Is Dubai the key to peace in the Middle East? I've been taking another look at this Wired article on Dubai and reading some others as well.

I'm pretty much convinced by Steven Den Beste's arguments that humiliation is as important as poverty as a key to understanding terrorism, and that those who identify with the Islamic terrorists are much less likely to do so when they have successful modern economic achievements to replace pride with humiliation. Steven has also pointed out that this kind of humiliation can be made worse rather than ameliorated by handouts. So in opposition to Steven, I believe that to all the other obstacles to America building a successful capitalist democracy in Iraq we must add the danger that they will on some level fear that having American 'help' will make this modern economy into another handout. And those other obstacles are formidable.

I still hope that we can prevent Iraq from turning into a complete disaster, but at best we can hope it will follow the example of Dubai rather than lead the Arab world. While attempting to prevent collapse in Iraq, we must look to Dubai for actual progress.

There is a sort of irony, since at least in the short term this progress would presumably mean loss of American jobs, as with India and China, and Japan in previous decades. It may even be that major economic rethinking on the order of Adam Smith's genius is required for us to absorb this, since on the path we are following now may lie eventual precipitous decline in the value of the dollar, which might well cause a collapse in the world economy. But things cannot continue otherwise, since pretty much everyone agrees successful Arab economies are the only long term cure. Major restructuring of the world economy must be the subject of another post; this one is about Dubai.

Dubai is far and away the most welcoming country for tourism in the Arab world. It is a regional hub for banking and shipping - which I believe merely means large shares of very small pies. They are building internet and industrial parks, but although they have made deals with major corporations, building may only be beginning. Still, they have made a start, and we must do whatever we can to encourage it, because progress there is not seen as synonymous with being an American puppet. I'm not sure precisely what we can do - but nobody has a plan for Iraq either, and this tiny Emirate is in much better shape.