Putting a stop to the Argenzuela Project

[Editor’s note: The following piece is written by Dr Nicolás Cachanosky, an economist at Metropolitan State University, Denver and a native Argentinian. Dr Cachanosky hails from the same PhD program (at Suffolk University) as Rick, who introduced us. His homepage is here, and he is also a member of the group blog Punto de Vista Económico (which you can find on the blogroll here at NOL). Check out his popular work for the Mises Institute, too. – BC]

For the last 12 years Argentina was under the influence of the Kirchner administration. First by President Néstor Kirchner (NK), and then two terms by her wife (and widow since 2010) Cristina Fernandez de Kirchner (CFK). Their plan, as perceived by many, was to alternate presidential terms between NK and CFK and remain in power endlessly. While this plan came to an end with NK’s death in 2010, CFK started to entertain the idea of reforming the Constitution to be able to run a gain for office. Because this was not possible, she chose Daniel Scioli, the Governor of Buenos Aires Province to be her successor. Last Sunday, November 22nd, Mauricio Macri, Mayor of Buenos Aires City beat Scioli in a ballotage and became president elect starting his term this coming December 10th.

Argentina was in path to become what is referred as Argenzuela. Namely, the Kirchner administration was taking the country, step-by-step, to become the next Venezuela of Latin America in a close way to what has been described as the four stages of populism. Under the Kirchner administration, the government increased their political ties with Venezuela, Iran, and China, at the expense of political relations with countries like the United States, Germany, and the United Kingdom. But the resemblance was not only in terms of political friendship, but on institutional and economic reforms. Argentina became a country where “Republic” is just a word on paper without a real presence in the country’s institutional reality. According to the Fraser Institute’s Economic Freedom of the World, in 2003 Argentina ranked 99 out of 153 countries. By 2012 it ranked 149 out of 152 countries. The loss of economic freedom was fast and significant. Economic troubles and imbalances did not take long to appear.

Macri’s victory in the presidential elections put a stop to the Argenzuela project. We know what a presidency by Macri won’t look like. But it is still hard to say what it will actually look like. Macri is known for his emphasis not in free or unfree markets, but on an efficient administration. While not difficult to be more free market than the Kirchners, it might prove difficult to describe Macri’s political movement, Pro, as a free market party. The Kirchner administration has refused, at least so far, to share information with Macri and his appointed ministers, so the real situation of the economy and the Treasury remains unknown. Macri and his team are working on reform plans half-blinded because they don’t have reliable economic information, if they have it at all.

Specific reforms by Macri are still unknown (at the time of writing these lines), but his team of Ministers has already been announced. The people he’s bringing to the government with him show significant successful careers in government, the private sector, and international organizations (her chosen Chancellor is the Chief of Staff of Ban Ki Moon, General Secretary of the United Nations.) This is a clear contrast with the Kirchner administration, where all the Ministers showed a strong ideological motivation before professional accomplishments.

The economic crisis in Argentina hands Macri a unique opportunity to carry long needed significant reforms. He has, also, a unique political position. His political party has not only won the presidential election, with Pro Macri has also retained the Mayor’s office of Buenos Aires City and also won the Governor elections for the Buenos Aires Province. Macri’s Pro is in charge of the three most economically and political important districts. Let us hope that Macri does not become yet another lost opportunity in Argentina’s history.

Small Thought On The Terrorist Attack in Paris, France

What the attack in Paris has made clear to me is that there is a deep hatred amongst people against the west. I believe that much of this hatred stems from the same roots from which my discontents with the west had also grown – western interventionist policies with foreign nations. I also sense such discontents among the few people that I know from Pakistan, Nigeria, Afghanistan, Iraq, Morocco, and Serbia.

My displeasures with the west originate from the personal stories of my parents who, before they became victims of the Khmer Rouge, were also victims of American bombings of Cambodia – a fact that is not widely known. The bombardments that started in 1965 ended in 1973, and had killed hundreds of thousands of Cambodians. Indeed, before the Khmer Rouge took power over Cambodia in 1975 and before they sent all people to the rural areas to grow foodstuffs for ‘Angkar’ (the Organization/the State), there were already widespread famines and scores of displaced people due to the bombings. It had created a chaotic climate in which the anti-western, anti-capitalist, and anti-imperialist propaganda of the Khmer Rouge found their way into people’s minds – mostly into the minds of those poor rural Cambodian people that were suffering most from the secret bombings. Ben Kiernan writes in ‘Bombs over Cambodia’ (2004):

Years after the war ended, journalist Bruce Palling asked Chhit Do, a former Khmer Rouge officer, if his forces had used the bombing as antiAmerican propaganda. Chhit Do replied:

“Every time after there had been bombing, they would take the people to see the craters, to see how big and deep the craters were, to see how the earth had been gouged out and scorched . . . . The ordinary people sometimes literally shit in their pants when the big bombs and shells came. Their minds just froze up and they would wander around mute for three or four days. Terrified and half crazy, the people were ready to believe what they were told. It was because of their dissatisfaction with the bombing that they kept on co-operating with the Khmer Rouge, joining up with the Khmer Rouge, sending their children off to go with them. . . . Sometimes the bombs fell and hit little children, and their fathers would be all for the Khmer Rouge.”

Cambodia, together with Laos, still remains one of the heaviest bombed countries in the history of the world.[1] My parents were just 7-8 years old at the advent of the secret bombings. Imagine that a drone would bomb the school of your child or the hospital in which your loved ones are, would you not feel enraged? Would you not want to take revenge on those that are responsible?

A pre-moral person looks at the consequences of the actions. He sees the attacks, he acknowledges the dead, he becomes emotional and judges firmly. A moral person withholds his judgements and attempts to comprehend the causes of the attackers’ actions. I do not want to justify the killings of the French people, but I would like to emphasize that if we were really to honor the victims, we should reflect on the question why there are people that hate the west so fiercely. Maybe our society itself is part of a larger machine that is the origin of foreign hatred against the west. We must not only realize that religious fundamentalism is a danger to the world, but that there is a more contemptible false idol which is democratic fundamentalism – the uncritical acceptance that democracy is equal to liberty, that it is always superior and that, if necessary, it should be spread with violence.

As long as we, as a society, fail to reflect on ourselves and the political system we participate in, we will never find a fundamentally peaceful solution.

[1] See Ben Kiernan’s ‘Bombs Over Cambodia: New Light On US Air War

Philosophical Research on Seasteading

The Seasteading Institute has recently published my philosophical dissertation on ‘Seasteading’. You can find it in the key research section of their Law and Policy page: http://www.seasteading.org/law-and-policy/.

Wayne Gramlich and Patri Friedman[1] founded the Seasteading Institute in 2008 in order to promote the seasteading movement, which has intellectually attracted mostly libertarian-minded individuals. The institute has also attracted funding from Paypal cofounder and early facebook investor Peter Thiel.[2]

A seastead is a permanent habitable dwelling on the ocean that preferably lies outside governmental waters. The Seasteading Institute believes that the creation of permanent societies on the seas can provide an experimentation space for innovative forms of socio-political organizations. The ultimate aim of seasteading is that newly emerging societies will inspire social changes around the world and contribute to human flourishing. First seasteads will be small-scale projects and they may even be constructed within existing governmental territories. However, seasteads could expand organically as technologies improve and innovative ideas of the functions of seasteads would emerge. One of the core ideas of seasteading is that an open experimentation space for social organizations will lead to progress in social rules and legislations, just as an experimentation space for new technologies leads to technological progress.

It is undeniable that social rules and legislations heavily influence all aspects of life, including technological progress and social well-being. One could for example compare North and South Korea, two countries that separated from each other in 1945. Both countries have had more or less the same culture and similar natural resources. However, what differs is their form of social organization; the North came under communist rule, whereas the South embraced western-style capitalism and democracy. Almost 70 years later, the differences in wealth, technological advancement, and social well-being are striking. South-Korea’s GDP per capita is for example 18 times larger, its internet penetration is more than 815 times greater, its life expectancy rate is 10 years longer, and the heights of South Korean pre-school boys are on average 4 centimeters longer. (Taylor, 2013, April 8).

The Seasteading Institute believes that, given that social progress and well-being heavily depend on how society is structured, mankind could make a huge step forward by letting social entrepreneurs start up seasteads to compete with governments in the industry of law-making and by letting millions engage in the experimentation with new forms of social organization.

In the paper, I provide a philosophical investigation of the concept of seasteading from a libertarian anarchist perspective. My investigation revolves around the following research question: “given that governments are resistant to structural changes of governance, how can mankind discover better forms of social organization?”

I argue that seasteading can fulfill that important role of moving mankind forward by experimenting with and finding new forms of social organizations that are best for human flourishing.

In the first chapter, I maintain that one core focus of political philosophy is to deal with the realities of value pluralism and political disagreements. I also contend that the most common form of social organization, representative democracy, does not satisfactorily deal with these realities. Hence, we should look for political possibilities beyond representative democracies. In order to discover these possibilities, we should experiment with new forms of social organization.

Chapter two discusses why there is currently little experimentation with social orders. I approach the issue from a meta-system level perspective and contend that all land on earth is more or less already claimed by states, which leaves little opportunity for people to start new societies on land. By applying the theory of monopoly economics, I maintain that the state’s monopoly on jurisdiction and coercion does not encourage them to provide good rules of law. It rather makes states extremely resistant to large-scale social changes. The obvious solution for finding better forms of governance then would be the introduction of competition into the industry of governments.

Chapter three deals with the epistemological attitude required for the experimentation space. I maintain that this attitude consists of having a sociological imagination, being epistemologically modest, realizing that social order can emerge spontaneously, and that the utopian dream of a single perfect society is impossible.

Chapter four discusses seasteading as the means by which the experimentation space could be realized. By homesteading the seas, a community can build and test new forms of social organization outside the scope of current governments’ control. It could generate new knowledge on social orders, thereby contributing to political philosophy and the social sciences. It could moreover also ease political tensions between citizens with different comprehensive doctrines.

Finally, I raise two objections to seasteading and address them accordingly.

If you would like to see an awesome seastead design, you should watch this video here:

[1] It may be interesting to know that Patri Friedman is the grandson of Milton Friedman and the son of libertarian anarchist David Friedman.

[2] Peter Thiel, previously a student of Political Philosophy at Stanford University, is also founder of the libertarian-minded newspaper The Stanford Review. He is a venture capitalist who is very much influenced by the Austrian School of Economics. With this in mind, it may not be surprising that the early mission of PayPal was to give its users more control over their money by enabling them to switch currencies. The goal of PayPal was to make it, in Thiel’s words (1999), “nearly impossible for corrupt governments to steal wealth from their people through their old means [inflation and wholesale currency devaluations] because if they try the people will switch to dollars or Pounds or Yen, in effect dumping the worthless local currency for something more secure” (Jackson, 2004).

Jackson, E.M. (2004). The PayPal Wars: battles with eBay, the media, the mafia, and the rest of planet earth. Los Angeles: World Ahead Publishing, Inc.
Taylor, A. (2013, April 8). A Crazy Comparison of Life in North Korea and South Korea. Retrieved from http://businessinsider.com
Thiel, P. (2009). The Education of a Libertarian. Retrieved from http://cato-unbound.org

A Phony Race Scandal

You heard it from me first: The scandal at the University of Missouri that led to the resignation of its president recently (11/8/15) stinks to high heaven. It’s a phony. It’s fabricated. How do I know? The real redneck racists being evoked, outlined, sketched in the story would have been proud just to find the can of spray paint to decorate a university building with a swastika. The problem with plotters is that they usually go too far, that they try too hard. The plotters in this case used the supreme refinement of doing the swastika in human feces. That takes effort, planning. It’s just too good to be true!

Why did the president and the chancellor both resign? Two reasons. But first, they did not “resign;” they were pushed out and for good reason. (See below.) Number one reason: University administrators have no backbone, as a general rule. A few years ago, my attorney and I beat up a dozen of them. We made them eat sand; we made them cry. Second reason: University administrators almost always have golden parachutes. Resigning, for such people, is like taking a vacation for others.

Why were they pushed out? There is big money involved although U of Missouri football has not been shining lately, I am told. U. of Missouri, like many other universities, has made itself a financial hostage to a handful of black gladiators they shamelessly insist on calling “students.” Someone correct me if I am wrong but I heard on NPR that one of the “students’” “demands” was for more hires for the university’s black studies program. Sounds tremendously familiar! Same thing happened thirty years ago all over the nation.  The plotters have good memories and no original thought at all. At my former university employer, ten years ago, there were protests leading to the university administration making a large lounge available for the use of “students of color.” (It’s true that no (No) sign was actually posted forbidding entry to whites; fair is fair!)

A student at U. of Missouri staged a hunger strike. Sorry, a hunger strike for five days is just a weight reduction experience. I realize this is an insensitive remark but, W.T. F.! We are witnessing a flurry of artificial racial protests nation-wide because the Democratic Party is desperate about its geriatric, dishwater white line-up. Even if it should win the election, the Democratic Party will still face a tremendous identity crisis. I don’t rejoice. Massive, collective dishonesty soils the water in which we all try to swim.

Republican Tax Plans are Misguided

Predictably, Republican candidates are showcasing tax plans offering goodies for everybody. When some spoilsport has the nerve to point out the worsening deficit that would result, the most common retort is that the tax cut will spur economic growth enough to overcome the higher deficit. Some day. Somehow.

Of course lower tax rates will spur growth so that the loss in tax revenue will be less than proportional to the cut in tax rates. But it is foolish to think that we’re ensconced on the far side of the Laffer curve, for those who know that phrase, which simply means that tax rates are so high that cuts will produce higher revenue.

What about the claim that a flat tax is fairer than the graduated rates we have now? Perhaps, but how does one judge the fairness of any tax? The usual answer is that taxes should be based on the taxpayer’s ability to pay. But that is a nebulous concept at best. It means that somehow we figure out how much income is necessary and how much is up for grabs by politicians  Do we need a cell phone, cable TV, air conditioning? Who’s to say?

At least a flat tax would treat everybody alike. Or would it? Under a flat tax, where everybody hands over the same percentage of their income, those who earn a lot pay more money than those who don’t. Why? Do the high earners consume more government services? Are high earners bad people who deserve punishment?

I concede that some tax schemes could be fairer than others. For example, much as I might like the idea of complete tax exemption for septuagenarian European-American males, I’ll grant that would be a bit unfair. But in the end no tax can be entirely fair because taxation is coercive activity: stealing if you like.

Don’t get me wrong: I like tax cuts, preferably across the board, but targeted cuts are fine with me too. But the focus on the tax code is misplaced. The root problem is the amounts of real goods and services that are consumed by politicians and bureaucrats. Whether they are financed by taxation or borrowing is a secondary issue.

Republicans should be drawing up lists of programs to reduce or eliminate. “Defense” spending should be at the top of the list. The list should be broad enough that everybody’s ox is gored. Who knows, this approach might actually gain some traction with the fed-up electorate.

Assessing Elections in Poland and Argentina in the Context of Populism and Liberalism in Europe and South America II (liberalism in the classical sense of course).

The Argentine election was for the state president, who is head of government as well as head of state. An expected first round victory for the Peronist party (formally known as the Justicialist Party) candidate Daniel Scoli disappeared as he failed to clear 45%. He is clearly ahead of Mauricio Macri, Mayor of Buenos Aires, running on behalf of a three party centre-right alliance which contains the less statist, and populist elements of Argentine politics, but at least the hope exists of a second round triumph over the Peronists.

The third candidate is also a Peronist, showing the difficulty of overcoming that legacy and why even just turning the Presidential election into a competition between a Peronist and a non-Peronist is a victory of some kind. The sitting President Christine Kirchner pushed at the limits of the Argentine constitution, which prohibits more than two terms for any President, by alternating in power with her late husband Nestór Kirchner. If he had not died in 2010, we might now be looking forward to a fourth consecutive term in power for team Kirchner.

Peronists or the army have run Argentina almost constantly since the 1940s. The periods of army rule give a good indication of how successful Juan Perón and his widow Isabel (the third wife) were in stabilising Argentine society and political institutions. Nevertheless the Peronists have been the only party with a record of electoral success in Argentina and have improved from the chaos that Juan and Isabel instigated in more recent appearances in government.

As such a dominant party they have relatively centrist technocratic elements (most notably ex-president Carlos Menem) as well as the hard core statist populist nationalists. The Kirchner years have tended increasingly towards the more populist end, stoking nationalist sentiment over the islands in the south Atlantic known in Argentina as the Malvinas and in the UK, which has sovereignty over the islands, as the Falklands.

There has been economic growth under the Kirchners, but it has now very much slowed as policy has tended towards high inflation, currency controls, confrontation on debt owed to foreign creditors and increasing budget deficits. There has been social liberalism, most obviously, on attitudes to the LGBT communities, but in a context of nationalist sovereigntist politics. At least we can hope that if Scoli wins, he will feel obliged to shift towards genuine economic sustainability and a less populist politics.

In general, this adds to a feeling that South America has passed the peak of leftist populism which has influenced most countries outside Colombia in the last two decades. The more respectable end of that spectrum in Brazil’s Workers’ Party, which had been fairly successful economically, appears to be declining under the weight of corruption scandals, economic recession and incapacity in delivering on the more populist side. On the less respectable side, Venezuela has lost its status as model for the world’s radical left as corruption, economic decay, state brutality, election rigging and persecution of the opposition has become too extreme to ignore, particularly since the state socialist hegemony no longer has Hugo Chavez as a charismatic frontman.

Brazil and Venezuela were the models of the left, reformist and revolutionary respectively, and no longer have that status. If there is a model now it is the Evo Morales Presidency in Bolivia, which in some respects is radical left, but not consistently enough to get the kind of model status previously accorded to ‘Lula’ (now caught up in corruption scandals as his successor Dilma Rousseff) in Brazil and Chavez in Venezuela (whose successor Nicolás Maduro is a blatant and charmless neo-Stalinist thug-apparatchik). The Morales regime has received some cautious support from those inclined towards liberty on the grounds that he has pursued an overdue reduction of the power of traditional rent seeking elites in Bolivia and engaged in an economic pragmatism certainly distasteful to former Chavez admirers, and not even entirely comfortable for former admirers of Lula.

The leftist populist tide in south America has not entirely receded, but is now discussed with increasing nostalgia and an increasingly elegiac tone by left socialist observers, and as it has receded has tended to leave only embarrassments for the socialist left or reformist pragmatist examples of at least some interest to the liberty community. We are not looking at a strong shift towards liberty in all its forms in that region, but at least we see some shifts opening the possibilities of new movements towards liberty in markets, rule of law, individual rights, and social openness.

Assessing Elections in Poland and Argentina in the Context of Populism and Liberalism in Europe and South America I (liberalism in the classical sense of course).

Election results I’ve seen today from weekend elections in Argentina and Poland and the more general thoughts they have inspired. Rather longer than I anticipated so posted in two parts, though not separated in time given that I am articulating immediate reactions.

The Polish parliamentary election has been bad news for those who share the perspective of Notes on Liberty in that Law and Justice, a social-national-religious sort of conservative party with strongly statist and populist inclinations, has taken over from the more open market/open society inclined Civic Platform. However, a new party, Modern (strictly speaking ‘.Modern’, but I’ll ignore that in the future as too likely to be mistaken for a typo, it is at least worth noting as suggesting a technocratic commitment to a digital age, reminiscent of the development of the e-state in post-Communist Estonia) which leans towards liberty in economic and social spheres, in comparison with most of Civic Platform and even more in comparison with Law and Justice, has entered the National Assembly, compensating for some of the votes lost by Civic Platform to the populist right.

We might at least hope that the next election in Poland produces a coalition government between Modern and Civic Platform, and hope that Law and Justice does not do too much harm during the coming years in which it will control the government and the (non-executive) presidency on its own.

The Polish political party structure has been confusingly variable since the end of Communism, with names of politicians reappearing from now extinct parties in new parties gathering a different if overlapping spectrum, and with different international partners. Modern’s leader, Ryszard Petru, is at least connected with the early phase of post-Communist politics as a disciple of Leszek Balcerowicz, who played a leading role in the transition to market capitalism and the earlier phase of liberal-centrist politics. Both Petru and Balcerowicz are ‘Europeanist’ in the sense of taking a positive attitude to the European Union, which is also the outlook of Civic Platform. Balcerowicz is even director of the College of Europe, a postgraduate institution in Bruges, Belgium, which educates many of those working in European institutions and in their general atmosphere.

This illustrates a major claim I put forward here about European politics, that is of a drift of market liberals, classical liberals and libertarians towards advocacy of the European Union, and an increasing tendency of the ‘Eurosceptic‘ right, even those with some libertarian-conservative history, to be caught up with hardcore populists even if some of the Eurosceptic right has pro-liberty inclinations. That part of the European right has always been more libertarian-conservative than libertarian-cosmopolitan.

The leading ideologue of libertarian-conservative Eurosceptics in Britain, Conservative Party Member of the European Parliament, Dan Hannan is very touchy about suggestions of backward looking nationalism and chauvinism, emphasising a cosmopolitan family background. However, despite these protestations, Hannan is a great believer in the superiority of British (and Anglosphere) ways, and in addition has always been for ‘democratic controls on immigration’, i.e. populist limitations on the market in labour and individual rights to mobility. The second leading British ideologue in that spectrum, and previously a close associate of Hannan, Douglas Carswell has joined the the United Kingdom Independence Party (UKIP), which has unmistakably populist inclinations in economic and social policy beyond restrictions on immigration. Hannan prefers to praise UKIP as ‘patriots’ rather than confront this.

Hannan engineered the formation of a eurosceptic right group in the European Parliament after David Cameron was persuaded that leaving the main centre-right group (European People’s Party) was a necessary price for keeping Tory Eurosceptics acquiescent with his leadership. Hannan’s European Conservative and Reformists Group does not include Modern or Civic Platform, but it does include Law and Justice, which gives a good idea of what part of the European political spectrum it appeals to, i.e. not those inclined to social and cosmopolitan liberty. Most disturbingly associate members include the Justice and Development Party in Turkey, i.e. the AKP of Recep Tayyıp Erdoğan associated with corruption, police brutality, politicisation of the judiciary, social media blocks, attacks on the media and all free speech, along with the demonisation of anyone not part of the more conservative parts of majority Turkish culture.

The idea that liberty can be combined with Eurosceptic discourse is declining, though it has been influential in some libertarian circles, particularly in the UK and Slovakia to be the best of my knowledge. There has been a recovery of pro-EU views (if highly qualified by the wish for reform) amongst the Greek liberty community, even after the recent Euro currency disasters. The Slovak eurosceptic libertarians seem to have collapsed. The Czech hero of European right wingers of that tendency, Vacláv Klaus, has turned out to be a harsh social conservative and Putin fellow traveler of a type obnoxious to the anyone of genuinely pro-liberty tendencies, leading to his exclusion from polite libertarian circles as seen in the loss of his Cato fellowship. A warning there surely about the perils of regarding the sovereigntist eurosceptic right as natural allies of liberty. Personally I believe the same applies to the Republican right in the US. That is of course another story, but just look at Donald Trump’s ascendancy and think about that. The German Free Democrats are making a come back after a period it seemed they might lose the most economically free market part of the electorate to AfD.

Small indications in some cases, but it all adds up to an overall and increasingly dominant picture (though course with exceptions) in which consistently pro-liberty forces support the European Union, which is very much the case in Turkey, even if desiring considerable reform. The strengthening of the populist right (Northern League in Italy, National Front in France, Swedish Democrats, Golden Dawn in Greece, Freedom Party in the Netherlands etc as well as those already mentioned) together with a populist-socialist surge has pushed those engaged with a consistent politics of individual rights and cosmopolitan openness towards a pro-EU centre.

The left populist surge has already receded in Greece where Syriza is in transition to standard social democracy while still using a more radical rhetoric, but has some energy elsewhere in Europe: Podemos in Spain, two left of social democracy parties in Portugal, Sinn Fein in Ireland, Jeremy Corbyn’s election as Labour leader in Britain. The left populist surge is less strong than its right wing equivalent and despite what the socialist intelligentsia in the UK believe the socialist surge within the Labour Party does not reflect a broader shift in British public opinion. Anyway, we are in a period where pro-liberty forces are coalescing with centrist forces in defence of a continuing EU of some kind, with some limitations on national sovereignty, not completely closed to refugees, not in thrall to an enclosed defensive traditionalist, legacy Christian identity politics.