For the Herald
Time to discard useless economic policies
A couple of days ago, the Uruguayan writer Eduardo Galeano, whose 1971 book The Open Veins of Latin America greatly influenced several generations of progressives, among them such future luminaries as Cristina, surprised Brazilians when he admitted that he would find it hard to read his famous essay again because in it he made it clear that he knew next to nothing about what he was talking about. The reason the book did so well was simple: it pandered to the collective self-pity many Latin Americans felt by telling them their countries were poor because foreigners looted them by purchasing their raw materials.
To many, that made sense. Why should they let others get their filthy fingers on the copper, oil, beef and wheat that belonged to them and them alone? In response to the Uruguayan guru’s eloquent call to arms, thousands of youngsters donned Che Guevara outfits and took to the hills to wage war against the capitalist bloodsuckers.
Much has changed since 1971, but Galeano’s old way of thinking still attracts the many who want to believe they are victims of a monstrously unjust capitalist world order out to do them down. At fairly regular intervals, benevolent middle-class Argentines discover that many of their compatriots are poor, very poor. The startling news always shocks them. They then, like Galeano in his previous incarnation, proceed to put the blame for this unhappy state of affairs on whoever or whatever they dislike most.
Churchmen, such as Jorge Bergoglio, and progressive thinkers say poverty is the fault of what they call “savage capitalism” or “neoliberalism”, by which they mean the economic policies that are favoured by the governments of all relatively rich countries. It would seem that, as far as these kind-hearted men and women are concerned, universal prosperity is normal and poverty an aberration, a crime against humanity perpetrated by grasping businessmen who are indifferent to the suffering of others.
Telling the sort of people who join street demonstrations against poverty that, had it not been for capitalism, the world would be much as it was in the middle ages, is evidently useless. They are equally unimpressed by the fact that most men and women in capitalist countries, including those who imagine life for them would be far more agreeable under a Marxist or Castroite regime, are far better off than in those that have succeeded in keeping the hated system at bay. To their way of thinking, for more people to live in comfort, capitalism will have to be brought to its knees.
Opposition leaders recently took advantage of the government’s reluctance to tell us how many families got less than the 2000 or so pesos a month that apparently would suffice to keep them above the poverty line to point their fingers at Cristina. That must have hurt; when it comes to fighting neoliberals, orthodox economists, oligarchs and other such vermin who, the progressive consensus tells us, have contrived to impoverish hard-working Argentines, the lady has few rivals.
Over two hundred years have gone by since the industrial revolution. Most people have become far richer, in real terms, than all but a tiny handful of their ancestors, and even they had to go without the many gadgets and services that today are regarded as essential. It is expected that, by the end of the current decade, 350 million more Chinese will have been incorporated into the middle class.
How will they manage it? Will they stage mass demonstrations, go on strike, force the Chinese government to give them more handouts, block highways until their demands are satisfied and do all the other things Argentine economic warriors imagine will help them win the war against poverty? Of course not. In 1979, the chairman of the Communist Party, Deng Xiaoping, put an end to such folly. Since then China has stuck to the capitalist road that, as Deng and his pragmatic comrades appreciated, was the only one that would take his country toward a prosperous future.
It might be thought that by now rulers everywhere would agree that the best way to “fight poverty” would be to do what so many others have done over the years, discarding policies that proved useless in favour of those that had produced good results. In a more rational universe that would certainly be the case, but in the one we live in large numbers of intelligent, well-meaning individuals refuse to recognize what to Deng seemed obvious. Instead of trying to follow the path the materially successful have already followed, they strive to persuade themselves and their compatriots that it leads nowhere worth going.
For the millions of Argentines who are desperately poor to have any chance of a better life, the private sector, which includes a myriad of tiny firms and some largish corporations, would have to flourish. That would require, among other things, a stable currency, greater respect for basic property rights and the elimination of the many bureaucratic obstacles that make it far harder to set up a business here than in other countries. For politicians who assume they should be in charge of just about everything and want to ensure their cronies rake in more money than anyone else, letting free enterprise work as it usually does when given a chance would be an unpleasant prospect, but by now it should be plain even to them that attempting to replace it with something allegedly more “human” has only served to keep the poor where they always have been.