How Capitalism Failed the Arab World

I was surprised to see a book about this topic; it always appeared to me that the Middle East might be a good place to do business, if only the infrastructure were better and there wasn’t a danger of being killed. Things were looking up after the Arab Spring, now that the old dictators were falling, and that should’ve been the start of opportunity. Unfortunately, I was wrong. The author proves that not only was the Arab Spring the result of a hopeless economy, but the Arab economy is still hopeless.

    Richard Heydarian begins with the blunt facts; the Arab states are all at odds, women have few rights, and there’s poor infrastructure. The Arab governments made little effort to modernize their education system, and wasted money fighting Israel. This doesn’t make an ideal place for foreign investment, not if you’re boycotting your economically powerful Jewish neighbor and threatening to attack the country that makes the world’s most popular soda. You can’t expect to do business with people you’re scaring off.

    What I don’t agree with here, however, is the comparison between Ataturk and Reza Shah Pahlavi. Don’t get me wrong, I agree with the author’s argument on how westernization saved Turkey, but he misses a vital fact. Turkey was NOT an Arab country; the people were not Arab by ethnicity, they didn’t speak Arabic, and the Arab world at the time was weak. There was no Ba’ath party yet, no Al-Jazeera, no televisions whatsoever, and there was probably no Arab radio (even if there was, how many Arabs would’ve owned radios?) The Arab world must have been 90% illiterate, so they couldn’t have read about Kemalism in the papers. In short, the Arab world couldn’t object to Ataturk shutting down the mosques and giving women equal rights.

   The argument about Reza Shah is also, in my view, inaccurate. He was definitely pro-western, and he was not popular with the Muslim clergy, but he did absolutely none of the great things Ataturk did. He didn’t introduce the Latin Alphabet, nor did he force parents to send their kids to school. Iran ended up poor, uneducated, and in no position to become and economic power. Remember how Peter The Great went abroad to learn about warships, medicine, and architecture, so he could go back to Russia and make it powerful? Or that he insisted that the sons of noblemen go abroad to study in order to keep their titles. Reza Shah did no such thing, and blew an opportunity.

    All in all, the author blames the Arab dictator’s incompetence for economic failure. Saudi Arabia, Libya, Egypt, Syria, and Iraq were in a great position to improve. They could’ve contracted with Japan to design and manufacture a car, and have it built in the Middle East, but they didn’t. This book shows how time and time again, the Arab states missed every opportunity. Muammar Gaddafi wasted his oil billions by grabbing Soviet weaponry, training terrorist, and sponsoring African dictators. Meanwhile his own people were uneducated, hungry, and foreign investment was zero. I bet the biggest source of wealth for a Libyan was money sent home by relatives working abroad. His army officers were incompetent, he lost most of his air power in the US attack of 1986, and how he survived for another 24 years is beyond me.

    There’s one thing about this book that I don’t like, and that’s the title. If anything in this book is true, then capitalism didn’t fail the Arab world. It’s the other way around; the Arab governments failed to do what they needed for capitalism to work.