What's most important, though, is that we must set up an Iraqi Oil Commission which will be chaired by the Americans and contain members of the coalition that actually sent men and materiel. The purpose of this commission is to administer Iraqi oil income so that it goes to the Iraqi people and not to despotic leaders or corrupt politicians. It will administer current assets and develop future assets.

But its two most important functions will be to maintain the unity of the country and de-Arabize oil in the Middle East.

Since the oil fields are not equally distributed in the country, but massed in the north and the south, the temptation is always present for the Kurds in the north and the Shia in the south to run off with these assets and secede from the country and finance their own independence. In our plan, all the income flows through the Commission and is dispersed to each section on a per capita basis. Each sector will get its rightful share. This scheme guarantees national unity and the legitimacy of the Commission is, in turn, guaranteed by the full faith and credit of the U.S. military.

The second reason for centralizing Iraq's oil assets and entrusting them to an independent Commission is to dissociate Iraq from OPEC, which has demonstrated, since its inception, a tendency to use the oil resources of the Arab world en masse as political weapons against American foreign policy. Up to now we have depended on our pseudo-friends, the Saudis, to protect us from OPEC. Now we can tell them to suck a lemon if they don't like our policy.

Remember Orson Welles' famous speech in The Third Man, in which he says, "You know what the fellow said: In Italy for thirty years under the Borgias they had warfare, terror, murder, bloodshed; and they produced Michelangelo, Leonardo Da Vinci, and the Renaissance. In Switzerland they had brotherly love, five hundred years of democracy and peace, and what did they produce? The cuckoo clock."

It was a great line, but not quite true -- at least not the part about brotherly love and five hundred years of democracy and peace in Switzerland. Nowadays we tend to think of Switzerland as stable as the Alps and the Swiss Franc, the symbol of peace and neutrality, and a country that runs like a clock without having to be wound. That's not the way it always was. In fact, until 1848 it was as warlike and unstable as the rest of Europe for the previous thousand years. It had constant wars with Austria, France, and Italy. It had countless internal and civil wars amongst its own cantons. Until 1848, its 26 cantons were sovereign states, each with its own currency, laws, customs, passports, etc.

Even today it can be divided into four distinct language sectors -- French, Italian, German, and Romansh -- twenty-six cantons, and within these, 3000 communes. Each of these is autonomous and Swiss citizenship can be conferred only by one or another of these communes.

The central government is relatively weak and controls tariffs, communications, transport, water conservation, the postal service, and the monetary system. The government is administered by the Federal Council, which is a seven member collegial board, an organization of equals with a rotating presidency, with each member presiding over a federal department. As though the U.S. cabinet administered the government without a president.

The real power over people's everyday lives resides in the cantons and communes. They decide who votes, and for what; they decide on the criminal and civil code of each canton, and how much shall be spent and for what purposes.

When Napoleon conquered Switzerland, he tried to impose French law on the Swiss. It was a complete disaster and lasted only as long as Napoleon. The Swiss are a stubborn, proud people and over the past 700 years have developed mores and values which they prize. And that is what the organization of the Swiss government reflects -- a jealous guarding of the values and cultures they wish in their respective autonomous cantons, and an acknowledgment of some degree of central regulation as a necessity in a modern world.

One could do a lot worse than use a Swiss paradigm for the new Iraq. Four states -- a Shiite state in the south, a Kurdish state in the north, a Sunni state in the center, and a religiously mixed state in the city of Baghdad. Each of these states would develop and control the political and ethical values of the citizens of each state without much influence from the central government. The people of each respective community would choose their communal leaders as well as those who would represent them in a central constituent body.

The central government would look after functions that require a nationwide purview -- commercial codes, monetary system, water control, transportation, roads, etc.

The next most important component of the plan is to bring a free market to Iraq and to do what is necessary to encourage capital formation and entrepreneurship there. This must be understood as a long-term project -- the creation of business institutions completely independent of governmental politics.

The array of instruments and institutions would be too numerous to specify here but some of the most important would be such things as a modern western central banking system that regulates interest rates, a code governing private property laws and liability, a uniform

May 2003               - 9 -               Outpost