Sunday, December 11, 2022

giants with feet of clay................

De Soto calls our economic system, which has been masquerading as a market economy for generations, mercantilist. 

     The term is confusing, since it defines a historic period, an economic school, and a moral attitude.  Here, "mercantilism" means a bureaucratized and law-ridden state, that regards the redistribution of national wealth as more important that the production of wealth.  And "redistribution," as used here, means the concession of monopolies or favored status to a small elite that depends on the state and on which the state itself is dependent. . . .

     It is essential that the state remember that before it can redistribute the nation's wealth, the nation must produce wealth.  And that in order to produce wealth, it is necessary that the state's actions not obstruct the actions of its citizens, who, after all, know better than anyone else what they want and what they have to do.  The state must restore to its citizens the right to take on productive tasks, a right it has been usurping and obstructing.  The state must limit itself to functioning in those necessary areas in which private industry cannot function.  This does not mean that the state with wither away and die.

     By the same token, a large government is not necessarily a strong state, as the majority of Latin American nations shows.  Those immense organisms that in our countries drain the productive energy of society to maintain their own sterile existence are in fact giants with feet of clay.  Their giantism makes them torpid, and their inefficiency deprives them of the respect and authority without which no institution can function well.

-Mario Vargas Llosa, from the Introduction to Hernando de Soto's The Other Path

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