Venezuela has been at the top of the news lately because of violnent demonstrations and government abuses (for background on the situation in Venezuela, check out Joe Carter’s post). Director of research at Acton, Samuel Gregg, has written a special report at The American Spectator commentating on Venezuela as well as Latin America as a whole:
Given Venezuela’s ongoing meltdown and the visible decline in the fortunes of Argentina’s President Cristina Kirchner, one thing has become clear. Latin America’s latest experiments with left-wing populism have reached their very predictable end-points. There is a price to be paid for the economics of populism, and no amount of blaming nefarious “neoliberals” can disguise cruel realities such as food-shortages, electricity-blackouts, endemic corruption, the disintegration of rule of law, utterly insecure property-rights, and wild inflation — all of which have helped Argentina, Venezuela, Bolivia, and Ecuador achieve the ignominious distinction of being categorized as “repressed economies” in the 2014 Index of Economic Freedom.
Certainly it’s not clear that Nicolás Maduro’s regime in Venezuela will lose power. As the Wall Street Journal’s Mary Anastasia O’Grady has underscored, the Castros who run the prison camp otherwise known as Cuba will do whatever-it-takes to try and prevent that. Nor is it certain that Argentines won’t vote for yet another Perónist who promises to solve everyone’s problems via government decree when presidential elections come due in 2015.
But if crises are indeed opportunities, now is the time for those Latin Americans who recognize populism’s flaws to think seriously about what comes next. One mistake would be to imagine that all that’s required are different economic policies.
Obviously alterations in economic structures matter. Without, for instance, a dramatic shift of economic incentives away from the relentless cultivation of connections with politicians and bureaucrats, Latin American nations will continue to struggle. Likewise, mandated price-and-wage controls, government restrictions on currency and capital movements, the nationalization of industries, import-substitution policies, and the manipulation of official statistics will all have to go.
Unless, however, these moves are accompanied by significant cultural change on the part of not just elites but also the wider population, the full benefits of such transformations won’t be realized. They would also be in imminent danger of being reversed by the next populist caudillo who comes along, promising heaven-on-earth to his supporters.
Gregg goes on to discuss some of Alexis de Tocqueville’s remarks about Latin America:
In Democracy in America, Tocqueville observed that Mexico had formally adopted a written constitution almost identical to that of the United States. Mexico had proved, however, unable to overcome apparently chronic political instability. “The Mexicans,” Tocqueville lamented, “wishing to establish a federal system, took the federal Constitution of their Anglo-American neighbors as a model and copied it almost completely. But when they borrowed the letter of the law, they could not at the same time transfer the spirit that gave it life.”
By “spirit,” Tocqueville meant the habits and beliefs that prevailed in any one society. His point was that if American-style constitutional arrangements weren’t accompanied by certain patterns of behavior, the impact of such political structures was likely to be minimal. Likewise if there is a tendency to equate community with the state — which was certainly the case in Tocqueville’s France and, as anyone who has traveled throughout the region knows, is the disposition of many Latin Americans today — then people will be less likely to see Edmund Burke’s little platoons as the first port of call when addressing social and economic pathologies.
So what cultural dispositions need challenging throughout Latin America if the region wants to exorcize its populist demons? One is the widespread clientelismo that infects so many Latin American societies from top-to-bottom. Populist leaders exploit this cronyism, not least because they rely upon using government to dispense favors and largesse to their tame followers. That’s how they lock in political support, especially when the economy inevitably starts going south.
Gregg ends his report on a more positive note. He says that even in this tumultuous time, there are those brave enough to speak out against the state and work for the betterment of society, especially the Venezuelan educational institution and PovertyCure partner, FORMA:
Many of them could wash their hands of their country and leave. Instead they have chosen to stay. Despite daily intimidation by Chavista thugs, they are thinking about the long-term and working, despite fearsome odds, to educate a new generation that they hope will have a chance to shape a post-Chavismo Venezuela.
What’s also noteworthy about these particular individuals is that they have no illusions that present-day Western Europe or contemporary America are good role models. They’re not blind to disturbing trends in these countries, such as increasing welfare-dependency, growing public debt, and the relentless spread of crony capitalism. Nor are they impressed by Western liberals’ near-obsession with imposing lifestyle-liberalism by state-fiat.
The other insight of such Latin Americans is that they know time is running out. Right now, groups like FORMA are in the fight of their lives against a hard-left regime that has brought their country to its knees. But they also recognize that unless the populist virus is thoroughly purged from elite and popular culture, the rest of the world will continue losing interest in Latin America. After all, what foreign investors in their right mind, when faced with a choice between economic catastrophes like Argentina and once-poor but now-prosperous countries such as South Korea, would give Buenos Aires or Caracas a second thought?
Populism not only relies upon lies about Latin America’s past, but it is also presently destroying the continent’s future. The sooner it — and its exponents — go, the better.
You can read the full article here.