Discourse: Nationalization, Private Companies and Crony Capitalism

The neoliberal (a.k.a. crony capitalism) ruling of the world during the last 50 years is usually generalized as a “big fish eats small fish” relationship. The story continues, with the big fish in Washington, Brussels and Moscow fed themselves with the riches of the world and profited from globalization.  Meanwhile, the small fish continued breeding and feeding the always hungry lords.  This general discourse is repeated in most if not all the academic papers dealing with postcoloniality and globalization.

The impact of the ideas of these intellectuals is widespread and not easily observable for the ignorant masses.  As such, when you read the newspapers in Latin America or Africa in regard to the “new” nationalizations being undertaken by the “new” socialist/anti-neoliberal governments in Argentina, Bolivia, Brazil, Greece, Lithuania, and Sri Lanka since 2011 people usually ignores that there is nothing “new” in these actions.

These nationalizations of privately owned assets have been in many of the cases actual renationalizations of companies that were not owned by the principles of free market ideas, but that had been privatized by corrupt social democratic governments 50, 40 or 10 years before and who created new privately owned privileged companies.  As a result of these social democrat and socialist governments many privately owned companies emerged as the bastions of crony capitalism, inefficiency and corruption.  The previous, generally increased as closer the national industries were owned by crony private companies that owned single-crop cultive exports and resource rich regions.

To mention short examples of the previous, recently in Argentina Yacimientos Petrolíferos Fiscales (YPF; English: “Treasury Petroleum Fields”) was renationalized (not nationalized) by the government under claims of corruption, inefficiency and negative benefits to their national interests.  In Bolivia, Transportadora de Electricidad (TDE) was nationalized by Evo Morales government.  However, TDE was also a fruit of the neoliberal and crony capitalist deals established in 1952 after a coup d’état that established a military socialist democracy with the party  Revolutionary Nationalist Movement (MNR) which allied into a military-nationalist clique that lasted for 50 years.

Privately owned companies produce always more efficient and better products than state-owned companies.  However, privately owned companies that have benefited from government granted privileges for decades not necessarily will produce more and better services and products than state-owned companies.  The previous is something that few of us dare to identify and explain with a non-contradictory historical and philosophical background.  Meanwhile, the great majority of academics influenced by collectivist philosophies will start writing articles and books applauding the “successful” renationalizations and condemning those free-market authors who will write back and fight.

Indeed, there is a difficult road in defending private property and privately owned businesses in the context of countries and regions that lack respect for individual rights and the rule of law.  As such, to defend the private vs collective in those circles it is necessary that first we identify how the societies are currently organized around the collective inefficient systems of social and economic organization.  In the case of Bolivia and Argentina it is necessary for us to identify how these business and societies are not structured and organized around the principles of free market and individual rights.  By understanding and explaining this clearly there will be a chance to change the discourse of discussion from “why is renationalization good?” to “why laissez faire capitalism is better than the privately owned business of crony capitalism?”

A Plan to Collapse Iran’s Central Bank and its Origins

The foreign policy of the richest countries has always depended in controlling the world’s monetary systems. As a continuation of the postcolonial systems, they continue holding the power to grant credits to poorer countries, to rescue their economies in periods of crisis and in pushing for an increase in world “reserves” and international “liquidity.” The end result of this policies resulted in creating world inflation and enriching those central banks that controlled the dice of this international game (just as it had been done in the previous colonial period).

Colonialism may seem to many an ‘old history’ that was overcome with the modernization of the world and the decolonization processes after World War II.  Nonetheless, in the following postcolonial period many already institutionalized strategies continued working and are still present today.  The IMF, for example, was one of the institutions born as a result of the decolonization process. Its results (far distant from their founding vision) were to keep the postcolonial countries in monetary and economic dependency.

For long the world’s centralized banking and monetary authorities, headed primarily by the International Monetary Fund, collaborated to initiate a period of surveillance, aid, and guarantees for the world’s financial markets as  and  explained in the post “The IMF and Moral Hazard“. However, the long-term results of theses policies fostered the dependency of postcolonial economies and, as such, empowered the populist leaderships in the former colonies that pursued expansive social programs that couldn’t be supported without their foreign aid and long-term indebtment.

Video: The Plan To Collapse Iran’s Central Bank

Today, I saw a video titled “The Plan To Collapse Iran’s Central Bank” in which analysts in the U.S.A. are evaluating the possibilities of collapsing Iran’s economy and disenabling them to continue researching their nuclear programs. Strategies as these may seem as “bogus” to many; however, the long history of international monetary intervention of the economies in postcolonial countries is long and influential (see: Pastor, Manuel (1989). Latin America, the Debt Crisis, and the International Monetary Fund. Latin American Perspectives).  The results of any of these strategies always end up creating inflation and as  mentioned in his essay “End the IMF” in the year 1963 the only solution for and end to inflation (an as such for peace and economic recovery) is to eliminate the IMF and the interventionist international monetary system that has proved, in practice, a gigantic machine for world inflation.

File:50000 IRR obverse.jpg
50,000 Iranian rial

PPs, from Spain to Guatemala

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The PP’s have just won the executive elections in two very distinct cultural, political and economical contexts in Spain and in Guatemala.

The PP’s (The Partido Popular in Spain and the Partido Patriotain Guatemala) implemented a ochlocratic discourse with which they won the support of the majorities. In Spain, the Partido Popular discourse appealed to the masses by claiming that the Socialist Party (PSOE) had failed to be responsible in managing the economic crisis and that the solution was a paternalistic leader like Mariano Rajoy who was to bring order.   In Spain, the  current economic and social crisis raised the unemployment rate from 8.1% in 2006 to a historical level of 20% by 2010 an 21.5% by September, 2011. More so, the increasing financial crisis in the region continued to  debilitate the government of José Luis Rodríguez Zapatero (PSOE) whose premiership policies of raising taxes and the lack of a coherent economic plan were ineffective to tackle unemployment and reducing the government deficits from two digit numbers.

In Guatemala, the same ochlocratic discourse won the support of the masses by criticizing the Party Unión de Esperanza Nacional (UNE) and its irresponsibility to stop the organized crime elites that control most of the government’s structures (corruption with money from organized crime has captured the local, judicial, legislative and executive powers). Their campaign also identified in the figure of Otto Perez Molina (known as Mano Dura ‘hard fist’) the leader that was going to stop the advance of corruption and organized crime.

Independently of the achievements that either of these political programs will have in their countries; it is evident that the paternalist and populist discourse is again an effective tool to manipulate the masses in moments of economic and social crisis. Unfortunately, these discourses implemented by the “Conservative/Right” movements in their respective contexts have historically failed to solve the problems they aimed to fix. The long-term effects of these discourses have led to an increased disenchantment with the economic elites (usually linked to right movements) and to the reelection of leftist movements after the end of the “conservative/rightist” terms.

The problem with these discourses is linked to one single philosophical concept. That is the concept of Collectivism that has caused for several centuries so much poverty, hunger and suffering around the globe,

“The political expression of altruism is collectivism or statism, which holds that man’s life and work belong to the state—to society, to the group, the gang, the race, the nation—and that the state may dispose of him in any way it pleases for the sake of whatever it deems to be its own tribal, collective good.” Ayn Rand

Let us hope that Spain and Guatemala will find a right philosophy sooner than later.