Carlos Rangel: Twenty Years later his ideas are still the right ones (In Spanish)

November 22, 2010

More democracy, less Government, can it be simpler than that?

43 Responses to “Carlos Rangel: Twenty Years later his ideas are still the right ones (In Spanish)”

  1. A_Antonio Says:

    Out of this post, but I can not hold this….

    Chavez really amuses me, every day. Maybe he is tired that his name and image are associated with failure and stingky projects, associations, buildings never finish and crazy groups from his own government.

    That’s why he issue a Lay that not allow the use his image and name in nothing of above without his permission.

    Chavez is the people, but the people can not even pronounce or write his name without his permission.

    Is he a God?

  2. Kepler Says:

    A very interesting video. I agree with all but one thing: if there is no good, free education for the average citizen, there is absolutely nothing else.

    No country on Earth, absolutely no country, has ever become developed without the government investing in good basic education for its citizens.
    That was the case in Germany, that was the case in the US before 1850, that was the case in Japan, that was definitely the case in South Korea and that is starting to be the case in China.

    Allow all private schools and universities you like, open up everything, but
    the country needs top teachers for basic education and guarantee pupils can have the books without their parents spending a month’s salary on them.

    Those who cannot understand this studied in private or semi-private schools and have no idea what a privilege they had.

    It would be interesting if we could have in Venezuela open debates between people who espouse Rangel’s ideas and a couple of other positions.

    Unfortunately, we mostly have TV programmes where one group presents their ideas.

  3. A_Antonio Says:

    Sorry, In my last comment, I mean Chavez issued a Law.

    And about this post, I think health and education should be free for every one. Salaries may be less because this, and productivity may be more. Tax the rich people and owners of the production means, beneficiares from the cheaper salaries.

    With a basic health and education granted by the State, people will work with more peace of mind and can work better. And yes, please, State shall guarantee security and low crime rates.

    Education shall directed to put the work well done as persecute of self realization and happiness. Germans and some Italian Industry tradition is base on this. Education, do NOT produce slaves, produce master minds and masters with hands to make pieces of arts to use all in every day live, with a quality to be proud of.

  4. Kepler Says:

    Just in case: of course, there should be freedom and markets and competition and promotion of enterprises. Just good basic education won’t make it: look at Russia. It could only do so much. Corruption, oligopolies, bureaucracy have maimed development and indepence from oil.

  5. firepigette Says:

    The most important education people can get is the one that develops morality and integrity.

    China has practically institutionalized a lack of morality though lies and oppression.Under these circumstances no matter how much they learn about technology, math , science,music or literature it will be either useless or harmful without the wisdom of how best to use what is learned.This is especially true when it comes to an emphasis on left brained studies.

    There are plenty of people without a great deal of formal education who live happy and productive lives, basically because they are wise, and spiritually developed, and there are loads and loads of highly educated academically who are miserable and immoral and make everyone else miserable as well.

  6. Kepler Says:

    Firepigette, we are talking about development of nations. Of course, you can be happy and live in the Middle Ages and die of apendicities or some stupid disease during childbirth. We don’t want that.
    Again, try to focus: development of nations, economic development, sustainable development. Those are the topics here.
    Ethics is also basic, but that is no guarantee for development.

  7. Vitor Says:

    Most libertarians would rightfully agree that democracy hardly mean less goverment.

    Afterall, democracy relies on a ever growing bureaucracy to always look more “professional”.

  8. Carlo Says:

    I suggest every blog reader here taking a look at this book (difficult to get): DEL BUEN SALVAJE AL BUEN REVOLUCIONARIO..
    Carlos Rangel, wrote it as we switched from the 70′s to the 80′s..
    Maybe Nostradamus could not do it better.. the book did not explain in 1980 exactly WHAT WILL HAPPEN in Venezuela from 1999 to 2010 but it explains WHY IT WILL HAPPEN.. It’s a pleasure to read it

  9. moctavio Says:

    Carlo: I posted Charts last night, tried to send you an email, but it bounced, send me email to devilexcrement@gmail.com and I will send you notices.

  10. Carlo Says:

    Miguel… I read the charts this morning..Thanks
    I agree… Not so pretty..

  11. torres Says:

    Democracy is about citizens ruling their own lives, not about deciding who rules over them. Government officials, in a democracy, are there to serve, not rule.

    The problem in Venezuela is not rooted in *how* the government should spend the money from natural resources, but in the generalized thinking that government should get to decide. The only money the government should get to decide how to spend is the money it gets paid to spend through and from taxation. Beginning with conflict of interests, government has no business in spending money from any other source.

    Rangel is absolutely correct: a market economy is the ticket for Venezuela.

    Too bad he didn’t mention cash distribution of natural resource money as the way to kick start it, while taking the excess money out of grubby hands of those who think they know better than other adults how to spend it. Anyone who thinks so should have to convince people to give it up through taxes, not expect people to thank them after the fact.

  12. Gringo Says:

    Carlos:
    I suggest every blog reader here taking a look at this book (difficult to get): DEL BUEN SALVAJE AL BUEN REVOLUCIONARIO..
    Carlos Rangel, wrote it as we switched from the 70′s to the 80′s..
    Maybe Nostradamus could not do it better.

    Agreed.

    The English language version of Del Buen Salvaje al Buen Revolucionario ,The Latin Americans: their love-hate relationship with the United States , is available online at Google Books.

  13. A_Antonio Says:

    Like I tried to say in last comments is I have more fond about: Welfare State Capitalism (I do not know if this is exact translation to English of “Capitalismo del Estado de Bienestar”).

    Previous establish in its constitution, State should satisfy Education, Health and suppression of hunger in society, all outside that shall be run by the free market, capitalism.

    But States should regulate the markets. The present economical crisis, frauds like Murdok and Lehman Brothers are due to the lack of regulation and lack of control from the State.

    Now in USA, Greece and Ireland, speculating trades and capitals only complicate things more than solve, (now are speculating against who will fall next Portugal?, Italy?, Spain?) these are out of the control of the States, except State will pay with recue money almost all the errors from traders and bankers with other people money and with the debilitation of their welfare rights.

    Markets worldwide, now are too big, too speculating and in trades are out of common sense economy. I think in the future a big bubble will be explode, when somebody probe that most of the sum of all electronics trades, electronic money and their rules, are base on pure speculations without any formal relation to something real (production, industries, gold, minerals…), most trades in market overlapping various time the face value of any property, product, commodity, etc. (by creating various economics products to trade the same thing). I estimate that electronics money and trades have the values of three times all earth gross economic product. When the bubble explode, capitalism will have to be rebuild it, from the beginning, again. But is proved the capitalistic do not learn and the cycle will begin again, unless States does regulated the market and cut the cycles.


  14. Many years ago (28 to be exact) Rangel invited me to be interviewed on his TV program. At some point, we got hung up on a point, he wanted an answer, I was not sure what it was he wanted. He was looking for a single answer, that the five people that were with me on something had all studied abroad. I had not noticed.

  15. Roy Says:

    A_Antonio,

    Have you got a link or reference for the new law you are referring to about controlling the use of Chavez’s name and image?

    That is almost too idiotic, even for Chavez. I would like to see some confirmation on that one.

    Shall we now refer to him as “He who shall not be named”, like Voldemort in the Harry Potter books?

  16. loroferoz Says:

    Carlos Rangel was one of a group of a few Latin American philosophers and economists who dared read Latin America from a liberal (classical) perspective.

    In a moment when it was unfashionable to do so. It was an exercise of common sense and intellectual courage. Their assessment was quite lapidary, and accurate.

    We, Latin Americans must be quite amusing to outsiders, in our attempts at organizing an imaginary paradise that we believe is an original concept with us. But comes whole from fantasies Europeans had (mostly about inexistent savages that are supposed to be us); but either did not bother to apply to themselves, or were briefly applied and rejected because they had disastrous consequences. Then, the “refugees” from such ideological failures, the philosophers of disastrous fantasies come real, found refuge again in, guess? Latin America. Thus Juan Peron, for example.

    If that were not enough, we Latin Americans tend to blame for our troubles the most practical and useful ways of societies that have been way more successful than ours.

    If you thought everybody was a leftist or a social-something in Venezuela and felt overwhelmed in the 2000s, then, sir or madam, you are quite lucky you did not live in Venezuela in the 1970s and criticized the world view in vogue then. The Raven and the Black cat of Poe had better receptions.

    Hugo Chavez, to me is a symptom of the immaturity of Venezuelans. Of all the flaws in thinking and in culture that have kept Venezuela from going even near the path to real development. The paradox is that such an exquisitely sick and warped world view as Venezuelans sport, is sustained and shielded from reality by a source requiring a lot of technical expertise, oil extraction. When oil extraction gets down to the common level, the reckoning comes.

  17. torres Says:

    Tunel Hugo Nochavez…

  18. Kepler Says:

    Now Miguel,

    The fact all of you studied abroad is not surprising at all. You should also take a look at what schools you visited when you were in Venezuela and what background your parents had.

    There are a couple more things. It is not just about free markets and capitals. They never ever ever were.
    It is true in Venezuela people haven’t had a liberal market, but even that is by far not enough nor convenient at some stages.

    Venezuela will, like today, be ripped off, raped, robbed, time after time by a class of – yeah, that word – compradores who just sell off the land to foreign powers…because it is easier.

    Actual stable capital and sustainable development – when I say sustainable I don’t mean particularly the ecology but primarily the economy, taking into account the ecology – have only come when there are national interests and a national consciousness to take
    the best non-dogmatic decisions at a given time and moment.

    The United States actually became a power after they did some of these things:
    - massively stole technology from others, did not care about patents
    - protected its markets to the access of some products
    - created a concensus among its citizens to defend their national interest firstly.
    etc.
    Of course, it also went to other countries and preached “free markets”. It actually bombed markets “free” as in the case of Japan and several African and Latin American countries.

    Japan learnt its lesson. After a couple of decades of absolute misery and protests, the government and the peopled changed their views and started to decide just on what THEY thought was convenient. And that is the Meiji period. They did accept “free trade”, but now on THEIR terms (preferring free trade outbound now and not inbound). They invested massively in real education. They imported teachers, the best, and selected students to go and study abroad and bring back the best.
    They initially imitated and then improved foreign technology, often not caring much about patents UNTIL it was convenient to them.

    And so are Chinese doing.
    And so did Flemish many centuries ago.
    And so did the Germans.

    Now, the sad thing is Venezuela is battling between some staticists and some others who blindly think there is one single solution and that is what their teachers in US universities teach them to do: open up markets
    completely, just “let markets regulate everything”.

    You are a physicist firstly. Markets do not follow physical rules. What we call rules are rules only in an ideal world, which is much more different from the ideal world of a physical system.

    Let’s beware any one lesson we get when we study abroad. The Germans, the US Americans, the Japanese, the Chinese: they all want us to buy their products and they want the oil, the gold, the iron, the uranium perhaps later, that is in Venezuela. They want them at the lowest possible price.
    They will do anything they can to influence that.

    So, while we should stopped complaining about being the “wild who was raped” and who only needs to “be free and let the government do it”
    we should remember it is not “free markets” as a magic law, there is no real invisible hand, but it is a war out there, a war of interests…and so far, Venezuelans of any colour, even while claiming to be patriots, just end up selling off the interests of their communities – and when I say communities I mean their country.

  19. Ira Says:

    Kepler, why does the U.S. want or need Venezuelan oil any more than Saudi Arabian oil?

    You’re confusing the U.S. with oil companies, and the oil companies operating in VZ back when were certainly not all American.

    Also keep in mind that without international investment and technology, VZ has no oil industry. So what exactly is being raped, what interests are being sold off against the common good?

    It sounds like some want it both ways. They want something for nothing.

    And some people are so damn obsessed with oil being the be-all and end-all for VZ success. Hence the wonderful and appropriate name of this web site.

    Hell, the best thing that could happen to VZ is if all the wells dried up tomorrow. Then the country would have to actually grow up economically.

    Nickel isn’t doing Castro much good these days.

  20. Kepler Says:

    I agree the best thing would be for wells to dry up.
    What I am saying is that it is not good to believe there is one simple solution to development.
    I find irritating that most Venezuelans who do go abroad get blended and
    just swallow the whole catecismo that some guys there sell them, when
    no country, absolutely no country just prospered through
    the “free markets” mantra. In fact, you can’t have it and no one has ever had completely free markets unless they get what the Japanese got BEFORE the Meiji times, total collapse.

    Of course, US, EU, Japanese governments AND companies (which are always closer to each other than you think) would want us to believe the answer is just open up our markets completely and just let anything happen. Of course, they sell us the electronics, we sell them the bananas and oil.

    No, I don’t want it to have it both ways. I ask you to tell me how
    countries become prosperous. Free markets – to a big extent – are necessary, but in many case they are not and in many cases you need much more than that. That has always, absolutely always been the case.

  21. JoseM Says:

    Guys, I have been looking the book everywhere without success any clue where can I get it?

  22. loroferoz Says:

    Kepler, substitution of importations and tariffs was tried in the 80s across the board in Latin America.

    It failed miserably, wherever, whenever they tried it, including Venezuela. The stellar class of Venezuelan “entrepreneurs” that could not compete and are easy to coopt by Socialism is a product of such failures.

    Japan did have to adjust from being a medieval, feudal society to an industrial one. Their opening of 1854 is hardly what you would call “voluntary” and hardly what you would call “free market”. They were threatened with serious bombing. Extra-territoriality for foreign citizens and a lot of other privileges for foreigners can hardly be called free trade.

    Of course it’s not just open the customs and let anything happen. That would produce shock in a country accustomed to other ways. But eventually if not immediately, Venezuelan industry and business will have to couple gears to the rest of the world if it is to succeed.

    The Japanese and Koreans were among the last afforded the privilege of developing industry under protectionist regimes. They could produce everything among themselves because labor was dirt cheap and mount these huge keiretsu and chaebol all japanese or korean. Now, enter the Chinese, who accept foreign investment (from Japan and Korea too!) and have cheap labor, and Globalization. That is no longer possible.

    You need to build industry, agriculture and capital. That that can be done in a freer market framework, particularly given that now, the parts and raw materials for most anything are produced in thirty different places and shipped together via container to be assembled. Globalization, let’s recall.

    Also, those businesses that do not prosper under partially free conditions will not prosper under other conditions. Period. No use assembling consumer electronics in Venezuela under heavy protectionism if the Chinese can bash through every time the barrier is set higher for them. For all the importations substitution some Venezuelan businesses could not compete with the U.S.A. where wages were higher in the 80s and you bought there (the U.S.) whenever you had half a chance.

    And don’t get me started on the ridiculous policy of requiring export permits to ensure nothing “necessary” leaves Venezuela.

    Pro-business, may work if you are letting business work and not privileging parasitism to the State. Some light handed tariffs, may work. An industrial policy, given that the State has many near-useless public enterprises that can only be used to provide raw material, may work. There’s nothing wrong about having some businesses in Venezuela partially owned by foreigners. Guarantee that there is a vital stock exchange, and maybe make it attractive to offer shares there, then Venezuelans will be able to own even foreign owned businesses.

    Hot air and bombast about injured sovereignty, rape, robbery and red murder when we should be talking about international trade, economics and industry, which are none of those, that, can be, oh well, checked in at the wardrobe.

  23. Gringo Says:

    JoseM:
    Guys, I have been looking the book everywhere without success any clue where can I get it?

    Amazon has Spanish language version for $38, with English language version much cheaper [The Latin Americans: Their Love-Hate Relationship With the United States: different title from Del Buen Salvaje al Buen Revolucionario, but the same book in English language.]

    As I previously pointed out, you can read the English language version- or nearly all of it- for free online @ Google Books.

    Where in Venezuela? No idea.

  24. Kepler Says:

    Loroferoz,

    Here we come again.

    I am not talking about substitution of imports.
    Japan had to adjust from a medieval society, like Venezuela, actually now.

    “Their opening of 1854 is hardly what you would call “voluntary” and hardly what you would call “free market”. They were threatened with serious bombing. ”
    Sure, in the name of free trade, as they always do one way or the other. As they still do, even if not as blatantly. Perhaps you did not follow the threats towards several African countries from US and French governments…not out of concern for human rights, mind, but because they were not delivering the minerals the French and the US Americans craved at the price they wanted.
    As I am saying: they, the powers that be, expect US to have open markets, but they have NO free markets, unless we do a lot of haggling,
    just like the Chinese are doing now.

    Japan did not prosper by just following the West with opening up their markets in the way the West wanted. The Meiji period did it in the sixties and for that there was some form of government help even if it was not by injecting money, but knowledge and controlling conditions and the speed in which foreigners could enter into a completely powerless, Medieval market.

    http://en.wikipedia.org/wiki/Meiji_period

    “But eventually if not immediately, Venezuelan industry and business will have to couple gears to the rest of the world if it is to succeed.”

    Sure, we agree on that. The issue is that we have on one side the ones who do not want to open the markets and on the other we have the ones who want to open the markets as no one on Earth but Haiti and similar countries have done. And the disaster comes even faster.

    As I said: we should be very wary of magic solutions, one way or the other. State protectionism as Latin America had in the eighties is waste. Opening up things just in the manner US and EU and Chinese wants us to do is at least as bad.
    Nobody has done it before. Don’t expect los más pendejos lo traten de hacer.

  25. Tambopaxi Says:

    For joseM and Gringo: Google Books does have “The Latin Americans”, but it’s a 48 page preview section only. Google does say that the book’s available at Barnes and Noble for $22.50. Good luck!

  26. Ira Says:

    Kepler, you know I’m only querying you here about this all, right? Although I’ve spent lots of time in the past in VZ and never more than a few weeks at a time, I didn’t live there–and was able to get on a plane and leave. So everyone here knows more about what’s going on in the country now than I do.

    But I ask you this, in particular, from the period of 1988 to 1995 or so, pre-Chavez:

    1) How come the crappy $20 Casio watch that I could buy in any store in Brooklyn would sell for the equivalent of $50 in Caracas? (We’re talking about garbage watches here.) Was it tariffs, or retailer greed?

    2) My brother-in-law would visit us in New York a month before Christmas to buy and stockpile the new Christmas decoration novelties…box them up…bribe the customs guy at Maiquetia…and make something like a 400% profit on his investment.

    Why are these things so expensive in VZ?

    For God’s sake, one time that I visited, a family member just wanted me to bring him a FRYING pan.

    If Venezuela couldn’t then and can’t now manufacture a digital watch, christmas ornament or a frying pan, the country is in real trouble.

    Granted, the U.S. doesn’t manufacture much of this shit either, but that’s because it’s first world and way beyond that.

    To put it bluntly, Venezuela isn’t.

  27. m_astera Says:

    The first thing any viable society needs to be able to do is feed its own people, then clothe and shelter them. Selling off the natural resources to buy those things only works until the resources run out or the market for them disappears.

    One can find any number of once-prosperous but now abandoned mining towns as small-scale examples.

  28. m_astera Says:

    Kepler-

    I think you vastly underestimate the literacy and education rate in the USA before 1850. Having been involved with USA education and especially higher education for many years, I don’t think the State schools are doing a very good job. Most of today’s college graduates could not pass an eighth grade examination from 100 years ago. At the last college graduation ceremony I attended, there were degrees awarded in Video Game Culture and Queer Youth Studies. I am not making that up.

    The single most frightening book I have ever read is John Taylor Gatto’s Underground History of American Education. Gatto was a long-time teacher and Teacher of the Year in NY State. I would suggest that anyone advocating “free universal education” run by the State should at least read the first few chapters.

    The book is free on line in various places.

    http://www.scribd.com/doc/12880618/John-Taylor-Gatto-Underground-History-of-American-Education

  29. Kepler Says:

    Ira,

    You did not say it bluntly, but rather mildly.
    Venezuela is an underdeveloped banana republic with loads of oil. Venezuela’s average citizen has education levels that are not just below those of an already third country nation as Colombia, but below those of Bolivia (based on 1998 stats, now I bet it’s worse).

    I do not want Venezuela to compete with the EU or the US now. What I want is that when it starts to open up people on top and at the bottom become pragmatic and think twice before they implement any single measure.

    The problem is they do not do it. They haven’t tried liberalizing the markets really? Sure. But the times when they have even pretended to “start to try it” out of necessity riots have ensued. In other countries worse. Remember 1989? And what CAP tried to come up with were just some long-due measures. Granted (and I do not know how many people here know the full extent of this): the riots and violence of 1989 were not spontaneous, they were cold-bloodedly planned by left-winged extremists. Still: that is the material and the issues any government in Venezuela has to face.

    So:

    Before you try to implement almost anything (but perhaps the exact timing of some measure like freeing up the currency system), you need to tell people in advance and TEACH them. Average people in Venezuela have the crappiest of all education levels but for Haiti and perhaps El Salvador, but they are not stupid. They are just very ignorant.

    Discuss things and present measures.

    To your questions:

    1) I guess it is mostly greed. We need, among other things, transparency and with that, competition.

    2) Because the system is closed and control of resources of any kind strictly in the hands of a mafia or friends of the mafia.

    I actually bought a Venezuelan-made radio in the nineties. I was probably the único pendejo who bought them anything, but they were trying to export to some islands. The radio worked perfectly well (can’t remember the name). Most of the parts they were using were actually provided by other Venezuelan companies.
    Rualca, a middle-size company that started producing wheels for parts to be delivered to the Valencia factory of Ford and others there, was exporting over 90% of its products when Hugo came to power.
    It was no impressive miracle, but a nice thing evolving.
    That company, taken over by the state, is a shadow of itself:
    http://www.rualca.com.ve/index.htm
    I am sure the company that produced that little, primitive radio does not exist anymore.
    Yeah, all state, interventions and so on. And that came because of people’s ignorance and groups from any side fighting with each other for control of a feudal country.

    Venezuela is a blob with 1000 ticking bombs. Before you come in to save it with a totally free economy, as there is none on Earth, you firstly have to start neutralizing those bombs. Otherwise you will never make it.

    You have to prepare counter-measures for the consequences of trying to liberate/free/whatever one part.
    Of course, you need to have a comprehensive plan, which I doubt anyone among our politicians have.
    And you have to treat all Venezuelans as people, not as idiots, and tell them what Venezuela is and what not and do it openly until they are prepared.

    Open up markets? Look at Kenya. Do you know the best lands are being bought by Saudis and Indians and South Koreans? Do you know how many farmers are getting displaced and becoming hungry after being in excellent lands?

    Look at Malawi. I can get delicious Tilapia fish from Malawi’s Lake. The whole ecosystem for other species of fish has collapsed and all those fishers are out of job because of a couple of factories.

    How to open up things? It is needed, but you can’t do it with a click of your fingers.

    People should learn a bit about how the US became a first world country in the first place. It did not start in 1820 or later. The conditions were there from early on and the first thing they had to prepare were their people, to compete.

  30. Ira Says:

    Kepler, the thing is, what fueled U.S. growth and success were immigrants–right off the boat.

    Yeah, we had our business moguls from the very beginning–those who control big industry and our daily lives from behind closed doors–but that didn’t stop the immigrants who didn’t speak a word of English from reaching great heights.

    I guess this is all moot though, because under Chavez, opportunity simply doesn’t exist at ALL.

  31. Kepler Says:

    Ira, just to conclude: yes, it was those immigrants primarily. Now, those immigrants came from Britian initially and Germany and then all Europe etc.
    A large amount of them (but for the slaves and a few others) could read and write: because of the Bible, because of the systems, because of a lot of things. In 1770 almost every village in the USA with 3000 people had a newspaper (OK, in times of no internet that made sense). Benjamin Franklin, among others, had very actively engaged in creating a network of public libraries well before independence.

    The first real printing press came to Venezuela about 1810.
    Venezuela did not reach the literacy levels of the US of 1770 until well in the middle of the XX century. The responsability lies on us.

    What I say is this: we need to tackle real education (not the piece of bloody paper, not degrees with nice stamps) now and we need to let Venezuelans know how they are lagging behind.
    Secondly: yes, we need openness, but for many reasons in order to do it in a sustainable way we have to think through how things will be implemented and how consequences could backfire in a society where most people think in feudal terms.

    And yes, all of this is moot but I consider we must talk about how Venezuela will be rebuilt once the caudillo is gone. Talking very publicly ab about that in Venezuela and outside is the way to g, it is actually a self-fulfilling profesy.

  32. loroferoz Says:

    Kepler: In the name of free trade, freedom, equality and any other noble ideal, governments will take military action or threaten it. I don’t know you, but military action and government are about discretionary violence, they do not belong in the same group of concepts with free trade and in my opinion cannot bring it about in any form, ever. Just as they cannot bring on freedom ,or equality or anything that depends on the absence of discretionary violence.

    As for the price of say, COLTAN, I believe the best the government of say, Congo can do is set up a decent legal framework for exploitation and clean it’s act. Then the price will be just fair. The rest is so much demagoguery.

    I am aware that the world is not a perfect anything. That as long as governments exist, there will be restrictions to trade. That companies have to seek their own governments for redress of any injustice suffered in trade, or resort to international arbitration at an organization that includes the government that did the injustice.

    The Brazilians and the WTO are examples of this. Their representatives are probably the most visible champions for a freer market for the agricultural products of Brazil, which compete succesfully abroad. Too much, apparently, for protectionist souls in the U.S. and the European Union.

    However, the Brazilians don’t go fantasizing about a Brazilian consumer electronics industry that cannot survive competition with the Chinese, even with high tariffs. They do not carve an exclusivity territory for Brazilian consumer electronics that nobody will want in Brazil because of lack of competition and innovation, and which will be unheard of in the rest of the world because they will not be exported anywhere, not at high prices and very low, provincial appeal or technology.

    And success in today’s world comes from export. In exporting, you HAVE to compete with the things others make. It was not at-home protection for Japanese autos that outcompeted the Detroit Three. The Japanese cars competed with innovation, quality and good engineering in the face of tariffs and demagogues in the U.S., of United Auto Workers and the lobby of the Three.

    Lesson: Some businesses will thrive, produce for domestic consumption and export. And some will not, however you protect them.

    Some “Chinese/Japanese/other country” product will bash through with lower prices, even after tariffs. And if these “protected from competition”, kept businesses get to survive in a closed market, they are swept under surely under the next technological change because of lack of innovation.

    So you want to set tariffs to “protect” industry at home. Fine, make it simple and non onerous and non demagogic. Say XX % for import (where XX does not exceed 20% ever) . You want to reward other countries that behave well and lower tariffs? Lower tariffs in return for them too. For export, however, charge only a nominal, not higher than 2% tariff.

    The best protection for business and industry at home is good government with sound finances (since they have to keep and maintain the currency, don’t they?), and a predictable, nonabusive legal framework. Not rewarding dependence and underperformance.

    1989 Venezuela, and 2010 Venezuela, and in between, have been Distorsion Capitals of the World. There’s a population also with unrealistic expectations. Nobody knows how to defuse that huge bomb all at once. It should not be done. Or it could be exploded when time runs out, by events themselves.

    However, whenever possible, government should not continue doing the things that set up the bombs in the first place.

  33. Kepler Says:

    Loroferoz,

    But please, understand what I am trying to say: we are NOT isolated. Any country can try to do as you say, but the others are not playing by the rules.

    This does not mean we should escalate the protectionist war, but we have to be aware that while the gringos and the EU officials tell people in the South that everything is “about free trade” and all, they are very very very protectionistic. There are important groups within those governments that are actually acting in an utterly criminal way: promoting wars in Congo to make mines change hands, putting pressure on Uganda to buy crap the do not need just for some aid, etc, etc.

    You are talking all the time about an ideal world and expect the weakest to behave not just fairly, but you tell him not to mind the fact people in those developed nations are to a big extent wanting to rip him off.
    And they export their subsidized milk, whether they are Europeans or North Americans or whatever. And they buy off
    lots of government officials in Madagascar and Kenya and tell
    them to evict people from fertile lands so that they
    can grow strawberries for Europe or North America.
    Those people are government and mafiosi businessmen not part of your
    free trade world? Indeed.
    But they are there and they have always been there.
    A nation cannot pretend they won’t attack as soon as it starts to
    deregulate blindly.

  34. loroferoz Says:

    Skepticism. Critical Thinking. They are vital to intellectual honesty and to good sense. It means that when you hear people proclaiming noisily to stand for a particular principle you go and examine very closely how they act in reality. It means you never give a blank check of endorsement to a particular group. You cheer for good behavior and congratulate those engaging in it as long as they do that.

    Governments are not monolithic institutions. Expect government officials to lie, even if to cover the fact that some laws and policies they have not crafted themselves. Just saying “free trade” does not mean they practice it, even imperfectly like everything real humans do.

    So, Europe and the U.S. act in ways that are politically expedient and might “work” there, because the State has enough money to subsidize, and there’s wealth around, to keep a few farmers in their own set, inefficient, quaint ways. Their own government officials are not to be believed in wanting or being able to produce free trade.

    That is why I underlined the stance taken, by say, Brazil. They push for freer markets, they make efforts to have something to export to the world, in sectors like agriculture, biofuels or general aviation. They take other countries to task for their own obscene subsidies.

    I am talking about the real world. The real world success comes from export and international trade. That takes importation, of raw materials and machine tools and some consumer goods. And the best that can happen to a real, struggling, beginning entrepreneur is to find the lowest possible price to get what he needs. High tariffs don’t help here because they take money from the end user to give to the government. Without ensuring, at all, that an industry will arise that will be worthwhile.

    The policy of “let’s produce everything domestically for us and only for us”, failed before Solon took command in Athens. Failed in a number of countries in the 1950s and 1960s. Only when some of those, like Indonesia, changed to an emphasis on exporting, did they become known in the world for something, and knew some wealth. Taiwan, South Korea and others were well along that same path.

    Again, iron-clad protection for citizens’ rights, property and commerce INCLUDED and a halfway-honest, limited government is the best protection for local industry and for local people. You are talking about resources being plundered in third-world countries. How come the fishermen have no property over exploitation of fish, having been there first? How come they evict people from their own land? No real property rights, courtesy of a government that is corrupt and opressive, and which probably set out in the path of Socialism and of Substitution of Imports in the 50s and 60s, to get here.

    What you call an “attack” can only succeed if the people are locally deprived of rights and wealth, and with internal complicity of corrupt and all powerful govt. officials. These will harm their own country, and the suggestion of their keeping the power they have to “direct” ( to their own and cronies’ pockets) the economy through tariffs grates me mightily. They should be removed and the new ones should have their powers severely limited.

    Nope, these people you mention are not part of free trade, even partially free trade. And I still cannot sympathize with some hoggish dictator wanting to set prices for a mineral resource. Situation too familiar.

    There’s a film titled “Globalisation is Good”, directed by Johan Nordberg. He actually goes there and asks the “exploited” workers of Nike in Thailand, and the farmers in Kenya, what they want. For example, the farmers in Kenya want Europe to open it’s own agricultural markets and NOT to flood their own markets with subsidized “aid”.

  35. Kepler Says:

    Jesus, L, you don’t get it. Are you really pretending not to understand or what?

    I am not for autarchy, I AM NOT SAYING there should be more subsidies,
    there should be protectionism. I am saying we should do what those countries that prospered did and what they did was NOT WHAT YOU TELL HERE OVER AND OVER AND OVER. That’s what they tell us to do.
    The truth is that they have opened their markets only PROGRESSIVELY
    and only when they saw convenient and it was all the time gaging and haggling and pushing, not unilateraly opening up and expecting others to be nice to you.

    I am just telling you what real life is: a lot of people want the others to offer free trade but they themselves do not offer it unless you haggle a lot and become very combative, as actually China and Brazil have done. They did not simply “opened up” and started to grow.

    There is absolutely no country, not Brazil, not China, not the USA and not anyone else, who has ever becomed developed just out of “free trade” and absolutely all, all have cheated others. Real life is about concessions, concessions, tic for tac and being watchful.

    In most of the world there are few property rights. Yes, it is nice if we arrange that, but first we have to fix that up.

    Jesus, you are always talking about an ideal world. See: Venezuela is already in the world. I don’t know the numbers, but I’d say the vast majority of land has no property right. Now, I am all for giving rights. How do we proceed?

    Venezuela and Madagascar and Kenya did not appear today. There is a situation RIGHT NOW there. People there have miserable education and mostly no property rights. Many do have a claim, but claims are mostly in conflict.

    “Nope, these people you mention are not part of free trade, even partially free trade. And I still cannot sympathize with some hoggish dictator wanting to set prices for a mineral resource. Situation too familiar.”
    And who said they were free trade? No, they are not, but those are the ones we have to deal with all the time.

  36. Gringo Says:

    Tambopaxi : Your point about limited preview for Rangel’s book in Google Books is well taken. There is a way to get around the limited preview hassle of Google Books, at least in part. Do an Advanced Search on the book- title should suffice- and then put in a keyword such as “Marxist,” “Aprista,” “Castro,” “Allende,” etc. into the appropriate search area- one keyword at a time will suffice. While this will not enable you to see all of the book, it will enable you to see most of the book, especially over more than one search over more than one time at the computer.

  37. loroferoz Says:

    And Kepler, I am all for gradual opening. As long as there IS opening.

    I can accept to pay taxes to import. As long as they are not huge and onerous in time. As long as they are TAXES and no attempts at economic engineering by privileging some sod who happens to share nationality with me.

    But first things first. A workable legal framework, an internally open market at least, a half decent government with limited powers. Iron-clad rights for everyone do a lot more than tariffs and regulation.

    And face it. In the real world, tariffs and regulation are conceived and applied by the very governments that are responsible for the lack of the things I mentioned in the preceding paragraph.

    That corrupt officials will keep direction of the economy in the face of all their previous “failures” GRATES MY HEART AND MIND MIGHTILY.

    I’d rather that the locals organize themselves in Keiretsu or other cartels. It’s more honest.

  38. loroferoz Says:

    For once, Kepler, look at the guys in power here. And see who is enacting and enforcing regulation.

  39. BB Says:

    In my very politically uneducated opinion the best government is that which cannot be seen or heard, but is quietly working to resolve problems and benefit the people. Having a president in your face all the time goes against all kinds of productivity, principles and progress. As someone said above “a government should not rule, but serve”. A well represented parliamentary system vs. presidential, would seem to me to be the way to go.

  40. Kepler Says:

    BB,

    I agree. Look at Switerland. What Venezuelans should bear in mind, though, is that the government does need to do something that any other government did before a country became developed: effective investment in
    good public education.

    I think there is a problem in the Americas. There is no proper role model now. Even though the US has excellent, excellent universities and R&D, public schools are now a mess. The US is almost the only model most Latinos come to see…and those of their own countries.
    So the “deciders”, who in Venezuela if not military come mostly from private schools or semi-private schools, say: “well, privatize everything, also schools, just defence should be under the government’s control”.

    But actually even in the US progress started because the vast majority of its citizens had a very good education level for their times and that level was due to investment carried out in British USA (by the governments and also by local governments) and above all in Europe, as most people who arrived in the States and were not slaves could actually read and write.

    And it turns out that governments in Britain and continental Europe were indeed investing in education

    http://en.wikipedia.org/wiki/History_of_education_in_England#Early_modern_period

    We did not have that in the rest of America (but for Canada). Venezuela was particularly the worst off among non-tiny countries in Spanish America.

    We need to fix that. Of course, for that we need a lot of transparency in the education process, something teacher’s unions and a government now or later will hate.

  41. Kepler Says:

    In pre-university schools the US does have something Venezuelan politicians should learn about (the US has also other things to teach, but mostly for university):

    textbooks for all children.

    I have said it before. This is a big issue in Venezuela. An average worker needs to spend at least one whole month’s salary to pay for the books of one ten-year old school child in Venezuela. The school or the state do not give a cent for that. Public libraries are a misery. How do you expect a semi-illiterate population to move forward like that? Children should have this guaranteed, irrespective from their parents.
    And they should have top teachers.


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