Writing from Dubai today, where the recession has hit hard, especially in the construction sector, while the oil & gas sector has picked up a bit due to the price of oil staying above the USD 50 per barrel mark and nearing 60 for the first time in 6 months. The surrealism of the past decade though has given way to a bit more pragmatism, with some 85% of (mainly) construction projects cancelled or postponed. It’s possible again to get a taxi in Dubai!
Lots of interesting feedback on “Doug’s Gulch”! As is usual in Libertarian circles, a wide range of opinions, however, most of you that responded (many thanks!) feel sympathetic toward the idea of a retreat far away from the troubles of the world and among like-minded people while making money at the same time. To be fair, the majority of the people at La Estancia de Cafayate have not “gone on strike” and they are still very much involved in their day-to-day businesses, following world affairs closely.
Others felt that such places bring reminders of cults, such as Jim Jones or David Koresh, and would cause ordinary folks to think of Libertarians and their philosophy in the same terms: just another cult!
Of course, we do not consider our movement as “cultist” and Classical Liberal Philosophy has a long and respected history, appealing to the basic instinct in all human beings to be as free as possible from force, fraud or coercion. Despite this appeal, the philosophy has had a small following, reinforcing the perception of a “cult”.
In fact, there were plenty of religious metaphors in your feedback. Does or can our Philosophy generate the same kind of fervor, commitment and even sacrifice that religious philosophies are able to do? Do we need it and, if yes, how could we achieve it? More comments on this please!
There was broad consensus that the current crisis is not sufficiently severe to warrant Libertarians getting out of their existing comfort zones, yet. What more would it take, I wondered?
Would the scenario in Kenya, where I just spent nearly one month, be bad enough? Kenya’s society seems to be on the brink of collapse: millions facing starvation, a looming drought, water and power shortage and rationing, the dam that supplies the capital city of Nairobi only 30% full (the lowest level since its construction), the Mungiki and other criminal sects wreaking havoc by killing scores of people with machetes, running protection rackets, hijacking cars, trucks and buses, a new mysterious disease that killed 16 people in one week in one village, injured passengers in a bus accident being robbed of their belongings, assassinations in broad daylight of human rights activists, teachers, and businessmen, rising unemployment, over 200,000 internally displaced people living in tents following the election violence in early 2008, a potential conflict with Uganda over a 1 hectare island in Lake Victoria, railway lines being uprooted by angry youths, a week-long sex boycott by a prominent women’s group, a currency devaluation of over 20% in just a few months, annual inflation at over 25%, politicians bickering over positions of power and money, a maize scandal, massive bribery and corruption at all levels of the public sector - and you wonder what more does it take for a society to disintegrate and become dysfunctional?
Very little of this is covered by the international media, from what I can see. Perhaps it does not resonate with many of you either and you may dismiss this as just another African country that can’t get its act together. But is it possible that we will see this happening in other parts of the world? I have chosen Kenya because of my first hand experience but I could have chosen Zimbabwe, where the situation is possibly even worse. Even Mr Gono, the former Reserve Bank Governor who gave the world its first One Hundred Trillion Dollar bank note, is back despite objections from the MDC party in the new “unity” government.
Politicians have learned to take advantage of these problems by using them to ask for more foreign aid from the World Bank, IMF and aid agencies. “Give us more money”, they say, “or things will get even worse!” This has created a mentality that “other people” are going to “fix” all the problems and it is not our responsibility. It has removed all sense of urgency and responsibility from local politicians, so they have the time to fight over power and money for themselves. The ultimate moral hazard?
And just like governments are bailing out failed banks and businesses in the developed world (more moral hazard?), so the donor and aid agencies are continuing to provide funding for corrupt governments in the developing world. Once the funds arrive, they are misappropriated, misspent and misapplied. As Ronald Reagan used to say: “Foreign aid means poor people in rich countries giving money to rich people in poor countries”. There’s no incentive to use the money wisely. If they did, the money might stop coming.
Is the world heading in the same direction as Kenya and Zimbabwe? Your thoughts, please!
Crisis Update
Crisis? What crisis?
Rising stock markets, the results of the “stress tests” by the US Treasury showing that “only” another couple of hundred billion dollars in additional capital will bring the banking sector back to health, the swine flu not being as bad as feared and the general feeling that we’ve had enough bad news for too long already, have given rise to demand for more optimism. We don’t want to hear the phrase anymore that says “things will get worse before they get better”.
For the past 6 months, people were reading the news to find out how bad this crisis is going to get. Now they want to read how soon the recovery will start and things will improve. Federal Reserve Chairman Ben Bernanke obliged by cautiously predicting a recovery later this year. We want to hear “good news” now, even if it means we will be lied to. Better pretty lies than ugly truth!
Of course, we all want to hear positive developments as a continuous flood of bad news is very depressing and pessimism becomes a self-fulfilling prophecy. I too prefer to be optimistic as it is a much better motivator to “do something”, like trying to encourage the Libertarian community to collaborate on any number of projects that will promote the cause of liberty and at the same time enrich the lives of Libertarians, both materially and intellectually. I would not do that if I thought it was pointless.
Therefore, I am pleased to report that several of you have expressed your willingness to collaborate with other Libertarians in principle, but you need more details and information about how such collaboration will work, on what terms and basis you could cooperate, in what areas, and what’s in it for you. All fair questions! My hope (and intention) was to use this newsletter as a means (catalyst might be too strong a word) to find the answers to these questions, find the people that are interested, get your creative ideas and suggestions, and create a virtual global community whose members can collaborate in areas of their own choice but produce concrete results that benefit not just the members but also the community and even society at large.
As Nick Sorrentino points out in his recent blog (www.libertyandeconomics.com), the Internet is the most Libertarian place on the planet and we should make the best use of it while it retains its relative freedom from political and government interference. So far, attempts to control the Internet by countries such as China, Singapore, UAE, and Pakistan (to name but a few) have been largely unsuccessful and we hope it will stay that way. However, we cannot be complacent and I am sure that such attempts will not only continue but become more serious and forceful in future. Let’s make the most of it while we can! We can? Now there’s a novel slogan for a Libertarian campaign!
Cheers!
Andy
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