BRICS and Mortar: Building a Movement Fit for the Developing World

The primary concern of this article is how Libertarian theory could ever possibly be applied successfully to what is often referred to as the ‘Developing World’. But before I begin, I will make a few remarks. Firstly I fully appreciate the scope and diversity of the ‘Developing World’, therefore accepting the inadequacies of catch-all terms like the ‘Global South’, ‘Third World’ and ‘Developing World’. A lifetime could be spent addressing such a massive section of the humanity, and still not be adequately detailed. Not to mention that such broad-brush approaches to the social sciences are completely outside of the contemporary academic tradition. Secondly I will mention that I am by no means an established expert on the issues on which this article addresses, merely a passionate and humble observer. Lastly I will say that far from trying to solve the myriad of issues that most of the countries in the Developing World face, by prescribing some sort of uniquely ‘Libertarian solution’ this article will aim to be a collection of pertinent inferences and observations about Libertarian discourse and ideas, and how they might relate to countries outside of the ‘Western World’. By paying more attention to what’s happening outside the remits of our own countries, we can only strengthen our movement, enrich our intellectual discourse and build the foundations of a truly global project.

Fundamentally I believe that Libertarian discourse tends to understate the issues that facing the Developing World. Yet there are good reasons for this, even in the Western World, the Libertarian cause is still a minority issue, albeit a growing one. It seems almost inappropriate for a nascent political movement in the Developed Word to devote time and energy to other countries. As well as being a small group, almost none of the main architects of Libertarian ideas have come from the Developing World and thus have tended to deal with issues immediately concerning the First World. However, I am fully aware that many free-market writers and academics have alluded to (sometimes in depth) to Asia, Africa and Latin America. Yet, these casual references do not come close to the massive amount of literature surrounding the Developing World emanating from mainstream academia or even Marxist literature.

‘BIG-STATISM’

The reasons why we should address the issues faced by the Developing World are self-evident and compelling. Ultimately in terms of how the early 21st century will be looked at by historians and analysts, we are losing the debate. In his book ‘How Asia Works’, Joe Studwell provides a compelling case that the Asian ‘Tiger Economies’ owe their success not to free-market liberalism, but to centralised; state-led economic projects, whereby strong and determined governments turn their nations into exporting superpowers. Despite Libertarians having a voice on many issues in the Western World, globally speaking we are going through a period of ‘Big-Statism’. The so-called BRICS are all large countries that command massive quantities of internal resources: land, population, mineral wealth and energy. Despite the fact that the future of the BRICS is far from certain, it remains true that their pre-eminence among the developing countries is perceived as having little to do with free-market ideas. On the contrary, it would appear that these select nations owe their position to their lack of reliance on ‘free-trade’ and ability to develop their domestic economies. Furthermore, not only do we see the rise of big nations, but smaller nations are increasingly clumping together: ASEAN, The African Union, Mercosur, ALBA etc. show that any dreams of the world turning into a patchwork quilt of small independent entities is just that…a dream. Hayek would be horrified. Importantly ‘Big-Statism’ is a trend that extends beyond the territorial definitions of a nation. The role of the state in the BRICS countries is significant. The nature of the government in China needs no elaboration, yet even in Brazil and Russia almost all of the largest companies are at least in part, state-owned. Additionally, even in supposedly Capitalist India, large swathes of the country are governed at a regional level by Marxist local authorities.

Clearly, as well as nations strengthening their internal institutions, tightening their grip on the lives of their economies, we also live in an era of international tension. In his seminal work on geopolitics, Paul Kennedy wrote as early 1989:

‘There are smaller yet still more significant arms races- not to mention wars- in the Middle East, Africa, Latin America, and across Asia, from Iran to Korea. The consequence has been an explosion in Third World military expenditures, even by the poorest regimes, and large-scale increases in arms sales and transfers in those countries.’

Paul Kennedy, Rise and Fall of The Great Powers

This quote seems as appropriate now (perhaps more so) than it did when it was written. Consequently, geopolitically speaking, the Developing World has never been more militarised. Therefore, the challenge this poses to the Libertarian movement is that such a context of tension isn’t conducive to dissolving national boundaries and deregulating economies. This is a massive topic that I can only really allude to here, but I think the stark realities (however unfortunate) of global geopolitics are something that deserve to be considered.

How valid the claim is that the Developing World is growing prosperous thanks to protectionist policies is debatable. The BRICS economies are complex and experts are far from agreement on whether or not they will pass the precipice into the Developed World anytime soon. The same can be said of ‘Big-Statism’, what specific policies really would ensure the best road to development is beyond the scope of this article (or its author). Yet if history is to be any guide, It would suggest that strong and centralised governments can be moderately successful, but rarely build the foundations for a truly robust and prosperous society.

LINGUISTIC

The second main difficulty the Libertarian movement faces when concerning the Developing World is linguistic. The world ‘Capitalism’ is universally controversial, particularly when people begin to attribute characteristics or a certain ‘nature’ to it. Either rightly or wrongly, for most of the world’s population outside of the West, Capitalism is synonymous with violence and oppression. And perhaps rightly so, a brief look at the history of most of Latin America, Africa or Asia reveals countless atrocities unleashed in the name of ‘Capitalism’ and ‘Westernisation’. Importantly, often the policies that Developing World leaders implement are far removed from the Libertarian conception of Capitalism and truly free markets. Furthermore, as is the case in Pinochet’s Chile or Zia Ul Haq’s Pakistan, the most supposedly ‘Capitalistic ‘ rulers tend to be awfully bloodthirsty. Therefore, it is evident that the word Capitalism is ambiguous when concerning the Developing World. I would argue that the Libertarian movement has been guilty of throwing its support behind morally bankrupt regimes only because they have labelled themselves as Capitalists. I believe that by taking more notice of the Developing World might help free-market activists avoid errors such as these.

Yet I believe that there is no reason that this should be the case. Essentially the political history of the Developing World is a scrap yard, littered with the rustic relics of failed collectivist experiments. Weather in Nasser’s Egypt, Suharto’s Indonesia and (on the extreme end of the scale) Mao’s China; a significant proportion of the world’s nations have suffered horrendously at the hands of irresponsible and violent strongmen, spurred on by deluded Leninist fantasies. Clearly, Collectivism has left as much a mark on the developing world as what is called ‘Capitalism’ has ever done. This important ideological quandary brings me on to another, perhaps more salient issue.

This is the popular assertion that somehow so-called ‘western’ ideas are fundamentally unsuitable for the Developing World. On a certain level, this is true, but it is mostly false. If the ideas of freedom and prosperity continue to be referred to as uniquely ‘Western values’ then indeed they will probably be seen (quite rightly) as fitting into a long history of European and American imposition on Non-Western societies. However; on another level this binary separation of ‘Western’ and ‘Eastern’ ideas about social organisation is inadequate. For example, I believe that when the claim is made that a more individualistic approach to politics is fundamentally unsuited to Chinese society (for example) it is wrong. Even Joe Studwell, who spends most of his book praising authoritarian regimes, admits;

‘On its present trajectory, China is set to be a middle-income per capita, but profoundly institutionally retarded state. At an economic level, this gives leading nations nothing to fear.’

Joe Studwell, How Asia Works

Fundamentally, the idea that Liberal modes of social organisation have no place in the Developing World, is an accident of history- often professed by the apologists for anti-democratic ideologues. People from the Asia, Africa or Latin America are not by nature servile, fanatical or immutable. The global diversity of religions and histories is important to consider, but it shouldn’t stop us from engaging confidently with people from around the world.

8 Comments

  1. First of all it simply is not true that countries owe their success to government interventionism.

    For example, the much famed ministry of trade and industry in Japan urged Mr Honda to not try exporting cars.

    The idea that Japanese Civil Servants are superhero types whose “planning” created the Japanese economic miracle of the 1950s and 1960s is just wrong.

    Indeed Japanese government was small back then – today Japanese government is indeed big, but I do not think anyone would seriously suggest that Japan is having an economic miracle now.

    What policies are needed to promote prosperity?

    First security of private property rights.

    If private property can, on a whim, be taken by the state – then one is trapped in “Oriental Despotism” (not known for economic miracles) of the sort that held back the Islamic Middle East for over a thousand years.

    The heart of the West is the relative security of landed property – things like the Edict of Q in 877 AD.

    This does NOT mean that land was never unjustly taken by Western rulers – of course it was.

    It was a rare thing – it was a not a normal thing (a matter of casual whims).

    That is the difference.

    Second one needs relatively stable money – ideally an commodity (rather a currency that is just the whim of the state).

    If there is massive debasement of the coinage – or massive fiat money inflation, then long term economic growth is replaced by destructive “booms-and-busts”.

    Massive fiat money inflation is the story of most of modern Latin America.

    This is why, for example, Argentina has gone from an nation on a par with Canada (a century ago) to a Third World nation today.

    Thirdly government regulations should be few and well known.

    “The more laws there are, the more corrupt the state is” Tacitus correctly said – and that is still true two thousand years later.

    If there is a vast web of “laws” no one can really know what they are, especially if politicians and administrators can simply change them on a whim.

    If law is not based on the “non aggression principle” (basically “hands off” – hands off the bodies and goods of others) then it is not good.

    Last – but not least.

    Taxes and government spending should be low, if income and wealth are taxed away (to fund big government) private investment (the only true investment) in a desperately poor country is not possible.

    And look at ALL the ways government can take money – not just the official ways.

    For example many Latin American countries claim to have low “tax as proportion of GDP” figures – but leave out the endless demands (and they are demands) for bribes from police and other officials.

    If they are threatening you in order to take money – that is a TAX (even if it does not show up in the official figures).

    And that includes the United States – where the 4th Amendment has been ripped up and Federal, State and local officials now seem to loot at will.

    Indeed, come to think of it, the United States (at least wide areas of it – such as New York State and California) fails all of the above.

    There is no reason why the United States (or some other Western nations) should stay “first world” societies – there is no Divine Right to do so (as Argentina shows).

    Indeed I would stick my neck out and say that we shall see New York State head OUT of the “First World” over the next few years – it is, after all, a massively taxed and regulated place.

    The New York Federal Reserve can not prop it up for ever – indeed, in the end, Credit Money bubbles are part of the problem, not part of the solution.

    By the way…….

    Government “aid to the Third World” is also part of the problem not the solution (it encourages unsustainable “public services” and so on).

    This Lord Peter Bauer and others proved many years ago – see “Dissent On Development” and other works.

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    1. Paul, I concur on the core elements needed for sustained liberty and hopefully prosperity.

      Getting shot of a centralized, “big man” power structure and associated cronyism, corruption and inertia is problematic.

      I think Britain was lucky in that it was an island and on the periphery, so had less interference in its reformations.

      Other countries, more so these days, have very many vested interests in maintaining cronyism and forms of nationalised feudalism, within and without.

      Existing countries may be unfixable without resorting to a form of “War Libertarianism” , so the solution could well be new metropolises to replace the existing rot. Charter Cities, New Hong Kongs. I suspect they would have to have a form of that, too.

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      1. Things may indeed have gone beyond the point of reform Tim – government has usurped the basic functions of Civil Society and, therefore, government spending has expanded out of all bounds and the basic culture of society is collapsing. Also the financial system (indeed the capital structure of the economy) is a credit bubble joke.

        However, wars are matters for the young. If things go as you say, my only role in such a war would be to die – in a pathetic and undignified fashion. Hopefully I will be dead before any such war.

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      2. I am not saying “War Libertarianism implies actual war, but a form that is prepared for it and as to operate differently based on the presumption of massed external States willing to intervene; cheekily paraphrasing” War Communism”.

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  2. Just to clarify, I didn’t mean to suggest that I think Japan’s meteoric success was a result of state planning, I merely thought it was worth pointing out that when we talk about the developing world, there are some well thought out narratives that try to discredit free-market ideas- Even if they are wrong. But I guess any confusion here is my fault for poor wording!

    But you are right, the points you mentioned would be of benefit if they were implemented (properly) in countries across the world. And they go a long way to providing a ‘Libertarian’ method of economic advancement. However, if history is to be any guide, it would suggest that there is no ‘recepie’ for international development. Even well considered policies will fail if they are put to practice in the wrong society at the wrong time.

    And yes, unfortunately there is no sacred contract that keeps the developed world wealthy, the stupidity of some ‘first world’ leaders baffles me….

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  3. I drove around 180 miles on the A1 yesterday, it is an extremely bumpy road with subsidence, ruts and potholes that are so frequent as to be impossible to avoid. It struck me that this is an indication that the UK is slipping into ‘degraded nation’ status (there are many other indicators, just look at the tattiness of people around you or the £1,500,000,000,000 National Debt). The Zeitgeist is that these things, order, smartness and caution do not matter. The reason why is most likely the corrupting influence and involvement of the State in our lives.

    Pick 100 random Brits and put them on an island. Perhaps 25 will be public-sector types, wedded to statism, 10 will be workshy loonies and the 65 rest,perhaps one with libertarian views, would try to get along and make something of it, but they would be parasitised by the 35.

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