December 5, 2007

What Latin Americans Want

by Samuel Gregg D.Phil.

When Venezuelan voters rejected President Hugo Chavez’s plan to overhaul the constitution in a Dec. 2 referendum, they were not only pushing back on Chavez’s latest grab for power but sending him a message on what he calls “21st Century socialism.”

Chávez, along with Ecuador’s Rafael Correa and Bolivia’s Evo Morales, have been claiming mandates to nationalize key industries, impose extensive regulation, end their central banks’ independence, and make it virtually impossible for businesses to terminate anyone’s employment.

Latin Americans -- according to Chávez, Correa, and Morales -- have rejected the market economy and want to pursue collectivist alternatives. There’s just one problem with this claim. It isn’t true.

If Chavez had been paying attention, he might have seen his defeat presaged in last months’ release of the 2007 Latinobarómetro poll of Latin American public opinion. Fifty-two percent of Latin Americans, the poll says, view the market economy as the best economic system for their country. That’s a slight drop from the percentage recorded in the 2000 Latinobarómetro poll.

Still, it is a remarkable figure given the spotty implementation of economic-liberalization throughout the region, not to mention the Marxist-tinged anti-capitalist rhetoric that has infested Latin America’s political discourse for decades.

Naturally the numbers vary from country-to-country. A favorable view of the market economy was held, for example, by 74 percent of Colombians, 66 percent of Nicaraguans, 60 percent of Mexicans, 57 percent of Bolivians, and 49 percent of Venezuelans. Latin America’s populist-left caudillos are not presumably thrilled with these figures.

Even more surprising is the view taken by Latin Americans of privatization. Privatizations of state utilities occurred all across Latin America in the 1990s. Generally they were badly executed, the process heavily marred by corruption.

Yet despite this record, the number of Latin Americans who believe privatization has been beneficial rose from just over 20 percent in 2000 to 35 percent in 2007. Incredibly, 47 percent of Venezuelans, 45 percent of Ecuadorians, and 43 percent of Bolivians regard privatization as advantageous for their countries.

Once again, Messrs. Chávez, Correa, and Morales will be disappointed with such numbers -- not least because they suggest those opposing their nationalization schemes cannot be dismissed as numerically-insignificant “colonial elites.” Nor are Latin America’s leftist caudillos likely to be happy that 56 percent of Latin Americans regard private enterprise as indispensable -- that’s right, indispensable -- for their countries’ economic development.

Yes, this number does reflect a drop from the 2004 figure of 69 percent. But the decline has occurred in a context of an unprecedented demonization (even by Latin American standards) of business by the region’s populist-left presidents. Despite this, 61 percent of Venezuelans think private enterprise is essential for their nation’s economic development -- a remarkable number given the country’s political climate.

But although support for basic institutions that promote economic liberty and prosperity remains strong, the Latinobarómetro poll also indicates Latin Americans want more economically-interventionist governments. Curiously, the same poll reveals Latin Americans are very dissatisfied with their governments’ abilities to provide even very basic services. So how do we explain these apparent contradictions?

One explanation -- hardly unique to Latin America -- is that people often want mutually-exclusive things. The same person who values private entrepreneurship may also want a big welfare state, but not understand that the high taxes which pay for large welfare-systems reduce the incentives for people to be entrepreneurial. This, however, doesn’t fully clarify why Latin Americans want government to do more, despite their fatigue with their governments’ rampant inefficiency and corruption.

Here we need to recognize the significance of a characteristic of many Latin American cultures: the weakness of those non-state associations commonly called “civil society.” This flaw -- a Latin American problem since colonial times -- means many Latin Americans find it difficult to imagine any organization other than the state addressing a range of social issues.

This makes it all the more significant that the most trusted organization in Latin America is (as it has been from the beginning of Latinobarómetro polls) a non-state organization -- the Catholic Church. Reviled by Chávez and Morales, but trusted by 74 percent of Latin Americans, the closest institution to the Church in terms of public confidence is the military at just over 50 percent. It’s likely the Church’s disassociation from political power (despite the efforts of aging, fading liberation theologians) contributes to its high positive ratings.

And herein is a challenge for Latin America: the need for more truly independent non-state associations able to undertake most of the tasks many Latin Americans want governments to do.

Given Latin America’s history, the widespread emergence of such associations would be of almost revolutionary significance. But it would certainly amount to a far more authentically people-driven development than any economy-destroying “revolution” promoted by the likes of Messrs. Peron, Allende, and Castro in the past, or Chávez, Correa, and Morales in the present.

Dr. Samuel Gregg is research director at the Acton Institute and author, most recently, of The Commercial Society (2007)

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