Tag Archives: freedom

All I Want for Christmas Is… Freedom

Discovering Freedom

Discovering Freedom book cover (image: www.for.org.pl)

While spending this holiday season in my native Poland, I added a new book to my Christmas gift wish list: Odkrywając Wolność – Discovering Freedom - by Leszek Balcerowicz. After 1989 Balcerowicz shaped Poland’s economic transformation from communism to market economy, facing difficult reforms along the way in the context of building young and fragile democratic institutions. The book is not an autobiography detailing his personal account of the transition. Nor is it a technical textbook for fellow economists or political scientists. Instead, the book is meant for every citizen as a foundation of knowledge on political and economic freedom.

As Poland’s Finance Minister in the first post-communist government during the crucial period from 1989 to 1991, then again from 1997 to 2000, and as the Chairman of the National Bank of Poland 2001-2007, Balcerowicz has been one of the most influential policymakers in the country. In recent years, he successfully tried another role – as the head of a new think tank, Civil Development Forum, or FOR (Forum Obywatelskiego Rozwoju). FOR’s stated mission is to protect liberty and promote truth and common sense in public discourse. What the organization believes makes it distinct is effectiveness. In FOR’s own words, “We do not exist to simply publish texts and hold conferences, though we use these tools. We aim to amend existing laws, influence decision-makers considering new laws and to educate the general public, because well informed citizens are the best bulwark against despotism.”

In this spirit of making the principles of liberty easily understandable and accessible to the general public, Discovering Freedom is a extensive compilation (over 1,000 pages!) of writings by the greatest free thinkers, from Adam Smith and Milton Friedman to Karl Popper and Mario Vargas Llosa. Balcerowicz made the selection and wrote the introduction. Many of these texts had not been previously widely known in Poland and the book’s objective is to popularize them because, as Balcerowicz put it, societies must constantly strive for freedom.

Read More…

Chasing Life

My precious, precocious boy is 8. Watching him chase fireflies and learn to ride a two-wheeler, it is hard to picture him with a submachine gun, shooting the neighbors. But that is the horrific story told today by Ricky Anywar, Founder and Executive Director of Friends of Orphans (FRO) in Uganda. Boys as young as eight, stripped from their homes by the Lord’s Resistance Army and forced to commit atrocities in their own communities. Afterward, they are often ostracized by the community, meaning they have nowhere to turn should they try to escape.

Ricky was one of these child soldiers, 14 when he was taken. His brother escaped once, only to commit suicide when he realized his parents had been killed and he had nowhere to turn. Ricky escaped and was brought back by the LRA, then escaped again. Thanks to a kind and strong woman who took him in, and a clear sense of what he did and did not want to do with his life, Ricky not only made it out finally, he finished school, got a job, and then chucked it all so that he could go back to northern Uganda—this time to help rescue and rehabilitate boys, give them hope, livelihood, and a safe place to re-create community.

These days Ricky is welcomed and lauded, rightfully so, having received the 2008 Harriet Tubman Freedom Award and the 2008 Humanitarian Award from World of Children for his work with former child soldiers. As an alumnus of IREX’s Community Solutions Program, he was honored today for his work as part of IREX’s Founder’s Day celebrations. His story is a moving reminder of the huge challenges facing countries in conflict and how very grateful we should be where boys can run free and chase fireflies.

Tarek Mohammed Bouazizi: Entrepreneur and Inspiration

As the fourth annual Global Entrepreneurship Week is underway we would be remiss not to recognize Tarek Mohamed Bouazizi, the Tunisian entrepreneur whose frustration and self-immolation inspired protests throughout the Middle East.

Bouazizi was a produce vendor in the town of Sidi Bouzid, in central Tunisia, who at the age of 26, was the sole breadwinner for his family.  As the owner of a small business operating in the informal sector, he was subject to repeated police harassment, excessive fines, demands for bribes, and the confiscation of his goods and equipment.  With no recourse to defend himself, the harassment caused  humiliation and despair.  On the day Bouazizi lit himself on fire, a policewoman effectively put him out of business by confiscating his produce and weight scale.

Renowned Peruvian economist and reformer Hernando de Soto recently authored an article in the Financial Times, where he illustrates the institutional barriers that kept Bouazizi out of the formal sector, leading to the abuse by the Tunisian authorities. According to de Soto it would have taken Bouazizi 142 days and $3,233 to register his business.  The $3,233 is roughly 12 times his monthly net income.  Bouazizi was also unable to buy a truck to expand his business, since he could not record the deed to his family home in order to use the property as collateral.

As Egyptians and Tunisians begin to grapple with the complicated issues of constitution writing, electoral laws, and the role of Islam in the political sphere, they should not lose sight of the circumstances that led them here.  Issues such as property rights, access to capital, and fair treatment under the law all have enormous effects on people’s daily lives as Bouazizi and the revolutions in the Middle East this year have emphatically demonstrated.  Entrepreneurship, the ability to start and build one’s own business, has the potential to be a driving force behind economic growth in the Middle East.  The entrepreneurial energy and desire exists, but governments in the Middle East should seek to facilitate rather than hinder this enterprising spirit.

This story also appeared on the Community of Young Entrepreneurs blog.

Take the power back

(Photo: Cato Institute)

With a mostly blank cover page and a quote from Ayn Rand, Ecuador’s largest newspaper, El Universo, protested the court’s ruling against its directors and former opinion editor – three years in prison and a $30 million fine for four lines in an opinion piece.

In the disputed piece, “No a las mentiras” (No to the lies), Emilio Palacios denounced Ecuador’s President, Rafael Correa, as acting like a dictator. President Correa claimed that in the opinion piece, Palacios wrongfully accused him of ordering forces to open fire on a hospital full of innocent civilians. Five months later, the court found Palacios, along with the newspaper, guilty of libel.

The court’s decision has incited the fury of freedom organizations.

To many, the ruling clearly violates basic freedoms. Yet libel and slander are legitimate, destructive offenses that most would agree ought to be prevented. So how is this different?

Among wealth-maximizing individuals in a free society, the freedom of speech and press does not protect slander and libel. Penalizing such negative behaviors incentivizes individuals to internalize the cost of their actions and protects their image and privacy against blatantly false and damaging accusations. In this context, the ability to sue for libel and slander is socially efficient – the law makes society as a whole wealthier.

Unlike individuals, governments are budget-maximizers, not wealth-maximizers. For individuals, the outcome from bad decisions may be bankruptcy. Similarly, firms that make costly, inferior products will lose against innovative, productive companies. Governments, on the other hand, do not typically face such incentive structures, leading them to be more wasteful of the population’s resources. Massively overpaying government contractors illustrates this waste.

As budget-maximizers, governments do not run more efficiently when their image and privacy are protected. On the contrary, criticism and questioning are essential for a more efficient state – one less burdened by corruption, rent-seeking and waste. When citizens are discouraged or outlawed from questioning and criticizing the government, public officials and bureaucracies gain free reign to strip the population of rights.

If citizens make false allegations against government officials, their claims should be subject to society’s scrutiny and evaluation. But they should nonetheless live in an environment without self-censorship due to fear of excessive punishment.

Rather than an effective deterrent against negative behavior, the massive fine is a glaring reminder of who’s in charge. While honor and dignity may be priceless attributes, the $30 million fine (plus the extra $10 million fine to the newspaper company) and three-year sentence is excessive by any standard. This ruling is not about fairly compensating an individual or discouraging socially and economically destructive activity. It is a signal meant to show who holds power and how the media is expected to behave.

The benevolent dictator myth

Although the concept of an economically benevolent dictator has increasingly gained popularity, the relative short-run success of an authoritarian regime has much more to do with the economics of growth, while its long-run performance is marked by inefficiency, poverty, and corruption.

The recent rapid economic growth of Asian nations such as China lead some to reconsider the belief that democracy is inherent, even necessary, for economic growth. Among the appeals of an authoritarian regime is the popular perception that a strong leader can act decisively and efficiently to reduce poverty and target problems in the economy, while a democracy might be hindered with indecision and competition.

But speed does not necessarily translate to solutions or growth, especially when made by an authoritarian government.

While an authoritarian government may be able to build and decide quickly, that does not ensure its actions and decisions are efficient, let alone optimal. In fact, these governments cannot match the efficiency of competitive free markets and price signals, and are riddled with misuse and misallocation of resources.

Authoritarian governments are plagued with rent-seeking bureaucracies and firms – groups that receive rents, or favors, from the government in exchange for kickbacks and political support. As economist Gordon Tullock demonstrates, these rent-seeking groups create massive dead-weight loss, draining the economy of wealth. While rent-seekers exist in democracies, they thrive in governments with unchecked power and extensive corruption.

A country can import knowledge and technology to accelerate growth for a time, but as it approaches what growth economists call “the technological frontier,” governments lose the ability to mask corruption’s effect on growth using imported technology and cheap labor, and GDP comes crashing down.

But the most important aspects are those that indicators such as GDP overlook: rights and liberties. In their struggles to remain in power, authoritarian rulers destroy rights such as the freedom of speech and assembly as part of desperate tactics to suppress the political opposition. Further intangible factors, such as environmental quality, are not accounted for in GDP figures. The environment’s impact transcends mere subjective preferences, affecting the health and quality of its inhabitants. Yet through weak property rights and authoritarian policies, pollution and resource depletion have become tangible problems for these regimes.

In this recent feature service article, Aleksandr Shkolnikov, Policy Reform Director at The Center for International Private Enterprise (CIPE), explains why short-term growth is not all it seems, emphasizing that “what matters is long term, sustainable development and the root sources of economic growth. For every China case you will find dozens of Zimbabwe cases; for every authoritarian economic miracle you will find dozens of economic failures.” He notes, “The history of sustainable economic development and prosperity clearly shows that it is not about strong leaders, but it is all about strong democratic institutions.”

Article-at-a-glance:

  • Rapid economic growth in some authoritarian countries has led many to believe that democracy is not necessary for prosperity and economic development.
  • Democratic governance, however, is essential for economic growth to be sustainable in the long term.
  • Strong democratic institutions, not strong leaders, are necessary for continued growth and investment.

Download the full Economic Reform Feature Service article.

Celebrating International Youth Day 2010

Bob Esponja

Bob Esponja: An innovative marketing campaign in Encarnación, Paraguay for a student business selling cleaning products. (Photo: Fundación Paraguaya)

On the United Nations’ webpage, you will see that this is the day “to celebrate young people’s energy, imagination and initiatives” and that this year’s event will “highlight youth’s critical contributions to peace and development.”

Another International Day of…?  Maybe, but what better moment in the year to reflect on the connection between youth,  peace, and development.

For some years now, international organizations have been putting out the word that there is a critical connection among the three. Said the World Bank in its 2007 World Development Report, “Development and the Next Generation:”

The developing world’s 1.3 billion young people ages 12-24 are the next generation of economic and social actors.  Making sure that they are prepared for their futures…is thus enormously important to the course of poverty reduction and growth.  Because missed opportunities to invest in and prepare this generation will be extremely costly to reverse, both for its young people and society.

Read More…

Venezuela’s politics of fear

Venezuelan President Hugo Chavez taken more than a few a steps toward the establishment of a totalitarian state in Venezuela. We have all heard of the systematic repression of the freedom of the press, the confiscation of broadcasting companies that oppose the government plan and of the mandatory broadcasts of all his speeches. Now President Chavez’s grip on freedom of expression has taken the form of a decree, that establishes the “Centro de Estudio Situacional de la Nacion” (CESNA) or the “Center for Situational Study of the Nation”. This new institution has the power to declare “confidential, classified or restricted the disclosure of any information, fact or circumstance considered to be of national interest.”

Read More…