grew to "six times their level a decade ago" to over $5 trillion. "China holds about half of the total reserves," countered Bernanke.
The bearded academic also denied that his institution's second round of long-term asset purchases, dubbed QE2, was responsible for the weakening of the dollar. "Much of the decline over the summer in the foreign exchange value of the dollar reflected an unwinding of the increase in the dollar's value in the spring associated with the European sovereign debt crisis," noted Bernanke. The depreciation of the greenback is due to "changes in investor risk aversion" and the "underlying strength and stability that the U.S. economy has exhibited over the years," he said.
Bernanke asked emerging economies to allow exchange rates to be set by market forces to "reflect market fundamentals." This would in turn "shift demand from surplus to deficit countries."
"The international monetary system has a structural flaw: it lacks a mechanism, market based or otherwise, to induce needed adjustment by surplus countries, which can result in persistent imbalances," repeated Bernanke, making no reference to deficit countries, the other side of the imbalance.
Quantitative easing has come to be the term by which the Fed's easing has been referred to in the U.S. The chairman considered the usage "inappropriate" as quantitative easing, he says, "typically refers to policies that seek to have effects by changing the quantity of bank reserves, a channel which seems relatively weak." He contrasted it with the actual policy, by which "securities purchases work by affecting the yields on the acquired securities and, via substitution effects in investors; portfolios, on a wider range of assets."
Bernanke was joined in a panel by IMF boss Dominique Strauss-Kahn, European Central Bank president Claude Trichet, and Brazilian central bank president Henrique Meirelles.
View the original article here