Left Not Always a Help to the Poor

Frontier Centre, Poverty, Role of Government, Uncategorized, Worth A Look

Ever since revolutionaries toppled the French crown in 1789, the political left has asserted that the solution to shrinking poverty is to announce good intentions and follow up with government confiscation of private assets.

The latest would-be defender to join history’s club of thieves in the name of the poor is newly elected Bolivian president, Evo Morales. On May 1, he seized control of Bolivian natural gas fields, developed by foreign companies, and declared, “The looting by foreign companies has ended.”

Morales’ portrayal of needed foreign investment is opposite of its actual effect but typical of demagogues. Sinking billions into undeveloped fields for a poor country which then provides jobs and tax revenues is anything but looting.

But Morales is not alone; foreigners and investment are regularly pilloried by anti-trade activists, such as Canada’s own Naomi Klein. Back in 2003, Klein celebrated the violent overthrow of Gonzalo Sánchez de Lozada, Bolivia’s (last) market-oriented reformist president.

“The [Bolivian] farmers and workers who forced their president to flee to Miami last week have made it clear that if the new president breaks his promises, he won’t last long either,” exulted Klein. Sure enough, that new president didn’t last and Klein, whose anti-business books are distributed by multinational corporations, was at it again in November.

In one American magazine, Klein praised Bolivian indigenous groups for “their ability to topple governments.” The indigenous groups to which Klein referred were helped along by Morales, who in 2003 was head of the coca-growing farmers’ collective. To overthrow de Lozada, the Bolivian “Workers’ Confederation” organized protests in low-income neighbourhoods; the country’s poorest families were told to have at least one member show up for those protests or risk a 100-peso fine, or worse. That’s another trademark action of the international left: join the spontaneous “worker’s movement,” or else.

When Klein celebrated the violent toppling of de Lozada, it’s worth recalling what he had already accomplished: de Lozada had, in his previous role as the country’s planning minister between 1986 and 1988, quickly reduced the country’s hyper-inflation rate from 25,000 per cent to just 15 per cent. By the 1990s, inflation averaged just 9.9 per cent annually. The left—which prattles on about its love for the poor—should recall that inflation harms those on the margins more than anyone as it turns their meagre wages and savings into worthless paper.

For those who think Bolivia’s public sector was starved as a result of market reforms, Bolivia’s government revenues in fact rose as a percentage of the economy, from 10 per cent of GDP in the mid-1980s to 17.2 per cent in 2001, shortly before the regression to anti-market populism. Simply put, Bolivia’s 17 years worth of economic reforms brought more people, investment and even taxes into the formal economy.

Demagogues such as Morales get away with their nonsense because few analyse the results of their past-implemented economic jihads. As poor as Bolivia is, it is revealing to compare it with the left’s favourite Latin American poster-boy, Cuba.

Over the last half-century, Cuba saw its real per capita GDP drop by more than one-third while Bolivia—despite all its problems, corruption and cronyism—grew 28 per cent in real per capita terms; most of the improvement happened since (and because of) the mid-1980s economic reforms. Cuba, which the left has romanticized since Fidel Castro’s 1959 revolution, should be the richest country in Latin America, given its proximity to the wealthy United States. It was fourth richest in 1959; it’s now the fourth poorest.

Of course, part of its problem is the American trade embargo. I can make that point, but leftists can’t. If they blame Cuba’s anemic condition on a lack of American investment, they undercut their arguments on Bolivia, Venezuela and others. After all, there, they posit investment as the problem.

The class warfare of the radical left has led to misery and will do so again in Latin America’s latest upsurge of self-destructive, anti-foreigner, anti-market revelry. It’s a bit overdue for the leftists of the world to be called on that fact.

Mark Milke, the author of A Nation of Serfs?, can be reached at mmilke@telus.net. This article originally appeared in the Calgary Herald May 12, 2006.