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Cato Dispatch for October 2, 2009

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(Links to outside sources were active as of the date of this dispatch; however, not all news sources maintain links to current stories indefinitely. Some links also may require registration.)

Pressure Builds on Iran over Nuclear Facilities

With new information that Iran has been operating an undisclosed nuclear facility, Bloomberg reports that Iranian officials have "agreed to allow international inspectors to visit its new nuclear fuel plant within the next two weeks and will meet with negotiators for the U.S. and other leading United Nations powers later this month."

Christopher Preble, director of foreign policy studies, says that the future of U.S. foreign policy toward Iran seems bleak:

The Iranian government must be convinced that it does not need nuclear weapons to deter attacks against the regime. It is likely to push for an indigenous nuclear-enrichment program for matters of national pride, as well as national interest.

The Obama administration should therefore offer to end Washington's diplomatic and economic isolation of Iran, and should end all efforts to overthrow the government in Tehran, in exchange for Iran's pledge to forswear a nuclear weapons program, and to allow free and unfettered access to international inspectors to ensure that its peaceful nuclear program is not diverted for military purposes.

While such an offer might ultimately be rejected by the Iranians, revealing their intentions, it is a realistic option, superior to both feckless economic pressure and stalemate, or war, with all of its horrible ramifications.

In a 2007 Cato study, "The Bottom Line on Iran: The Costs and Benefits of Preventive War versus Deterrence," Foreign Policy Analyst Justin Logan assessed various strategies to dealing with Iran's insistence on attaining nuclear power.

China Celebrates 60 Years of Communist Rule

It has been six decades since Mao Zedong seized power and declared the existence of the "People's Republic of China." Since that time however, China has implemented a number of economic policies that have brought economic prosperity to the nation of 1.3 billion people. But there are still many areas that are in much need of reform.

James A. Dorn, vice president for academic affairs, says the real revolution took place 30 years ago, when China began its transition from a planned economy to a market-based one:

China's rise from an isolated state-controlled economy in 1949 to the world's third largest economy with a vibrant nonstate sector is something to celebrate on the 60th anniversary of the founding of the People's Republic of China.

Under Deng Xiaoping, China's transition from plan to market began in earnest in December 1978. For more than 30 years now, China has gradually removed barriers to a market system and increased opportunities for voluntary exchanges. Special economic zones, the end of communal farming, the rise of township and village enterprises, and the massive increase in foreign trade have enabled millions of people to lift themselves out of abject poverty.

Economic freedom has increased personal freedom, but the Chinese Communist Party has no intention of giving up its monopoly on power. China's future will depend to a large extent on the path of political reform. Further strengthening of private property rights, including land rights, would create new wealth and a growing voice for limiting the power of government. It is doubtful that in another 60 years there will be single-party rule in China.

For more on China's economic transformation, read Dorn's book on the subject, Economic Reforms in China: Problems and Prospects.

Cato Quick Hits on Health Care

• How Congress is cooking the books: When it comes to the health care reform debate honest budgeting is nowhere to be seen.
• Is mandatory health insurance unconstitutional?
• Real ideas for health care reform: "Break local monopolies by letting insurers compete across state lines."
• More on the health care mandate: "Compulsory health insurance could require nearly 100 million Americans to switch to a more expensive health plan and would therefore violate President Barack Obama's pledge to let people keep their current health insurance."

Chris Moody, editor, cmoody@cato.org