16 May 2014 ~ 0 Comentarios

The great debate

by Carlos Alberto Montaner

Hayek

Exactly 70 years ago, Austrian economist Friedrich Hayek published The Road to Serfdom. The book, a best-seller at the time, retains (almost) all its relevance in this Latin America of ours that doesn’t learn its mistakes or forgets its worst behavior. Three decades after Hayek published his best known work, the Swedish Academy awarded him the 1974 Nobel Prize for Economics.

What did Hayek say in his famous book? Something very important: that centralized planning by the State runs against all freedoms and progress. It impoverishes us, spiritually and materially.

Why? In essence, although Hayek did not explain it thus, because freedom is the full exercise of the faculty we have to make decisions and build our lives with them, in accordance with our values, interests and desires.

When the State decides for us what presumably is convenient for us, it not only impoverishing us but also creating in us a deep discomfort. That type of State ceases to be an ensemble of institutions at our service and under our command and turns into our lord and master. It subjects us to the most vile servitude.

It happened in Cuba, as it has occurred always in the totalitarian States, when the government established the books we should read and those that should be destroyed. When some enlightened revolutionaries decided what truths had already been established and even the way in which we should earn a living.

They even chose the people who we should like or hate, as happened when they issued an order to sever all ties with the "worms" who had left the country. Couples broke up and parents, children and siblings stopped talking to one another.

Or when homosexuals were persecuted because the State had cruelly metastasized to the affective region and had decided to control the emotions of people to make them happily and obligatorily "normal" through re-education, which was achieved by mistreating them on the cane fields.

Aside from what Hayek wrote in The Road to Serfdom, there is an essential element that maintains the validity of the book seven decades after its publication. Its text describes the role that the State must play in its relation to society and, above all, the role it mustn’t play because we’ll all end up adversely affected.

It is not true that the State — an entelechy managed by people who, like everyone else, have their interests, preferences and political clienteles — is capable of defining "the common good" and acting efficiently and with a sense of justice. This was demonstrated by another Nobel laureate in economics attune to Hayek, James M. Buchanan, with his studies on "public election."

It is not true that the State must choose "winners" and "losers" or assume the task of distributor of goods to equalize the results of people’s work. It usually does this badly, distorts and reduces the process of wealth creation, and demonizes economic achievements as if they were shameful acts.

Among the biased decisions of the functionaries-turned-commissars, presumably transformed into pious agents of an improbable social justice, and the market, formed by the free decision of millions of people, the best result, the result that usually leads to development and elevates the standard of living of an entire society, is the one derived from the market, which is, undoubtedly, an expression of freedom.

At the start of this note, I stressed that The Road to Serfdom preserves almost all its relevance. Where does it fail? Maybe in assuming that socialism invariably leads to totalitarianism. That is not always true. Intelligent socialists learn from experience and can rectify their ways.

That’s what the Swedes did when faced with the economic crisis of the 1990s, provoked by the excesses of the Welfare State.

I shall end with a paragraph by Mauricio Rojas, a Chilean from the carnivorous socialism who arrived in Sweden as an exile, after Pinochet’s coup. There, he earned a doctorate in economics, evolved intellectually and emotionally and became a member of the Swedish Parliament representing the party of liberals.

Says Rojas, back in Chile and very concerned over the measures that Mrs. Bachelet is taking:

"It would be most lamentable to embark on the road of the great State-Boss that others have had to back out from. One can build a different welfare State that brings together the creative force of competition, diversity and capitalism with a profound commitment of solidarity, but to do that, one should not be carried away by the slogans of those who believe they’re right just because they shout louder."

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