How fast does populism destroy economic freedom in Latin America?

The turn of the twentieth century has seen an increase in populist government in Latin America. That populism is no friend of free markets is well known. And even if their movement against free markets if fairly quick, it is common for individuals to loose track of how fast they are loosing their economic freedoms.

There are five cases of populist governments in Latin America that can work as benchmarks for the region. In particular, we can look at the behavior of governments in Argentina, Bolivia, Brazil, Ecuador, and Venezuela for the time frames depicted in the following table.

Table 1

During this time period, populist governments failed to increase GDP per capita consistently faster than the region. The only exception is Argentina. But its fast increase in GDP is largely explained as recovery after the 2001 crisis and by consuming capital stock, not as an expansion of potential output. It is no accident that Argentina met stagflation in 2007. In the last three issues of the Economic Freedom of the World (Fraser Institute) Argentina ranks among the bottom 10 free economies in the world.

The following figure shows the fall in ranking of each country in the Economic Freedom of the World.

Figure 1

We can translate the information shown in the above into loss of ranking position per year of populist government. This is what is shown in the next table.

Table 2

This table offers a few readings:

  1. Argentina is the country that fall in the ranking of economic faster than its peers.
  2. Ecuador shows a very slow fall. This is due to two reasons: (1) Ecuador already starts from a low ranking position. (2) The last year of the index (2015) shows an improvement (without this improvement the fall is quite sharp as well.) Ecuador does not represent a case of “good populism.”

What this table is showing is that if an individual is born in any of these countries ranking 1st in economic freedom the same year a populist government takes office, then the same country will rank at the bottom of the world before he retires. In the case of Argentina, in 27.8 years the country will be at the bottom of the list, this means that by the time this individual starts to work, Argentina will already have a very repressed economy. By retiring time, this individual will have no experience of living and working in a free economy.

This numbers are not just descriptive of populism in Latin American countries. They also serve as a sort of warning for Europe and the United States, regions that have already seen some signs of populist behavior in their governments and political groups in the last few years. Populism can be emotionally attractive, but is very dangerous for our economic freedoms.

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North Korea at the North Sea?

Yesterday, both Houses of Dutch Parliament jointly opened the parliamentary year, which is always held on the third Tuesday in September, and is known as “Budget Day.” Normally, there is not much pomp and glory in the Low Lands, but on “Little Princes Day” (as the day is literally called), we go all-out: the King and Queen are driven in a horse-pulled carriage to the Hall of Knights, the oldest part of the parliamentary buildings (built around 1250), surrounded by military troops in full ceremonial dress. The King reads his speech (actually written by and under full political responsibility of the Prime Minister and cabinet) from a huge throne, announcing the government’s plans for the next year. Male ministers in morning coats, ladies in dresses and hats, with the powerful elites also assembled.

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King Willem-Alexander and Queen Maxima entering the Hall of Knights (source)

After the reading, the Royal couple make their way back to one of their palaces in the centre of The Hague, returning once to greet the masses from the balcony.

Meanwhile, the Minister of Finance officially presents the 2018 budget to the Lower House. The separate budgets of all departments are laws, which will have to pass both Houses before 31 December. This process is normally preceded by a two day debate on “the general state of the country,” but this year it is skipped because there is only a caretaker government in office. It awaits the finalization of negotiations for a new government, which started right after the elections on 15 March. Still no government is formed, although it is widely expected that a four-party coalition will be presented within a few weeks, consisting of small Christian left wingers, centre Christian Democrats, and two social liberal parties, D66, and Prime Minister Mark Rutte’s VVD.

Although much improved since the low point of the Great Recession, around 2011-2012, the public finances are still shocking from a classical liberal perspective. The income of the national government is 285 billion Euro (around 338.5 billion USD), which is 43% of GDP.

It consists mainly of several mandatory insurance premiums for collective arrangements (112.2 billion Euro), income tax (55.4 billion; the highest bracket of 51.5% tax applies to all personal income over 68.507 Euro), and VAT (52.8 billion). The rest are mainly specific taxes, related to companies, the environment, excises, dividends, et cetera. In 2011, the public share of GDP was still 47%, while in the 1980s it reached peaks of around 60%. Not exactly anywhere near an ideal liberal situation, no matter what liberal persuasion you are. Personally, I would argue that 25% should be the max for a decent set of state tasks, but I am sure that makes me some weird Northern European commie in some American libertarian eyes!

The situation is even more dire if we see where that money is spent. Health care (80.4 billion euro) and social security (79 billion) are always in competition as the largest spending departments. So that is 56% of the budget already and both increase annually, no matter the economic circumstances. The third post is public education (35.4 billion), followed by funds for provinces and municipalities (24.4 billion), foreign affairs and foreign aid (12), police and judiciary (10.3), defense (8.4), and infrastructure and environment (also 8.4), with the other departments taking parts of the rest. Despite a very rare expected budgetary surplus of 7.8 billion in 2018, the national debt is still 53.7% of GDP. Perhaps not bad in international comparison, still not good for any liberal.

These numbers are only part of the story, because there are also numerous local taxes, and the number of liberty-inhibiting regulations, from European, national, provincial and local origin are staggering. There is not one really free market, and there are hardly parts of individual life not regulated or influenced by the state. A comparison with North Korea is of course still far-fetched, yet socialism is alive and kicking on the North Sea shores.

In my view it is evidence of the remarkable power of capitalism that The Netherlands is still one of the richest countries on earth, a global top 15 economy (GDP per capita), with only 17 million inhabitants. No matter how hard you curb it, the capitalist system still delivers amazing results. Of course, the opportunity costs of the Dutch regulatory state are very high. In terms of personal liberty there are not many better places on the planet. Yet in other fields it is a different story. Economic freedom is a mess, which means that the material aspects of personal freedom are seriously restricted. Yet the worst is the mentality. Sadly, most Dutch have traveled the whole Hayekian Road to Serfdom, making a shift to classical liberalism highly unlikely.

Ten best papers/books in economic history of the last decades (part 2)

Yesterday, I published part 1 of what I deemed were the best papers and books in the field of economic history of the last few decades. I posted only the first five and I am now posting the next five.

  • Carlos, Ann M., and Frank D. Lewis. Commerce by a frozen sea: Native Americans and the European fur trade. University of Pennsylvania Press, 2011.

This book is not frequently cited (only 30 cites according to Google Scholar), but it has numerous gems for scholars to include in their future work. The reason for this is that Carlos and Lewis have pushed the frontier of economic history into the history of Natives in the New World. This issue of Natives in North America is one of those topics that irritates me to no end as an economic historian. A large share of the debates on economic growth in the New World have been centered on the idea that there was either some modest growth (less than 0.5% per year in per capita income) or no growth at all (which is still a strong testimonial given that the population exploded). But all that attention centres on comparing “whites” (and slaves) in the New World with everyone in the Old World. In the first decades of the colonies of Canada and the United States, aboriginals clearly outnumbered the new settlers (in Canada, the native population around 1736 was estimated at roughly 20,000 which was slightly less than the population of Quebec – the largest colony). Excluding aboriginals, who comprised such a large share of the population, at the starting point will indubitably affect the path of growth measured thereafter. My “gut feeling” is that anyone who includes natives in GDP accounting will lower the starting point dramatically. That will increase the rate of long-term growth. Additionally, the output that aboriginals provided was non-negligible and probably grew more rapidly than their population (the rising volume of furs exported was much greater than their population growth). This is why Carlos and Lewis’s work is so interesting: because it is essentially the first to assemble economic continuous time series regarding trade between trappers and traders, the beaver population, property rights and living standards of natives. From their work, all that is needed is a few key defensible assumptions in order to include natives inside estimates of living standards. From there, I would not be surprised that most estimates of growth in the North American colonies would be significantly altered and the income levels relative to Europe would also be altered.

  • Floud, Roderick, Robert W. Fogel, Bernard Harris, and Sok Chul Hong. The changing body: Health, nutrition, and human development in the western world since 1700. Cambridge University Press, 2011.

This book is in the list because it is a broad overview of the anthropometric history that has arisen since the 1980s as a result of the work of Robert Fogel. I put this book in the list because the use of anthropometric data allows us to study the multiple facets of living standards. For long, I have been annoyed at the idea of this unidimensional concept of “living standards” often portrayed in the general public (which I am willing to forgive) and the economics profession (which is unforgivable). In life, everything is a trade-off.  A peasant who left the countryside in the 19th century to get higher wages in a city manufacture estimated that the disamenities of the cities were not sufficient to offset wage gains (see notably Jeffrey Williamson’s Coping with City Growth during the British Industrial Revolution on this). For example, cities tended to have higher food prices than rural areas (the advantage of cities was that there were services no one in the countryside could obtain).  Cities were also more prone to epidemics and pollution implied health costs. Taken together, these factors could show up in the biological standard of living, notably on heights. This is known as the “Antebellum puzzle” where the mean heights of individuals in America (and other countries like Canada) fell while there was real income and wage growth. The “Antebellum puzzle” that was unveiled by the work of Fogel and those who followed in his wake represents the image that living standards are not unidimensional. Human development is about more than incomes. Human development is about agency and the ability to choose a path for a better and more satisfying life. However, with agency comes opportunity costs. A choice implies that another path was renounced. In the measurement of living standards, we should never forget the path that was abandoned. Peasants abandoned lower rates of infant mortality, lower overall rates of mortality, the lower levels of crowding and pollution, the lower food prices and the lower crime rates of the countryside in favor of the greater diversity of goods and services, the higher wages, the thicker job market, the less physically demanding jobs and the more secure source of income (although precarious, this was better than the volatile outcomes in farming). This was their trade-off and this is what the anthropometric literature has allowed us to glean. For this alone, this is probably the greatest contribution in the field of economic history of the last decades.

  • De Vries, Jan. The industrious revolution: consumer behavior and the household economy, 1650 to the present. Cambridge University Press, 2008.

Was there an industrious revolution before the industrial revolution? More precisely, did people increase their labour supply during the 17th and 18th centuries which lead to output growth? In proposing this question, de Vries provided a theoretical bridge of major significance between the observations of wage behavior and incomes in Europe during the modern era. For example, while wages seemed to be stagnating, incomes seemed to be increasing (in the case of England as Broadberry et al. indicated). The only explanation is that workers increased their labor supply? Why would they do that? What happened that caused them to increase the amount of labor they were willing to supply? The arrival of new goods (sugar, tobacco etc.) caused them to change their willingness to work. This is a strong illustration of how preferences can change more or less rapidly (when new opportunities are unveiled). In fact, Mark Koyama (who blogs here) managed to insert this narrative inside a very simple restatement of Gary Becker’s model of time use. Either you have leisure that is cheap but time-consuming (think of leisure in the late middle ages) or leisure that is more expensive but does not consume too much time (think the consumption of tea, sugar and tobacco). Imagine you only have the time-expensive leisure which you value at level X. Now, imagine that the sugar and tea arrive and, although you pay a higher price, it provides more utility than the level and it takes less time. In such a context, you will likely change your preferences between leisure and work. I am grossly oversimplifying Mark’s point here, but the idea is that the industrious revolution argument advanced by de Vries can easily fit inside a simple neoclassical outlook. On top of solving many puzzles, it also shows that one does not need to engage in some fanciful flight of Marxian theory (I prefer Marxian to Marxist because it is one typo away from being Martian which would adequately summarize my view of Marxism as a social theory). If it fits inside the simpler model, then you don’t need the rest.  De Vries does just that.

  • Anderson, Terry Lee, and Peter Jensen Hill. The not so wild, wild west: Property rights on the frontier. Stanford University Press, 2004.

Governance is not the same as government (in fact, they can be mutually exclusive). In recent years, I have been heavily influenced by Elinor Ostrom’s work on how communities govern the commons in very subtle (but elaborate) ways without the use of coercion. These institutional arrangements are hard to simplify into one variable for a regression, but they are theoretically simple to explain: people respond to incentives. Ostrom’s entire work shows that people on the front line of problems generally have the best incentives to get the right solution because they have skin in the game. What her work shows is that individuals govern themselves (see also Mike Munger’s Choosing in Groups) by generating micro-institutions that allow exchanges to continue. Terry Anderson and Peter Hill provide the best illustration in economic history in that regard by studying the frontier of the American west. Settlers moved to the American West faster than the reach of government and the frontier was thus an area more or less void of government action. So, how did people police themselves? Was it the wild west? No, it was not. Private security firms provided most of the policing, mining clubs established property rights without the need for government, farmers established constitutions in voluntary associations that they formed and many “public goods” were provided privately. The point of Anderson and Hill is that governance did exist on the frontier in a way that demonstrates the ability of voluntary actions (as opposed to coercive government actions) to generate sustainable and efficient solutions. The book has a rich theoretical framework on top of a substantial body of evidence regarding the emergence of institutions. Any good economic historian should own and read this book.

  • Vedder, Richard K., and Lowell E. Gallaway. Out of work: unemployment and government in twentieth-century America. NYU Press and Independent Institute, 1997.

The last book on the list is an underground classic for me. Richard Vedder and Lowell Gallaway are very good economic historians. It was produced like many other underappreciated classics (like Higgs’s Crisis and Leviathan) by the Independent Institute (see their great book list here). Most of their output was produced from the 1960s to the 1980s. However, as the 1990s came, they moved towards the Austrian school of Economics. With them, they brought a strong econometric knowledge – a rarity among Austrian scholars. They attempted one of the first (well-regarded) econometric studies that relied on Austrian theory of the labor-market (a mixture of New Classical Theory with Austrian Theory). Their goal was to explain variations in unemployment in the United States by variations in “adjusted real wages” (i.e. unit labor costs) all else being equal. At the time of the publication, they used very advanced econometric techniques. The book was well received and even caught the attention of Brad DeLong who disagreed with it and debated Vedder and Gallaway in the pages of Critical Review. Although there are pieces that I disagree with, the book has mostly withstood the test of time. The core insights of Out of Work regarding the Great Depression (and many of its horrible policies like the National Industrial Recovery Act) have been conserved by many like Scott Sumner in his Midas Paradox and they feature prominently in the works of scholars like Lee Ohanian, Harold Cole, Jason Taylor, Price Fishback, Albrecht Ristchl and others. In the foreword to the book, they mention that D.N. McCloskey (then the editor of the Journal of Economic History) had pushed hard for them to publish their work regarding the 1920s and 1930s. McCloskey was right to do so as many of their contentions are now accepted as a legitimate (if still debated) viewpoint. The insights regarding the “Great Depression of 1946” (a pun to ridicule the idea that the postwar reduction in government expenditures led to a massive reduction in incomes) have been generally conserved by Robert Higgs in his Journal of Economic History article I mentioned yesterday (and in this article as well) and even by Alexander Field in his Great Leap Forward However, Out of Work remains an underground classic that is filled with substantial pieces of information and data that remains unused. There are numerous unexploited insights (some of which Vedder and Gallaway have followed on) as well. The book should be mandatory reading for any economic historian.

Fight for your economic right to party

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Two months ago, London’s iconic Fabric nightclub was shut-down by Islington Council on the dubious grounds that it had failed to adequately search club-goers for drugs. Fabric, a sprawling multi-level concrete venue, is dear to the heart of many Londoners. Its dramatic closure came as a shock. David Nutt blamed our hypocritical drug laws, while others spied conspiracies to turn the venue over to housing developers. In response to the public outcry, this month, London Mayor Sadiq Khan has appointed Amy Lamé as ‘night tzar’ (some use the even grander title Night Mayor) with the task of reviving London’s nightlife and especially trying to save venues like Fabric.

Tzars sound great in theory but tend to fail in practice. They are meant to break-up bureaucratic silos and join-up policymaking so that it conforms to a grand plan in a particular policy area. Rather than following rules regardless of outcomes, they have an outcome that the executive asks them to pursue remorselessly. However, I argue that this is precisely the opposite of what you want if your goal is a sustainable, thriving night-life culture. London night-life has suffered because of its politicization, not from a lack of it. The answer is strong rights for entrepreneurs to provide entertainment to willing consumers. This means reforming of government powers to license venues and prohibit development on arbitrary grounds. While ending drug prohibition is of deep importance, here the drug-use excuse was the face of a more pernicious power that local governments have to shut down successful businesses on arbitrary grounds.

In the United Kingdom, land development and property-use decisions have essentially been nationalized since 1947. While building still takes place, it only happens following detailed, expensive consultation with local planning authorities with significant input from local residents. As a result, the supply of building amenities has become unmoored from demand. The most noticeable impact has been rising house prices and rents in areas where the economy is growing. This is a boon to landlords lucky enough to own property in areas of high demand. But it causes those without property to suffer significantly higher living costs. It has led to bizarre developments such as it being easier to open a new golf course in the South-East than to start a new housing development.

While the majority of people feel the strain primarily through higher rents, less visible is the impact on businesses who are equally constrained by planning laws. They struggle to find suitable buildings for their commercial activities. Competitors and local residents can use the planning process to block new construction or changes to lawful uses for particular venues. Businesses lack legitimate expectations about where they will be allowed to expand. Those that do succeed need to invest heavily in lobbying and legal support. The result is that people end up travelling further to get to shops and to their places of work.

Club venues face a number of additional biases in this process. Local officials are more likely to be blamed for noise and crime associated with clubs but not praised for their fun and economic benefits. This fosters risk-aversion amongst local policymakers. At the same time, club-goers may outnumber local residents but most are not able to vote in local council elections. Residents might well have originally moved into a central London location precisely to experience fun, exciting nightlife. But once there, perhaps especially as they get a little older, their priorities change. They realize that they may want to live in an exciting city, but just so long as their particular neighborhood is a little less exciting. Rather than move to a quieter area, they express their preferences through the political process and demand that venues that have been around a lot longer than they have be closed.

Unfortunately, if too many residents in the city come to the same conclusion, you end up shutting down historic clubs on the slightest pretext. When it comes to hosting unlawful activities, businesses can be presumed guilty, with no secure way of ever proving their innocence.

In this context, having a tzar is an understandable response as a counter-balance to the call of the NIMBYs. But it doesn’t solve the core problem which is a system that cannot adequately represent revelers but augments complaints. The tzar can champion venues but will be silenced once these entrenched interests turn up the noise. Instead, we need a system that recognizes the presumptive right of businesses to market entertainment to willing consumers. Only provable nuisance should be cause to fine or eventually close venues. Once established, entertainment venues should not have to regularly prove their social worth to a licensing committee (the fact that they have willing customers is sufficient warrant for that).

Most importantly, complaints from recent arrivals against historic venues that have always hosted loud parties should be discounted. This works in a fashion in Tokyo, where mixed development is widely permitted (no one stops people from taking up residence in an otherwise commercial district) but without any assumption that those residents can then alter the make-up of their community through the political process.

BC’s weekend reads

  1. Racism in Brazil, and American academic imperialism
  2. A quick lesson on race and class in Brazil
  3. Unlike Their Parents, Black Millennials Aren’t A Lock For Clinton
  4. The Rise of the Libertarian Technocrats
  5. Property versus Democracy
  6. Our Friendly Visitors

Liberals and Conservatives should stop talking about guns

I’ve come across some great journalism on guns and gun control recently. Here’s the key points:

  • Most gun deaths are suicides. Many of these suicides would have happened were a gun not available, but many of them wouldn’t have.
  • Most gun homicides mostly affect young black men.
  • More guns does not equal less crime.
  • Gun accidents affect very few people.
  • Cost-benefit analysis would likely suggest improving safety other places would save more lives, given limited budgets. (e.g. changing attitudes on vaccinations)

A basic theme seems to be that government can do little on the margin to reduce gun deaths. Crime rates are uncorrelated with number of guns, or regulations in place. Upright citizens do not turn into Rambo when they see dastardly criminals mug little old ladies. Guns are actually sort of boring in practice.

It’s possible that the government could affect gun deaths with a comprehensive gun control policy backed by public opinion (the Australian option). But it would likely cost so much that you’d lose the budget and/or political capital to enact other reforms that would be less controversial and save more lives.

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We don’t torture people in America, Todd. That’s called one of the amendments.

What about the second amendment? The real argument for the second amendment is that having armed Americans around is pretty practical in general, but also important to prevent tyranny. In practice, guns aren’t half as practical, in terms of personal or national defense as back then. The capability of America’s military is so extraordinary that American’s don’t stand a chance of fighting a corrupt American government.

Let’s acknowledge that the Bill of Rights, though surely important, is ultimately a piece of paper that is neither sacrosanct nor a practical guarantee of anything in particular. The founders were brilliant, but fallible. The constitution is frequently ignored by governments, and citizens often do little to discipline such governments. Second amendment advocacy is mostly a symbolic gesture that probably comes at the expense of using political capital to protect the fourth amendment (the one that should protect you when the government decides to take your guns, cold dead fingers or no).

Conclusion

There are weak arguments to made in favor of gun control and weak arguments to be made in favor of protecting the second amendment. But mostly this whole debate seems like a distraction from more important issues. Symbolically valuable? Sure, but at what cost? The cost is the political will to make a bigger difference somewhere else. There are more valuable freedoms to protect, better interventions to pursue, and more lives to be saved.

O que é capitalismo?

O Brasil é capitalista? O capitalismo é culpado por vários problemas que observamos no Brasil? E outros países? A China é hoje um país de economia capitalista, ainda que com política socialista (ou comunista)? O capitalismo prejudica os mais pobres enquanto beneficia os mais ricos? Estas são algumas questões com as quais me esbarro regularmente. Algumas pessoas mais sofisticadas observam que não há apenas um capitalismo, mas vários: o capitalismo brasileiro é diferente do sueco, que é diferente do japonês, que é diferente do norte-americano, e assim por diante. Vejo alguma pertinência nesta observação, mas penso que ela ainda deixa de lado a questão mais básica e fundamental: o que é capitalismo?

Suponho que sem recorrer a qualquer fonte podemos concluir que capitalismo é algo relacionado a capital. Segundo o Palgrave Macmillan Dictionary of Political Thought, de Roger Scruton, “o capitalismo é um arranjo econômico, definido pela existência predominante de capital e trabalho assalariado”. De acordo com esta definição, no capitalismo alguns ganham salários e outros ganham lucros. Capital por sua vez é definido como “os meios de produção produzidos, ou seja, commodities que foram produzidas e que por sua vez podem ser empregadas na produção de outras commodities”. Em outras palavras: capital são recursos que são empregados na produção de mais recursos. Capitalismo é um sistema econômico (e não predominantemente político ou social ou cultural) que gira em torna da alocação destes recursos.

Partindo de uma forma de pensar semelhante, Milton Friedman observou que todos os países são capitalistas. Os EUA são capitalistas. A China é capitalista. A URSS é capitalista (Friedman estava fazendo esta observação ainda no período da Guerra Fria). Não há país (ou sociedade) onde não haja capital e onde não ocorram decisões sobre como alocar o capital. Há bastante tempo Max Weber fez uma observação semelhante, afirmando que alguma forma de capitalismo esteve presente em todas as civilizações, com a diferença que mais recentemente o Ocidente produziu um capitalismo moderno, com características peculiares. Mas voltando para Friedman: todos os países são capitalistas. A questão é: quem controla o capital?

A pergunta de Friedman lembra uma observação de Friedrich Hayek: durante o período da Guerra Fria era comum afirmar que a economia da URSS era planejada, enquanto que a economia dos EUA não era. Mas esta afirmação está errada: ambas economias eram planejadas. A da URSS por um pequeno grupo de pessoas em Moscou; a dos EUA por milhões de indivíduos espalhados pelo país. O ponto de Hayek é que uma economia necessariamente envolverá decisões sobre como alocar capital (ou recursos). A questão é: quem tomará estas decisões? Um grupo de governantes num comitê centralizado, em nome de toda a população? Ou a própria população, numa esfera mais modesta, dentro de suas próprias vidas?

Adam Smith é popularmente considerado o pai do capitalismo (e também da Economia como disciplina acadêmica, além do liberalismo econômico. Adam Smith teve muitos filhos). Curiosamente, Smith não usou o nome capitalismo em seus escritos (este nome seria cunhado mais tarde por marxistas – o próprio Marx também não usou este nome, ao menos não regularmente), mas falava sobre sociedade de mercado. A observação de Smith era que em tempos recentes mais pessoas estavam se tornando mercadores. Em tempos antigos (sobretudo na Antiguidade Clássica de Grécia e Roma) as relações econômicas eram dominadas por donos de terras e escravos. Havia mercadores (ou comerciantes), mas estes ocupavam um espaço menor na sociedade (e também eram vistos com desconfiança por não produzirem nada – apenas trocarem o que outros produziram). Na Inglaterra do final do século 18 mais pessoas eram comerciantes, isto é, trocavam alguma coisa, ainda que “alguma coisa” fosse sua força de trabalho em troca de salários. Neste sentido, Smith não inventou o capitalismo moderno: apenas observou e descreveu seu nascimento – além de suas vantagens diante de outros arranjos econômicos.

Partindo de Adam Smith e chegando a Friedman e Hayek, podemos observar quatro elementos fundamentais do capitalismo moderno (ou do liberalismo econômico, ou as sociedade de mercado, ou do livre mercado): escolha pessoal; trocas voluntárias; liberdade para competir em mercados; direito de propriedade privada. A escolha pessoal se refere às decisões individuais que se toma a respeito dos recursos individuais (devo sair para trabalhar hoje? Ou devo ficar em casa?). Trocas voluntárias se refere ao fato de que posso livremente trocar meus recursos com outra pessoa que queira fazer o mesmo (havendo uma coincidência de vontades). Liberdade para competir significa que posso oferecer meus serviços (ou produtos, ou talentos) e aguardar que haja interessados. Propriedade privada se opõe a propriedade coletiva ou comunal, geralmente sob controle do estado.

Uma forma mais direta de sistematizar a teoria de Smith (e neste ponto de Friedman e Hayek) é dizer que no livre mercado a propriedade é privada (e não coletiva ou comunal) e o trabalho e assalariado (e não escravo). Mais simples ainda, o livre mercado opera pela máxima de “não faça aos outros o que você não gostaria que fizessem com você”, ou “não mexa com quem está quieto”. No livre mercado os indivíduos são livres para fazer trocas voluntariamente com outros indivíduos – que queiram voluntariamente fazer estas trocas, havendo coincidência de vontades.

Há muitos economistas que consideram que a sociedade de mercado é mais um tipo ideal do que uma realidade. Alguns países estão mais próximos desta ideal do que outros, e neste sentido é válida a observação de que há variedades de capitalismo. O capitalismo praticado no Brasil (ou na China) não é (nunca foi e nunca chegou perto de ser) o capitalismo liberal descrito ou almejado por Smith, Friedman e Hayek. O capitalismo praticado nos EUA está mais próximo disso, embora esteja num franco afastamento deste ideal há várias décadas.

Saber o que é capitalismo é um primeiro passo para sabermos se este é um modelo que desejamos ou não. Pretendo nos próximos posts continuar este assunto. Por ora, digo apenas que quando falo a respeito de capitalismo estou pensando na sociedade de mercado descrita ou almejada pela tradição liberal. Caso o que temos no Brasil seja capitalismo, certamente não é este capitalismo que defendo.