Remove the Axis of Evil from the UN, World Bank, WTO, and the IMF?

Members of the UN Security Council gather for a meeting at the United Nations in New York City, on Sept. 27, 2018. Don Emmert/AFP via Getty Images

Commentary

During World War II, the Axis powers—Nazi Germany, Fascist Italy, and Imperial Japan—took on the free world with impunity. Arrayed against them were the Allies—the United States, the British Empire, and most of the Western world.

With Russia’s invasion of Ukraine, the world again is squaring off in a struggle of good and evil. History is repeating itself as repressive regimes invade and threaten other countries. Once again, peace-loving nations are taking on the new axis of evil: Russia, China, Iran, and North Korea.

Russia’s expansion westward has galvanized the United States and Europe while NATO will become stronger with the likely addition of Sweden and Finland. China, North Korea, and Iran sympathize with Russia, since its aggression is consistent with their efforts to extend their influence over others. Free countries are a constant threat to repressive nations’ ability to control their own people.

China’s threats to invade Taiwan and its bullying of its neighbors similarly affects Asia. Japan, South Korea, and other Asian nations are building their militaries and aligning closer to the US for protection.

As some kind of a new world order emerges, countries and businesses face an important strategic choice: Either align with repressive regimes or align with countries associated with economic and political freedom.

The Fraser Institute and Heritage Foundation each measures a country’s economic freedom based on how closely it follows free-market classical principles. These principles include 1) following the rule of law, 2) minimizing tax burdens, 3) containing the growth in government spending and regulations, 4) relying on free markets to allocate resources, and 5) establishing monetary stability.

These principles directly relate to personal freedom. The further away the nation strays from these principles, the closer it gets to extending control over others and tyranny.

While no country receives a perfect 100 percent, extensive research shows higher economic freedom scores correlate with greater personal freedom and prosperity. Lower freedom scores relate to repression and poverty. My book, Rich Nation, Poor Nation: Why Some Nations Prosper While Others Fail, documents how shifting policies toward economic freedom improves conditions, while moving away brings hardship and poverty.

As countries and businesses choose sides, they must understand the implications of their choice.

The United States–Europe–Japan coalition of countries have economic freedom scores mostly in the top 25 percent of the world. They not are only the most economically free countries but also the most politically free. This coalition provides roughly 50 percent of the world’s output and per-capita incomes 300 percent above the world’s average.

In contrast, the Russia–China–Iran–North Korea axis has economic freedom scores in the lowest half of the world. Russia has the highest freedom score in this group, with 56 percent out of a 100 percent, China is at 48 percent, Iran is at 42 percent, and North Korea dead last at 3 percent. All these are failing grades.

In terms the world’s economy, the new Axis powers combine to produce roughly 20 percent of the world’s output. Despite its massive resources, Russia’s per-capita income is only 62 percent above the world average. China’s per-capita income is even with the world average; oil-rich Iran is 25 percent below the world average; and North Korea is unmeasurable.

Failed States vs. Free States

Each of these Axis powers is a failed state. Russia, despite being blessed with some of the greatest resources in the world, has failed to take advantage of its natural wealth. Its population is declining. China’s population is top-heavy with age, unsustainable by any measure and will soon decline rapidly. Massive demonstrations in China and Iran confirm how willing their people are to put their lives at risk to express their dissatisfaction and anger at living under such repressive regimes.

Another commonality of these repressive countries is that people often want to leave for countries where freedom enhances a person’s dignity and allows them to make the most of their naturally given talents. Who would risk life and limb to move to Russia, China, Iran, or North Korea? No one.

The new axis of evil is not an economic threat to the United States or the rest of the free world. It is their nuclear arsenals and inclination to use aggression that makes them a serious threat.

To avoid World War III, freedom-loving countries must reorganize ineffective and often corrupt international agencies. Membership in the United Nations, World Bank, World Trade Organization, and the International  Monetary Fund should be exclusive to countries promoting economic and political freedom. Excluding repressive regimes from a coalition of free nations is the most effective way to increase the strength and bargaining power of those confronting the axis of evil.

Free nations already control half the world’s output. Guided by economic freedom, these nations would naturally move to a free-trade zone, unleashing a powerful force for expanding the wealth of free nations. Such a free-trade zone would be a significant force to attract neutral nations seeking freedom and peace.

The massive economic power wielded by nations organized around the principles of economic and political freedom would provide substantial leverage against potential aggressors. Repressive regimes would no longer have to wait for their military incursions to discover the economic costs of their aggression. The costs of being isolated from the free world would be readily apparent before undertaking military action.

A coalition of free countries can greatly enhance the potential for global peace by placing pressure on all repressive regimes to enjoy the benefits of an expanding and prosperous free world.