Ship Seizures Could Break Global Trade

One ship seizure can look like enforcement, but it also become a blueprint for global chaos. The United States seizure of an oil tanker off Venezuela this week put a spotlight on something economists have been warning about for years. Oil is not just Venezuela's biggest export. It is the engine that funds basic government operations and pays for essentials like food and medicine. According to the Times and others. If seizure becomes more common, the economic pressure rises fast. Each cargo loss is a direct hit to revenue. And economists warn Venezuela could be forced to sell oil at cheaper discounts to traders still willing to take the risk. But the bigger problem is the precedent. If powerful countries begin intercepting commercial shipping whenever they dislike another government, global trade becomes less neutral, less predictable, and more expensive. That rise grows in a world where the United States is increasingly stepping back from being the default referee of open sea lanes. When there's no universally accepted traffic cop, every seizure becomes permission for the next one. Okay, what's the real message here? Yeah, some are rooting. Way to go, America. Taking over this ship from a country we don't like. But you know what it's called in other parts of the world? Piracy. When you just take a ship, take all of its contents, do what you want with it, that's piracy. Our entire worldwide economy is based on the premise that that shouldn't happen anymore. Let's dig a little deeper here. Now, I'm not a supporter of the Venezuelan government, let's be clear about that. But you don't have to be a supporter of a narco terrorist if you consider them that of an illegitimate government, a dictator, if you consider them that, to be a little bit troubled by this idea of one nation in the middle of the sea just taking over another boat, another cargo vessel, another shipping vessel, because they don't like something about that government. What very few people understand, which I didn't really realize until not that long ago, is how amazingly intertwined the global economy is now. It's fashionable these days among both the right and the left to denounce globalism, to denounce the neoliberal order. But, okay, what do we have before that? In 1945, we had countries very isolated. We had their economies isolated. And because of that, you often had massive starvation, massive disruption, a lot of civil wars, because people were upset that current leadership couldn't feed the country with globalization, with shipping being more or less completely open around the world and protected. Thanks to the United States, economies got better, the whole world got wealthier. Was it completely equal? No. Was there increased inequality? Yes. By and large, we went from a country, from a world where about 90% of the world lived under the poverty line to today under 10%. That all happened in a span of just 70 years. It's been amazing, an amazing accomplishment. When you look at the history certainly of the last 6,000 years of humanity, it's, it's almost beyond belief. It's fantasy world. If you go back in a time machine to 1945 and the say, okay, things are going to be very different than they were the last 6,000 years or even the last hundred years, we are going to see the elimination of billions of people living under poverty. We're going to see a lot fewer civil war. Yes, I understand there's still civil war, but we're going to see a dramatic elimination, reduction of civil war, starvation, misery. And it's going to be because of this thing called international trade where you get to make something you're good at. Put it on a boat, send it over here, sell it to people in another country. Sometimes, not always. Sometimes they'll put stuff they make on a boat, send it back to you, and you buy it has been the basis of global capitalism. It's why the United States is rich, but it's why across the globe, not all people, but most people in most countries are much better off. So it's very tempting to say, well, this is a one off. The United States is powerful. They have the right to protect their citizens. And Venezuela sending us drugs, okay, but you know what? If Americans didn't buy these drugs, they wouldn't send them here. If Americans could actually lead productive lives, maybe exercise, maybe have friends, maybe get off their cell phone for a few minutes, they wouldn't be so depressed. They'd have to take fentanyl or cocaine, whatever the drugs are, they wouldn't have to take them. As far as I can tell, the President of Venezuela is not coming to the United States, knocking on your front door, putting a gun to your head, saying, now here's this syringe shoot up. Now you're not doing that. Is he perhaps willingly, knowingly that his people are selling drugs? And some of that money's got. But that's a separate issue from one country taking over possession of transport vehicles. It's not a sexy issue. Sexy. This video is not going to go viral and make 10 million views. But it is important. Let's look at some, some more facts in this case because it is important. Shipping stability dies when power replaces rules. Now, what we've been hearing from Washington, certainly for the last 11 months, but on and off from certain quarters for the last decade is we don't want to be the world's policeman. Okay, you're on your own other country. Well, people just don't realize how much the United States economy has benefited. How many business people, how many farmers, how many manufacturers in the United States have benefited from the fact that, that you know, other than the occasional Somali pirate, if you create a product in the United States and you send it to Singapore by boat or Japan or anyplace else, you don't have to think about there's a 50, 50 chance it'll get there. 50% chance some pirate will just take over the ship and take all my stuff that I'm ended up with. You didn't have to worry about that. That's made United States entrepreneurs, farmers, business people richer. It's also made the rest of the world rich, richer. Everyone has benefit from that rule. And I realize it's not fashionable to stand up for the New world order, for the liberal order, for the neoliberal order, for the status quo system that the elites created. I realize I'm not going to get 10,000 thumbs up on this for saying that doesn't mean it's not true. The other thing is when you start cutting off ships to certain countries, you can destroy their economy. Now you can say, well that's great. We, we want to destabilize Venezuela. Okay, what happens when a million Venezuelans are knocking on the door trying to swim across the Rio Grande? Maybe you catch 900,000 of them. There's another hundred thousand that were willing to risk anything, risk their lives to get out of starvation situation in Venezuela. Now what happens when you duplicate this across the world, country after country after destabilization, because shipping lanes have shot down. Now again, we in the United States are lucky. We grow our own food. We're a net exporter of food. And always true, we're a net exporter of energy. So if the United States becomes relatively cut off from the rest of the world, yeah, it'll hurt, it'll be inconvenient, our stock prices will take a hit. By and large, we'll be okay. It's not true for most of the world. Most of the world is so interconnected to worldwide commerce, specifically through shipping because it's just cheaper to send things on a, in a giant cargo container on a giant bar than it is to fly stuff around the world. And whether you're Japan, whether you're China, whether you're almost anywhere, you need stuff coming into your country, you need stuff going out of your country. So make no mistake about it, this seizure of a ship can have all sorts of unintended consequences. Now, conservatives like to bemoan the fact that liberals often don't think through their actions. Well, you want to have this welfare program to give people free housing? Think about the unintended consequences. It could give people incentives not to work because you'll give them a house. We hear that all the time from conservatives. Here's the thing, they're not wrong. There are often unintended consequences when the hand of big government takes some action that in isolation might make sense, but sets the precedent, unloads all sorts of triggering effects that are in fact quite negative. And I'm not making predictions here, but I do accept the idea that this is potentially a warning shot. This is potentially very, very negative. You can make the case that Maduro is awful, awful, awful. Fine, not arguing with you there. But you can also make the case that this could have a triggering effect and essentially sending a message to any nation, hey, forget about the United States. They'll do whatever they want. Ah, now this is interesting. I'm broadcasting this live right now on TikTok. I just received a violation warning. Your live is flagged for misinformation. Huh. Well, if, if TikTok or anyone else would care to tell me what that misinformation is, I would love to know. Those of you watching me on TikTok, please let me know. I understand I've said some things that someone might not agree with. They may dispute my reasoning, but I don't believe I've said anything that is factually correct or incorrect at this point. Oops. Hope that wasn't a Freudian slip. So if you detect anything I said that was deliberate misinformation, please let me know. I would love to know some other facts. The situation. China is a major buyer of Venezuelan oil. Now this oil is going to China. Are they going to feel entitled, obligated to reciprocate? Did they take an oil tanker owned by a US Company figuring, well, tit for tat, they took oil that was coming to us that we'd already paid for. That's. And I'm not making that allegation about this tanker, so we have the right to take theirs. It is troubling. Now, according to Francisco Rodriguez, an economist at the University of Denver, he told the New York Times, continued seizures would cause a deep decline in, in Venezuela's import capacity. Now, this is a problem because the resulting drop in import capacity could push Venezuela into an even greater recession depression because fewer dollars mean fewer necessities arriving again. You can say great, we want to destabilize this regime, but what if there's nothing better? What if the next leaders were. Sometimes we don't think about that other cost associated that you might have to pay and I might have to pay. If it becomes standard policy for ships to be taken over, pirated by other governments or non government. Think of how the insurance premiums are going to go up on shipping. Think of how much less reliable things are. You know how you and I are kind of lazy and we don't want to go to the shopping mall and we need a product the day after tomorrow, it's Friday night and you forgot to get that thing for your kids school project. You, you push a button on Amazon and it's there by Sunday. Guess what? That might not happen if intercepting ships because you don't like the leadership of that country becomes the new normal. So once again, you can call me too conservative if you like. I happen to think conservatives are correct when they state oftentimes when government officials take an action, they don't look at the unintended consequences of their action. And they either make one problem worse or they maybe help a little bit with one problem, but they create 10 more problems that are even bigger. And that's the problem I see with these seizures of boats from regimes we don't happen to like.