Final thoughts on Rio Olympics

Rio Olympics are over, and it seems to me, they are leaving a great impression. Despite all the problems the city and the country faced in recent years, not to mention the fact that Brazil is still a developing country, all ends well for Summer Olympics 2016.

One final comment I would like to make about the events once again relates to Brazilian athletes: Brazil scored an unprecedented 19 in the medal table (7 golds, 6 silvers and 6 bronzes), establishing a new record for itself. Among Brazilian medalists were people like Martine Grael, who won gold in Sailing, 49er FX Women. Martine is the daughter of twice Olympic gold medalist in sailing Torben Grael. Her brother Marco and uncle Lars also sailed in the Olympics. We also had people like Isaquias Queiroz dos Santos, who won Silver in Canoe Sprint, Men’s Canoe Single 1000m, Bronze in Canoe Sprint, Men’s Canoe Single 200m, and again Silver in Canoe Sprint, Men’s Canoe Double 1000m, becoming the first Brazilian athlete to ever win three medals in a single edition of the Olympic Games.

Isaquias was born in a very poor region of Brazil, and has been through great adversity before becoming an Olympic medalist: as a child he poured boiling water on himself and spent a month in hospital recovering; at the age of 5 he was kidnapped and offered up for adoption before being rescued by his mother; at the age of 10 he fell out of a tree and lost a kidney. In his teenage years he severed the top third off his left ring finger. He started training in a social project supported by Brazilian Federal government.

I am pretty sure that this picture happens with athletes and medalists from other countries: on one hand we have medalists like Martine, coming from a well-to-do environment and with a family of athletes who introduced her to the sport. On the other hand we have medalists like Isaquias, who had to face great hardships but was helped by social programs to become an Olympic athlete. Considering that, should the government create more programs to develop more people like Isaquias? Should the government prevent the privileges of people like Martine? Questions like these may sound preposterous to many, but they actually reflect much of the political discussion we have today: should the government help kids from poor families with education, healthcare and other things in order to create a head start? Should the government overtax the rich (and their heritage) in order to create more equality? In other words, what we have here is a discussion of equality versus freedom. In order to talk about that we have to understand what is equality and what is freedom.

There are many senses in which Isaquias and Martine will never be equals: they were born in different places, to different families. They had different life stories. There is a sense in which no two individuals are equal: each one of us is in each one way unique. And that makes us all special in each one way. Of course, when talking about equality most people are thinking about equality of outcome. But they forget (or ignore) that in order to have this kind of equality you need to ignore all the differences between individuals – the very same thing that makes us all unique and special – or to use government force to take from one and give to another. So, unless you are willing to ignore all the differences that make us all unique or to use force against non aggressors, you have to accept at least some income inequality as part of life. The classical liberal answer to that is that we need to be equal before the law: a great part of the liberal project in previous centuries was basically to abolish privileges (private laws) and to make all equally responsible before government. That is an equality we can all have. And we should.

The second point is freedom. Freedom from what? Or to do what? There are at least two kinds of freedom discussed in the context of the liberal revolutions in the 18th and 19th centuries. One is related to John Locke and the Founding Fathers, the other to Jean-Jacques Rousseau. In the Declaration of Independence Thomas Jefferson wrote that “all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.” The discussion about this phrase can go really long, but I want to emphasize simply that in Jefferson’s view you have the freedom to pursue your own understanding of happiness. I may completely disagree with what you are choosing for your life, but at the same time I am not to force you in any way to change your choices. I am not to force upon you my brand of happiness, not matter how much I am sure I have the correct one.

Rousseau’s version of freedom is very different: as he famously stated, “whoever refuses to obey the general will shall be compelled to do so by the whole of society, which means nothing more or less than that he will be forced to be free.” In other words, if you are a minority (and especially if you are an individual, the smallest minority possible) people can force upon you their brand of happiness. That is one reason why Rousseau is called “the philosopher of vanity”: he refuses to accept that people see life in a different way from his own. Rousseau’s vision of freedom is connected to his troubled relation with Christianity – where indeed you need to have a relationship with God through Jesus to become free. But the catch is that in Christianity God never forces you. Rousseau’s god is very different, and as such, Rousseaunism is just a Christian heresy.

To conclude, in order to create more income equality you have to destroy the classical liberal version of freedom – or to change to another version that inevitably leads to totalitarianism. As Milton Friedman said, “A society that puts equality — in the sense of equality of outcome — ahead of freedom will end up with neither equality nor freedom. The use of force to achieve equality will destroy freedom, and the force, introduced for good purposes, will end up in the hands of people who use it to promote their own interests.” I just hope we can have more people like Isaquias and Martine, who achieve great goals, sometimes with the help of friends and family, sometimes in completely unpredictable ways.

What’s happened tonight

Hello, dear community! I wasn’t able to write here for quite a long time, but what’s happened tonight changed my mind and I feel an urgent need to share my experience with you.

What is a peaceful living? Seems that majority’s answer is “to feel safe in your country, in your house, to have enough money for living and inspiration for self-realization, etc.”. Well, edge of a corner is a feel of safety. And I’ve lost it tonight.

Just imagine. It’s 3 p.m., you sleeping in your bed, watching 10th dream and declining internally start of a working week. And then suddenly you awaken by door bell, there’s a lot of police outside, an ambulance (accidental heart-attack of your neighbour), bomb-finding squad with trained dogs and around 300 people on the street, scared to death. Evacuation. In night, which’s dark as shit, soldiers trying to find bomb: somebody called to police hot-line and reporting a chance of terroristic attack on our building. It’s a phone terrorism – 3 years of a jail in Russia. They didn’t found anything, so we were able to move back in one hour.

But will you be able to sleep again? I wasn’t.

Two hours of total sleep, wasted day at work… And know what? It’s a PTSD – posttraumatic stress disorder. I’m afraid to go home. Afraid to sleep. Because I’ve lost that sense of safety in my own house. You can be killed on a street (optional joke about hard living in Russia), you can die in car accident or somewhere else. But your house – is your fortress. Fortress with paper walls.

Be safe.

Massachusetts to let cabs tax Uber: The seen, the unseen, and the minor nuisance

There’s a simple alternative to regulation: liability. We don’t need to tell companies how to be safe if we make them legally responsible for negligence.

It’s as though Mass’s government decided that back-to-school season calls for creating real-life rent seeking examples for my class. They’re going to start taxing ride-sharing customers $0.20 per ride with five cents of that going to the taxi industry.

“The law says the money will help taxi businesses to adopt ‘new technologies and advanced service, safety and operational capabilities’ and to support workforce development.”

New technologies like an app that gets more use out of otherwise idle cars? Or an app that makes it easy to hail a ride with little wait? Or an app that brings supply into harmony with demand when demand surges? Oh wait! We’ve already got that and it’s the thing that’s being taxed!

There are a few important economic lessons that Massachusetts’ electorate is evidently in need of. Let’s start with taxes.

Taxes don’t stick

“Riders and drivers will not see the fee because the law bars companies from charging them.” They won’t see the fee, but that doesn’t mean they won’t pay it. A business only exists by collecting money from customers and paying some portion of that to suppliers. The government cannot tax a business without taxing that business’s customers and suppliers.

Granted, part of the cost will be reflected in lower profits (although profits aren’t as big as people think) which means Uber’s shareholders will face part of the tax. But what does that mean? It means 1) a little less money in pensions, and 2) potential investment capital is moved from the people who gave us the best version of taxi travel to the people who gave us the worst version of it.

Money is fungible and I don’t know how to run a cab company

Safety, new technology, and workforce development all sound good, but taxi companies (at least those that deserve to stay in business) will already be doing these things. Safety is important because accidents are costly (especially if your fleet size is limited by regulation). New technology is being adopted by every other (competitive) industry without government support. Other companies invest in their employees.*

Supporting workforce development is part of a larger trend of people supporting specific fringe benefits without appreciating the tradeoff between monetary and non-monetary compensation. And all these ideas reflect a faulty logic: just because something is good, doesn’t mean we need to force people to do it.

Voters simply aren’t in the right position to know if some good thing is good enough relative to other options. If you go into the backrooms of any industry you aren’t already familiar with you will surely learn about techniques and tools you had no idea existed before. So why should we expect that cab companies need regulators to tell them what to do? Let them learn from their trade magazines.

But there’s good news. If we mandated that cab companies use this new revenue stream to pay for new tires, they wouldn’t simply waste the money by buying superfluous tires. They’d stop buying tires out of their own revenues and start buying them from Uber’s. Telling someone to pay from their left pocket simply leaves more money in their right pocket for everything else.**

Extra money in cab company coffers could allow them to invest in better service, happier employees, “and help so taxi owners could buy ‘flagship’ vehicles like a 1940s Checker or a Porsche.” But cab companies are already free to reinvest their profits if they think doing so would create value (i.e. greater future profits). The more likely outcome is that they will simply have more money than before.

Competition is not the problem, it’s protectionism

When we see problems in the world we need to look for their root causes if we want to actually make things better. More often we act like a doctor diagnosing cancer is the cause of the cancer. Don’t want cancer? Outlaw doctors!

Cab companies aren’t as successful as they previously expected and the apparent culprit is Uber. But they only exist because an inefficiency in the market created a profit opportunity. Cab companies are doing poorly because they don’t provide as much value per dollar. And that’s largely because of regulation that prevents competition. Much of it was put in place specifically to protect incumbents from competition.

A lot of these regulations sound nice enough, but they still created the market niche that Lyft and Uber filled. And they protected cab companies from competition right up until ride-sharing became feasible.

Regulation is not the answer

Let’s give cabbies the benefit of the doubt for a minute. Let’s assume that they aren’t really in it for the cash-grab and that they just want to help people get around safely and conveniently. Let’s even assume that NYC’s medallion system is about congestion rather than competition.

If that’s the case, then there are better ways to address the root causes of the problems cabbies tell us to worry about. We don’t need to address each of these problems individually if we can find a few key causes at the root of each of them.

never-half-ass-two-things-whole-ass-one-thing

Cabs have medallions but civilians don’t, so congestion will still be a problem in cities until congestion fees are implemented that balance the demand for road access with its limited supply. Safety is important, but mandating extra inspections for only some types of cars is a half-assed way of dealing with it.

There’s a simple alternative to regulation: liability. We don’t need to tell companies how to be safe if we make them legally responsible for negligence. This is an important lesson for how we think about regulation in all industries. The basic logic is also why economists vastly prefer pollution taxes to specific regulations; it’s usually better to name the outcome we want and create a cost for failure to meet it rather than mandate specific behaviors.

Perhaps this means we should modify the laws that require all drivers to be insured so that some drivers have higher minimum liability coverage. That would be far less invasive and do far more to alleviate the concerns Uber’s critics raise than mandating specific behaviors.

Concentrated benefits dispersed costs

Okay, so maybe this is too small an issue to be concerned with. If that’s not by intentional design, then it at least reflects an evolutionary logic. This policy is likely to survive because the people it taxes will face a cost so small it isn’t worth doing anything about. Yes, Uber and Lyft have incentive to lobby against it, but it’s so close to invisible that they’ll probably be able to pass it almost entirely on to drivers and passengers.

This is going to cost millions… with a tiny little m. At first I read it as a 5% tax and quickly realized that Uber rides are so cheap that I won’t even notice it. And 20 cents a ride is even less than 5%.

So why worry? Precedent. The problem with death by a thousand cuts isn’t any one cut.


*Of course we can argue about whether they do enough of that. There may be a tragedy of the commons if there’s asymmetric information between people looking to make human capital investments and businesses looking to gain access to specific human capital. Such a situation might create an opportunity for government to do some good by investing in public goods or subsidizing on-the-job training. But if that’s the case, it calls for very different programs (education reform, etc.) than taxing successful companies to subsidize their competition.

**Why is this good news? Because if cab companies did change their behavior it would imply they’re doing something where cost exceeds benefit. It would destroy value. Remember those stories of WWII rationing? Imagine that situation but with cab companies buying twice as many tires and just storing extras in the garage. It would clearly be a bad thing. Scarcity isn’t so urgent nowadays, but the basic logic remains the same.

Still thinking about the Olympics

Rio Olympics are close to the end, and so far it has been a wonderful time for Brazilian athletes: the country is scoring 15 total in the medal table, quite high in its historical record. Brazil’s first Olympic medal in 2016 was won by Felipe Wu right in the first day of competition: silver in Shooting, 10m Air Pistol Men. Wu was followed by Rafaela Lopes Silva, who won gold in Judo, Women -57 kg, and then by Mayra Aguiar, who won bronze, also in Judo, Women -78 kg. Rafael Silva won another bronze for Brazil in Judo, Men +100 kg, and then Arthur Mariano won still another bronze, this time in Gymnastics Artistic, Men’s Floor Exercise. Diego Hypolito won silver in the same competition. On the tenth day of competition Poliana Okimoto won Bronze in Marathon Swimming, Women’s 10km and Arthur Zanetti won Silver in Gymnastics Artistic, Men’s Rings. The next day, Thiago Braz da Silva surprised everyone by beating favorite French Renaud Lanillenie and winning gold in Athletics, Men’s Pole Vault.

In the last few days other athletes followed the ones mentioned in this opening paragraph, but I limit the text to them for a reason: one highlight of these first 9 Brazilian medalists is that, with the exception of Hypolito, all of them are in the military, and some of my friends on what is considered “the right” in the Brazilian political spectrum are using this information to poke (in good spirit) my friends on the left. On the other hand, my friends on the left highlight that many of the Brazilian medalists also have in common coming from very poor backgrounds, and finding in government social programs the chance to become professional athletes. I want to be careful to say that both are wrong and I want to explain why (I hope I will still have some friends after this). Basically both ignore the concept of opportunity cost.

The concept of opportunity cost postulates that spending in one direction means not spending in another. In other words, that every choice comes with the cost of forgoing the next best alternative. It was developed in all but name by 19th century French economist Frédéric Bastiat in the parable of the broken window (also known as the broken window fallacy or glazier’s fallacy) that appeared in his 1850 essay Ce qu’on voit et ce qu’on ne voit pas (That Which Is Seen and That Which Is Not Seen). The parable goes somewhat like this: a boy breaks a window. The window owner gets upset, but someone tries to comfort him by saying that this will give the window manufacturer the opportunity to work. In the end, the economy wins. Bastiat shows that this is a fallacy: the money spent in a new window could have been spent in another way, say, with new shoes. The world would have new shoes and still have a window, but now the world has a new window and no shoes. Bastiat proceeds to show the law of unintended consequences, or how our actions can affect the economy in ways that are “unseen” or ignored, and also to apply the concept to several areas of public policy. Two of these happen to be military expenditure and “Theatres, Fine Arts.”

Concerning military expenditure, Bastiat argues that spending money in order to defend the country against foreign aggressors can be a good investment, but that any money that goes beyond this necessity would have been better spent in other way. This argument goes against Bastiat’s contemporaries who argued that money spent on the military had the benefit of creating jobs, even if defense was not a real necessity. Bastiat’s conclusion is that if the money was left with the taxpayer, this person would find ways to spend that would create more and better jobs. Applying to current events, if Brazil is spending money in the military in order to protect its borders, this is a good investment. If instead it is spending money in the military in order to get Olympic medals, the money should be spent elsewhere.

Bastiat lived before modern Olympic Games, so he has nothing directly to say public spending in this kind of event, but I guess that what he says about “Theatres, Fine Arts” also applies here. Some of his contemporaries defended that the government should invest in Theatres and Fine Arts, because these things are good in themselves, created jobs, and so on. Bastiat was once more against what he saw as excessive public spending. This time his answer exposed him to the logical fallacy of the straw man, or misrepresenting one’s argument in order to make it easier to attack: his critics accused him of not caring about Theatres and Fine Arts. But if we examine the evidences carefully, that is not the case at all: to say that the government should not invest in Theatres and Fine Arts is not to say that nobody should invest in it. It is just to say who is supposed to make the investment, the government of individuals. I am not equalizing Theatres and Fine Arts with sports, but I believe the lesson applies in this field as well: to say that the government should not invest in sports is totally different from saying that nobody should invest in it.

In conclusion, it seems that public investment in the military and social programs is helping Brazil to win medals in this Olympics. But we can ask ourselves where would that money have gone had this investment not been made. Based on Bastiat, I believe that if the money spending was left for the individuals, Brazil would have better military, more Olympic medals, and less necessity of social programs, not to mention better jobs, and a better overall economy. Perhaps after this Olympic Games my friends both on the left and on the right can feel like investing more in sports. Or maybe they will realize they prefer to spend on something else.

HARD Summer and legal belligerence

3 die after attending HARD Summer rave near Fontana (http://lat.ms/2aKrN6q)

I just attended this concert, and lived. There was around 150,000 people. HARD Summer is an annual festival for electronic dance music, ordinarily thrown in the Los Angeles fairgrounds but moved to Fontana this year. Three twenty-year olds died during the two day event, presumably from drug overdoses; another two died last year, and eight have died from drug-related causes within LA county since 2006.

The intuition is simple: drugs are so popular at concerts is because it is one of the very few public places to actually engage in use without fearing legal consequences; few people get arrested while hidden in a crowd. Recreational effects are secondary, because recreational considerations account for all gatherings. It’s also a great way to make new friends, and factors as part of the culture, etc. The criminalization of drugs means that they are taken covertly instead of publicly, and thus much more dangerously and ignorantly. So, concert-goers, to satisfy their adventurousness and recreational fixation, must purchase their drugs in the streets and sneak them through security, instead of buying them safely inside from some reputable dealer. And there are cops on the premises, and not medical practioners and drug safety experts. (Cops that are especially incompetent with public health, as this article suggests.) 

And so young adults die at these events, and their parents blame the management, the county, the city – for “failing to protect” the rave’s attendees from pushers distributing drugs. A lawsuit was filed last month, citing negligence and wrongful death, in the case of woman who consumed “what she believed to be pure ecstasy,” after she died of multiple drug intoxication. The promoter’s owner, Live Nation, the city, the County Fair Association, down to the security, Staff Pro, face the suit. There could possibly be a measure of protective failure. The management doesn’t make promises or guarantee welfare to the individual attendees, but the police, also known as public safety officers, were not able to effectively use CPR, according to a witness in the parking lot. In California, law enforcement is required, under Police Officers Standards and Training, to be accredited to perform CPR. Yet, even if legal responsibility was on the officer, moral responsibility rests on no one.

The risk-taking behavior was entirely in the hands of the attendees. Health as a consequent of personal risk-taking is inherently a personal responsibility. When consuming drugs – which are infinitely more dangerous because of criminalization – the consumer also incurs a perceived risk (based on subjective probability), proportionate to several external factors. One of these factors is the hospitality and security of the local environment. If it could be shown that assurance of protection had been made on behalf of nearby staff or officers, resulting in a reasonable estimation of security, a moral duty would be invested. No such guarantee existed though. On a side note, the staffers even provided free water, which is actually rare at these events, and vital for safe drug use. (But not as an antecedent necessarily resulting in safety, nor even enough to lower the perceived risk substantially such that otherwise drugs would not be consumed.) 

The parents of the deceased twenty-year olds are planning to sue whoever could legally be held accountable, but I think it’s easy to see the difficulty in assigning meaningful blame. I know, also, that many people, more reasonable than the parents but not wholly impartial, want to blame the consumers themselves. I don’t think it is an altogether correct judgment to blame drug consumers for their deaths, simply for trying to squeeze more pleasure out of a state-suppressed existence. There exists responsibility, but the blame is incalculable and worthless to investigate. Who can rightfully be held accountable? The event organizers, for trying to suppress drugs but inevitably failing at whole prohibition? The pushers, in their harsh realism, living dangerously to supply wealthy and risky (but competent) young adults with their demands? The drug “kingpins”, for functioning productively in an open market with high demand, with full consent of all involved parties? The basement scientists, for discovering new chemical arrangements – agents that can be used medicinally as well as recreationally; agents that are inherently neutral to their alteration, route or variety of consumption? The Earth, and Nature itself, for creating the ingredients? I believe the chain of thought concludes with a puritanical condemnation of human nature. Human nature as something to be escaped, battled with religion or values; at the very least it must be vehemently detested by society. This is the conclusion of those who would want to sue others for their children’s use of drugs. 

There are those too, that want to simply change the United State’s drug culture: our alcoholism, our designer drug scene. This not through laws necessarily. It’s worth pointing out, however, that whenever someone expresses the desire to change a cultural aspect, he or she can only be saying, in veiled language, that their ideology should replace the current ideology. There is no society, there are only individuals in that society; talking about battling “society” can only mean pushing on a new ideology to others. Society’s temperament and exclusive nature can be chalked up solely to psychological states in the brains of its members. When recognized as a useful fiction to describe coordinated groups of people, instead of an emergent quality, cultural attitudes can be critized. Otherwise, writing polemics about society, and not individuals in the social sphere, makes clear an authoritarian intent: group all these people together and inflict my rules; empower me with merciless authority; subjugate dissenters to anonymity.

(For a brief aside, this is one of the idealistic problems of progressive movements: their unceasing condemnation of an unreal entity. The great majority of people blame their problems on society. There’s a classic idiom, occasionally attributed to Neitzsche, that “God is in the details”; used to stress the significance of detail, it can also be used rather literally to describe man’s desperate search for God. In early history, the Western world thought its God lived in the clouds above, e.g., the tower of Babel. After the invention of the telescope, the world moved its God back to outer space. Now, with our advanced technology, we can see billions of light-years into space – with ourselves at the radius of the observable universe, of 45 billion light-years – and still cannot find God. So, the theological theories have changed (now God is “all around us,” or “in another dimension,” and he breaks the laws of physics and logic). The way that people brood on their social problems is similar. Without the ability to accurately pinpoint an antagonist, the invincible figure of Society is summoned to scapegoat problems that may not have any material instances. Thus, “institutional” is really a synonym for “individual.”) 

It is detestable to enforce, legally or idealisticaly, a new ideology upon others. But the true moral repugnancy of this entire situation, rather than resting on event administrators, rests on those that would sue others – and thus attempt to prevent another 149,997 people from having a good time next year – for a grand payout because they cannot cope with their children’s choices, after they themselves raised them. 

A Note on Trump, Immigration, and Healthcare Reform

Hopefully, the US election will start getting out of the he-said-she-said of assassination attempts and badmouthing parents of military personnel and start being about actual policy issues. Unfortunately, that isn’t going to happen at all, but in a minuscule and futile attempt to help get us there, I’m going to blog about some policy issues for a minute.

Trump’s campaign released a brief memo about his healthcare positions recently. For the most part the positions—though not quite detailed enough to really call a “plan”—are fairly decent. They contain most of the reforms free-market analysts have been proposing for decades such as opening insurance competition across states, allowing for Health Savings Accounts, and streamlining Medicaid funding. Notably missing was abolishing the employer mandate to reduce price fragmentation, as Milton Friedman proposed, although Trump proposes taking steps in that direction by introducing a tax deduction for individual insurance plans.

But what stuck out to me was that Trump, surprise, surprise, made xenophobia an element of his health care proposal by furthering the myth that immigrants are a further drain on our healthcare and welfare programs:

Providing healthcare to illegal immigrants costs us some $11 billion annually. If we were to simply enforce the current immigration laws and restrict the unbridled granting of visas to this country, we could relieve healthcare cost pressures on state and local governments.

Meanwhile in reality, undocumented immigrants actually contribute more to Medicare than they withdraw. It is unclear where Trump is getting his $11 billion figure, but he is ignoring the increased payroll taxes undocumented immigrants pay into these programs. A 2015 study found that, in fact, between 2000 and 2011 immigrants paid up to $3.8 billion more into Medicare than they took out. From the results of the study:

From 2000 to 2011, unauthorized immigrants contributed $2.2 to $3.8 billion more than they withdrew annually (a total surplus of $35.1 billion). Had unauthorized immigrants neither contributed to nor withdrawn from the Trust Fund during those 11 years, it would become insolvent in 2029—1 year earlier than currently predicted. If 10 % of unauthorized immigrants became authorized annually for the subsequent 7 years, Trust Fund surpluses contributed by unauthorized immigrants would total $45.7 billion.

Poor immigrant children, both legal and illegal, are also less likely to be enrolled in Medicaid or CHIP than citizens.

Thus Trump’s campaign is being factually dishonest by claiming that restricting immigration will help fund government healthcare systems, it will actually make Medicare go insolvent sooner. Which is especially concerning given that, until this memo, Trump has shown no interest in any meaningful entitlement reform.

This refrain—that immigrants are a fiscal drag on America’s welfare programs—has been among the most common refrains from Trump, and has even been popular among libertarians who are otherwise sympathetic towards immigration. But, as I’ve argued extensively in the past, it is completely false. Almost every major study shows that immigrants, at worst, pay as much into welfare programs as they get out of them.

Some thoughts on the Olympic Games and cosmopolitanism

Right now my city, Rio de Janeiro, is hosting the Summer Olympic Games. It is in many ways a great moment, and it is especially good to see people from so many parts of the world together in relative harmony. In other words, a good example of cosmopolitanism. The cosmopolitanism in the city today reminds me of the attempts of multilateralism that marked Brazilian (and world) foreign policy in previous governments, but that now seem to fade away. The two terms, cosmopolitanism and multilateralism, are not exactly synonyms, but are closely related: multilateral policies should work in bringing peoples together in a more cosmopolitan world. Concerning that, I think of a multilateralism that does not work in bringing people together through cosmopolitanism, and one that can work in that way.

When the Cold War was over, multiple theories were presented to explain what would happen to a world without the tension between two superpowers. Some suggested that the US would reign as a lone superpower; others that it would embrace some form of benign hegemony, in a New World Order. Others still believed that US power was in decline, and that the World would see more multilateralism in the 21st century. This last view was especially dear in Brazil, but as the 21st century progresses, it does not seem to hold as much water anymore.

One great example of multilateralism substituting American hegemony was the integration of Western Europe, but that does not seem to be the case anymore. It is true that beginning shortly after WWII European countries experienced growing levels of regional integration, culminating with the European Union and the Euro in the 1990s. But even then, economists warned politicians and the general public that such a level of integration was not possible, at least not without a central government in Europe. Successive economic crises, Brexit, and the harsh questioning of immigration policies show today that economists were right back then.

Another example of multilateralism celebrated in the 1990s was the growing importance of the UN. Successive humanitarian missions and interventions in several countries suggested that that UN could now surpass the dawn that marked the relationship between USA and USSR in the previous period. Optimism went so far as to discuss themes such as the ‘obligation to intervene’, substituting previous understandings of state sovereignty. But as the years go by, cases like Haiti, Rwanda, Sudan, and many others show that the optimism was at best too high.

Finally and more recently, Brazil and other underdeveloped and developing countries focused greatly on South-South Cooperation, trying to substitute the more standard paradigm of North-South Foreign Aid. This materialized in initiatives such as UNASUR and BRICS. Although presented as a new development, that was actually very reminiscent of The Non-Aligned Movement, The Group of 77, and other initiatives from the 1960s and 1970s. Now, as Brazil, Venezuela, Ecuador, Bolivia, Turkey, China, Russia, and several other countries face growing levels of economic and political hardship, attempts to “overcome American hegemony” seem but preposterous.

New forms in multilateralism in Europe, the Global South, and even the World (in the UN) did not work because they are not really democratic, as they claim to be. Behind a rhetoric of democracy, empowerment of the poor, and so on, they are just new forms of mercantilism: political elites trying to control the economy, not just at the national level, but the international one as well. The point was never to actually bring people together, but to maintain the status quo by avoiding real competition.

The multilateralism that can bring about cosmopolitanism, and that somewhat shows in the Summer Olympic Games in Rio, is one characterized by spontaneous order. People do come together: that is the natural ways of things. The desire to trade spontaneously brings different peoples closer to one another, and as they are closer they realize how much they have in common, and also what can be learnt from the differences. It is not always a peaceful dealing, but the more people are educated to tolerate the differences and to benefit from them, the more cosmopolitan they become.

A top down approach to cosmopolitanism is just a deformed clone of the real thing. Even if some results appear, they always seem to fall somewhere in the uncanny valley, and anyway, the results do not last very long. A bottom up cosmopolitanism is the real thing, and if only elites let it be, it can grow stronger, bring more wealth, and even a little more peace to the world.