Further claims about Saudi

by on November 12, 2017 at 12:56 am in Current Affairs, Uncategorized | Permalink

Here is Ali Shihabi:

In the short term, these detentions will lead, directly and indirectly (i.e., by example of what can happen to those who do not cooperate), to the recovery of substantial ill-gotten assets from many members of the elite, including, in all probability, vast tracts of urban land that were “acquired” by senior royals in decades past. The monopolization of this resource limited the amount of urban land available to the masses, pushing up land and home prices, which contributed to massive land and home shortages. Remedying this situation will reduce the cost of home ownership, thereby alleviating a major source of grievance among middle- and lower-class Saudis.

And:

More importantly, in a country beset by an extremely wide political spectrum ranging from the extreme religious right to the liberal left, achieving consensus on key issues is virtually impossible. Hence, if any reform is to take place within a reasonable time frame, it will have to be autocratically managed. Reforms such as removing the prohibition on women’s driving, combating extremism, and curbing elite entitlements would have been impossible to accomplish through deliberation and consensus. Coercive action and an authoritarian hand, rather than endless debate, discussion, and negotiation with thousands of royals and political, economic, and religious elites, was needed to drive home to these individuals that the monarchy is serious about fundamental reform and that the “old guard” needs to get with the program or face dire consequences.

Previous attempts to negotiate elite entitlements achieved negligible results. To cite just one example, relentless pushback and delay tactics scuttled a recent initiative that would have forced elites to pay full utility costs and newly introduced property taxes on undeveloped land. Arresting high-profile household names, people long considered to be untouchable, was the best way for the King and the Crown Prince to deliver the shock needed to recalibrate the behavior and expectations of the elite class.

I am not convinced by the conclusion, but here goes:

Paradoxically, the Saudi “purge” may very well secure the future of Saudi elites as a class, and even the future of the very elites who were arrested. In Dubai, the crackdown ended when convicted elites were quietly released after they had returned looted state assets. It is probable that the Kingdom will follow a similar path. For Saudi elites, succumbing to a “revolution” from above that requires them to forfeit some of their extreme wealth and privilege is still preferable to a real populist revolution from below, which would wipe them out completely and destroy the country.

Pointer is from Ahmed Al Omran.  And here is coverage from Reuters.  Here is Ian Bremmer.

1 Scott Mauldin November 12, 2017 at 1:28 am

Decent analysis that could be read as a general critique of democracy and deliberation.

I do wonder when the backlash of the old guard will be, though. The monarchy will have to continue to act decisively including sussing out more critics within the inner circles – the Saudi royal family is quite large, and those that could stand to lose from a reshuffling could make alliances with religious conservatives. I would expect the religious right to say that Shiites, who are still the bogeyman to even moderate and liberal Sunni (majority) Saudis, are benefiting the reforms. It’s hard to see how this all goes over peacefully.

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2 Bill November 12, 2017 at 8:06 am

I was reading it the same way as you did…a critique of democracy and deliberation. Well, they never had democracy, and they probably won’t after this exercise either.

The question is: will they have stability, or will this be the beginning of tribal warfare among the elites. At least all our elites demand is that we eliminate the estate tax.

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3 ferris November 12, 2017 at 9:59 am

… our US Presidents and Congress enthusiastically support the anti-democracy, totalitarian Saudi rulers (Obama even personally bowed to them) — surely our noble D.C. politicians know what’s best (?)

The traditional solution to troubling monarchs, in world history, is to terminate them with extreme prejudice.

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4 Tom T. November 12, 2017 at 10:25 am

That’s what made Libya what it is today.

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5 Roy LC November 13, 2017 at 6:06 am

And France too…

6 clockwork_prior November 12, 2017 at 1:39 am

‘The monopolization of this resource limited the amount of urban land available to the masses, pushing up land and home prices, which contributed to massive land and home shortages.’

But isn’t the rich getting richer the only way to make sure that the ‘masses’ are able to enjoy the benefits which the rich so freely provide when using the marketplace for their benefit? This sounds scarily like land reform, e.g. socialism.

What is not to be convinced about this – ‘Saudi elites, succumbing to a “revolution” from above that requires them to forfeit some of their extreme wealth and privilege is still preferable to a real populist revolution from below, which would wipe them out completely and destroy the country.’ Unless, of course, one thinks that would just be virtue signalling behavior, which all loyal readers undoubtedly know, is something easily dismissed.

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7 Anonymous November 12, 2017 at 2:56 am

^
Clockwork Troll

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8 clockwork_prior November 12, 2017 at 3:28 am

As you wish – but when it comes to property ownership in American cities, particularly Prof. Tabarrok is a big fan of removing zoning laws, so that a land owner could build a 50 story apartment building in place of a 5 story apartment building. Do note that this would ensure the rich getting richer, while also apparently providing more apartments available on the market and removing government interference from the proper functioning of the free market. (We will, as Prof. Tabarrok always does, leave aside the question of infrastructure – think water/sewage, as a concrete example.)

However, this is not what is happening in KSA. There, the rich are being deprived of the opportunity to use their wealth to provide more housing, which is what Prof. Cowen and Prof. Tabarrok generally argue is the normal process of creating a better world, instead of a government deciding to seize the land of the rich to provide land to the poor.

The second point could be brought into clearer focus by pointing out that generally, using history as a guide, the extremely rich prefer society to be plunged into the destruction of a revolution before forfeiting some of their extreme wealth and privilege, and that Prof. Cowen, with his immense knowledge, is aware of that fact. Thus, he disagrees with the more optimistic assessment, but stating it so baldly goes against his priors? mood affiliation? if he were to point out how disastrously societies have suffered the results of letting those with extreme wealth and privilege be in charge over generations, even with full awareness of history in such cases.

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9 Tom T. November 12, 2017 at 10:38 am

Interesting that prior’s pre-written zinger about zoning laws was so far off-topic that someone else was able to submit the first comment while prior was busy figuring out how to change the subject.

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10 Anonymous November 12, 2017 at 8:24 pm

+1

11 Daniel Cañueto November 12, 2017 at 2:26 am

He tries to sell Bin Salman’s actions as his way to solve the “elite overproduction” theory synthesized by Peter Turchin. However, even if it solves it, that’s not the real motivation behind the actions. I rather see talented aposteriorism from the writer.

And well, it is incoherent to blame society for pushback against liberalism when your Government is still funding the structures who ensure lack of any liberalism.

To sum up, it is a pity that so much talent is lost in mercenary PR BS. If only we were able to focus the Overton’s window on Washington’s fifth column generator lobbying.

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12 Brian Donohue November 12, 2017 at 4:35 am

The King will deliver The People from The Nobles.

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13 So Much For Subtlety November 12, 2017 at 4:48 am

It worked for Ivan the Terrible.

Paradoxically, the Saudi “purge” may very well secure the future of Saudi elites as a class

This is just nonsense. We are in the world of Ibn Khaldun. The solidarity of the Saudi family cannot survive when it is this large. Instead of a small tribal group held together by kinship ties and their associated feelings, the Saudi King is gradually asserting himself over his clan with the help of his slaves and personal dependents – foreigners in this case made up of Western advisers and South Asian labor.

His clan members will respond by abandoning the Royal family, while looting as much as they can and moving to London and Paris.

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14 Roy LC November 13, 2017 at 6:09 am

+1

There are parts of the world where politics is better learned from period soap operas, than what western elites find plausible”

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15 TMC November 12, 2017 at 11:24 am

Maybe so. Where else has it been a net gain for the people? Chile?

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16 Roy LC November 13, 2017 at 6:12 am

Well this was historically the basis of Swedish politics until the 19th century, the Tsars did it too. I can’t say that it helps the common people but an excessively powerful nobility has usually been worse, cf. Poland or France before the Bourbons.

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17 rayward November 12, 2017 at 5:58 am

Mohammad bin Salman could not have written it better.

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18 Benjamin Cole November 12, 2017 at 8:13 am

“The monopolization of this resource (build-able land) limited the amount of urban land available to the masses, pushing up land and home prices, which contributed to massive land and home shortages. Remedying this situation will reduce the cost of home ownership, thereby alleviating a major source of grievance among middle- and lower-class Saudis.—”

Sounds like the system of property zoning almost anywhere along the West Coast.

Why is it Western “free market” pundits loath rent control….but go mute on property zoning?

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19 Bill November 12, 2017 at 8:43 am

The difference is ownership of the land in Saudi Arabia, not zoning of it. There is a difference.

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20 DanC November 12, 2017 at 8:56 am

Please, increasingly have titular ownership of property without the freedom to use the property to meet community needs (that might be in conflict with a regulatory elite) is de facto ownership by the state.

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21 Bill November 12, 2017 at 10:24 am

Please understand that we live in a democracy and that those whom we elect draft zoning ordinances, often to prevent a cement plant in your backyard. If you want to live in the wilderness without neighbors, go right ahead. But, if you have neighbors who can impose an externality on you, listen up.

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22 DanC November 12, 2017 at 10:38 am

Trust the bureaucrats, they are smarter then you, in fact for some it is better if you just turn the mundane choices of your meaningless life over to others. Trust them, they are smarter than you and are much better at making choices than you. They, these wonderful brilliant all knowing folks, are responsive to the needs of the community. They are the perfect agents for progress and the protection of the ignorant. I can imagine which group you belong in – the brilliant paternalistic protector of all that is good or the ignorant fool who must be protected from their own stupidity.

23 Bill November 12, 2017 at 1:14 pm

Dan,

You use the word bureaucrat,

When you mean elected representatives.

You use the word paternalism,

When you mean enforcing the law.

24 chuck martel November 12, 2017 at 8:44 am

“relentless pushback and delay tactics scuttled a recent initiative that would have forced elites to pay full utility costs and newly introduced property taxes on undeveloped land.”

The idea is using state taxation dynamics not to primarily raise revenues but instead to create desired changes in behavior, taxes as a “nudge”.

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25 DanC November 12, 2017 at 8:46 am

Let’s see. America is deeply divided and getting anything done in Congress is difficult. Should we cheer for Trump to declare that to save democracy he must ignore Congress and impose his vision of making America Great Again?

Or should we cheer for the deep state, the growing regulatory elites, to announce that electoral politics prevents them from achieving their goals, a better America, and they will form a committee, headed by their rightful leader, Hillary Clinton, to create a new government with the help of media elites. (And make claims that a foreign government subverted the election requiring the removal of a “fake” leader.)

Or once you accept that a “leader” can announce that he (or she) has a better vision for the future that requires that normal political restraints should not apply to them, what is to stop another “leader” from announcing that their group has an even better vision and has an even more legitimate claim on resources that requires a subversion, perhaps temporary, of democratic rule. Once you make the claim that “extreme” circumstances require a benevolent dictator, “extreme” circumstances suddenly become very common.

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26 Borjigid November 12, 2017 at 9:05 am

Prediction: this is not going to end well.

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27 Roger Sweeny November 12, 2017 at 10:34 am

Ali Shihabi seems to believe the Saudis are in a Tullockian transitional gains trap.

http://econlog.econlib.org/archives/2017/11/tax_reform_and.html

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28 Barkley Rosser November 12, 2017 at 3:02 pm

Regarding the conclusion, it may well be that internally there will be that there will be greater stability, at least for some period of time. I do not know about what happened in Dubai, but certainly Xi Jinping’s purge of 1.4 million CPC members on corruption charges over the last five years has solidified his power and made potential opponents wary. MbS’s arrest/purge of apparently over 200 people may well do the same, but it is far from obvious that all that this Ali Shihabi has to say about this is believable (I do not know who he is, but he is certainly coming across as a full-bore mouthpiece for MbS, with most such people coming off as very wrong about many of their forecasts so far). Are those arrested such obvious symbols of corruption to the Saudi masses, especially young people? I doubt the commander of SANG, Meti bin Abdullah was. Maybe al-Waleed bin Talal and Bakr bin Laden are, although they are basically very successful businessmen rather than princes getting most of their wealth from stealing from the government. But probably young people can be convinced that those arrested are such corrupt people, given that MbS has also apparently taken complete control of Saudi media with this wave of arrests and purges, following Putin.

Something that looks highly questionable to me, and makes Shihabi look like a total mouthpiece, is his claim about urban land. So, maybe some of these 200 arrested owned land that was gotten through questionable methods or circumstances. But who has seized that land and what are they going to do with it? If there is money to be made by building housing on it, either for sale or rental, why did not all these corrupt urban land owners do that? Somehow there is some very absurd assumption here that the seizer (MbS himself?) of the land is suddenly going to be building lots of housing and handing it out at low prices or for low rents. How believable is that? I don’t believe it for one second. What a pile of propagandistic baloney.

It may be that there are good intentions out of some of this, let us say maybe this apparent land seizure that is apparently going on in connection with this wave of arrests and purges. But so far MbS’s “good intentions” (aside from allowing women to drive next June, maybe) have been total disasters and flops. We have his starting up of a war with the Houthi in Yemen, with whom KSA was once allied a half century ago. That has now resulted not only in the complete failure to defeat them but the biggest cholera epidemic the world has seen for some time and a famine, now being wildly exacerbated since the new blockade since the Yemenis fired off some lame missile at Riyadh.

We have MbS’s move with some allies to blockade and boycott and make demands on Qatar. That has been nothing but an embarrassment, with Qatar refusing to back down and its government remaining in power, and now also strongly allying with Iran, with this whole effort supposedly aimed at their playing footsie too much with Iran. It is not footsie at all anymore, but the whole hog. Just plain stupid on the part of MbS. What an incompetent.

And now we have the completely indefensible and extremely dangerous intercession in Lebanon, apparently tied with this purge in KSA itself. Lebanon, once the peaceful and cosmopolitan home of “the Paris of the Middle East” (Beirut) suffered decades of ethnic strife, with many thousands killed. They have managed to maintain a delicate political balance through the horrible war in Syria that has put tremendous pressure on them with refugees and much more. So now MbS has pressured its Sunni and pro-KSA premier, Saad al-Hariri to resign, with al-Hariri in KSA and possibly under house arrest, not making public statements, while pretty much everybody in Lebanon is demanding his return and many charging that the Saudis are holding him against his will. MbS is trying to get at Iran through Hezbollah, but there is no reason to believe any of this will harm Hezbollah. If anything, aside from possibly setting off a fresh intra-Lebanon ethnic war, it will strengthen Hezbollah in the internal political balance. Some have speculated that MbS is trying to get Israel to invade Lebanon to subdue Hezbollah, but most accounts have them pretty uninterested in such a venture. I know of no commentator who is forecasting anything remotely good out of this completely idiotic and indefensible move. If this is the sort of intelligence that is behind this purge, and it is, one should not assume anything wise coming out of it, even it internally stabilizes the political situation in a condition of near absolute dictatorship in the hands of MbS.

A few days ago in WaPo, Anne Applebaum remarked that some nations charge people withe corruption while others arrest some and then charge them with corruption, with Saudi Arabia being among the latter.

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29 Barkley Rosser November 12, 2017 at 3:06 pm

Oh, some nations charge people with corruption and then arrest them, while others arrest them and then charge them with corruption, KSA among the latter.

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30 Barkley Rosser November 12, 2017 at 3:15 pm

Ian Bremmer makes it clear that there is no obvious evidence or reason to believe that any of those arrested/purged are actually corrupt. This is a power and money grab pure and simple, although dressed up as anti-corruption purge.

One of the supposedly good things MbS is doing is trying to get KSA off oil, and maybe also off lots of welfare spending. I forecast neither will succeed. The big centerpiece is sale of 5% of ARAMCO. This is a joke. It has been hyped to the skies, but this is basically a big nothing.

Oh, I do grant that his reigning in of the Mutaween religious police is a good thing. There are rumors that maybe some hardline clerics got swept up or will be, although no specific names have been reported in that regard. Let them stop funding radical madrassas and mosques in parts of the world where moderate forms of Islam are dominant, such as in Southeast Asia and Bangladesh and Western Europe. That would be more impressive.

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31 Roy LC November 13, 2017 at 6:17 am

The religious police can grow too strong and threaten the wrong people. They can use their authority to challenge the tyrant which means a mass elimination of them may be desirable, but they are too valuable to the state as an institution to not recreate. And after a purge the rest will behave appropriately.

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32 carlospln November 12, 2017 at 3:39 pm

“Let them stop funding radical madrassas and mosques in parts of the world where moderate forms of Islam are dominant, such as in Southeast Asia and Bangladesh and Western Europe”

+ 1

KSA is Australia’s greatest enemy. It has funded $10-15B in hate spewing madrasses in Indonesia since 1990.

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