Inteligencia y Seguridad Frente Externo En Profundidad Economia y Finanzas Transparencia
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08/08/2005 | Balancing democracy, market economy

Carlos Alberto Montaner

In a recent survey about the causes of people's misery, conducted among college students in Lima, Peru, a clear majority of the respondents blamed the capitalist system for almost all the woes besetting the world. In a similar exercise in Argentina, the results were even more impressive: 62 percent blamed the market economy and, of course, perfidious Americans.

 

It's no wonder that economist Carlos Rodríguez Braun maintains that Latin Americans' best friend is not the dog but the scapegoat.

In almost all of Latin America the same perceptions abound, to a greater or lesser degree. They are usually repeated in university classrooms, read in the newspapers and spoken by many politicians and religious leaders.

Reality, moreover, seems to confirm such perceptions. If half of the population of Latin America is miserable and lives in mud and tin shacks, in societies organized as self-described capitalist democracies, it is natural that a good many people think that the model doesn't work. That is why neither populism nor antidemocratic attitudes fade away. Why defend what apparently has failed?

In Latin America, both the market economy and democracy are misunderstood. For a country to create wealth and surpluses on a permanent basis, the right to create private enterprises and own property is not enough. In Haiti, for instance, private enterprises and proprietors have always been around.

Nor does the existence of periodic elections and parliaments guarantee the proper functioning of institutions. In Ecuador and Bolivia, the people vote and the legislators meet, but the republican structure -- the three powers that balance each other and act as counterweights -- is not capable of maintaining order and guaranteeing the citizens' peace and security.

Sometimes there is even the impression that the conflicting concurrence of these three powers becomes a major obstacle to tranquil coexistence in those countries.

Theoretically, Swiss and Paraguayan societies subscribe to the same economic and political models, but those models work very well in Switzerland and very badly in Paraguay. The problem, then, is not in the theoretical model but in the way that it's applied.

In Switzerland, the rule of law is reliable, politicians and citizens obey the law, people have the right to reasonably fair trials, universities teach and carry out research, enterprises grow and invest, labor unions don't press absurd demands and diverse ethnic communities -- though they don't love each other deeply -- don't aim to demolish the state. It has been thus for a long time (at least since 1848), which has provided sustained Swiss growth and the rewarding certainty that tomorrow will always be better than today.

In Paraguay, instead . . . but why repeat what we all know?

How do we ensure that the happy combination of market and democracy will eventually produce in Latin America the same fruit that it has produced in countries such as Holland, Denmark, Ireland and even Spain and Portugal?

The answer may lie in the Chilean experience, or the Spanish experience after Franco's death. It all begins with forging a clear consensus within the largest segment of the sensible ruling class, to the right and left of the political span.

That consensus involves an agreement based on the preservation of the four basic pillars of the system, just as they exist in the 20 most successful nations on the planet:

  • Respect for the rule of law (which implies the end of impunity).
  • Democracy as a method to make collective decisions (that cannot violate individual rights).
  • Private property and market (instead of statism and planning).
  • An opening to the exterior, for the purpose of interrelating decisively with the First World in the fields of finance, technology and trade.

    Any society that firmly sets its course in that direction for a prolonged period of time will arrive at a safe port. The problem is not in the model; it's in the way it is applied.

  • Hacer - Washington DC (Estados Unidos)

     



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