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Source link: http://archive.mises.org/11476/real-economic-reform-for-a-hurting-haiti/

Real Economic Reform for a Hurting Haiti

January 18, 2010 by

If there is any instance of Bastiat’s notion of “legalized plunder,” under which the powers of government are applied to steal the wealth of some for the benefit of others who are politically well connected, it is Haiti throughout its sad history. FULL ARTICLE by Richard M. Ebeling

{ 23 comments }

jl January 18, 2010 at 9:06 am

If Haiti is to rebuild itself, it seems that the understanding of economics and liberty has to come from the bottom up, rather from the top down. Haiti is nominally democratic — there is reference to voting — in between coups d’etat. Like the article says, we can’t impose our enlightenment from the outside. So Haitians need to learn to put limits on their government, and do more for themselves. In short, they will get the government that they ask for. The trick is to avoid asking for the wrong kind of government — the one that promises a free lunch for everyone, the one that promises to protect them from foreign capitalist exploitation, and so on.

Hard Rain January 18, 2010 at 9:43 am

You had me going until I read: “A stable and noninflationary monetary system.”

Is there one place in the entire world where this actually exists? :P

"Kristian" January 18, 2010 at 10:17 am

Obviously, the most dysfunctional nation in the western hemisphere isn’t going to accept private property and laissez-faire before the US or Canada does.

Panagiotis Peter Manousakos January 18, 2010 at 10:37 am

Finally, a reasonable man speaks form the ‘free market side’. Mr. Ebeling, I have criticized a writer on another site for omitting what you are now addressing – The importance of ‘healing first’ and ‘teaching later’. Our movement will fall apart if we do not complement our views with the admission that we must let our empathy and humanity be the first person on site.

Thank you.

David K. Meller January 18, 2010 at 12:42 pm

A very interesting and timely critique of existing policies and their underlying statist ideology toward Haiti’s people, policies and ideology which both laid the groundwork for the scope and intensity of the earthquake catastrophe, and caused much of the misery and hardship extant among Haitians for the past two centuries. However, it is just not enough to remove pernicious government and military intervention there, it must be replaced with something better.

For a free market to evolve, legal and political institutions must emerge in a community which clearly support the creation of PRIVATE PROPERTY through homesteading, exchange, and voluntary agreement (contract). Without such an institution, no free markets can emerge, much less remain unpolluted by outside (government, union, or private criminal) intervention. I also don’t see how “democracy” can contribute to this process, and indeed, a (type of) government which puts everybody’s property up for grabs at the whim of everyone else’s vote is not going to produce useful results.

I don’t know enough about Haitian history and culture to offer useful advice as to how this is to be done, but I have a strong impression that heeding the likes of Bill Clinton, Aristide, or Paul Krugman would definitely NOT be helpful!

I certainly wish everyone, including Haitians…

PEACE AND FREEDOM!!
David K. Meller

Stranger January 18, 2010 at 12:44 pm

Claiming that “the people” need to accept property rights in order for a civilization to grow is just an appeal to collectivism. Not only does it not provide a solution to poverty, it also does not explain how civilization could arise in the first place!

If there ever was a country that could benefit from colonization, it is Haiti. It has some of the dumbest, most superstitious people in the world. Should it turn into an open country, it would probably benefit greatly from foreign elites setting up their own governing structures. However, every time some disaster or rebel insurrection starts up, the U.S. intervenes to protect and restore the local power. It is like Haiti is the symbol of something that needs to be preserved at all cost, colonial republicanism perhaps?

Daniel January 18, 2010 at 1:26 pm

A first step to reform would be to cut off governmental foreign aid which only serves to entrench the political oligopoly at the expense of the private sector and lower classes

DG Lesvic January 18, 2010 at 3:32 pm

Before we can convince the Haitians to reject “coerced redistribution,” we have to figure out how to convince the Americans to do so.

How would Prof. Ebeling, or anyone else at The Mises Institute, address this problem?

Fallon January 18, 2010 at 3:48 pm

DG,

What would you like to see LvMI or Ebeling do that they are not currently doing?

damocles January 18, 2010 at 4:22 pm

Since roughly 99% of Haitians believe in voodoo, a form of devil worship that they credit for defeating the French 200 years ago, the likelihood of any enlightened policies catching on is…well, Slim is leaving town. Utopia, meet the dark ages.

Norm January 18, 2010 at 4:29 pm

The Haitian community in South Florida is developing and prospering. The only solution for Haiti is to give Hatians desiring freedom and prosperity the opportunity to leave. Let those who remain either change their ways of die. Developing adequate capital either internally or from outside will take hundreds of years.

michel Georges January 18, 2010 at 4:35 pm

The tragedy unfolding in Haiti has deep historical and conceptual roots.Central plannnig and its bureacratic apparatus could only make things worst particularly for those who are at the bottom of the economic ladder.Besides, any effort to address the pressing issues at hand , that stops short of going to the root causes of this deep wound is doomed to fail. The history of Haiti is a living testimony to this reality.
In all fairness, nature in its fury could be blamed for the widespread and massive physical destruction and human calamity. However, it would defat the purpose of honestly relieving the despair of the people on a short term basis and providing a window of hope for reconstruction in the long run if, as technocrats may be tempted to do, one downplays the underlying institutional dysfunctions and the misguided ideas that have dictated public policy in Haiti for the last century. The world has another chapter of misery and violence in the making if one does not draw a clear line or one does not strike a balance between a humanatarian effort on one hand and the need to bring about institutional reforms that vested interests will either divert or torpedo on the other hand . The race against time to save and rebuild lives in Port-au-Prince, Leogane and Carrefour is one thing but the drive to dismatle a predatory system inimical to economic prosperity for alll is another.
Mr Ebeling in his article has skillfully identified the key areas that policy makers should set their eyes on. Therefore, it is useless to reapeat them. All too often, international donors and Ngos ignore the fact that the struggle to put an end or to alleviate poverty in Haiti is a fight to institutionalise ideas that alllow everybody regarless of his or her social background to create wealth and prosper.
It has been an uphill battle for my associates and myself as members of the only liberterian organisation in Haiti to make people realise that economic freedom is the only way out of this historical quagmire . Misbegotten ideas about the origin and nature of life , the state, property rights , democracy, money and economic theory are major stumbling blocks for breaking the vicious cycle of nepotism and crony capitalism.Those who are claiming that the current events in Haiti have their roots in a contract with the devil, lack of foreign aid and historical determinism are either religious zealots or political activists. They can only add fuel to a social fire and economic despair. It is a miguided concept and a disregard for property rights distorted by the current Constitution that has worsened the imapct of the earthquake. It is deeply rooted judicial positivism with its propensity toward egalitarianism that has weakened the rule of law in Haiti and making things impossible for law enforcement officers when there a social breakdown. It is pervasive relativism has perpetuated and cheapened life in Haiti and maintained the confusion beteween a right and a good. It is the refusal of policy and politicians alike to acknowledge the primacy of economic laws that has delayed and retarded economic development.
It is clear that the dysfunctionality of a state that has received a mana of foreign funds is going to call into question many taboos and is a turning point in many regards. The doctrine that democracy is the only way to economic freedom has run its course and is a major casualy of this unexpected turn of event. The current drama in Haiti has refuted its validity. It is time to try something else.

Michel Georges

Irlep

Fallon January 18, 2010 at 4:37 pm

damocles,

Come now. Voodoo might be many things but devil worship? I do recall that the Bible says that the Devil can quote scripture with the best of them. With this in mind, and given his recent bigotry, it is highly more likely that Pat Robertson is the Devil.

Bob January 18, 2010 at 5:07 pm

I’d like to see someone follow up this article with a detailed austrian informed account of the political-economic history of Haiti, the policies, practices and ideologies, and the effects of various foreign interventions that made it what it is. One of the things I’ve read is that Haiti got off to a bad start in part due to crushing reparations it paid to France for being independent, payments it made up to 1947! (I’d also like to read how the French government justified this dastardly deal going on so long, and what club it held over Haiti to make it honor it.) For me, it’s too general to leave it at “The government, not just for decades but also for more than two centuries, has been notoriously corrupt, brutal and tyrannical. If there is any instance of Frédéric Bastiat’s notion of ‘legalized plunder,’ under which the powers of government are applied to steal the wealth of some for the benefit of others who are politically well connected, it is Haiti throughout its sad history.”

Bruce Koerber January 18, 2010 at 5:10 pm

Send All Lying Politicians To Haiti!

“Where is the President of Haiti?” That is what main stream media has asked.

How little do they know that the disappearance of the politicians long-term would be the greatest blessing for Haiti. But funny money is flowing in so the politicians of all stripes pronounce and pounce.

Since Haiti is desolate and the rotten fruit of ego-driven interventionism I propose that Haiti be designated as the ‘Guantanamo Bay’ for politicians. We need a very large holding tank for all of the politicians that are violating their oath to uphold the Constitution. What we could do is we could send these treasonous and mostly pompous pretenders to Haiti. There, they can choose to live in the desolated destruction of ego-driven interventionism or to decide to educate themselves about the immorality of socialistic and fascistic democracy.

The worst criminals – the members of the inner circle of the unConstitutional coup and their chief agents – will also be tried and mostly convicted of war crimes. Their fate is deservedly even worse than rotting in Haiti.

DG Lesvic January 18, 2010 at 8:35 pm

I had written,

Before we can convince the Haitians to reject “coerced redistribution,” we have to figure out how to convince the Americans to do so.

How would Prof. Ebeling, or anyone else at The Mises Institute, address this problem?

Fallon then wrote,

DG,

What would you like to see LvMI or Ebeling do that they are not currently doing?

This. Point out that taking from the rich to give to the poor can not reduce but only increase income inequality and “social injustice.”

DG Lesvic January 18, 2010 at 11:40 pm

As I said, I would like the Mises scholars to point out that taking from the rich to give to the poor doesn’t reduce but increases inequality, or tell us why that isn’t so.

That has been the challenge before you for the last quarter century. It was most recently delivered by a guest here named Al, in response to Prof Ebeling’s announcement of his new book, saying:

“That is all well and good but can you refute DG Lesvic?”

It doesn’t look as though we’ll ever know, but, Prof Rothbard certainly could not do so, as you may see at

http://econotrashtalk.org/#The_Forbidden_Theory_of_Redistribution

scuttlebut8 January 19, 2010 at 5:47 am

Didn’t some famous person once say “People who don’t learn from history are destined to repeat it”
I mean it seems we just keep pouring good money after bad, who exactly is minding the store. Did we not learn anything from Katrina.
And what other countries have saddled up their horses to ride in and save the day.
Send help, yes, but also send a means to make sure the money goes to the people and not where it normally goes, right in the pockets of “government” fat cats.
Its a pity and my heart really does go out to these people, but somewhere along the line we have to draw our own lines. Let some of the rest of the world stand up and be counted.
Scuttlebut8
Indonesia

Fallon January 19, 2010 at 7:21 am

DG,

You write:

“But the market will not rest with disequilibrium, for always tending toward equilibrium, it will tend to bid the wages of the taxed, undersupplied occupations of the rich upward and those of the subsidized, oversupplied occupations of the poor downward, thereby compensating for the burdens and benefits of the taxation and subsidization, but, to what extent; will it but partly compensate, fully compensate, or overcompensate?”

Let me see if I follow you on this using your engineer v. janitor example. You posit that the tendency toward equilibrium would make employers, having the same demand for engineers, raise their wages to counteract redistribution, which, in turn, would erase whatever gains the poor might have received?

But aren’t the engineers first paid based on marginal revenue product? Where would the firms get the ability to raise wages in effort to close the gap created by taxation? (Even so, the engineers still take home more than the janitors.) Maybe the overall demand for a firm’s product would just decrease or shortages would ensue. Are you sure it is reasonable to hold demand for engineers and firms’ products constant under a universal tax redistribution scheme? If there was this constant demand wouldn’t then an across the board equal down shift happen in the demand for production and, because of it, engineers too?

Hmm. Lots to think about and learn here. I hope I was relevant.

One side point- I do not think it behooves you to use the title “Dumb Jews”. The fact that so many luminaries addressed you at all is pretty cool to some degree! Maybe you should learn from Mike Sproul, who tirelessly peddles the Real Bills Doctrine, a very unpopular idea, in the face of people who get tired of trying to get him to see (what they perceive as) his logical errors and sometimes resort to ad hom out of frustration. Sproul does not retaliate, generally.

Or better yet, learn from Mises himself. Oh but wait, I guess he did have some outbursts now and again as he got frustrated with the world. But did he ever insult anyone?

Stephen Grossman January 19, 2010 at 10:15 am

>Since roughly 99% of Haitians believe in voodoo

Bernanke is a scientist! Bernanke is a scientist. Bernanke is a scientist!

J. Murray January 19, 2010 at 10:43 am

What does a religious belief have anything to do with it (apart from the clearly exaggerated 99% claim)? Most of Europe and America at one point believed that witches were not only real, they were among us and needed to be rounded up and burned. Haiti will just have to evolve its society on its own. But, the biggest thing holding them back is foreign aid. Cut out the foreign aid and the Haitian leaders can no longer keep them oppressed just above the point of outright revolt.

DG Lesvic January 19, 2010 at 11:57 am

Fallon,

You asked,

“Where would the firms get the ability to raise wages (of the engineers) in effort to close the gap created by taxation?”

Just as the additional wages for janitors had been taken out of the hide of the engineers, the additional wages for the engineers would be taken out of the hide of the janitors.

You wrote,

“(Even so, the engineers still take home more than the janitors.)”

If janitors were paid $10/hour and engineers $10.01, how many young men would go to engineering school?

You wrote,

“Maybe the overall demand for a firm’s product would just decrease or shortages would ensue. Are you sure it is reasonable to hold demand for engineers and firms’ products constant under a universal tax redistribution scheme?”

I am sure, for, as Mises explained,

“There is no means of studying the complex phenomena of action other than first to abstract from change altogether, then to introduce an isolated factor provoking change, and ultimately to analyze its effects under the assumption that other things remain equal.”

You wrote,

“If there was this constant demand wouldn’t then an across the board equal down shift happen in the demand for production and, because of it, engineers too?”

Yes. You’re absolutely right about that. Production has been interfered with, so there will be less production, and that means less demand. But why relatively less for engineers and more for janitors? There will be less overall but the same relative demand for engineers and janitors.

You wrote,

“Hmm. Lots to think about and learn here. I hope I was relevant”

You are the first and so far only person at The Mises Institute who has been relevant. The rest are what I have called irrelevantarians.

You wrote,

“The fact that so many luminaries addressed you at all is pretty cool to some degree!”

Yes and no. They all did so a long time ago, and behind closed doors. None of them will do so any more, out in the open.

Is that so cool?

I didn’t start out using the title, Dumb Jews. I started out with A New Idea in Austrian Economics.

Ignored.

Then, Intellectually Incorrect, The Amateur Science of Economics, and the Professional War Against It.

Ignored.

If Dumb Jews is ignored too, I’ll try something else.
But God knows I’ve tried everything but insult, and that’s about all that is left. It would certainly be different if more people were like you, but, so far, you’re unique.

GJG March 7, 2010 at 10:48 am

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