Never the Same Again

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Hong Kong ranks among the freest societies in the world. Not only economically, but socially it is a very liberal place. It was marinated in British ways until 1997, much longer than Singapore and other colonies. Then China took it over as a special administered region, which according to the agreement with the UK meant that it was only nominally to be under Chinese control for the next 50 years. It was possibly the only colony in which a vast majority of citizens did not want the British to go.

For most of the past 22 years, China has been easy on Hong Kong, despite the fact that the People’s Liberation Army’s garrison headquarters is one of the most visible landmarks of Hong Kong island, a constant symbol of the fact that China can fully take over Hong Kong in minutes, if it wants to. This alone is enough to generate fear and hate among the people of Hong Kong. It does not help that they are conscious and made aware every day by the hordes of visiting tourists from China — through what are seen as their rather less sophisticated ways, their rudeness and misbehavior — that a far less developed country of China controls one of the richest societies on the planet.

Nouveaux riches from China buy properties in Hong Kong, driving up prices, their children take up slots in good schools, and they put buying pressure on edible goods, such as milk powder, etc., that have a high risk of being adulterated in China. Or at least this is what the people of Hong Kong think.

The People’s Liberation Army’s garrison headquarters is one of the most visible landmarks of Hong Kong island, a constant symbol of the fact that China can fully take over Hong Kong in minutes.

China has built ultramodern infrastructure in the region. It is now possible to cross the sea from Hong Kong to Macau using the world’s longest bridge, which is 55 kilometers long and cost a whopping $19 billion to build. Bullet trains now run from the heart of Hong Kong to Shenzhen in a mere 15 minutes for a cost of $10, and to Guangzhou in a mere 50 minutes. Shenzhen and Guangzhou are cities that were the fountainhead of the Chinese economic miracle when Deng Xiaoping made them the places for experiments in free-market capitalism in 1979.

The area adjoining Hong Kong continues to be the heart of Chinese manufacturing. It is a hive of energy, activity, progress, and optimism unlike anywhere else on the planet. In many ways, technology is more customer friendly in East Asia than it is in the West. The enormity of this can be appreciated only by those who visit. I often go to China, where I hold a long-term visa, and I go to Hong Kong often enough that I am allowed to pass the immigration eChannel that its citizens use, without a need to talk with any officer.

I am extremely fond of China, and see it as the future of humanity, and certainly as the only Third World country — if at all it can be considered that any more — that has the potential to become a developed society. Culturally and economically, it has been on a rapid upward trend. Chinese today compete with the best in the world, and their creativity has been unleashed. In many areas of research, Chinese organizations produce more quality and quantity of output than any other country on the planet, including the US. The reading habit is increasing rapidly among Chinese. There are tens, perhaps hundreds, of Chinese cities whose downtowns look more modern than those in the most developed parts of the world.

China owes a lot of its growth to Hong Kong, Taiwan, and Singapore, countries that were able to channel both Western technology, adapted for Chinese culture and language, and Western investments. China became successful by copying Western technology and often improving on it, something that I, unlike others in the West, see as a massive achievement — because copying is not all that easy, as is demonstrated by the failure of the other Third World countries to do the same. China owes its gratitude to the West for enabling this.

I see China as the future of humanity, and certainly as the only Third World country — if at all it can be considered that any more — that has the potential to become a developed society.

Time has moved on, and gratitude has faded, or perhaps it never existed — the concept of national gratitude hardly exists outside the West and Japan. And China’s egocentric president Xi Jinping has inserted his thoughts in the constitution of China, declared himself a lifetime president, implemented a tyrannical social credit system, and taken a heavy-handed policy toward neighboring countries. In his overconfidence, he appears to think that China has arrived and could fight a trade war with the US head-on.

Xi has likely surrounded himself with yesmen and with others too fearful to speak. His arrogance and his distance from the ground realities are weaving a web of entanglements for China. Xi has helped to accentuate a sense of nationalism among Chinese. Out of jealousy and an inferiority complex, Chinese nationalists act big-brotherly toward Taiwan and Hong Kong, both highly developed societies. But in a country where face value is very important, where the central government is the key stabilizing force, and where decisions once taken cannot be easily reversed, Xi cannot afford to look weak. In a country of 1.39 billion people, this has created a massive systemic risk.

Unfortunately, by fuelling nationalism, by engaging in trade war with the US — a war that could have been avoided had he agreed to play fair — by being heavy-handed in contrast to tilting toward the rule of law, and by constantly interfering in Hong Kong, Xi is making China unstable, and at best seriously retarding its progress.

In his overconfidence, Xi appears to think that China has arrived and could fight a trade war with the US head-on.

When in 2014 Xi tried to influence Hong Kong’s electoral process, massive protests arose. Today, Hong Kong again finds itself in the crosshairs of China. The new protests, enormous and intense, are against China’s attempt to institute a law enabling extradition of Hong Kong residents to mainland China. Xi miscalculated. The protestors have come to conclude that China wants — by hook or by crook — to incorporate Hong Kong fully into China, something the people of Hong Kong are very paranoid about.

Hong Kong people are not like those who were at Tiananmen Square in 1989. The people of Hong Kong lack conditioning in fear-based control. They will fight much longer and harder, and will do everything possible to attract international attention.

According to the agreement that China had with the UK, it was to keep Hong Kong politically independent until 2047. But Xi cannot keep his hands off the golden-egg-laying goose. He and nationalist Chinese fail to understand that Hong Kong under the party’s control will no longer be Hong Kong, and will break one of the major channels of progress for China. But if he has to pull back, the reverberation will embolden those elements within China that want democracy. This is a lose-lose interference — because democracy would be a disaster for China.

Let me explain.

Across the spectrum from the Right to the Left, the people of Hong Kong tend to like the West. Many would have preferred to be continued to be ruled by the UK. They fly the Union Jack or the American flag to show their affiliation. The central theme organizing the protestors is a desire for a democratic process, unrestrained by China.

Hong Kong people are not like those who were at Tiananmen Square in 1989. They will fight much longer and harder, and will do everything possible to attract international attention.

But despite their liking for the West, a large number of people in Hong Kong exist in situations that would not be approved of in the West. Live-in maids who must stay away from their families in Indonesia and the Philippines, lower-class workers who must share a small room, often with the same bed shared among those working in shifts — many examples are possible. They all go against the sensitivities of the egalitarian forces in today’s West. Of course, these people exist because they get a better deal in Hong Kong than they would have where they grew up. Insisting that they get better working conditions would only mean that they would not have a place in Hong Kong and would be forced to stay in their home countries. Life is tough, but the free market offers them the best deal.

Democracy, by igniting populist forces, will destroy this arrangement. Taxes will go up and interference in private property and business — the kind of interference that gets socially generated in a democracy — will significantly reduce the freedoms that make Hong Kong what it is.

Hong Kong has no minimum wages. And, interestingly, wages in Hong Kong go down when the economic situation requires. No doubt there is a huge underclass. In a democratic system, the underclass will vote for economic egalitarianism, exactly what will destroy Hong Kong’s free market — damaging the underclass the most.

But anyway, it is impossible to see Hong Kong becoming democratic. China won’t let that happen. China cannot even afford to find a compromise, for losing face would mean nationalists going against the government, destabilizing China.

Taxes will go up and interference in private property and business will significantly reduce the freedoms that make Hong Kong what it is.

The need of Xi and China not to lose face means that this situation can no longer be disentangled. Given Xi’s constant interference, democratic desire in Hong Kong is going to stay. Several of my friends living in Hong Kong are seriously contemplating moving to Singapore. I myself am investing in property companies in Singapore, but I feel sad that, irrespective of which side wins, Hong Kong will never be the same again.

I go to China often. Chinese people are clearly fearful of discussing politics in the open, often even among friends. I like the fact that they are politically not active and focus on their own circle of influence. They lack the sense of entitlement. They also lack political freedom (which often translates into a sheep expecting the fox to steal from another sheep), but they enjoy social and economic freedoms. Unlike in other poor countries, women walk around feeling mostly safe.

If Xi now gives in, even partially, to the demands of Hong Kong protestors, it will embolden those demanding democracy in China. But a democratic China would be a disaster. It would create entitlements among its people, waste their resources on political activism, and introduce short-term-minded politicians and outright goons to power. Stability would be replaced by political infighting, and with that would also go whatever liberties there are. Measuring liberty is subjective, but I cannot think of a poor country that offers more liberty than China. I certainly feel far freer in China than in India — although the Chinese generally dislike Indians.

Whatever happens, Hong Kong will no longer be the same Hong Kong. Nor will China be the same China. And Xi is responsible for the mess, and for creating massive systemic risks against stability within China. I am a big fan of China and hope it finds a way out. But in retrospect, China would have been much better off never acquiring Hong Kong.




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In Hong Kong, Carrying Signs

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The news from Hong Kong reminds me of lyrics of a song from my youth — “a thousand people in the street, singing songs and carrying signs.” Except it wasn’t a thousand on June 9, 2019. It was a million. Repeat: a million. One-seventh of Hong Kong’s population.

Imagine one-seventh of the population in the city closest to you, out on the street demanding that legislators not pass a law concerning extradition of criminal suspects.

Years ago, I lived in Hong Kong. I was among the Hong Kong Chinese for three years. They were hard-working, versatile, street-smart. Proud, too. They regarded the British as weakened by the welfare state, the Singaporeans as rigid, and the Middle Easterners as religious fanatics. The Hong Kong people were not hotheads. They did not yell and shake their fists at one another in public, like the Italians. They did not go on strike for inscrutable reasons, like the French. They were not like the Indonesians, who celebrated the heroes who had fought for their independence and won, or the Filipinos, who celebrated the heroes who had fought for their independence and lost. The Hong Kong people did not grow up singing the national anthem, saluting the flag, and praising the military, like the Americans. They didn’t have a flag that was really theirs or a real military, either. When I got there in 1989, they had no political parties, though they were about to create one.

It was a million. Repeat: a million. One-seventh of Hong Kong’s population.

The first piece I ever wrote for Liberty (as R.K. Lamb, in the March 1990 issue) was about Hong Kong, where I was living along with 40,000 or so American expatriates. (More than double that, now.) The territory was governed by the British. They had cut a deal with China to turn it over in 1997. They hadn’t asked the Hong Kong people about that deal, and China hadn’t asked, either. On its face, the deal seemed all right. Under Deng Xiaoping’s formula of “one country, two systems,” China had agreed to let Hong Kong retain its legal system for 50 years, until 2047.

In those days 2047 was an unimaginably long time away, and 1997 was coming up. The question was, how was “one country, two systems” going to work? The Hong Kong press — one of Asia’s freest — was reassuring. Things would be fine. China has promised to let us be! Outside the spotlight, Hong Kong professionals were quietly “voting with their feet,” emigrating to Australia, Canada, the United States, and several countries in Southeast Asia.

I didn’t think “one country, two systems” was going to work. In 2006, I wrote a piece for Liberty admitting that I had been too pessimistic: China had done better by Hong Kong than I thought it would.

Overall it still has — so far. I have to give China credit for that.

The Hong Kong people did not grow up singing the national anthem, saluting the flag, and praising the military, like the Americans.

Milton Friedman had proclaimed in his Free to Choose TV series that Hong Kong had more economic freedom than any place on earth. The Fraser Institute and the Heritage Foundation, both of which annually survey economic freedom, verify that it still is. But an economy requires a foundation of politics and law, which Friedman well knew. Hong Kong’s legal foundation was, and is, British law, which is a product of centuries of the politics and history of the people of England. When I’d ask a Hongkonger why Hong Kong was rich, the answer was, “hard work.” Nobody ever said, “British law.” The Hong Kong people had worked hard to build their prosperity, but they hadn’t built the system of law that supported their personal and business freedom. They had inherited it. If they wanted to keep it after 1997 they were going to have to fight for it, and I wasn’t sure whether they would.

Well, they have. Whether they will prevail is another matter.

The British never gave the Hong Kong people political freedom, meaning the right to vote out their government and institute a new one. The handover in 1997 gave the people only a limited vote. They formed a number of “pro-Beijing” and “pro-democracy” political parties. In the 2016 elections, the pro-democracy parties got 36% of the public vote and the pro-Beijing parties (a weird mixture of pro-communist and “patriotic” business conservatives) 40% of the public vote, so the pro-democracy parties do not have a claim to rule. Hong Kong’s political system makes that nearly impossible anyway. Of 70 seats in the unicameral legislature, half are elected by public vote and half by the union federations, the chambers of commerce, the lawyers, the teachers, the social workers, and other “functional constituencies.”

When I’d ask a Hongkonger why Hong Kong was rich, the answer was, “hard work.” Nobody ever said, “British law.”

For more background, take a look at the Council on Foreign Relations report “Democracy in Hong Kong.” Under this hybrid system the pro-Beijing parties have held on to their majority for 22 years. Hong Kong’s chief executive has never been elected by the people; the current executive, Carrie Lam, was chosen by a select group of 1,200 Hongkongers acceptable to Beijing. The pro-democracy forces have been pushing for more than a decade to have the executive be elected by the people, but China will not allow it.

On to the current matter. I am no expert; I haven’t lived in Hong Kong since 1993, and I haven’t followed the story as it has been building these past four months. I have done my catching up on the Internet.

According to a report in the Irish Times, the matter began in 2018 with a 19-year-old Hong Kong man who went to Taiwan with his 20-year-old girlfriend, who was four months pregnant. The man returned alone and admitted to police he had strangled her, stuffed her body in a suitcase, and dumped it near a subway station. Under an extradition treaty, the man would have been extradited to Taiwan for trial for murder. Hong Kong has extradition treaties with some 20 jurisdictions, including the United States, but not Taiwan and not China, the sovereign power over Hong Kong.

In February 2019 the Hong Kong government said it needed to remedy this problem by amending its Fugitive Offenders Ordinance. The changes would allow the Hong Kong government to extradite a person to a non-treaty jurisdiction. This proposal is what a million people are in the street about. They are worried that the new law will allow innocent people to be extradited to China.

The pro-democracy forces have been pushing for more than a decade to have the executive be elected by the people, but China will not allow it.

The Hong Kong government says not to worry. The proposed law stipulates that no person can be extradited for the expression of political views, for a political crime, or for a political motive; that no person can be extradited in a case of double jeopardy or any crime for which the sentence is less than seven years; and that if there is a possibility of a capital sentence the destination country must promise not to impose it. (Hong Kong does not have the death penalty. China does.) The law says that any person extradited has the right to appeal to Hong Kong courts, and can be extradited only if the chief executive agrees.

I’m no lawyer, but on its face the proposal seems all right. The law is strong in Hong Kong. The courts have been good. And yet a million people are in the street. The story, I think, is not about what the proposed law says. It is about the fear of how such a law might be used, and the political consequences of its passage. The people of Hong Kong remember what China’s government did in 1989 to the protesters at Tiananmen Square, and they still do not trust the Chinese state.

One group that has come out against the law is the American Chamber of Commerce in Hong Kong. This is notable. The AmCham is not Human Rights Watch. It represents US corporations, which are primarily interested in commerce. But commerce and human rights are connected in ways AmCham is quite aware of. In its public statement, AmCham expresses the worry that “the new arrangements could be used for rendition from Hong Kong to a number of jurisdictions with criminal procedure systems very different from those of Hong Kong — which provides strong protections for the legitimate rights of defendants — without the opportunity for public and legislative scrutiny of the fairness of those systems and the specific safeguards that should be sought in cases originating from them.”

This proposal is what a million people are in the street about. They are worried that the new law will allow innocent people to be extradited to China.

What recent reasons are there to worry? Martin Lee, the Hong Kong lawyer who founded the territory’s first political party, wrote a piece for the Washington Post, naming some of the reasons. In 2017, mainland agents abducted Chinese Canadian billionaire Xiao Jianhua, who has not been seen since. In 2015, five Hong Kong publishers were taken; one of them, Lam Wing-kee, was forced to make a televised confession.

“Why were these people abducted?” Lee wrote. “Because there is no extradition law between Hong Kong and China. There is no extradition law because there is no rule of law in China, where the Chinese Communist Party dictates who is innocent and who is guilty. For the same reason, the United States has no extradition arrangements with China (though it does with Hong Kong).”

Lee wrote, “The Hong Kong government is poised to pass an extradition law that will legalize such kidnappings and threatens to destroy Hong Kong’s free society . . . Beijing could extradite Americans in Hong Kong on trumped-up charges . . .”

I remember Martin Lee from my time in Hong Kong, and later, when he came through Seattle and I interviewed him. Lee is an old-time liberal, dogged to the point of ouch. He sometimes cries wolf when the wolf doesn’t come — that is, he imagines things that don’t happen — but a smart lawyer may imagine various futures in order to protect his client. And that would be the Hong Kong people. They are worried about what might happen.

What to do, if you're China? You inhibit Hong Kong’s democratic institutions now.

And think about what the world looks like from their shoes. They have 28 years left of “one country, two systems.” After that comes one system — China’s. In 2047, Hong Kong’s British law goes away.

Poof.

Put yourself in the shoes of the Communist Party of China. You really didn’t like Deng Xiaoping having to grant that pushy Englishwoman, Margaret Thatcher, “one country, two systems.” Hong Kong’s system is alien, bourgeois-liberal, British. You want it to go away. You want Hong Kong to be Chinese — fully. But if Hong Kong’s British-derived law survives intact up to 2047, millions of Hong Kong people will demand that you extend their system for another 50 years. You don’t want that. You want to make sure that never happens.

What to do? You inhibit Hong Kong’s democratic institutions now. You stop any expansion of the number of publicly elected seats in Hong Kong’s legislature, and you do not allow Hong Kong’s chief executive to be publicly elected — ever. You don’t have to say “ever”; you just have to drag your feet, wave your arms, declare emergencies, make excuses, whatever it takes, to make sure full elections don’t happen by 2047.

For the Hong Kong people, accepting Deng Xiaoping’s “one country, two systems” was always a bet that China would change politically.

You also want to cut holes in the Hong Kong legal system — with a public security law, or a law requiring political content in public education, a law that allows you to extradite criminals to China, etc. The extradition law can promise not to grab anyone for political offenses, but some person decides what those are. And if people like you get to choose that person, then you’re fine.

As a Communist, you want to chisel away at Hong Kong’s British law until by 2047 it’s not worth anyone fighting for.

Defenders of China will say I am making things up, and they will be right. I am imagining things. I believe that’s what the Hong Kong people are doing — imagining their future.

For the Hong Kong people, accepting Deng Xiaoping’s “one country, two systems” was always a bet that China would change politically — that after 50 years, China would be enough like Hong Kong that the people living then could work things out. Economically and socially China has already changed a lot. Politically not so much — and the years tick by.

Margaret Thatcher and Deng Xiaoping cut the “one country, two systems” deal 13 years before Britain’s lease on Hong Kong was set to expire in 1997. They needed to do it then because Hong Kong people, and foreigners also, had to have some assurance about life after 1997 so they could make business investments, take out mortgages, start careers, and decide where to live their lives.

Thirteen years before 2047 is 2034. That’s a milepost to think about. And it’s coming up.

Unable to secure their future at the ballot box, they are attempting to do it, peacefully but urgently, in the street.

Most readers of Liberty live in jurisdictions in which the great political questions are settled. We argue over the remaining issues, and occasionally work ourselves into a lather about them — imagining that the next election is the most important in our lives, that Barack Obama is going to usher in socialism, that Donald Trump is going to suspend the Constitution, or that Bernie Sanders is going to hoist the red flag. It’s fun, you know, and some of the issues are important, but it all pales before the political questions faced by the people of Hong Kong.

Almost 30 years ago I wrote in Liberty that I thought the Hong Kong people had failed to take charge of their political future, being “too busy in Mr. Friedman’s capitalist paradise, making money.”

Not anymore. The Hong Kong people don’t have the British to protect them or anyone, really. Unable to secure their future at the ballot box, they are attempting to do it, peacefully but urgently, in the street.

How did the song go? “A thousand people in the street, singing songs and carrying signs, mostly saying ‘hooray for our side’.”

Damn right, hooray for their side.




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The Two Socialisms

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When I was in college, the selling point of socialism, communism, revolutionary activism, all of that, was something called “participatory democracy.” That’s what the mighty SDS (Students for a Democratic Society) stood for. That’s what the neo-Marxists stood for. That’s what all the “community organizers” stood for. The idea, endlessly reiterated, was that “decisions must be made by the people affected by those decisions.” No one talked about Medicare for all, or government-funded preschools, or government-mandated revisions of the environment. The idea was that centralized “state capitalism” was wrong, not primarily because it was inefficient, or even inequitable in its effects, but because its decisions were not “democratic.” They had not been made by the people affected by them. If it was inequitable or “slow” (i.e., inefficient), that was why.

Now we are witnessing an immense revival of “socialism,” led by Democratic Party opportunists and hacks. And it is all about laws that need to be made to increase the power of the centralized state. It is about giving professional politicians sole power over healthcare, housing, education, transportation, employment, qualifications for voting, and the possibility of self-defense — and all this without the tiniest hint that anyone except the Philosopher Kings who compose the Democratic Majority in the House of Representatives should be consulted. Participation? What’s that?

American “socialism” has shifted, in our time, from a demotic and “participatory” style to a rule-from-the-top dogmatism.

I have to be honest. I am a foe of “participatory democracy.” I do not believe it is optimal, in any sense, to give power over the individual’s existence to whoever happens to be a coworker, a fellow student, or just a guy who happens to turn up at a meeting. I find myself unable to decide whether a regime of little Red Guards is more repellent than a regime of Bernie Sanders bureaucrats arrayed, rank on rank and cube on cube, to decide what the width of my bathroom door should be.

But I think it’s worthy of notice that American “socialism” has shifted, in our time, from a demotic and “participatory” style to a rule-from-the-top dogmatism, constantly twisting in response to the whims of the politicians but always determined to enforce those whims.

I wonder whether any of the socialists have noticed this. Perhaps they are as ignorant of their own traditions as they are of economics or sociology, or respect for anyone except themselves.




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The Great Regressives

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Like most other libertarians, I am not a trusting friend of democracy. I think Thoreau was right when he said, “That government is best which governs least.” Democracy is a means of putting limits on government, and providing the legitimacy of consent for the few state functions that remain. One reason I am not a progressive democrat (small or large “d”) is that the progressives’ century-long demand for people to use democracy to “control the conditions of their own lives” would mean, if it meant anything, the power of every momentary majority to control the conditions of life — or death — for everyone else.

It is therefore not surprising to me that leading advocates of progressive democracy have been self-willed, dictatorial personalities who systematically confused their own whims with the will of the people. Consider Rousseau. Consider the early 20th-century progressives with their lethal mixture of socialism, racism, and prohibition. Consider Bernie Sanders.

Progressives had invented the recall, a hundred years before, but as usual the progressive power structure resorted to every possible means to keep a recall from actually reaching the voters.

Further irony is provided by the fact that the progressives’ specific schemes have always taken a socially antidemocratic form. Socialized medicine means a monopoly that can be challenged only at the risk of your life. Laws providing for collective bargaining mean a corrupt and self-perpetuating union leadership. Empowerment through education means the oppression and banality of compulsory schools.

But if you try to use the means of redress that the progressives themselves came up with, they will call you undemocratic.

Such was the case in the late campaign to recall Josh Newman, a Democratic state senator from Orange County, California. I could tell you a lot about Newman, but it’s sufficient to say that he was a party hack who won election by a few votes in a district characterized by moderate politics and then proceeded to vote for every extreme measure of the state’s Democratic leadership. One of the things he voted for was a giant increase in the gas tax, an increase that will cost the average household $800 a year. Further, he provided the two-thirds majority necessary for the extremists to pass any other bill they might wish to pass.

When he voted for the gas tax, a movement arose to recall him. Progressives had invented the recall, a hundred years before, but as usual the progressive power structure resorted to every possible means to keep a recall from actually reaching the voters. They used lawsuits, union goons, and a sudden legislative change in the rules to put off the fatal day when Newman would appear on the ballot. The anti-Newman forces spent about $2 million; the Newman forces spent about $8 million.

These sentiments were shared and preached continually by the state’s political leadership.

Now here’s the joke. Newman’s campaign dwelt on two issues: the appalling cost of a recall election (about $3 million, allegedly, and you can compare that to the billions of dollars that Newman’s votes were pulling out of Californians’ pockets); and the undemocratic nature of the recall. After all, as Newman proclaimed in his terminally self-righteous speeches, he hadn’t done anything immoral; he had voted for the tax “in good faith.” The people therefore had no right to remove him. These sentiments were shared and preached continually by the state’s political leadership and by such supposed purveyors of news as the Los Angeles Times (now virtually bankrupt, but going down with all its false colors flying).

Newman’s last move was a legislative attempt to ban “bounty signature gathering,” his phrase for paying people to solicit signatures for recall petitions and ballot initiatives. Of course, the only way you can collect the multitude of signatures that progressive law demands is by paying people to get them — and why shouldn’t you? You know why. It’s because your use of the progressives’ democratic mechanisms would cost the progressives their power.

Now comes election night, June 5, and Newman is losing by almost 20 points, and here is what happened, in the words of the San Francisco Chronicle.

Newman spokesman Derek Humphrey said in a statement that "the early numbers are not what we were hoping for," but did not concede the loss in what he termed "an undemocratic special interest power grab."

Even a late endorsement by former presidential candidate and independent Vermont Sen. Bernie Sanders wasn't helping Newman. Sanders recorded a 30-second Facebook ad urging voters to back Newman while praising his support for single-payer health care, education, the environment and immigrant rights.

Well, so much for Newman; he was recalled. This episode is just a footnote to the history of “progressives” and “democracy,” a history writ large in the bloated figures of the university presidents, tech CEOs, state-supported activists, and dynastic politicians who occupy the commanding heights of today’s political economy — progressives all, and despots as far as you permit them to be, each one of them exercising the power that can only be obtained by an undemocratic special interest power grab.




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No Cheers for Democracy

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Democracy, the most celebrated religion of both the Left and Right, has spread like wildfire. Zimbabwe has recently fallen for more democracy. Social movements in the Middle East — with the most recent one known as the Arab Spring — are inching the area toward more democracy. Even in reclusive Saudi Arabia democracy is slowly gaining an upper hand. Bangladesh, Myanmar, Pakistan, and Nepal are solidifying their democracies; their military or traditional-religious heads have found it increasingly difficult to assert their will. Many political leaders in Africa now vacate their seats in response to the verdict of their citizens.

Democracy is winning. It is a religion, a faith, which is seen as an objective, universal truth, a truth that cannot be challenged. It is the solution to all ills. It is perfect and cannot be damaged by evidence. When a society does well, the true believers attribute this to an improvement in democracy. When a democratic system does not work — as it doesn’t in Africa, Latin America, the Middle East, and South Asia — the blame must go elsewhere. The true believers always ask for more democracy.

South Africa has continued to become more democratic, with its institutions increasingly reflecting the wishes and the culture of the masses. The political leadership is now openly in support of expropriating farms from the minorities. The masses, quite fallaciously, believe that such acts will improve their lot.

The true believers always ask for more democracy.

In 1994, before the advent of democracy, South Africa had a first-world infrastructure. Today, there are random electrical outages, water supply is in deep crisis, roads are bad, and crime is off the charts. Hate-crime against the minorities, including vicious torture and sadistic rape, is on the rise. For more than two decades the canniest people of South Africa have been emigrating to Canada, Australia, or the US.

The end of apartheid — in 1994 — did not have to begin the rule of the masses, but it did. Democracy has slowly changed the nation’s institutions, adjusting them to the mass’s demands and whims. The minority are whites, so the media and the intellectuals pay little heed to their rights. According to the media’s definition of “racist,” only whites can be that way.

Was South African apartheid a bad policy? Is the Indian caste system regressive? It is easy to say “yes” — and move on. But all changes in social and political systems have their collateral damages. A culture of individualism, decentralization, and the rule of law emerged in Europe to reduce collateral damage. From this point of view, supremacist democracy has been a disastrous regression.

The end of apartheid did not have to begin the rule of the masses, but it did.

South Africa now has apartheid against the whites, one consequence of which has been the destruction of the lives of blacks as well. The white minority — even today — is the intellectual and business spine of South Africa. As the minority loses its grip or emigrates, South Africa is imploding. Can the masses, peasants, and politicians not see what is coming? Apparently they cannot — which is the reason why democracy puts a society in a vicious cycle. Not just South Africa but the emerging democracies of Egypt, Myanmar, Papua New Guinea, and Nepal have been on assured paths to disaster.

Instead of thinking through why democracy might be the reason for the failure of societies, Western intellectuals blame a made-up recession in the number of democracies. When things go wrong, they credit the situation to a lack of democracy, even if democracy has been in ascendancy. If their rationalizations are no longer tenable, through circular reasoning they define and redefine “democracy” to ensure that it stays on the pedestal.

Over the long haul, Turkey and Malaysia have been among the best examples of progress in the third world. Not only have they become increasingly democratic but their GDPs per capita have grown relentlessly, making them middle-class societies. Both also have Muslim majorities; there is likely no other country in which increasing democracy in a Muslim majority society coincided with rapidly rising GDP per capita and maintenance of stability.

Can the masses, peasants, and politicians not see what is coming? Apparently they cannot.

It was not too far in the past that Turkey was under strict secular control by the army. Then, in 1997, the military asked the then Prime Minister, Necmettin Erbakan, to resign. His fault was that he had mixed religion with politics. Pressure from the US and international organizations meant that Turkey had to become more democratic and distance itself from the rule of the military.

It might be claimed that Turkey improved economically and socially because of this strengthening of its democracy. But Turkey was merely one beneficiary of a general trend of economic growth affecting the third world. The economies of Turkey, Malaysia, Latin America, South Asia, Africa, in fact, every country and particularly non-democratic China grew rapidly during the past two decades. None of them grew because of democracy. They grew because of the electronic revolution. Ironically, the growth of non-democratic China changed the economic structure of the world and made it possible for the third world to benefit, as the crumbs fall into its lap. Because it suited their purpose, ideologues credited this all to “democracy.”

But now, as democracy has grown, politics in Turkey and Malaysia increasingly reflect the will of the masses. Masses in the West might care more about hedonism, but it is religion, magical thinking, and the afterlife that occupy the minds of the masses in the third world. Fanaticism — hence totalitarianism and diminishment of the individual — has been growing rapidly in Turkey and Malaysia.

Most people in top positions in the media, the IMF, the World Bank, etc., maintain the usual, regurgitated, and extremely favorable view of democracy and multiculturalism. This has to be the case, for they cannot say (and eventually even think) anything that might be (mis)interpreted as racist, or they will be thrown out of their jobs. The result is that political correctness has absolute control over the institutions of the West.

Fanaticism — hence totalitarianism and diminishment of the individual — has been growing rapidly in Turkey and Malaysia.

Of course, it requires little reflection to notice that democracy isn’t the panacea it is made out to be. Quite to the contrary, it has been an unmitigated disaster for the third world. The Khmer Rouge in Cambodia had massive public support when they took power. During their rule, the guards at the concentration camps soon became the inmates, while the earlier inmates were sent to the killing fields after grotesque torture and dismemberment. Even the topmost “leaders” got caught up in this cycle of brutality. In a period of just over three years, they managed to kill as much as 25% of the population.

What they did in Cambodia is something no sane person, using the lenses of Western culture and political correctness, can understand. But perhaps that is exactly what needs to be understood to see the underpinning problems of democracy. One must understand the psyche of the masses and the peasants.

A vast majority of even the world’s enlightened society is made up of people who have no interest in public policy. While in the West, this is often reflected in an expectation of free-stuff and resulting social welfare programs, the counterpart in the third world is usually tribal and superstitious. In the West, the desires of the masses result in a politics of redistribution and envy, a win-lose paradigm that, like a termite from within, slowly destroys the morals and the institutions of society. In poor countries, these desires result in a politics that is increasingly sociopathic and tyrannical, a lose-lose paradigm.

To see the underpinning problems of democracy, one must understand the psyche of the masses and the peasants.

I travel around the world to understand what is happening, without the lenses of political correctness distorting my understanding. One soundbite that I often hear from economic analysts is that if a country wants to keep growing it has to allow entrepreneurialism to take hold, reduce regulations and the size of the state, and do what is right. If that is the way the world worked, in this modern age of technology there would have been no reason for vast areas of the world to suffer from abject poverty. These economists are either politically correct (or else they would be thrown out of their jobs), living in gated communities (real or virtual), or simply naive. In any case, they are paid well to stay ignorant about the problems that democracy is afflicting on the third world, and increasingly in the first world.

Why can the masses not see the problems they are creating for themselves by voting to destroy their wealth-generating class, the backbone of their society? Why do they not see that they are creating tyranny for themselves by imposing through their vote fanaticism in their institutions, a contest in which there is no winner? Why cannot the wisdom of the crowds — democracy — provide improvement in governance? Why don’t their collective votes align their economic structures for growth?

For the third world, tribalism and magical thinking are the mental and cultural operating system. While they claim to seek peace and economic growth, there is a list of numerous other dominant considerations — superstitions, religious dogma, the afterlife, pride in the tribe, which makes the individual impotent, the everpresent fear of Satan, family entanglements, envy, ego, and a conspicuous lack of understanding of the concept of causality. Even if they are keen on economic growth, their irrationality assures that they do more of what created their poverty, in a vain attempt to remove their poverty.

Economists are paid well to stay ignorant about the problems that democracy is afflicting on the third world, and increasingly in the first world.

The situation gets rapidly worse as you go down the class hierarchies of these societies and arrive at the people who mathematically are the major voting bloc. The peasants are traditionally tribal, superstitious, and envious. In a democracy, the bottom 51% of a society decides the nature of its institutions. Institutions take a long time to change, but eventually the psychology of the masses, their irrationalities, and their tribalism permeates it.

Many people worry ad nauseam that the USA supports the totalitarian regime in Saudi Arabia. But people from that area know that were Saudi Arabia to become democratic, it would become much more fanatical. While isolated locals might ask for more liberties, and their voice be exaggerated by the Western press, making Saudi government look like the one remaining province of tyranny, the masses insist on an increase in totalitarianism. While a few isolated women might burn their hijabs, the majority of women insist on them.

And what about other countries?

Quite in contrast to video images of recent protests, and the Western narrative of Iranians asking for liberties, 83% of Iranians favor the use of sharia law. It is a no-brainer that more democracy isn’t going to change Iran in the way romantics in the West think it will.

A rule of, by, and for the peasantry is the maturing of democracy, and it never ends well for anyone, including the peasants.

Syria is nothing but an advanced stage of the Arab Spring, of the movement for democracy. So, mutatis mutandis, is Venezuela, where the culture of the masses and peasants has seeped into the government. With each gyration of democracy, Pakistan has become an increasingly Islamic state, where a word against the holy book results in a death penalty. India, the world’s biggest democracy, is rapidly taking the same course, as its deep-rooted superstitions, tribalism, and magical thinking continue to permeate its institutions.

We must again ask whether any democratic change would increase the rule of law and the culture of individualism — or whether it would be detrimental to both.

A rule of, by, and for the peasantry is the maturing of democracy, and it never ends well for anyone, including the peasants. The peasant revolutions of Mao’s China, Stalin’s Russia, Pol Pot’s Cambodia, and the innumerable civil wars of sub-Saharan Africa have virtually no competitors in causing misery and destruction. Peasants, except in New Age literature, have high time preference; they lack education, critical thinking, and rationality; and they are unskilled in planning. They focus at best on the immediate accumulation of resources. Allowed to feel victimized, allowed to pass responsibility onto others for their predicament, they happily do so.

But haven’t the elite, the intellectuals, the businessmen, the entrenched classes, the feudal lords not been exploitative?

In Brazil, India, and Venezuela the middle class is extremely corrupt. In the caste system of India, the lower caste does not even exist as human being in the minds of the upper caste. The elites are the exploiting class. But when the peasants get into power, there are no limits left for corruption and exploitation. They enable lose-lose tyranny and brutality — pure, unadulterated savagery.

All power structures are exploitative. The question is which one does the most for society.

The state is a totalitarian instrument. Apartheid was the same. The caste system is the same. Among all these systems, the rule of peasants — democracy — is the worst. Their inability to think of the future and understand public policy means that once in control, they rapidly destroy the institutions, enter a phase of hedonism, go into conflicts over resources, or simply destroy the country’s capital, eventually trending society toward Malthusian equilibrium. One has to spend time in backward societies to see how, as if by magic, the masses instinctively destroy any advantages they get from technology and economic growth.

Capital, civilization, and prosperity do not occur in nature. Increasing capital and even maintaining it is the job of the elite — not of masses or peasants. All power structures are exploitative. The question is which one does the most for society and what steps to take to move society toward more liberty. Democracy isn’t that next step forward.




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It's Delightful, It's Delovely, It's . . .

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Bureaucratic Precision

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This must be right. The EU's translation budget is hundreds of millions a year.




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The Tower of Babble

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I don’t look good in hats. Especially not when they’re made of tinfoil. It’s quite possible that some of you may picture me in one as you read this essay. But I hail the Brexit vote as a huge and very welcome step away from a one-world government.

Episcopalians generally don’t worry much about such a thing. No priest or theologian in my church, so far as I’ve ever heard, has warned us against it. I think we’re generally supposed to regard the stories in Genesis as having edifying spiritual lessons to teach us, but parallels are seldom drawn between them and our 21st-century world. Please excuse me for bringing religion into the discussion, but I see a definite parallel in the European Union.

Instead of constructing a more prosperous and harmonious world for everybody, the faceless bureaucrats appear to want to rule over us all.

In the story in Genesis 11, the peoples of the world have become one unified mass. They’re proud of their unity, which they take as a sign that they can do anything they set their minds to. And they begin to build a monument to themselves and their greatness: “Come, let us build ourselves a city, with a tower that reaches to the heavens, so that we may make a name for ourselves: otherwise we will be scattered over the face of the whole earth.” We are told that the Lord does not share their enthusiasm. “If as one people speaking the same language they have begun to do this, then nothing they plan to do will be impossible for them.”

God does a lot of really human stuff in the Old Testament; he even has to move around to keep track of us. If I were to adhere too closely to the story in Genesis, I’d need to believe not only that he has no idea what’s going on until he comes down to see it but alsothat he thinks people are able to succeed in doing whatever they attempt, which obviously they can’t. Nevertheless, the story seems to be true about certain people’s intentions. Consider those of the people who run the EU. Instead of constructing a more prosperous and harmonious world for everybody, as they claim, the faceless bureaucrats appear to want to rule over us all. Ruling the world is an ambition even older than the Bible. It shows no sign of dying out today.

Genesis reports that “the Lord scattered them from there over all the earth, and they stopped building the city. That is why it was called Babel — because there the Lord confused the language of the whole world.” In whose interest is it, really, for the world to speak the same language? And in the deeper sense, what would that mean?

It might not necessarily mean that everybody would understand the same words but that everybody would have the same ideas — that we could all be gathered together by one governing body and made to conform to one overriding plan. Tyrants have always loved that concept, because it would make it possible for them to keep everyone under their control. For the rest of us, however, it’s a much more dubious prospect.

The teeming mass of humanity on this planet was never meant to be governed by a single human entity.

In an earlier story in Genesis, the serpent tempts our first parents with the promise that if they eat the fruit God has forbidden them, they will be like gods. That’s the ambition of everyone who has ever desired to rule the world. It could very credibly be claimed that it’s what the lords and masters of the European Union aspire to do.

In reality, the teeming mass of humanity on this planet was never meant to be governed by a single human entity. It may be too big a job for anyone but God. At any rate, it’s an endeavor no person or organization on this earth has ever been able to accomplish. Whether we believe in God, in Natural Law or in the Unseen Hand of the Market, centuries of experience show that we are far more justified in trusting any of those entities than in trusting any aspiring leader, or set of leaders.

We possess technology that, until this century, would have been unimaginable outside of a dystopian sci-fi movie. Never before has the possibility of a one-world government loomed so menacingly. If the trend toward greater government centralization continues, tyrants will have the capability of monitoring our communications, our most intimate movements, our facial expressions, and our very thoughts. They will be able to stretch that tower all the way to the sky — perhaps even into space. If we don’t stand up and dismantle the project now, the time may be approaching when it will be unstoppable.

But it’s a long way from being unstoppable yet. What the Brits voted to abandon, on the 24th of June, could just as well be called the Tower of Babble. Constructed of empty promises and held together by political doublespeak and outright bribery, the latest thrust at one-world government stands on shaky ground. Now, other nations have apparently been inspired to consider exit referenda of their own. Perhaps Americans will be moved to reconsider the possibility of decentralizing our own political authority.

Will that tower fall? If it does, the crash will be heard around the world. To the devotees of the superstate, it will be the sound of catastrophe. But to those of us who hold freedom dear, it will be the music of heaven.




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Report From Iquitos

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I am writing from Iquitos, a town in Peru, encircled by the jungle of the Amazon. The only connection to the external world is by air. Boats — loaded with cattle, exotic animals, human beings, and forest-produce that in the US would put you in prison for several lives — go downstream and upstream, providing access to smaller villages and tribes, but not to anything beyond. Iquitos is very spacious and well-planned. The mighty Amazon and its tributaries surround the town, and most people have come here from its tribal areas.

For less than $40 a day, I can have a very good style of life. It costs me $22 for a good, clean, air-conditioned hotel, with full breakfast included. A tip of 30 cents a day gets me all the attention I want. A very good meal at an “expensive” restaurant costs me $8. The cost is much less — about $3 — if I go to a good, busy place for locals. Most taxi rides cost 60 cents. Yet because most things are flown in, Iquitos tends to be about 25% more “expensive,” in my estimation, than similar places I have visited in Peru.

During 30 minutes of my sitting in a boat one evening, several fish jumped in, without a need for bait.

I tend to eat at local places. I buy fruit from roadside vendors; a handful costs me 30 cents. This helps the local economy the most, for the money that I spend in touristic areas mostly accrues to the well-connected, entrenched interests. Moreover, spending money directly with locals ensures that their emotions get aligned with my interests and safety — eventually they will go out of their way to win my favors. People are very friendly.

The Amazon offers cheap and good food. During 30 minutes of my sitting in a boat one evening, several fish jumped in, without a need for bait. Fruit trees are easy to find. It is hard to go hungry.

Not too far away is dense jungle and animals of all sorts, all of which are hunted down, irrespective of the diktats of the federal government, the World Wildlife Fund, and so forth. If something “protected” is not killed, it is because its meat is not tasty. In the local market every endangered or protected species can be bought. Locals might show revulsion if you asked them directly whether they hunt monkeys and dolphins. But ask them subtly — without evoking any implanted defences — what dolphin and monkey meat tastes like, and they will describe it.

I feel very free in Iquitos. But for locals it is not a libertarian paradise, not even close. Outside the core, touristic area, Iquitos is very dirty, because people utterly lack the concept of hygiene.

The receptionist at my hotel works every single day, from 3 PM to 11 PM. She works 365 days a year, with no vacation or weekends. This is how they all exist. In the morning she looks after her younger siblings while her own parents go to work. She has nine siblings, all younger, six of them are girls. When asked, she had to count to remind herself how many there are. All of them share a couple of small, dark rooms. Every woman is loaded with children, mostly girls.

The rule is babies first, with whomever, with no thought whatsoever about the future.

There is something about this area that results in a high female-to-male ratio. Some say there might be twice as many — or more — female births than male births in this area; anecdotal evidence shows this. One possible reason is a local fruit called aguaje, which apparently encourages certain hormones in women, although I failed to find a properly researched document to support this.

Girls here want to get pregnant quickly, partly because they have very strong maternal instincts, and being a single mother is perfectly acceptable socially — in fact this is the only way. The rule is babies first, with whomever, with no thought whatsoever about the future. My travel guide, who speaks fluent English, sees absolutely no reason why he should have any discussion with his daughters about the risks of unplanned, early, single motherhood. At the age of 23, he has three daughters, from three different women. Mostly he does not care what the woman he has a relationship with does when he is not with her. Incest is not uncommon.

People have enough to eat, so major crimes do not happen. But when crime must be controlled, it is through fear of punishment and much more importantly through real-time policing; those who cannot think much into a future don’t worry about punishment tomorrow. This reminds me that in many parts of Africa there is no word for “tomorrow” or “future.”

As I have seen elsewhere among people lacking reflective, critical reason — which is the situation in most of the non-Western world — petty crime, such as seizure of cellphones, is not considered immoral and hence is very common. The police and military must stand on every corner.

The area around Iquitos could be better than Switzerland. It isn’t. But you cannot blame lack of resources, lack of space, or even lack of educational possibilities. People here have a very high time-preference. A remote village of 500 people that I went to, about two hours away by boat from Iquitos, started getting surplus money through its interactions with jungle-related tourism, so it set up a night club and two bars. Not a piece of machinery was bought.

Contrary to what a rational person might have expected, Iquitos isn’t a peaceful paradise — the situation got worse with the influx of money.

Any excess money over basic needs gets spent on pleasure, right away. Iquitos is very noisy, because people like loud music and other loud sounds. Girls in very short skirts stand outside shops to attract people to buy motorbikes, TVs, and big, high-capacity sound systems, all playing at full blast. Casinos (and I am told brothels, in this rather promiscuous society) are everywhere, showing how bored people are. They are addicted to constant distractions.

Any rational person would have expected the surplus to go into investments in capital. But of course, the World Bank with its Ivy League educated “economists” must be happy, for they want consumption to go up. Contrary to what a rational person might have expected, Iquitos isn’t a peaceful paradise — the situation got worse with the influx of money.

Outside the supermarket here, there are several women sitting with scales, to let people weigh themselves for a few cents. None has business. There are shops after shops after shops, all well stocked, selling exactly the same wares, with none too busy. Hundreds of women sit next to one another selling exactly the same vegetables and fruit, all staring in oblivion, from early morning to late in the evening. Everywhere people, including the receptionist at my hotel, sit glued to the soap operas on their TVs. Soap operas are packed with fighting and exaggerated emotional dramas.

Anyone who tried to understand the situation might come, quite contrary to what the mainstream developmental economists would suggest, to the conclusion that in the final analysis the problem here — as elsewhere in the developing world — is not lack of capital, space, resources, safety, or property rights; nor is it overpopulation. The World Bank, the IMF and most economists are looking in the wrong direction.

The problem of poor societies is their lack of imagination, creativity, and reason, which is the dominant characteristic of the non-Western world. Modern education has completely failed to inculcate these human qualities. Perhaps it has made the situation worse, for education has been marketed to people in the non-Western world as something that offers a better material future, not a bigger vision of life. This has encouraged rote learning, not a passion for understanding the universe. In the end the education instilled in such students becomes just another baggage of beliefs, burdening them and distancing them from imagination, creativity, and reason.

Material prosperity without intellectual and spiritual growth does not add up and is not sustainable.

In most parts of the poor world (Africa, India, Peru, Central America, the Middle East, etc.) economic growth — the kind encouraged by international institutions — has had many bad consequences. These regions did not develop the concept of reasoning, planning, and strategic thinking. In the absence of these things, removing people from their tribal lives leads to emptiness and confusion. Any money they get goes into showing off and into too much drinking and partying. Noise, smell, chaos seem to develop quickly wherever surplus money comes to exist. Obesity and other lifestyle diseases are growing rapidly in all of these poor countries. And most rational people in the West fail to understand the situation: rational people’s rationality preempts them from understanding how irrational the developing world really is.

In such places wealth does not lead to peace, hygiene, improved health, and enlightened living. Even what could be an oasis becomes noisy, dirty, and diseased. The developing world has been the economic beneficiary of easy imports of technology, almost all of it attributable to the internet and telephony — both of which, during the past two decades, opened the floodgates of quick economic growth. Contrary to the claims of international institutions, growth in most of the developing world cannot be shown to be a product of liberalization, the spread of democracy, or public education.

For now, the World Bank and the IMF can justify their existence, but correlation is not causation. Liberalization didn’t really happen, although democracy is rearing its ugly head everywhere in the developing world. It has involved masses of people in public policy, masses who cannot think and reason, and are mostly driven by the desire for bread and circuses. Public education hasn’t delivered.

At the core, material prosperity without intellectual and spiritual growth does not add up and is not sustainable. Now the low-hanging fruit has been plucked, and growth rate in the developing world is falling rapidly. The consequences of overconsumption and lack of capital investment are becoming visible.

A true developmental economist should look at the reality beyond the superficial economic numbers. I am extremely happy and free in Iquitos, but what a tourist and an outsider with money can experience is not the full reality. Never trust economists who do a quick fly-in and fly-out of a poor country and while there get driven around in Mercedes cars and stay in five-star hotels. Ask them if they have been to Iquitos, and the jungles with mosquitoes and naked tribes.




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The Greek Mystique

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I’m not an economist. I may have gotten my figures wrong. I may have gotten my economic history wrong. But it seems to me that Greece, population 11 million, has defaulted on about $100 billion worth of emergency loans that were made to cover its inability to pay off even larger loans. It also seems to me that the money that was loaned went to sustain a pension system that enabled people — almost half of them government employees — to retire at an absurdly early age, and at a still more absurd age if they worked at hundreds of “hazardous” occupations, such as beautician and radio announcer. And it now appears that while taking emergency loans to enable it to get through a “tough” period of “austerity” mandated by its fiendish creditors, Greece actually added 70,000 workers to the government payroll.

In response to the awful suffering imposed on them from beyond, Greeks went to the polls on Sunday and passed a referendum encouraging their government to demand yet more money from their creditors, with the stipulation that Greeks themselves would do nothing “further” to economize. The referendum won by a landslide. The human pebbles who slid down the electoral hill apparently believed that the people who loaned them money were exploiting them by expecting them to honor some part of their agreements.

The Greek government will now demand that a large portion of its debt be “written down”; in other words, that Greece be licensed simply to keep the money it was loaned and now refuses to pay back. In support of this idealistic notion, many of the pebbles took to the streets, indignantly proclaiming that “Greeks are not beggars!” They are right; there are other words for what they are — or, more properly, for how they’re acting. It’s a fine illustration of the way in which normal, decent people turn into ne’er-do-wells and conmen at the polls. The first victims of the conmen are themselves. They convince themselves that they are acting decently — indeed, that they are impelled by a righteous cause.

hile taking emergency loans to enable it to get through a “tough” period of “austerity” mandated by its fiendish creditors, Greece actually added 70,000 workers to the government payroll.

We’ll see whether Greece will continue to find European financial agencies that are silly enough to provide more money, on the Greeks’ own terms. Maybe it will. In Europe, there are two suckers born every minute.

Others besides me have commented on these matters, and I’ve read a lot of their comments. But so far I haven’t encountered a certain kind of comment. It seems to me an obvious one to make, but it isn’t being made. So I’ll make it.

When we talk about “European” loans to “Greece,” we must remember that we are talking about money that governments and government-sponsored banks have arranged to cover the debts of Greek official institutions. No private individual would make loans like this, unless he was figuring on some government covering his ass. In Greece itself, no private individual would do that.It’s like the California “bullet train”: it’s supposed to be a wonderful investment, but somehow, not a penny of private money has ever been invested in it.

If there is a better argument against centralized economic decisions, I can’t think of one. Here we have enormously ridiculous, enormously expensive losses, engendered by a class of government-sponsored experts who thought they knew better than every other individual on the planet. And by the way, these experts were working with other people’s money, with money that is taken, not requested. That kind of money is always easy to spend. And here is the financial system that is supposed to give the world security.

No private individual would make loans like this, unless he was figuring on some government covering his ass.

The Greeks aren’t the only people who think that “investment” means extracting money from productive individuals and giving it to the government to spend on projects that can’t possibly turn a profit. That’s the modern system of political economy. As for the ability of the United States, or the now-sainted China, to stimulate its economy by increasing its debts, the comment of Ray Gaines in Monday’s Wall Street Journal says it all: the system is not working. Meanwhile, the culture of entitlement that is inseparably linked to borrowing without repaying spreads inexorably from the seminar room to the legislative chamber to the chamber of commerce and the welfare mob. Too confused to argue, it asserts its positions; too proud to beg, it demands.




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