Logic, Politics and a Suffering Economies

Logic, Politics and a Suffering Economies

By: Erreh Svaia

“Government, even in its best state, is but a necessary evil; in its worst state, an intolerable one.”

Thomas Paine

Recently I had a couple of discussions about what is happening in South America with apparent coups happening in countries like Venezuela, Brazil and Argentina, where a defeated left wing populist governments denounced foreign interference, even naming it Operation Condor 2, in reference to the coordination between the military dictatorship regimes in that region in the 70s-80s with CIA backing, it seems that after the active economic intervention by China all over South America and the posterior drastic reduction of it, the USA is looking to regain influence by taking advantage of the weakening of the Chinese economy, it looks like a new strategy, might we call it “soft” interventionism, let´s not forget the USA active role in the Trans Pacific Partnership Agreement which took president Barack Obama on a trip to communist Vietnam, we are on a completely new era and the USA is looking for allies to counteract Chinese influence either in South America or in South Asia, where it looks like an economic boom is about to happen, we must understand that perhaps battles are no longer played on the military sides, as ideologies have started to disappear or lost sense, now it´s seems that battles are being fight on economic ground and on the cyberspace.

One curious thing I always tell the people is that when a left wing government feels under menace, they always denounce coups by the right wing, it´s a bit of paranoia and a bit of the game of playing the victim, but when the left wing is the one pressuring in order to gain power, they use the more "romantic" and "idealistic" revolution term, in reality either the left wing and the right wing have always found ways in the past to gain power, kidnapping sometimes real social movements and turning them into something nastier and ultimately political, it could be the Mexican Revolution, starting with the lower classes demanding better conditions and to end the dictatorship of Porfirio Diaz, but ending with a new dictatorship by the PRI lasting for 70 plus years in Mexico, or the Russian Revolution, that rather than a dictatorship of the proletariat, as Marx predicted, it ended up as a dictatorship of the Communist Party, one more example? Take failed coup leader Hugo Chavez, in Venezuela, who used populism to seize power in a democratic way and later close the door to more democratic changes, he called it “Bolivarian Revolution”, a “revolution that in the end turned an oil rich country into one in which society lives on worst conditions even to those in some underdeveloped African countries.  

The left wing is always quick to denounce American interventionism in Latin America, but they remained quiet and accepted with joy money from China, consider Daniel Ortega in Nicaragua selling national territory to China for the construction of a channel like the one in Panama, how is that for Chinese interventionism or Chinese imperialism? It sounds as absurd as thinking that the USA is returning to the hard interventionism of the past.

Accusation against the “oligarchs” in Venezuela is common by President Nicolas Maduro, he accuses business man of hiding foods and other basic articles in order to create shortages and social discomfort, the truth is that considering the authoritarian control of prices and a “Commission for Fair Prices” setting prices below its production costs, no businessmen would dare to produce under these circumstances, selling below your production costs, what’s the logic of that?, now Maduro also warned the businessmen about not producing, a plant stopped would be expropriated and taken by the government, so as a businessman you have a problem here, you can sell and make profit to page your employees’ wages and production costs in the legal market, and if you stop producing the government is going to take your factory away, so what do you do? You either hide your production waiting for better times, or you go into the black market, where very few articles are available and prices soar high because of the big risk of getting caught, those shortages are not a novelty, they happened in the USSR when the government tried to control prices instead letting them float under normal market circumstances, you just can run a business under that conditions, neither private investors nor the government, who is giving days away from work to their bureaucrats because of electrical energy shortages, that’s also a fault of the “oligarchs”, is a fault of the populist government who instead of investing in their electric energy factories decided to spend the dollars form the oil bonanza days in backing the “Bolivarian revolution” all over the continent.    

In Argentina, recently elected president Mauricio Macri started to dismantle the enormous bureaucratic system built during the Kircheners administration, where the couple created a big dependency on the government by increasing the numbers of people working or receiving money from the government, when Macri started to make his government lean, Senators and Deputies form the opposition, still a majority in the cameras, quickly created a law in order to stop dismissals at work or to tax very high those employers who dismiss their employees, Kirchnerists disguised the strategy as a “fight against the tyranny of the oligarchs”, when in fact they are looking to protect the big bureaucracy, consider that just like in México, Argentina economic system depends mainly on medium and small business, those are the ones creating up to 90% percent of the jobs, not the big oligarchs Kirchnerist talk about, consider that if you area a regular guy working for an employer, but you want to start your own business, if you are in Argentina, you will think it twice, because if your business doesn’t work, you will be greatly indebted by dismissing your employees, so you prefer to keep your regular job, where you can´t be dismissed, sounds logical? So what basically the Kirchnerists are doing with their anti-dismissal law, in reality is keeping their bureaucracy high, and the job creation very low.  

The battle between the left and right keeps going on in Latin America, the left screams “coup”, while the right denounces manipulated “revolutions”, in the end, neither left not right are succeeding in getting benefits for the citizens, making social, political and economic conditions very hard, making progress almost impossible, if it was announced that Latin America was not going to grow economically a lot in the years to come, these kind of inner fights are making those scenario’s even more dramatic, as Venezuela keeps sinking and the new Argentinean governments is finding a lot of traps on the road to recuperation.