Not so modern now

Watching Charles Chaplin´s Modern Times (1936), I wonder how accurately it reflects daily life in the thirties, at least for the average American people. Though it may not be the main argument of the movie -I think it points more toward the confussion and perplexity of the common folk in a whole new social and economic environment-, I guess it gives a rather precise portrait of the difficulties -stagnant unenployment, great numbers of working individuals living in sheer poverty, 12-hour workdays, repetitive tasks in the working line, a biased system of criminal justice- the working masses had to face back then. However, and contrary to what many collectivists would like us to believe, this is not the situation we witness today. At least in the Western world -obviously, in other regions things are quite different, but nevertheless their way out is just the same- knowledge is the main characteristic of labour markets. In developed economies -and let us not forget our modern socioeconomic systems necessarily grew out of the one Chaplin shows in his movie- aiming to produce high value goods and services, and whose markets strive to find out the tastes, needs and desires of a wide variety of consumers, independent enterpreneurs, individually taylored careers, and high skilled, flexible workers are needed in great numbers, and less so massive unskilled work. Paramount among other factors, this development has changed for good labour markets and industrial relations, often blurring distinctions between bosses and subordinates, thus making collectivist forces -trade unions, socialist parties, enemies of globalization, advocates of a much dreamed radically egalitarian paradise, and the like- look anachronistic and out of touch with reality, with all their rethoric of working classes vs. capitalistic tycoons and views of wage earners as common fellows crushed by the whimsical wishes of greedy proprietors. Very seldom tales of good and evil succeed in accounting for a complex world which is best described by its multiple shades of grey.

Photo: Charles Chaplin in the set of Modern Times, 1936 © Max M. Autrey

The convictions of a libertarian candidate

Reading some of the opinions about a variety of issues of one of the American presidential candidates, you may think we are no longer living in the 21st century and travelled back in a time machine to the age of the American founding fathers. You cannot accuse Republican congressman Ron Paul of flip-flopping or dithering about his principles. However, in the words of this Texan libertarian, Thomas Jefferson and Ronald Reagan become strange bedfellows. Paul claims governments are the biggest threat to freedom, thus the need to reduce their size as much as possible and devolve decision powers to citizens in nearly every realm of social life. This includes upholding the Second Amendment to the Constitution, which allows American citizens to keep and bear arms, and reapeling every single piece of legislation devised to put into effect that right in the case of assault weapons or psychopaths. What Paul eschews to acknowledge -it would go against its libertarian beliefs-, and many other libertarians as well, is that the sole purpose of arms is to kill or wound, that we no longer live under tyrannical regimes -though far from perfect, we have devised institutions to help us have a say in what is being done to us and in our name-, that we no longer require armed militias to defend ourselves from our own government, that modern, functioning democracies are not just examples of ‘majoritarianism’, and that if we want to keep social order we better grant the state the monopoly of violence and then try to control it with reasonable checks.

Paul makes sharp and appropriate comments regarding government´s meddling in our private affairs (i.e.: the war on drugs) and, as other libertarians and classic liberals before him, the limits and failures of government intervention in many areas of public life, but fails to identify the present and future challenges to our freedom and our welfare, which do not come from democratically elected governments whose actions are subjected to the rule of law. Also, he does not recognize we may not fight many forms of discrimination in our modern societies with liberalization and free markets alone, and that some sort of government action is needed. True, governments may end up worsening the very problems they tried to solve -for instance, he is right at stating governments are exacerbating the problem of ethnocultural relations with their notions of ‘multiculturalism’-, but that is not an argument per se against public policies -to follow with our example, doing nothing will not improve social and economic integration-. Those challenges and threats -global terror, climate change, mass migrations, AIDS and other diseases, failed states, some forms of discrimination or how to bring the benefits of globalization to many world regions, to name but a few- are best meet with a flexible combination of private entrepreneurship and the accompanying role of a limited, effective government constrained by national and international laws (Paul is a self-proclaimed and extreme isolationist who advocates the U.S. withdrawing from or opposing institutions such as the UN, the NAFTA Agreement or the International Criminal Court).

Our libertarian candidate makes yet other remarks (i.e: against abortion, against federal funding for stem cells research and other comments on religion) that have nothing to do with liberalism. I am interested in knowing about his ideas on gay marriage or euthanasia, though I may easily guess at them. I claim these particular views make him a conservative, like scores of others who purport to be (classic) liberals but actually defend the status quo and despise certain lifestyles they dissaprove.

Ron Paul´s official website

Photo: Ron Paul © The Ithacan

Hobbesian doubt 1: fraud

Let us imagine we live in a distant future society in which the ownership of all goods remains in private hands and all the production and distribution -even of public goods- is carried out through the market. This is the libertarian world advocated by the anarcho-capitalist ideologues of the ‘minimal state’. According to those theorists, in this social order the state would have marginal, though important, functions, compared to our present states: defending nations against external enemies, preventing people from harming or coercing each other, and making sure voluntary contracts are respected.

In our radically free, libertarian society, states should not determine which kind of goods or services would be sold, who could buy or provide them or in which quantity. That means, for instance, that anyone could claim to be an architect or a doctor, and that consumers would have to rely solely on reputation by means of the information provided by the market. Individuals would then be forced to face the consecuences of their free, rational and informed -or prejudiced, stupid and ill-informed- choices. In due time, bad providers would have less and less clients and would eventually vanish from the market, whereas good ones would experience the rewards to their probity.

In this kind of society, should governments proceed against fraud? Could we not just think that cheaters would be ‘naturally’ ousted from the market? Remember, reputation is the key, so why not let people find out about bad architects or doctors for themselves, when the house they built for them falls on their heads or the treatement they recommended worsens their heath condition? Could we, on the other hand, consider fraud as a form of unilaterally breaking an ‘implicit’ contract? Remember as well that states should guarantee citizens observe contracts, since people acting otherwise would ensue chaos. So, what is the nature of this implicit contract, if any? Nowadays, if you buy, say, a medicine to lower your blood pressure, but you discover instead it has been made of cocaine, that is fraud and you may sue the company which manufactured it. But if you pay a psychic who promises you will be able to chat with your late grandfather, you cannot sue her if that communication does not occur, since it is considered you voluntarily purchased the services of a cheater out of sheer superstition. In our libertarian world you could buy the service of an alleged doctor who promises to cure you of your cancer by means of you listening, say, to the whole discography of Elton John. Should you be able to proceed against her for fraud? Then, why not go against the catholic church -or any other religious sect-, which promises you eternal life? Fortunately, belonging to a religious community is not mandatory -except in some Islamic countries-, but neither is it buying this product or that service if we are not forced to do so from a monopoly, and still governments act sometimes against liers, even when we voluntarily buy from them. Let us bear in mind fraud would be eventually wiped up from the market, so why intervene? However, we should also consider that a) even when liers and bad producers will eventually leave the market, nothing may prevent other liers and bad producers to get in -in fact, the reality will be surely closer to this constant in-and-out flow than to a perfect situation of honest and competent producers; and b) it make take some time until the public at large realizes the fraud and stops buying from a particular cheater, and, as as result, tragedies may occur, sometimes involving massive deaths, and often without time passing but rather all of a sudden. In many cases, government intervention does avoid those awful outcomes: think of air companies regulation or food and drug administration, to name but two examples. Could a truly free market provide this level of safety, or even a higher one? I really think so, but, at what initial price in human lives?

So, in our ideal libertarian world -indeed in our present world- should governments care for the accuracy of the information available to us and prosecute cheaters? Always? Never? Sometimes? When, then? Which are the criteria for a legitimate public intervention in this area? Nowadays is widely thought consumers may distinguish rather easily among good and bad food or shoe producers, but not so among good and bad oncologists, for instance, health care being such a specialized and complex good that governments should regulate its provision, be it public or private. Is it really so? Could we not get reliable information solely on market basis, however complex or crucial (even unreparable) the choice to be made? Do we have different answers to this question depending on the area? And, if markets are not providing the information we need to make decisions, does government intervention solve the problem? If so, at what price? Alternatively, could we have any sort of market solution to it? If so, at what price?

Post-colonial hypocrisy

In the EU-Africa summit that took place in Lisbon this past weekend, the Libyan dictator Muammar Qadhafi declared Europeans ought to compensate Africans for their past colonialism. He said a billion euros would be a suitable figure to start with. Notwithstanding how ill-managed most foreign financial help has been in the hands of corrupt and incompetent African governments, and the fact that such a sum would never reach ordinary Africans, Qadhafi shows an endless capacity for hypocrisy. Like many others, he is merely banging the drum for the idea that African backwardness is the direct consecuence of colonialism. Of course, this kind of language suits well the Western illiberal, antiglobalization ideologues and their supporters, but historical facts point otherwise. That evidence should not lead us to deny, for instance, the pernicious colonial policies of the British Empire in late ninetieth and early twentieth-centuries in Southern Africa, which destroyed a whole functioning social order and replaced it with a great deal of disarray and suffering. However, this is not equivalent to stating that without Western intervention in the continent, it would now be composed of peaceful and developed nations. Most probably it would have not, since African problems are rooted both in the past and in modern times.

In any case, being a former colony does not necessarily amount to dealing with a corrupt government and a backward and caothic economy. Many former colonies are now success stories, challenging the partial and biased claims of dogmatic populists and nostalgic collectivists. Singapore, Hong Kong and South Korea are good examples of ex-colonies which made policy choices that, in turn, eventually prompted a ‘virtuous circle’ in terms of development and modernization.

Singapore was a British crown colony from 1867 until 1957, when it became a self-governing nation, though it was only in 1971 when the British withdrew their military presence. After the first and second Opium Wars (1839–42 and 1856-60), China was forced to put Hong Kong in British hands. Then, the Convention of 1898 stated that Hong Kong would be leased to Britain for 99 years (it returned to Chinese hands in 1997, though keeping a special status). Korea was a Japanese colony from 1910 to 1945, and then suffered a war from 1950 to 1953 -between its Northern and Southern parts- that cost four million lives. Nowadays -data are for 2006- Singapore enjoys a per capita income of US$29,473, the equivalent figures for Hong Kong and South Korea being, respectively, US$27,342 and US$18,220.

The complex array of reasons behind present African developmental and political difficulties lays not in its colonial past but somewhere else, and it deals more with the lack of respect for human rights, the non-existence of the rule of law and the aversion towards free markets and their necessary institutional frames (independent judiciary, democratic checks and balances, a stable economic-legal system). Some African leaders should stop looking so often for those reasons abroad and take a closer look at themselves and the policies they are pursuing.

Photo: Seme Beach, Southwest Province, Cameroon, 2005 © phil h

The same old story: Uganda and Zimbabwe

A contemporary observer gives the following account of Idi Amin´s ousting of Asians from Uganda after his arrival in power in 1971:

Traders from the Far and Middle East have been coming to East Africa for centuries. Until the 1970s, South Asians ran most of Uganda’s businesses, factories, and sugar and cotton mills; they built many of the towns, taught in the university, and owned a great deal of property. Then, in 1972, Idi Amin threw them all out and gave their property to black Ugandans. Chaos ensued. The new African entrepreneurs were totally inexperienced and the economy fell into ruin. Amin spent what little foreign exchange remained in the country on whiskey and transistor radios to placate the army, and soldiers and other government henchmen looted at will.*

Some dictators -even when they hold several degrees by Western Universities- either never seem to learn from the past or they are too attached to their privileges to think of anything else but their political fate. Zimbabwe´s Robert Mugabe presided over a long period of political and economic stability during which Zimbabwean economy was among the strongest three in the continent. On the other hand, most property, especially land resources, remained on the hands of white Zimbabweans, a small minority of the population. For political motives (i.e.: enlarging the number of supporters with an eye on his goal of staying in power), disguised as a way of correcting a social injustice, Mugabe´s government is devastating what once was a succesful developing country -albeit economically and socially very unequal-, when it is currently taking land and farms from their white owners by force. Mugabe´s replica of Idi Amin´s policies -as it was the case in Uganda- are not benefiting the general population either, as many properties have been distributed among political cronies and supporters. It all -combined with the international sanctions imposed on the country to force its government to walk towards democracy and the rule of law- is resulting in the highest inflation rate in the world, an astonishing level of unemployment, a massive process of emigration, record poverty levels and the disintegration of Zimbabwean economy. Finally, even if Mugabe´s intention of correcting past -and present- grievances were genuine -which are not-, the ‘way’ he chose to do it only adds new wrongs for blacks and whites alike without solving none of the previous problems. Only by setting up real democratic institutions, the rule of law and a free market may those huge difficulties be overcomed in the long term.

Read more about the current situation in Zimbabwe here.

(*) Helen Epstein, The Invisible Cure (New York: Farrar, Straus and Giroux, 2007, p. 10), citing the following sources: Yoweri Museveni, What Is Africa’s Problem? (Minneapolis: University of Minnesota Press, 2000); and Henry Kyemba, A State of Blood: The Inside Story of Idi Amin (Kampala: Fountain Publishers, 1997).

Photo: Mbarara, Uganda, 2006 © salarios