We are developing the social individualist meta-context for the future. From the very serious to the extremely frivolous... lets see what is on the mind of the Samizdata people.

Samizdata, derived from Samizdat /n. - a system of clandestine publication of banned literature in the USSR [Russ.,= self-publishing house]

Chile and Milton Friedman

Reason magazine’s Brian Doherty (he of Burning Man fame) has written a nice piece looking at the controversial role the late Milton Friedman played in advising economic reforms to the government of the late, and not-very-lamented, Augusto Pinochet of Chile.

The New York Times columnist Anthony Lewis declared in 1975 that “The Chilean junta’s economic policy is based on the ideas of Milton Friedman…and his Chicago School…if the pure Chicago economic theory can be carried out in Chile only at the price of repression, should its authors feel some responsibility?” Such attitudes haunted Friedman to his death and beyond.

The reaction of some of the usual conservative suspects to Pinochet’s death didn’t help debunk this unfortunate association. Since he was a pro-American autocrat, who ultimately honoured a plebiscite and stepped down, portions of the American right have always had an unhealthy affection for the general. National Review ran both a symposium and a stand alone piece by former editor John O’Sullivan marking Pinochet’s passing, neither of which were much outraged about his crimes. O’Sullivan explicitly said , in the sort of bizarre moral prisoner exchange that partisan squabbling generates, that sure, Pinochet should suffer for his villainy – but only if Castro and Allende’s associates do as well.

I agree with pretty much every word of Doherty’s analysis, and his punchline is good:

Undoubtedly, Friedman’s decision to interact with officials of repressive governments creates uncomfortable tensions for his libertarian admirers; I could, and often do, wish he hadn’t done it. But given what it probably meant for economic wealth and liberty in the long term for the people of Chile, that’s a selfish reaction. Pinochet’s economic policies do not ameliorate his crimes, despite what his right-wing admirers say. But Friedman, as an economic advisor to all who’d listen, neither committed his crimes, nor admired the criminal.

Those leftists who nitpick at the late economist for his role in advising the Chilean regime have only the tiniest of legitimate reasons for bashing Friedman, I think. Considering that he was a man who made the case for abolishing the draft, decriminalising drugs, promoting school choice and so forth, his credentials as a pro-liberty guy were pretty much impeccable.

Augusto Pinochet

Other people will debate whether Augusto Pinochet, who died yesterday, was a wicked man who led a regime that killed three thousand people, or whether he should have killed rather more than three thousand as his communists foes have never had much of a moral problem with killing their enemies. My own opinion is that one should never kill an unarmed enemy – no matter what he or she might have been planning to do.

In the interests of honesty I should note that was not my opinion at the time. Many other communists regarded the independent Marxist President Allende as too rash and it is worth noting he was never a member of the official Communist party of Chile. Indeed when I heard the story about a group of communists mostly from outside Chile had been building forces from all over Latin America and beyond, had been told that President was about to deliver a speech and that they should come (leaving their firearms behind) and, when they got to the place the speech was supposed to take place, they were greeted with 50 calibre machine guns – well I laughed. But I was a child when I heard that story and children tend to be cruel.

Everyone has different levels of being shocked. For example, Pinochet either did not care (or did not want to know) about torture and summary execution. But when he got to hear of a rape of a prisoner he went through the roof (I heard this story from the prisoner via a BBC radio interview years ago) – the ‘holy army’ of Chile, based on the army of pre World War I Prussia – with joining up to the officer corps at the age of 15 and a monk like existence to one’s early 20′s, must not behave like ‘Argentines’, the prisoner must be released – and whoever was responsible must be…

On the democracy issue: It is true that Allende got more votes than any other candidate for President in the 1970 election (he got about a third of the vote), but he had violated the Constitution so much since then that the Congress had voted to outlaw him. Of course Pinochet did not turn over power to the Congress – he dissolved it (whatever it thought of Allende, the Congress with its majority of socialists and Christian Democrats would not have favoured someone who had just killed a lot of people – that it a problem with picking up a gun and doing some killing, how do you put it down again and not get punished?). By the way it was not, as is often claimed, the “first military coup in the history of Chile” as there was the coup of 1924 (but perhaps that does not count, as it was a leftist coup). → Continue reading: Augusto Pinochet

Venezuela – voters were not ‘mistaken’

So the social democrat who promised the people more government health care, education and welfare, higher minimum wage and so on, has been defeated. Even taking account of Chavez rigging things it seems likely that (with a claim of some 60% of the vote) he really did win.

Chavez promised the same things as the social democrat of course, but he offers more entertainment value. Jumping about the world and allying himself with anyone (Putin in Russia, the mad Mullahs of Iran and so on) who hates Uncle Sam.

At least Chavez understands that these people do hate America (and Western values in general), unlike so many people in Washington who think they can ‘talk’ to the Iranian regime (what would be there to be talk about – whether the evil infidels of the world should be buried or cremated?). Or President Bush who “looked into the soul” of Mr Putin and discovered that he was a “good man”.

As for the elections: I am often attacked for saying nasty things about the way people sometimes vote, but the case of Venezuela is a tough one for the “the people may make mistakes but they mean well” crowd.

President Chavez was first elected in 1998. He had previously led a military coup effort (which, on its own, should have sunk bid for the office of President of the Republic). He was up against a rather boring social democrat type – but there was nothing evil about that man. Venezuela was at peace (so there was no “it was the war stupid” factor), and no one could seriously believe that Chavez would be less corrupt than his opponent or that he would be any better at what is now called the “management of the economy”.

So why did the majority of people vote the way they did? They voted that way because Chavez played class war “the poor against the rich” – forget that the Venezuela government had spent vast sums of money, it still was not enough.

Why was it not enough? Was it because there were still lots of very poor people? Certainly, but in their hearts these people knew that they would still be just as poor under Chavez (and if they did not know in 1998 they certainly knew last Sunday – when they voted for him again, in spite of all the billions that have gone on his overseas alliances and in corruption). The majority vote they way they do because they see that there are well off people – and they want these people to suffer as much as they do.

A vote for Chavez is not a vote to make oneself better off (and it never was), it is a vote to make other people as poor and as unhappy as one is oneself.

Voting for people like Chavez is not a ‘mistake’, it is something very different.

Election for President of Ecuador

I hear that the anti-leftist candidate for President of Ecuador has been overwhelmingly defeated by the leftist candidate (an academic ‘economist’ who thinks, among other things, that free trade with the United States would be bad for Ecuador).

The last time saw the anti-leftist candidate (a very wealthy businessman) via television, he was on his knees (quite literally) begging for votes and promising people “jobs, homes, health care, education” (etc.) if only they would vote for him. And he has gone down to defeat by about two thirds of the voters.

He might as well have given a very different speech.

“Subhuman scum, when you vote for the leftist (which I am sure you will) he will put into place policies that will make you suffer greatly – some of you may even starve to death. This is exactly what deserve – as you lust after goods that are not yours and are prepared to use violence, or to have other people use violence on your behalf, to get those goods.

I have sold all my property and have taken the money out of the country, I am speaking to you via satellite from the Cayman islands”.

Certainly he would still have lost, but he would not have humiliated himself by going on his knees, begging and promising the moon. And he would have saved the fortune the election campaign cost him.

Bad times in Brazil

There is a long and detailed report in the London Times today about the scale of gangland and police violence in Brazil’s Sao Paulo. If ever there was an account ramming home the distance between the image of Brazil as a fun-loving, sun-soaked nation and a country of enormous social and economic problems, this surely is it.

Brazil is one of those country’s that I would love to visit some day (I am a bit of a nut about Brazilian music). But stuff like this does not exactly get me rushing to get on the aircraft.

Cuba after Castro

Interesting article here on what might be in store for Cuba as and when Fidel Castro finally dies. My hope, probably naive, is that that country finally gets a break and enjoys the fruits of free enterprise. One thing that makes me annoyed is whenever I hear of affluent Western travellers go on about how they dream of going to Cuba before it “gets spoiled by U.S.-led development”. Yes, I am sure all those crumbling houses in Hanava, all those ancient 1950s cars and cute old guys with no teeth look so, you know, authentic in contrast to the frightfully ghastly prosperity of Miami or for that matter, Hong Kong.

Like a good friend of mine, I am only going to Cuba when or if it becomes a shameless hotbet of capitalist vigour and not one minute before.

‘Cheap’ Venezuelan oil for Red Ken

What the hell is one supposed to make of this?

The point at which Venezuelan President Hugo Chavez decided that London should serve as a model for services and governance in Caracas was not immediately apparent. He came in May, visited City Hall amid much controversy and fanfare, and was soon gone.

But the result of his visit is likely to be an extraordinary deal struck with London Mayor Ken Livingstone that would see Caracas benefit from the capital’s expertise in policing, tourism, transport, housing and waste disposal.

London, meanwhile, would gain the most obvious asset the Venezuelans have to give: cheap oil. Possibly more than a million barrels of the stuff.

South American diesel would be supplied by Venezuela – the world’s fifth-largest oil exporter – as fuel for some of the capital’s 8,000 buses, particularly those services most utilized by the poor.

This is gesture politics at its most contemptible. It is particularly bad given that the poor of London are, by any meaningful yardstick, considerably better off than their counterparts in the South American nation. The idea that Venezuela, a nation led by a thug who’s democratic credentials could be best described as flaky, is some sort of benefactor to the oppressed masses of London, is an utter joke. It is also particularly ironic that as part of this “deal”, London will “help” Venezuela’s tourist industry. No doubt Venezuelans cannot wait to discover the joys of the British welcoming service ethic.

We tend to dismiss the antics of Ken Livingstone as political theatre. If he wants to stand on platforms with Irish Republican murderers, we giggle. If he provides platforms for gay-hating Islamic preachers, we are all supposed to roll our eyes in amusement. Good ol’ Ken, what a laugh.

Incidentally, I wonder what the British government thinks about this?

Colombia: when will ‘our side’ learn?

By ‘our side’ I mean the people fighting the Marxist FARC in Colombia – particularly President Uribe. I not expect mainstream politicians to be libertarians (although it would be nice), but I do expect them to have some common sense.

President Uribe is highly intelligent man who has had considerable success in fighting the communists in Colombia. However, his latest idea (as reported in this week’s Economist print edition) shows a lack of common sense (a state of affairs all too common in politicians – including highly intelligent ones).

President Uribe wishes to cut the top rate of income tax – good for him. However, the President wishes to ‘balance’ this by extending sales tax to cover various basic foods. Have no fear, the poor would be able to claim back the money they pay in tax.

So a new tax will be introduced (a tax on food), and this will be ‘balanced’ by a new welfare benefit (for make no mistake, this is what this payment will be). A complicated bureaucratic mess. Sadly it is often the most intelligent of politicians who think up ideas like this.

If someone wants to cut the top rate of income tax (from 38% to 32% or whatever) then they should do so. But if they fear a ‘loss of revenue’ (and cutting the top rate of income tax always ‘costs’ less in revenue than many people predict) they should cut government spending (which they should do anyway).

They should not introduce a new tax, certainly not a tax that will be presented (by the communists, but not just by them) as a tax on the basic needs of the poor – trapping the poor into going ‘cap in hand’ for a new benefit (if they can deal with all the paper work).

Let them drink rum!

There is still no official word that statist Cuban dictator Fidel Castro has passed away, so any obituaries will have to remain on ice. It is not our habit at Samizdata.net to concede a thing to dictators, but one has to credit Castro for his tenacity in clinging on to power, especially after the collapse of his Soviet patron in 1991.

One must never forget though that the Cuban people have had to pay the price for Castro’s tenacity.

What to do about Castro has been a policy question that has vexed every US President since John F. Kennedy. Until the end of the Cold War, the US certainly could not ignore a violently pro-Soviet state on its doorstep, but after 1991, a policy of benign neglect might have worked to undo Castro. However, one of the features of US policy has been its vulnerability to poltics, in this case, the political wishes of the large Cuban exile population in the politically sensitive state of Florida. (For example, President Clinton felt he had to sign the Helms-Burton Act which regulates the US embargo against Cuba, in an attempt to secure the state for the 1996 Presidential elections.)

Peggy Noonan has more on the political impact of Castro on America. I like her policy prescription as well.

As in: Allow Americans to go to Cuba. Allow U.S. private money into Cuba. Let hotels, homes, restaurants, stores be developed, bought, opened, reopened. Use Fidel’s death to reintroduce Cubans on the ground to Americans, American ways, American money and American freedom. Remind them of what they wanted, what they thought they were getting when the bearded one came down from the Sierra Maestre. Use his death/illness/collapse/disappearing act as an excuse to turn the past 40 years of policy on its head. Declare him over. Create new ties. Ignore the dictator, make partnerships with the people.

Yes give more money to Radio Marti and all Western government efforts to communicate with the people of Cuba. But also allow American media companies in. Make a jumble, shake it up, allow the conditions that can help create economic vibrancy and let that reinspire democratic thinking. The Cuban government, hit on all fronts by dynamism for the first time in half a century, will not be able to control it all.

That is how to undo Fidel, and Fidelism. That’s how to give him, on the chance he’s alive, a last and lingering headache. That’s how to puncture his mystique. Let his people profit as he dies.

If he is actually ill, why not arrange it so that the last sounds he hears on earth are a great racket from the streets? What, he will ask the nurse, is that? “Oh,” she can explain, “they are rebuilding Havana. It’s the Hilton Corp. Except for the drills. That’s Steve Wynn. The jackhammer is Ave Maria University, building an extension campus.”

Imagine him hearing this. It would, finally, be the exploding cigar. That’s the way to make his beard fall off.

Now that would be poetic justice.

Chile: An example of modern democracy

The President of Chile has “given in” to student and school pupil ‘strikes’ and protests. Of course the story is really a little more complicated than that as Madam President (Michelle Bachelet) was really as the same side as the people making noise waving placards on the streets. Otherwise the “strikes” would not have been much of a threat. It would have been a matter of “oh you do not want all this taxpayers money spent on you – fine, we will close the establishments you are not bothering to go to”.

The moderate left has been in power since 1990 and have increased education (however this spending is calculated), but that is not enough for the protesters. They complain that state schools are not as good as private schools and this has an effect on their chances of getting into a good college and getting a good job.

So what do they want done?

Do they want self management of the schools? This method does not really work in making state financed institutions act as if they were not state financed (cats do not bark) – but it is a standard suggestion (going back to the “market socialists” in Austria in the 1920′s), and it might have positive impact at the margin.

Errrr no. State schools in Chile already have some self management – the protesters wanted national government control (and President Bachelet has agreed).

Perhaps the protesters wanted to introduce examinations into state schools (some people argue that selective state schools are a way of helping upward social mobility).

Again no. The protesters want all entry examinations for state schools banned – how that is supposed to help make state schools as good as private schools is something that is not explained.

The real story is that after sixteen years of rule by the moderate left less moderate leftist forces are taking over. And President Bachelet is tilting a bit that way. My guess is that most of these school pupils and college students are most likely nice people. Not only nice as individuals, but capable of voluntary interaction in civil society. If there were less taxes and more voluntary (whether religious or secular) schools they might do better.

However, politics ruins everything. No doubt even in most of the private schools and colleges people are taught that representative government is what people should look to – not each other. As long as government is democrat it can be “a force for good” (unlike the old military dictator – no doubt the young are not taught anything good about him).

But democracy does not alter the laws of political economy. Government may (or may not) be a lesser evil – a way of countering other force (whether by bandits or by invaders), but it can not be a force for good – giving people nice things better than they could provide for themselves and for each other. This belief in government (as long as it is democrat government) as a provider of nice things is the central myth of our age. To win an election (we are told) one must pander to this belief. If this is true and remains true, civilization will fall. Hopefully, it will change.

The corporate state, McKinsey-style

How else? You might ask. But this abstract in McKinsey Quarterly caught my attention with its astounding wrong-headedness:

How Brazil can Grow -

The most important obstacle is Brazil’s huge informal economy which, distorts competition by putting efficient, law-abiding companies at a disadvantage. Macroeconomic instability­reflected in the high cost of capital­is the second-most-important hurdle, followed by regulations (such as rigid labor laws) that limit productivity.

Could it possibly be that it’s the top-heavy regulatory state and shocking tax rates on officially recognised activities that are keep the poor poor, small companies small, and the poltically unconnected outside the system hoping not to be noticed? It couldn’t be state favouritism and that same capricious regulatory apparatus that keep the risks high and capital proportionately expensive? It would also be interesting to know in what sense ‘efficient’ and ‘law-abiding’ go hand in hand in such circumstances. It is implied that unlawful, invisible, enterprises are inefficient ones (in whatever sense that is). How do they know?

Even leftists are getting concerned about Hugo Chavez

The UK’s Channel 4 news channel tends, in my experience, to cover the news with a fairly obvious leftist slant, so it was quite a surprise this evening to watch the programme’s longish report about what is going on in Venezuela, focussing on the activities of President Chavez and his increasingly dictatorial leanings.

I have a very rough-and-ready theory, which holds that countries blessed with vast natural resources are, in some senses, cursed. Venezuela is one of the world’s top oil producers and at a time when crude is trading at the present high levels, it means that a demagogue like Chavez can buy favours with selected groups for quite a while. A country not so blessed — such as Hong Kong say — has to live on its free market wits. In some cases an oil-rich place — such as Dubai, which I mentioned a while ago — is led by folk with the wit to develop its economy with a mind on what will happen when the black gold runs out.

This blog does not seem to like Chavez very much. As and when his government falls, it will not be a pleasant process.