Politics

Why I turned right

Bruno Gonçalves Rosi Culture, Politics , , , , ,

I understand things are not the same everywhere in the World, but until just a few years ago, to call yourself “right-wing” in Brazil was virtually unthinkable. The reasons for that are not totally clear, but the fact is that “right-wing” was a name with a very bad connotation. Brazil went through a military dictatorship from 1964 to 1985. This dictatorship was set in place to prevent a perceived communist threat in the country, especially after the Cuba Revolution of 1959. Therefore, it was an anticommunist dictatorship.

My understanding is that, because of that, to be “right-wing” in Brazil was understood as “being in favor of dictatorship”, and left-wing to be “for democracy”. Of course, examining things with just a little more care, nothing could be further from the truth. Fidel Castro and Che Guevara were no democrats. Actually, the military dictatorship in Cuba lives on. Mao Zedong was a horrendous dictator. So were Stalin and Lenin. There is no reason to believe that Trotsky would have been any less authoritarian.

There is no reason to believe that the socialists/communists in Brazil would have been democratic once in power. But they didn’t come to power, and because of that people could fuel the romantic image of revolutionaries unjustly persecuted by the military. Although I disagree with Brazilian philosopher Olavo de Carvalho in many points, I believe he is totally right on this: the military in Brazil was great in fighting the communist guerrilla. Thanks to them, we don’t have something similar to FARC in Brazil today. But when it came to propaganda and cultural war they were just awful. Communists in Brazil (and in other places) were great in selling the image of Che Guevara as a romantic hero fighting against the evil North-American Imperialism.

And this is the paradigm I grew up with. Either you are a freedom fighter, opposing evil capitalists and imperialism, or you are subservient to foreign powers and injustice. Considering this background, of course, nobody would like to be called right-wing. However, things changed.

One of the things that made me turn right was studying the right-wing political ideologies. I discovered that classical liberals and conservatives were not against the poor, just the opposite. The best example I can think of is Adam Smith: his Wealth of Nations is actually a love letter for those who are oppressed by unjust economic exploitation. What Adam Smith was trying to find out is what makes the lives of the simple people better. His answer, in a nutshell, was the free market. Similarly, the Founding Fathers were trying to give the common folk a better living without oppression. And they did. Very different from all the leftist revolutions. In short, free markets and liberal democracy work.

The second thing that made me turn right was the hypocrisy of some leftists. I realized that they want you to have freedom of choice, but only if you choose what they want. If you feel you have homosexual inclinations, they want you to have the freedom to embrace homosexuality. And so do I! But God forbid (or Marx forbid) you decide (for whatever reason) to fight homosexuality and become (or remain) straight.  They want women to have the freedom to get jobs. But they don’t want them to have the freedom to stay home to raise the kids. The examples are many, but the summary is this: I realized that many leftists are not ready to defend your right to be different.

I’m really sorry that things come down to what two consenting adults do in a closed room. I really am. But it seems to me that much of the leftist agenda is to have the freedom to choose only if you choose what they want. And this is what made me turn right: to accept other peoples choices as much as I want them to accept mine. Liking it or not.

How the populists came to power

Bruno Gonçalves Rosi Culture, Politics , , , , , , , , ,

Jair Bolsonaro was elected president in Brazil. Donald Trump in the US. In other countries, similar politicians are gaining popular support. Some are calling these politicians “populists”. I don’t really know what they mean by this term. The populists that I know better are Getúlio Vargas, Brazil’s president for almost 20 years in the mid-20th century and Juan Peron, a leading political figure in Argentina in the same time period. What they had in common? Both fought the communist influence in Latin America, favored the labor movement and were anti-liberal. They were also extremely personalist, leading to something that could be understood as a cult of personality. I completely fail to see important similarities between Trump and Bolsonaro on the one hand and Vargas and Peron on the other. But I can see some similarities between Trump and Bolsonaro. The latter two both came to power against what the left became in the last few decades.

Once upon a time, there was a young German philosopher called Karl Marx. He was very well read but wasn’t very bright on economics. Anyway, he decided that he would correct the classical liberal economic theory of Adam Smith. The result was that Marx concluded that in the center of the economy, and actually in the center of history itself, was the class struggle between the workforce and the bourgeoisie. Of course, although appealing on the surface, Marx’s economic theory is pure nonsense. Maybe Marx himself knew it, for at the end of his life he was more interested in living a peaceful life in London than in leading a revolution. But this didn’t stop Marxists from starting Revolutions throughout the world, beginning in Russia.

Ludwig Von Mises brilliant pointed out that Marxism would never work as the economic foundation of a country, for it ignored private property. Without private property, there is no price formation and without prices economic calculation is impossible. In doing so, Mises founded the Austrian School of Economics. The economic debate between Austrians and Marxists ensued, but arguing with a Marxist is like playing chess with a pigeon. He will climb on the board, knock down the pieces and believe that he won. Regardless, facts don’t care about your feelings, and reality proved again and again that Mises was right.

However, at the same time, something else was happening. In Italy, a Marxist named Antonio Gramsci concluded that armed revolution was not the best way to power. He believed that a cultural approach would be better. Some German scholars in Frankfurt concluded pretty much the same. Their question was “why the proletariat will not follow us?”. The answer was that they were too alienated by capitalist culture.

Following Gramsci and the Frankfurt School, Marxists all over the world gave up studying economics and decided to study culture. They concluded that everyone can feel oppressed. The class struggle seized to be between factory workers and factory owners and turned into a fight between man and woman, black and white, gay and straight. Identity politics was born.

And that’s how the “populists” came to power. It is not so much that the common people (and especially conservatives and libertarians) are crazily in love with Bolsonaro or Trump. It is just that people eventually get tired of being called oppressors. The left, once legitimately concerned with the conditions of the poor, ignored that the best solution for poverty is the free market. Instead, they decided they would crush the common people they swore to protect, calling them homophobic, misogynists and so on. Common people answered by voting for whoever was on the other side of the political spectrum.

RE: Economists’ Statement on Carbon Dividends

Rick Weber Current Events, Economics, Law, Politics , , , ,

I just got an email asking me to sign on to an open letter arguing for some carbon tax policies. I’m seeing some push back from (smart, economically literate) Facebook friends, but I think it’s a viable step in the right direction.

Here’s the statement paraphrased:

We think global warming is an important and urgent issue and we recommend these five things:

1. A carbon tax is the best, most cost-efficient way to do as much about carbon as needs to be done. [For a given level of carbon reduction, I agree. How much carbon reduction should happen (and how much at government behest) I am deeply agnostic about.]

2. We think this should be phased in over time and should be revenue neutral. [Yes on both points, but the rest of the statement makes it seem like they’re talking about a pretty short time horizon. I’m not sure how fast is too fast, but I’m sure there’s such thing.]

3. A carbon tax is more efficient than a set of specific regulations. [Certainly!] It’s also less likely to be subject to changing political winds. [Is it though?]

4. We should also apply a carbon tax to imported goods. This would reward energy-efficient American firms and prod other countries to follow suit. [Hmmmm… I can’t really disagree with the general principle, but this sounds like it will require bureaucratic oversight that will be subject to regulatory capture. On the other hand, we’ve already got that.]

5. We should give the revenue collected back to U.S. citizens, to offset increases in energy prices. [Okay, but if it’s going to be revenue neutral and come with a transfer scheme, that’s going to take some detangling!]

I buy into the notion that carbon emissions create large scale externalities that will probably be more bad than good on balance. Not universally bad, mind you. And not something that humanity won’t ultimately adapt to. But I think the people who will face the brunt of the bad outcomes will be the world’s poor (who we should help migrate to better climates!).

I don’t think we can just impose “the right” carbon tax and have everything come out just right. Even though I routinely draw out the case with a supply and demand graph in class, the truth is that nobody has access to those curves in real life. But a small tax can serve to reduce the inefficiency of pollution even if we don’t get it exactly right.

The revenue neutral part is important–we’re currently taxing lots of things we actually want more of (like investment). So if we can cut those taxes by taxing things we want less of (pollution), we’re reducing two sources of inefficiency in the current setup. Of course you and I have bolder views about what policy should look like in 100 years, but restricted to a 10 year window, a revenue neutral carbon tax looks pretty good to me.

The letter dramatically over-simplifies things. Climate change is probably a problem, but probably not as big a problem as proffered by proponents of proposals to prepare for apocalypse. It’s not clear to me that we have a good idea of a) all of the effects (good and bad), b) how people will adapt, and c) how people will adapt to a changing policy regimen.

Figuring out how to handle the tax on imports will be difficult and rife with rent seeking. Unmentioned is the impact on exports. If all our trading partners follow a similar policy, there’s no problem, but in the mean time there’s a tension that will probably be resolved with some unfortunate bit of rent seeking.

I’m sure most reasonable people would agree that instantaneous change would probably be unduly costly, but it’s not clear what the right speed of implementation is.

There are some miscellaneous rhetorical points I have issue with, but I suspect those are in there to throw a bone to people who aren’t me.

I hope that 10 years from now this open letter looks a bit silly. But I also hope that 10 years from now pollution taxes start to replace more inefficient taxes. On balance, I’m happy to see the letter prodding us in that direction.

Southeast Asia, China, and Trumpian foreign policy in 2019

Tridivesh Singh Maini Current Events, Politics , , , , , , , , ,

A survey titled, ‘State of Southeast Asia: 2019’ conducted by the ASEAN Studies Centre (between November 18 and December 5, 2018 and released on January 7, 2019) at the think-tank Iseas-Yusof Ishak Institute came up with some interesting findings. The sample size of the survey was over 1,000 and consisted of policy makers, academics, business persons, and members of civil society from the region.

It would be fair to say that some of the findings of the survey were along expected lines. Some of the key points highlighted are as follows:

According to the survey, China’s economic clout and influence in South East Asia is steadily rising, and it is miles ahead of other competitors. Even in the strategic domain, Washington’s influence pales in comparison to that of Beijing’s. As far as economic influence in South East Asia is concerned, a staggering 73 percent of respondents subscribed to the view that China does not have much competition. A strong reiteration of this point is the level of bilateral trade between China and ASEAN (Association of Southeast Asian Nations), which comfortable surpassed $500 billion in 2017. After China, it is not the US, but ASEAN which has maximum economic clout in the region. If one were to look at the strategic and political sphere, 45% of respondents opined that China is the most influential player in South East Asia, followed by the US at 30 percent.

Second, China’s increasing influence does not imply that it is popular in South East Asia. In fact, a large percentage of the respondents expressed the opinion that China’s lack of integration with global institutions is not a very positive omen. South East Asian nations also have clear reservations with regard to the Belt and Road Initiative (BRI). 50% of respondents believed that the project would increase ASEAN countries dependence upon China, and there were serious apprehensions, with one third of respondents raising question marks with regard to the transparency of the project. A small percentage of respondents (16%) also felt that the BRI was bound to fail. Many ASEAN countries have been alluding to some of the shortcomings of the BRI, of course none was as vocal as Malaysian Premier Mahathir Mohammad. In the survey, respondents from Malaysia, Thailand, and the Philippines expressed the view that their countries should be cautious with regard to the BRI. Interestingly, even respondents from Cambodia, a country where China has made significant inroads, Japan is the most trusted country and not China.

Third, US isolationism, especially under Trump, has led to an increasing disillusionment with Washington DC in the region. The current administration has been aggressive on China, and it has sought to take forward former US President Barack Obama’s vision of ‘Pivot to Asia’ in the form of the Indo-Pacific Narrative. Senior voices within the Trump Administration, including current Secretary of State Mike Pompeo, have been trying to give a push to the Indo-Pacific Narrative and reaching out to South East Asian Countries. In July for instance, while addressing the Indo-Pacific Economic Forum at the US Chamber of Commerce in Washington, Pompeo said that the US was going to invest $113 million in new U.S. initiatives in areas like the digital economy, energy, and infrastructure. Pompeo also stated that these funds were a ‘down payment on a new era in U.S. economic commitment to peace and prosperity in the Indo-Pacific region’. Pompeo’s address was followed by a visit to South East Asia (Singapore and Indonesia), where he met with leaders from a number of ASEAN countries.

On December 31, 2018, the US also signed the ARIA (Asia Reassurance Initiative Act), which sought to outline increased US economic and security involvement in the Indo-Pacific region. ARIA has flagged US concerns with regard to China’s expansionist tendencies in South East Asia. Other key strategic issues, such as nuclear disarmament on the Korean Peninsula, have also been highlighted.

The Trump Administration has also earmarked $1.5 billion for a variety of programs in East and South East Asia.

Trump’s decision to pull the US out of the Trans Pacific Partnership (TPP) led to a lot of disappointment in the region, with allies like Singapore putting forward their views. Speaking at the ANZ Forum in November 2018, Former Prime Minister of Singapore, Goh Chok Thong stated:

…It is still a superpower but it has become less benign and generous. Its unilateral actions in many areas have hurt allies, friends and rivals alike […] America First is diminishing the global stature, moral leadership and influence of the US.

This view was also echoed by a number of experts who commented on the finding of the survey.

The Former Singapore PM also made the point that Asia needed to recalibrate its policies in order to adjust to the new world order.

ASEAN

What is clearly evident is that ASEAN needs to build a new vision which is in sync with the changing geopolitical situation. While Malaysian PM Mahathir Mohammad, by scrapping Chinese projects and referring to a new sort of colonialism emerging out of China’s BRI project, has taken an important step in this direction, it remains to be seen whether other countries in the region can also play their role in helping ASEAN weave its own narrative. For a long time now, countries have been dependent upon both the US and China, and have thought in terms of choices, but there has never really been a concerted effort to create an independent narrative.

What ASEAN actually needs is a narrative where it does not shy away from taking an independent stance, and where it is also willing to take a stand on issues of global relevance. One such issue is the Rohingya Issue. Apart from Malaysia and Indonesia, none of the other members of ASEAN has taken a clear stand. In the past, many ASEAN countries thought that they could refrain from commenting on contentious issues. Respondents to the survey felt that ASEAN states should be more involved in the Rohingya Issue.

The United States and other countries which are wary of Chinese influence should come up with a feasible alternative. So far, while members of the Trump Administration have repeatedly raised the red flag with regard to China’s hegemonic tendencies, and predatory economics as has been discussed earlier, it has not made the required commitment. While the Trump Administration has not been able to pose a serious challenge to Beijing, it remains to be seen if the Asia Reassurance Initiative Act is effective.

It is also important for Washington, and other countries, not to look at Chinese involvement from a zero-sum approach. Perhaps it is time to adopt a more pragmatic and far sighted approach. If Japan and China can work together in the Belt and Road Initiative, as well as other important infrastructural initiatives in South East Asia, and India and China can work together in capacity-building projects in Afghanistan, the possibility of US and China finding common ground in South East Asia should not be totally ruled out. Amidst all the bilateral tensions, recent conversation between US President Donald Trump and Chinese President Xi Jinping, and statements emanating from both sides are encouraging.

Conclusion

An isolationist Washington DC and a hegemonic Beijing are certainly not good news, not just for ASEAN, but for other regions as well. The survey has outlined some of the key challenges for ASEAN, but it is time now to look for solutions. Hopefully, countries within the region will shape an effective narrative, and be less dependent upon the outside world. The survey is important in highlighting some broad trends but policy makers in Washington as well as South East Asia need to come up with some pragmatic solutions to ensure that Beijing does not have a free run.

Libertarianism and the shutdown

Ethan Blevins Economics, Liberty, Politics , , ,

Yesterday, Paul Krugman published a deceptive, sloppy, and self-contradictory opinion article in the New York Times entitled “Trump’s Big Libertarian Experiment.” The premise: the shutdown delivers what all libertarians want, and the shutdown (this is strongly implied) demonstrates just how silly libertarians are.

This is nonsense. First off, Trump is decidedly not a libertarian. Second, government shutdowns have occurred for decades–are all of these “libertarian” experiments? Finally, no libertarians that I’m aware of have ever favored mercurial spending freezes that sweep the rug out from under people who’ve come to rely on government programs. Principled reform is a bit different from abrupt financial lurches.

The disruption and harm caused by sudden spending jolts have no bearing on whether a libertarian society could work or not. Krugman points out that businesspeople are already enraged that the Small Business Administration has ceased issuing loans, an organization that many libertarians have claimed is unnecessary. Of course they’re angry–they expected something that suddenly has ceased. That has absolutely nothing to do with whether the SBA is necessary; it just demonstrates that people get ticked off when their expectations are suddenly dashed. The shutdown proves nothing about whether the private market could ultimately supply any benefits offered by the SBA.

He also says that work at the FDA has dwindled. Routine inspections have ceased. He has zero evidence that this has caused even an iota of harm to anyone, but the implication is clear: we’ll all be confined to the toilets soon as E. coli swamps the country. He marshals no evidence to confront whether state regulators can adequately fill this role, or whether tort law and market forces can suffice.

Libertarians envision a society in which many roles currently served by government can find contractual and common-law counterparts (or not, if it turns out no one wants the service). Libertarians certainly don’t believe in blasting holes in long-standing social structures without warning, without forethought, or without transition.

Ironically, to the extent we do confront Krugman’s silly claims, it appears that the shutdown’s impact has been minimal despite huge numbers of furloughed employees. The New York Times, aside from Krugman’s disposable rhetoric, also published a comparison of the number of furloughed employees (800,000 by their estimation) to private industries. The number of furloughed employees, for example, exceeds twice the number of people employed by Target. I don’t think this tells us what the New York Times thinks it tells us. These stats beg the question as to whether these positions are necessary at all. That said, any negative impact from the shutdown that actually does exist–aside from the furloughed workers losing money–should be attributed to social and economic disruption resulting from spending turbulence, not to the actual necessity of the government programs affected.

Some challenges Brazil has to overcome to achieve development

Bruno Gonçalves Rosi Current Events, Politics , , , , , ,

Now it is true. As I predicted some time ago, Jair Bolsonaro became Brazil’s president. Bolsonaro is not the brightest guy in the room, but I believe he has some qualities a leader requires. Above all, Bolsonaro shows conviction, a quality central to leadership, as Albert Mohler observes. Bolsonaro has the conviction that socialism/communism is the wrong way, and that Brazil has to try an alternative. The alternative, he has grown to understand, is the free market.

In his first remarks as president, Bolsonaro said that Brazil is “leaving socialism.” Some Brazilian friends, even people with high education, found this quote preposterous. In their view, Brazil can’t abandon socialism because she never tried it. That’s quite scary! After almost two decades of rule of the Worker’s Party (PT) there are people in Brazil who believe that Brazil never tried socialism.

It must be observed that PT is a big party, with many internal tendencies. Still, historically the party has the objective of turning Brazil into a socialist country. It is quite shocking that some people haven’t realized this!

On the other hand, many Brazilians still charge capitalism for all the country’s problems. The difficulty with this is that, if we take capitalism as free-market, Brazil has never been capitalist. Brazil’s economic history, in a nutshell, is of government control of the economy.

One of the challenges Brazil has, as surprising as it may be, is to teach people what is socialism and what is capitalism. The other is to make people understand that socialism is just bad. It has been tried. It failed, as it should. Capitalism, understood as economic freedom, worked everywhere. And there is no reason to believe that it wouldn’t work in Brazil.

The childishness of the left

Bruno Gonçalves Rosi Current Events, Politics , , , , , ,

Jair Bolsonaro took office as president of Brazil this last January 1. The government has barely begun, but I think we can already observe a little of what the next four years will look like. During the campaign, Bolsonaro made it clear that his government would be “liberal in the economy and conservative in customs.” Here an explanation is necessary for English speakers: in Brazil “liberal” almost always means “classic liberal,” that is, defender of the free market economy. Conservative, at least in the context of Bolsonaro’s speech, is not so different from the sense of the English language: conservatism as an appreciation of the customs and traditions of Judeo-Christian society.

The speeches of the Bolsonaro himself and his ministers already in office follow exactly this tone. Paulo Guedes, chosen to be the “super-minister” of the economy, made it clear in a speech of almost an hour that Brazil’s problem is excess of state. During the last 40 years or more Brazil has treated symptoms, not the causes of its economic backwardness. The speech of Paulo Guedes was a class of economic history of Brazil.

However, what dominated the Brazilian media in recent days was not a speech, but rather a remark by a minister. Damares Alves, the human rights minister, the one who was harshly criticized for saying she saw Jesus when she was in a guava tree, said at an informal moment that “boys wear blue and girls wear pink.” The speech fell on the media and provoked the reaction of Brazilian celebrities. Many “artists” appeared changing colors, men wearing pink and women, blue. What draws attention in this case, besides the difficulty of understanding figures of speech, is the infantilization of the left activists. Damares said that “boys wear blue and girls wear pink,” not that men wear blue and women wear pink.

The minister’s speech fits into a moment Brazil is living. The cultural wing of the left wants to teach that gender is only a social construction, with no connection to biology, and therefore children should be treated as neutral, awaiting their decision as to what gender they want to adopt. Damare’s remark, therefore, refers to the education of children in public schools, not adult men and women. Brazil is a country free enough for adult men and women to wear the colors they want. The identification of many celebrities with the minister’s speech shows that leftist activists have the mental age of kindergarten children.

Pres. Trump and Me After Two years

Jacques Delacroix Current Events, Politics , , , , , ,

I voted for Donald Trump for two clear reasons. First, his name is not Clinton. Second, he promised to nominate Supreme Court Justices from a published list of conservative judges. I have been amply satisfied on both counts.

Accomplishments

Then, I watched pleasantly surprised as the Trump administration engineered a tax reform that could only improve economic growth. Then, it quickly dismantled hundreds of federal regulations, a strategy that could only benefit entrepreneurship and business activity. Sure enough, there was a sudden rise in Gross Domestic Product growth. I don’t have any proof of causality here but the temporal coincidence is gratifying! At the same time, the unemployment rate – which had been going down even in the waning days of the Obama presidency, it’s true – continued to nosedive. It reached an all-time low for African Americans and for Hispanics. That fact illustrated nicely the basic conservative idea that results count more than intentions. (Remember, that Adam Smith wrote the same in 1776 but who reads Adam Smith nowadays?)

Soon, there was the blessed withdrawal from the comedy of the Paris climate “accord.” Then, there was the abrogation of the weak-kneed, poisonous agreement (not a “treaty) with the totalitarian and aggressive Islamic Republic of Iran. I applauded both with both hands. I was pleasantly surprised later by the initiative toward North Korea although I reserve judgment because nothing much has actually been accomplished on that front, except, possibly (possibly) a better mood. I do think President Trump has gone farther on the road to disarming that kingdom of cruelty and madness than any previous president. Yet, Continue reading →

How the United States can woo Africa away from China

Tridivesh Singh Maini Current Events, Politics , , , , , , ,

On December 13, 2018, US National Security Advisor John Bolton, while speaking at the Heritage Foundation, highlighted the key aims and objectives of ‘Prosper Africa,’ which shall probably be announced at a later date. The emphasis of this policy, according to Bolton, would be on countering China’s exploitative economics unleashed by the Belt and Road Initiative, which leads to accumulation of massive debts and has been dubbed as ‘Debt Trap Diplomacy’. A report published by the Centre for Global Development (CGD) (2018) examined this phenomenon while looking at instances from Asia as well as Africa.

During the course of his speech, Bolton launched a scathing attack on China for its approach towards Africa. Said the American NSA:

bribes, opaque agreements and the strategic use of debt to hold states in Africa captive to Beijing’s wishes and demands.

Bolton, apart from attacking China, accused Russia of trying to buy votes at the United Nations through the sale of arms and energy.

Bolton also alluded to the need for US financial assistance to Africa being more efficient, so as to ensure effective utilization of American tax payer money.

The BUILD

It would be pertinent to point out that the Trump administration, while realizing increasing Chinese influence in Africa, set up the US IDFC (International Development Finance Corporation), which will facilitate US financing for infrastructural projects in emerging market economies (with an emphasis on Africa). IDFC has been allocated a substantial budget — $60 billion. In October 2018, Trump had signed the BUILD (Better Utilization of Investments Leading to Development) because he, along with many members of the administration, felt that the OPIC (Overseas Private Investment Corporation) was not working effectively and had failed to further US economic and strategic interests. Here it would be pertinent to mention that a number of US policy makers, as well as members of the strategic community, had been arguing for a fresh US policy towards Africa.

Two key features of IDFC which distinguish it from OPIC are, firstly, deals and loans can be provided in the local currency so as to defend investors from currency exchange risk. Second, investments in infrastructure projects in emerging markets can be made in debt and equity.

There is absolutely no doubt that some African countries have very high debts. Members of the Trump administration, including Former Secretary of State Rex Tillerson, had also raised the red flag with regard to the pitfalls of China’s unsustainable economic policies and the ‘Debt Trap’.

According to Jubilee Debt Campaign, the total debt of Africa is well over $400 billion. Nearly 20 percent of external debt is owed to China. Three countries which face a serious threat of debt distress are Zambia, Republic of Congo, and Djibouti. The CGD report had also flagged the precarious economic situation of certain African countries such as Djibouti and Ethiopia.

US policy makers need to keep in mind a few points:

Firstly, Beijing has also made efforts to send out a message that BRI is not exploitative in nature, and that China was willing to address the concerns of African countries. Chinese President Xi Jinping, while delivering his key note address at the China-Africa Summit in September 2018, laid emphasis on the need for projects being beneficial for both sides, and expressed his country’s openness to course correction where necessary. While committing $60 billion assistance for Africa, the Chinese President laid emphasis on the need for a ‘win-win’ for both sides.

African countries themselves have not taken kindly to US references to debt caused as a result of China. While Bolton stated that Zambia’s debt is to the tune of $6 billion, an aide to the Zambian President contradicted the US NSA, stating that Zambia’s debt was a little over $3 billion.

At the China Zhejiang-Ethiopia Trade and Investment Symposium held in November 2018, Ethiopian State Minister of Foreign Affairs Aklilu Hailemichae made the point that Chinese investments in Ethiopia have helped in creating jobs and that the relationship between China and Ethiopia has been based on ‘mutual respect’. The Minister also expressed the view that Ethiopia would also benefit from the Belt and Road Initiative.

During the course of the Forum of China-Africa cooperation in September 2018, South African President Cyril Ramaphosa had also disagreed with the assertion that China was indulging in predatory economics and this was leading to a ‘New Colonialism,’ as had been argued Malaysian Prime Minister Mahathir Mohammad during his visit to China in August 2018.

Washington DC needs to understand the fact that Beijing will always have an advantage given the fact that there are no strings attached to it’s financial assistance. To overcome this, it needs to have a cohesive strategy, and play to its strengths. Significantly, the US was ahead of China in terms of FDI in Africa in 2017 (US was invested in 130 projects as of 2017, while China was invested in 54 projects). Apart from this, Africa has also benefited from the AGOA program (Africa Growth and Opportunity Act), which grants 40 African countries duty free access to over 6000 products.

Yet, under Trump, the US adopts a transactionalist approach even towards serious foreign policy issues (the latest example being the decision to withdraw US troops from Syria) and there is no continuity and consistency.

US can explore joint partnership with allies

In such a situation, it would be tough to counter China, unless it joins hands with Japan, which has also managed to make impressive inroads into Africa, in terms of investments, and has also been providing financial assistance, though it is more cautious than China and has been closely watching the region’s increasing debts. Japan and India are already seeking to work jointly for promoting growth and connectivity in Africa through the Africa-Asia Growth Corridor. The US is working with Japan and India for promoting a free and open Indo-Pacific, and can work with both countries for bolstering the ‘Prosper Africa’ project.

Perhaps, Trump should pay heed to Defence Secretary Jim Mattis’ (who will be quitting in February 2019) advice where he has spoken about the relevance of US alliances for promoting its own strategic interests.

There are of course those who argue that US should find common ground with China for the development of Africa, and not adopt a ‘zero-sum’ approach. In the past both sides have sought to work jointly.

Conclusion

African countries will ultimately see their own interests, mere criticism of China’s economic policies, and the BRI project, and indirectly questioning the judgment of African countries, does not make for strategic thinking on the part of the US. The key is to provide a feasible alternative to China, along with other US allies, or to find common ground with Beijing. Expecting nuance and a long term vision from the Trump Administration, however, is a tall order.

Jair Bolsonaro, Maria do Rosário, and the Champinha case

Bruno Gonçalves Rosi Current Events, Liberty, Politics , , , , , , ,

Over a decade ago, in November 2003, Liana Friedenbach, 16 years old (a minor in Brazil law), and Felipe Silva Caffé, 19 years old, were camping in an abandoned farm close to São Paulo.

While they were camping, the couple was found by a group led by Roberto Aparecido Alves Cardoso, aka “Champinha”. Initially, Champinha and his group wanted to steal from the couple. Realizing that they had little to no money, they changed their minds and decided to kidnap Liana and Felipe.

In the first day of captivity, one member of the gang raped Liana. Felipe was killed on the next day with a shot in the back of his head. Liana heard the shot, but the group lied to her saying that her boyfriend was set free. Liana was then raped by other members of the group led by Champinha.

The group never contacted the families asking for a ransom. On the third day, Liana’s family, worried about the lack of contact, called the police, which found the place where the couple was camping, with some of their belongings. Noticing that the police was closing in, Champinha killed Liana with knife strokes.

Champinha, the leader of the group who kidnapped, raped, and murdered Liana, was underage when the crimes happened, and because of that could not be sent to prison. Instead, he was interned in a correction institution.

The crime shocked Brazil. It was answering this crime that Jair Bolsonaro, at the time a congressman, was clamoring for a change in Brazilian law, allowing criminals like Champinha to be prosecuted. Maria do Rosário, a congresswoman from PT, the party of former president and today prisoner Lula da Silva, was opposing Bolsonaro. During their debate, Maria do Rosário called Bolsonaro a raper. Bolsonaro answered “I am a raper? Look, I would not rape you because you don’t deserve it”. Later Bolsonaro explained that he intended to insult Maria do Rosário by saying “even if I was a raper, as you say, I would not rape you because you are too abominable, even for that”.

So that’s it. I hope this helps non-Portuguese speakers who can read English to understand a polemic phrase attributed to Bolsonaro. And I also hope that Brazilian law is changed someday so that justice can be made and criminals like Champinha and his gang get the death penalty for their crimes.

A Brazilian view on the French Protests

Bruno Gonçalves Rosi Current Events, Politics , , , , ,

Paris has been taken by a great number of protesters complaining about (yet another) tax, this time on fuel and with the justification of “combating climate change”.

Five years ago, in 2013, several cities in Brazil (Rio de Janeiro among them) were taken by protesters. They were initially complaining about a rise in the bus tariffs. A small rise, if examined by itself, but apparently the last drop among a number of reasons to be discontent.

The Brazilian protests of 2013 were very ironic. Lula da Silva, a socialist, was elected president in 2002. He was reelected four years later, despite major indications that he was involved in corruption scandals. Lula left office very popular, actually, so popular that he was able to make a successor, Dilma Rousseff, elected president in 2012. It was during Dilma’s presidency that the protests took place. They were initially led by far-left groups who demanded free public transportation. So here is the irony: a far-left group, with a far-left demand (free public transportation), was protesting against a (not so far) left government. The situation became even more ironic because millions of Brazilians, who didn’t identify as socialists, also went to the protests, not because they wanted free public transportation (most people are intelligent enough to understand, even if instinctively, that such a thing cannot exist), but because they were fed up with the socialists government at one point or another.

The lesson is: “The problem with socialism is that you eventually run out of other people’s money.” The 2013 protests culminated this year, with Bolsonaro’s election. Mises observed very acutely that socialism simply cannot work. What he observed on paper, reality has confirmed again and again. France is just the latest example.

Rent isn’t a four-letter word

Nick Cowen Books, Economics, Liberty, Politics , , , , , , , , ,

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Inspired by the publication this week of NYU scholar Alain Bertaud‘s critical new book Order without Design: How Markets Shape Cities (MIT press), Sandy Ikeda‘s pre-book development series Culture of Congestion over at Market Urbanism, and London YIMBY, here is a note on housing reform.

Classical liberals see the economic solution to housing as relatively simple: increase supply to better meet demand. By contrast, the political economy of housing is almost intractably complex. The reason for this is that there are endless externalities associated with new housing: access to light, picturesque landscape, open space and uncongested roads just for starters. These gripes and grievances are the bread and butter of local politics. Unlike consumer product markets, housing cannot be disentangled from these social, political and legal controversies. A successful market-based housing policy must establish institutions that not only encourage housing supply growth but navigate around these problems while doing so.

Policy reform proposals that deliberately favour increasing owner-occupied single-family homes, as tends to be the focus among market liberals in the UK (and to some extent in the US), are currently self-defeating. As justified as they were in the past to achieve a more market-friendly political settlement, they are now a barrier to achieving plentiful, affordable housing. This is because every new homeowner becomes an entrenched interest, a potential opponent to subsequent housing development in their area. They impose more political externalities than renters. I propose we cut the link between support for home ownership and housing supply policies. This would free up policymaking to focus on expanding provision by all available market-compatible means.

This should include greater encouragement of institutional landlords, especially commercial enterprises. Commercial landlords have more incentive and capability to expand supply on estates that they own, while long-term renters (unlike homeowners) have an interest in keeping rental costs low. The lack of private firms dedicated to supplying housing in England compared to much of the rest of the world is startling and yet often overlooked even by friends of free enterprise.

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What is ‘Good’? What was Arendt pursuing?

Shree Agnihotri Liberty, Philosophy, Politics , , , , ,

Arendt is not the most consistent or coherent philosopher. Her writings display shades of sentimental as well as stoic rationality. Some might scoff at the progression of her thoughts. But the depth of her emotion is what grants her literature the luminescence that we need in times of moral darkness. The world was left waiting for what could have been a monumental work on political judgement when Arendt passed on before getting a chance to complete the final segment of The Life of Mind. The piece entitled ‘Judgement’ was left with an epigraph:

Victrix causa deis placuit, sed victa Catoni.

Taken from Lucan’s Pharsalia, it translates to ‘the victorious cause pleased the gods, but the defeated one pleases Cato.’ It refers to the Roman philosopher and thinker Cato’s life and beliefs. He chose to commit suicide rather than give in to the faction he thought was ‘wrong’. Thus, what is ‘good’ would remain good even if it is defeated a hundred times. His stoicism and moral stubbornness is perhaps what Arendt wanted us to inculcate as a way of moral disciplining of the mind. But also of relevance is the presumption that there is, in fact, something good that is universal and not subject to fluctuations of regions, religion, class or caste. It is like music? Only humans have the capacity to perceive beats, melody, pitch and a number of other variables that combine to make music as we know it. Irrespective of how isolated or engaged our culture might have been with a globalized world, we carry within us the ability to differentiate good music from bad. What differs is our perception of what is happy from sad. A Balinese music for cremation might sound quite happy and serene to the uninitiated. Similarly, perhaps we possess the capacity to ascertain the ‘good’ pursuits from the bad. While culture, upbringing and circumstances of nature might affect the way we perceive the degree to which we are obligated to act upon the thus discovered moral, no (non-sociopathic) human can deny the existence of the goodness of the moral once confronted with it.

I remember asking my professor once about what he thought was that one universal value in constitutions around the world that need protection from majoritarian attempts at amendment. He answered, without blinking, equality. I knew there was something within the wide array of norms that we associate with equality that I know is a good that commands universality. However, there was enough in the substantive affirmations of equality that had room for reasonable disagreement such that as an unbiased spectator I would not be able to dismiss one side over the other. Perhaps the universal principle requires a Humean recognition or a Kantian deliberation. Either way, that it exists and is worth pursuing is an unquestionable precursor to an Arendtian enquiry into the state of things.

There are some hints as to what she might have thought definitely existed within the set (and let us treat it as a set of values/ideals/principles for nothing if not humility about the extent of our understanding and knowledge) of what is ‘good’. Political freedom features quite prominently into her thought. The freedom to participate in public affairs as equals seems to have a place of prominence for Arendt. Not so much the concept of equality extended to realms outside the political. We are not born equal and cannot and should not try to find a natural occurrence of equality for that would require an unjust comparison of the distinctions and characteristics that distinguish individuals. The last blog post talked about Arendt’s insistence on separating the political from social and personal realms. While identity politics is often engaged to make a case for equality, and Arendt had nothing against the ideal of equality, she believed that it is in the political realm that we needed to affirm the ideal of equality most vehemently and zealously. This is because it affects directly our participation in the political which in turn affects everything about our existence in the world.

A better way to read Arendt is to go meta-psychological on her. Perhaps one of the ‘good’  values within the set is a form of communicative rationality, the desire and pursuance of a method of thinking representatively. And perhaps, just as liberation is a necessary precursor to freedom, so is the engagement of Arendtian judgment to finding that which is ‘good’.

Answering questions about Bolsonaro (from the comments)

Bruno Gonçalves Rosi Comments, Politics , , , , , , , , ,

Answering some comments about Bolsonaro, as far as I can.

Can you deal more precisely with some well known claims about Bolsanoro: he has praised at least one military officer who was a notorious torturer under the last dictatorship.

The “notorious torturer” in question is Carlos Alberto Brilhante Ustra. Ustra himself wrote a book, A Verdade Sufocada, questioning this accusation. I am not defending Ustra (as Bolsonaro does), but in my ignorance, I lift any judgment.

he has praised the dictatorship.

There is no denying that. Actually, Bolsonaro refuses to admit Brazil went through a dictatorship between 1964 and 1985.

I’ve just checked your previous contributions on Brazilian politics and you seem to be in favour of the dictatorship as a agent of struggle against Marxism. I agree that marxism is a bad thing, but it’s not clear to me that means supporting rightist dictatorship.

Nothing could be further from the truth. Read again.

You say that Bolsanaro understands the need for ‘order’ in Brazilian society.

Actually, his name is Bolsonaro. Where did I write that?

Can you identify some restrictions on liberty in Brazil that Bolsanaro would remove?

No, I cannot. One thing is for sure: he is not a libertarian.

Don’t you think there is the slightest risk his attitude to ‘order’ might lead the police to act with more violence?

Well, all things are possible. But I don’t think that this is plausible.

Do you deny that the police sometimes act with excessive violence in Brazil?

No.

Do you have any expectation that Bolsanaro will do anything to resolve this or the evident failings of the judicial system?

Yes. Having Sergio Moro as Minister of Justice is a great move in the right direction.

Do you deny that Bolsanaro said he would prefer his son to be gay rather than die?

No.

Don’t you think this gives gays good reason to fear Bolsanaro?

Not at all. Bolsonaro was being very honest about his personal beliefs and how they apply to his personal life. Even then, this was a few years ago. I believe he is changing his mind on a number of issues, including this one. Anyway, he was talking about his private life, and not what he would do as president.

I have had a message from a gay American friend who says he is afraid of what will happen and may have to flee the country? Do you understand and care why he is afraid? Do you have any words I can pass onto my friend to reassure him? Preferably not angry words about Gramsci, ‘cultural Marxism’ and ‘gender theory’.

If I can’t talk about cultural Marxism, Gramsci and gender theory, I can’t help much. This is essential to explain what is going on in Brazil.

Could you actually explain what this ‘gender theory’ in schools is that it i so terrible and apparently justifies Bolsanaro’s crude language?

It would take very long, but the short answer I can give here is that it is terrible to teach people that their gender has nothing to do with biology. Apart from real medical conditions, people are born XX or XY, and gender and sex go together.

Do you deny that he said a congress woman was too ugly to rape?

No, I don’t. This woman, Maria do Rosário, called him a raper. How would you feel being called a raper? I know I wouldn’t like a bit. Besides, on that occasion, Bolsonaro was exactly defending harder punishment for rapers, following the Champinha case. Champinha and his gang raped and then murdered Liana Friedenbach and her boyfriend Felipe Caffé in one of the most barbarous crimes in recent Brazilian history.  Maria do Rosário was defending Champinha and his gang. See if you can find something about it in a language you can read. In sum, Bolsonaro answered an insult with another insult. I have no problem with that whatsoever.

Can you explain how someone can be fit to hold the highest office in Brazil who makes such a comment?

It would take very long. But the short answer is that I am really happy to have a president who, if he had his own way, would have the death penalty for criminals like Champinha and his gang.

It’s nice of course that Bolsanaro says now he is favour of free market economics, but isn’t he now back pedalling on this and promising to preserve PT ‘reforms’?

He is not a libertarian. Libertarians are sure to be disappointed.

Well, I will stop here.  Sadly, although I can’t “write at length” more than that.

I write at length, so does Jacques, so there is no reason why you should not.

Actually, there are many reasons. You just don’t know. I did what I can right now. All the best.