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lunes, octubre 17, 2011

La paradoja de los Indignados por Axel Kayser(con traducción al español )

La paradoja de los Indignados

Mises Daily: Monday, October 17, 2011 by Mises Diario: Lunes, 17 de octubre 2011 por

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Tiempo de Outrage!

A wave of social upheaval is shaking the world. Una ola de agitación social está sacudiendo el mundo. In the West, the press has called the protesters "the outraged." En Occidente, la prensa ha hecho un llamamiento a los manifestantes "la indignación". The name is taken from the pamphlet Time for Outrage! ( Indignez-vous! ) by French intellectual Stéphane Hessel. El nombre está tomado del folleto de tiempo para Outrage! (Indignez-vous!) por el francés Stéphane Hessel intelectual. The outrage by the political and economic situation in the Western world is justified. La indignación por la situación política y económica en el mundo occidental está justificada. In Europe and the United States, the gap between financial elites and the rest has widened, while politicians have become a sort of modern nobility completely detached from the realities of the ordinary man. En Europa y los Estados Unidos, la brecha entre las elites financieras y el resto se ha ampliado, mientras que los políticos se han convertido en una especie de nobleza moderna completamente alejada de la realidad del hombre común y corriente. Democracies have failed to guarantee fair play among the different social actors, thus endangering their own existence. Las democracias no han logrado garantizar el juego limpio entre los diferentes actores sociales, poniendo en peligro su propia existencia.

The perception that something is fundamentally wrong in Western societies explains why Hessel has sold millions of copies of his brief and provocative pamphlet, triggering social movements in France and Spain . It also explains the emergence of Occupy Wall Street La percepción de que algo está fundamentalmente mal en las sociedades occidentales explica Hessel ha vendido millones de copias de su folleto breve y provocador, lo que provocó los movimientos sociales en Francia y España. También se explica la aparición de Ocupar Wall Street in the United States, a movement that officially declares itself to be inspired by the Spanish acampadas ("camper-protestors"). en los Estados Unidos, un movimiento que oficialmente se declara inspirada por el español acampadas ("camper-manifestantes"). The galvanization effect of Hessel's pamphlet has reminded us that intellectuals and opinion leaders, as Karl Popper insisted, have to be particularly careful and responsible with the ideas they proliferate. El efecto de la galvanización del folleto de Hessel nos ha recordado que los intelectuales y líderes de opinión, como Karl Popper insistió, tienen que ser especialmente cuidadoso y responsable con las ideas que proliferan. One should never forget Isaiah Berlin's warning that "when ideas are neglected by those who ought to attend to them — that is to say, those who have been trained to think critically about ideas — they sometimes acquire an unchecked momentum and an irresistible power over multitudes of men that may grow too violent to be affected by rational criticism." [1] This is a lesson of the history of Marxism and National Socialism that we cannot forget. Uno nunca debe olvidar de advertencia de Isaiah Berlin que "cuando las ideas son descuidadas por los que debían asistir a ellos - es decir, aquellos que han sido entrenados para pensar críticamente acerca de las ideas - a veces adquieren un impulso sin control y un poder irresistible sobre multitudes de los hombres que pueden crecer demasiado violento para ser afectados por la crítica racional ". [1] Esta es una lección de la historia del socialismo y el marxismo nacional que no podemos olvidar.

Dangerously, Hessel has failed to recognize that he is endorsing the same attitude that ended up in Nazism and Communism: collectivism. Peligrosamente, Hessel no ha reconocido que es suya la misma actitud que acabó en el nazismo y el comunismo: el colectivismo. Indeed, both National Socialism and socialism were derived from a rejection of the individualistic philosophy that laid the foundations of Western civilization. De hecho, tanto el nacionalsocialismo y el socialismo se derivan de un rechazo de la filosofía individualista que sentó las bases de la civilización occidental.

Individualism means, in this context, that each person is considered unique, an end in himself as Kant would say, and must therefore be free to pursue his own goals. El individualismo medios, en este contexto, que cada persona es considerada única, un fin en sí mismo como diría Kant, y por lo tanto deben ser libres de perseguir sus propios objetivos. Accordingly, he is free insofar as he is not coerced by others to pursue alien ends. En consecuencia, es libre en la medida en que no es coaccionado por otros para perseguir fines extranjero. Liberty is thus, as John Locke famously put it, "to be free from restraint and violence from others." [2] This idea of freedom as the absence of coercion is the cornerstone of any prosperous and open society. La libertad es así, como John Locke famosa frase, "para ser libre de restricciones y la violencia de los demás". [2] Esta idea de la libertad como ausencia de coerción es la piedra angular de cualquier sociedad próspera y abierta. Only where individuals are free to pursue their own ends by making the best possible use of the knowledge they possess can a civilized order of voluntary and peaceful cooperation exist. Sólo cuando los individuos son libres de perseguir sus propios fines, haciendo el mejor uso posible de los conocimientos que poseen puede un orden civilizado de la cooperación voluntaria y pacífica existencia. And only where coercion has been replaced by the voluntary arrangements of individuals can progress flourish. Y sólo cuando la coacción ha sido sustituido por los acuerdos voluntarios de las personas pueden progresar florecer. It is not an accident that the greatest achievements in history have been the product of freedom to pursue individual ends: no opera or major technological invention has ever been created under coercion. No es casualidad que los mayores logros de la historia han sido el producto de la libertad para perseguir fines individuales: no opera o invento tecnológico importante ha sido creado bajo coacción.

The idea that men have to enjoy the freedom necessary to pursue their own ends is exactly what collectivism rejects. La idea de que los hombres tienen que disfrutar de la libertad necesaria para perseguir sus propios fines es exactamente lo que rechaza el colectivismo. For the collectivist mind, individual interest has to be subordinated to the abstraction of the common good. Para la mente colectivista, el interés individual tiene que estar subordinada a la abstracción del bien común. Hessel's call for "a rational economic order in which the individual interest is subordinated to the general interest" perfectly summarizes the collectivist attitude. Hessel llama por "un orden económico racional en el que se subordina el interés individual al interés general", resume perfectamente la actitud colectivista. Once this idea is accepted there is no limit to government intervention. Una vez que esta idea se acepta que no hay límite a la intervención del gobierno. From then on, government can force individuals to follow predetermined courses of action, which are not their own, under the pretext of serving the common good, thereby undermining freedom and progress. A partir de entonces, el gobierno puede obligar a las personas a seguir cursos de acción determinado, que no son de ellos, bajo el pretexto de servir al bien común, lo que socava la libertad y el progreso.

The Fiction of Government La ficción de Gobierno

The tragedy of honest left-wing intellectuals who encourage movements such as Occupy Wall Street is that, without realizing it, they are outraged by what is to a large extent the creature of their own thinking. La tragedia de honestos intelectuales de izquierda que animan a movimientos como el Ocupar Wall Street es que, sin darse cuenta, están indignados por lo que es en gran medida a la criatura de su propio pensamiento. The best example is Hessel himself. El mejor ejemplo es el propio Hessel. He argues that fundamental principles of a free, humanitarian, and democratic society have been replaced by a system in which maximization and uncontrolled financial capitalism prevail. Él afirma que los principios fundamentales de una sociedad libre, humanista y democrática han sido sustituidos por un sistema en el que la maximización y el capitalismo financiero sin control prevalecer. A much better world, he insists, would be one in which individual interest is subordinated to the general interest. Un mundo mucho mejor, insiste, sería aquella en la que se subordina el interés individual al interés general. This can be best achieved if government plays a larger role in the economy. Esto puede lograrse mejor si el gobierno juega un papel más importante en la economía.

One should first ask if there is any reason to believe that government really cares about the common good. Primero se debe preguntar si hay alguna razón para creer que el gobierno realmente se preocupa por el bien común. Are bureaucrats and politicians not people like everyone else? Son los burócratas y los políticos no la gente como todos los demás? Was Lord Acton wrong when he said that "power corrupts and absolute power corrupts absolutely"? Lord Acton fue equivocado cuando dijo que "el poder corrompe y el poder absoluto corrompe absolutamente"? And if he was right, is it reasonable to think that those who are in power — and therefore already corrupted — would put their own interest aside in order to serve an abstract ideal called the "common good"? Y si estaba en lo cierto, es razonable pensar que los que están en el poder - y por lo tanto, ya está dañado - se puso a un lado sus propios intereses con el fin de servir a un ideal abstracto, llamado el "bien común"?

Even Hessel denounces that lobbyists have overtaken government in "the highest spheres." Incluso Hessel denuncia que los grupos de presión se han apoderado del gobierno de "las más altas esferas". Nevertheless, he seems to believe that if government were to have more control over industries, corruption would not do its harmful work. Sin embargo, parece creer que si el gobierno fuera a tener más control sobre las industrias, la corrupción no haría su trabajo nocivo. In other words, for Hessel, if politicians and bureaucrats had more power than they currently have, the system would be less corrupt. En otras palabras, para Hessel, si los políticos y los burócratas tenían más poder que tienen actualmente, el sistema podría ser menos corruptos. History, however, shows that Lord Acton was right: the more power there is in the hands of the rulers the more corrupt the system becomes. Pero la historia muestra que Lord Acton tenía razón: el poder más que está en manos de los gobernantes más corruptos del sistema se vuelve. The greatest failure of socialism was not that it brought about economic misery to the masses it was supposed to help but that it created a class system more violent and rigid than anything the Western world had ever seen. El mayor fracaso del socialismo no era que se produjo la miseria económica de las masas que se supone que ayuda, sino que creó un sistema de clases más violenta y rígida que cualquier otra cosa en el mundo occidental había visto nunca. The central maxim of socialism — namely, equality — was betrayed as soon as the revolutionary leaders consolidated their power over the state. La máxima central del socialismo - a saber, la igualdad - fue entregado tan pronto como los líderes revolucionarios consolidaron su poder sobre el Estado. The new elite created a two-class system that rested on systematic coercion: on the one hand there were the party leaders and their friends who lived like kings enjoying all sort of luxuries, many of them imported from the capitalist world; and on the other hand there was everyone else, fighting for survival. La nueva élite creado un sistema de dos clases que se basaba en la coacción sistemática: por un lado estaban los líderes de los partidos y sus amigos que vivían como reyes disfrutando de todo tipo de lujos, muchos de ellos importados de todo el mundo capitalista, y por el otro la mano que había todos los demás, luchando por su supervivencia.

We may still ask what would happen if political leaders were not corruptible. Todavía podemos preguntar qué pasaría si los líderes políticos no eran corruptibles. Would Hessel's idea work then? Funcionaría Hessel la idea entonces? Lets suppose for a minute that James Madison was wrong and that we were indeed governed by angels, that is to say, by incorruptible beings who would use their power only to seek the common good. Supongamos por un momento que James Madison estaba equivocado y que nos rige de hecho por los ángeles, es decir, por los seres incorruptibles que usarían su poder sólo para buscar el bien común. Lets also suppose that these angels had all the material means necessary to achieve their noble ends. También permite suponer que estos ángeles todos los medios materiales necesarios para lograr sus fines nobles. Now the question becomes, is the purity of intentions a guarantee for the quality of the results of someone's actions? Ahora la pregunta es, es la pureza de las intenciones de una garantía por la calidad de los resultados de las acciones de alguien? Would morally superior and powerful men know better than we do what is best for us? ¿Los hombres moralmente superiores y poderosos saben mejor que nosotros qué es lo mejor para nosotros? And more importantly, would we be willing to accept honest men or even angels forcing us to do what they think is best? Y lo más importante, ¿estaríamos dispuestos a aceptar los hombres de bien o incluso los ángeles que nos obliga a hacer lo que ellos piensan que es mejor?

Here it becomes even more evident that Hessel's argument rests on a falsehood: the idea that the common good or the general interest is something different from the sum of all individual interests, and that government is a separate entity that through coercion can elevate society to a higher degree of moral perfection and happiness. Aquí se hace aún más evidente que el argumento de Hessel se basa en una falsedad: la idea de que el bien común o el interés general es algo distinto de la suma de todos los intereses individuales, y que el gobierno es una entidad independiente que a través de la coerción puede elevar la sociedad a un un mayor grado de perfección moral y la felicidad. Few ideas in history have proved to be more appealing and at the same time more destructive than this one. Algunas ideas en la historia han demostrado ser más atractivo y al mismo tiempo, más destructivos que ésta. Those who, like Hessel, endorse it, ignore the fact that the greatest evils are usually not the result of bad men trying to harm others but of good men trying to help others they do not even know. Aquellos que, como Hessel, que aprueba, ignorar el hecho de que los mayores males no son generalmente el resultado de los malos tratando de dañar a otros, pero de los buenos hombres tratando de ayudar a otros que ni siquiera conocen. Henry David Thoreau fully grasped this when he wrote, "If I knew for a certainty that a man was coming to my house with the conscious design of doing me good, I should run for my life." [3] If angels were to govern humans, none of us would be spared from death for the greater good. Henry David Thoreau comprendido plenamente esto cuando escribió, "Si yo supiera con certeza que un hombre estaba llegando a mi casa con el diseño consciente de hacer mucho bien, debo correr para mi vida". [3] Si los ángeles gobernaran a los seres humanos, ninguno de nosotros se salvaría de la muerte de un bien mayor.

The fiction that government can safeguard a common good that transcends the diverse and irreducibly complex world of individual interests necessarily entails the idea that it can also provide for our necessities. La ficción de que el gobierno puede salvaguardar un bien común que trasciende el mundo diverso y complejo irreductible de los intereses individuales implica necesariamente la idea de que también puede proveer para nuestras necesidades. This fallacy is the origin of the fatal myth of the welfare state — an idea brought about by French rationalist liberalism. Esta falacia es el origen del mito fatal del estado de bienestar - una idea provocada por el liberalismo racionalista francés. This kind of liberalism, as Friedrich von Hayek noted, saw no limits in the power of human reason to plan social life and the economy, becoming thus the predecessor of collectivist movements such as socialism and fascism. Este tipo de liberalismo, como Friedrich von Hayek señaló, no veía los límites en el poder de la razón humana para planificar la vida social y la economía, convirtiéndose así en el precursor de los movimientos colectivistas como el socialismo y el fascismo.

No one understood the implications of this myth better than Frédéric Bastiat, a French intellectual who is barely known in his own country. Nadie entendía las implicaciones de este mito mejor que Frédéric Bastiat, un intelectual francés que apenas se conoce en su propio país. Writing shortly after the constitution of 1848 was created, Bastiat argued that unlike the Americans, who did not expect anything but from themselves, the French had transferred the province of social construction on to the abstraction of government. Escrito poco después de la Constitución de 1848 se creó, Bastiat sostenía que a diferencia de los estadounidenses, que no esperaba nada más que de sí mismos, los franceses habían trasladado de la provincia de la construcción social de la abstracción de gobierno. It was the responsibility of the state to elevate society to a higher level of morality, happiness, and material well-being. Era la responsabilidad del Estado para elevar la sociedad a un nivel superior de la moralidad, la felicidad y el bienestar material. An example of this false belief, according to Bastiat, was to be found in the French constitution of 1848, which declared, "France has constituted itself a republic for the purpose of raising all the citizens to an ever-increasing degree of morality, enlightenment, and well-being." Un ejemplo de esta falsa creencia, de acuerdo con Bastiat, se encontraba en la Constitución francesa de 1848, que declaró: "Francia se ha constituido en una república con el propósito de elevar a todos los ciudadanos a un grado cada vez mayor de la moralidad, la iluminación , y el bienestar. " Bastiat observed that this new government was a "chimerical creation from which the citizens may demand everything." Bastiat señaló que este nuevo gobierno era una "creación quimérica de que los ciudadanos pueden exigir todo." For Bastiat this could only lead to endless crisis and revolutions: Para Bastiat esto sólo podría conducir a una crisis sin fin y de las revoluciones:

I contend that this deification of Government has been in past times, and will be hereafter, a fertile source of calamities and revolutions. Yo sostengo que esta deificación del Gobierno ha sido en el pasado, y será en adelante, una fuente fecunda de calamidades y de revoluciones. There is the public on one side, Government on the other, considered as two distinct beings; the latter bound to bestow upon the former, and the former having the right to claim from the latter, all imaginable human benefits. [4] No es el público, por un lado, el Gobierno, por otro, considerados como dos seres distintos;. Éste obligado a otorgar a la antigua, y los primeros tienen el derecho a reclamar de este último, todos los beneficios imaginables humanos [4]

The Causes of the Present Crisis Las causas de la crisis actual

Bastiat' s words turned out to be prophetic. Palabras de Bastiat 's resultó ser profética. The myth of the welfare state spread from France and Germany to the rest of the Western world, leading to an explosion of welfare transfers and an equal explosion of the people's expectations with regard to their so-called social rights. El mito del estado de bienestar se extendió desde Francia y Alemania con el resto del mundo occidental, dando lugar a una explosión de transferencias de asistencia social y la igualdad de una explosión de expectativas de la gente con respecto a sus llamados derechos sociales.

Self-reliance was progressively replaced by a mentality of rights with no duties. Confianza en sí mismo fue reemplazado progresivamente por una mentalidad de derechos sin deberes. As a result, a gigantic disconnect arose between what people are willing to pay in taxes and what they expect in return in the form of government benefits. Como resultado, surgió un gigantesco desconexión entre lo que la gente está dispuesta a pagar en impuestos y lo que esperan a cambio en forma de beneficios del gobierno. Because promising welfare is the easiest way to win elections, politicians kept expanding the size of government over the decades. Porque el bienestar prometedora es la forma más fácil de ganar las elecciones, los políticos siguió creciendo el tamaño del gobierno durante décadas. And because the public would not have tolerated an honest increase in taxes to finance the new welfare programs, governments started borrowing the money necessary to finance them. Y porque el público no habría tolerado un aumento honesto en los impuestos para financiar los programas de bienestar nuevo, los gobiernos empezaron a tomar prestado el dinero necesario para financiar dichos proyectos. Thus, governments became dangerously in debt. Por lo tanto, los gobiernos se convirtió en peligrosamente en la deuda. Then the financial crisis came, to a large extent caused by government actions: welfare programs to make true the progressive "homeownership-society" dream in the United States created the structural conditions. Luego llegó la crisis financiera, en gran medida causada por las acciones del gobierno: los programas de bienestar para hacer realidad la progresiva "La propiedad de la sociedad" sueño de los Estados Unidos ha creado las condiciones estructurales. Government-sponsored entities like Fannie Mae and Freddie Mac, who bought and guaranteed around 50 percent of the total US mortgage market, offered the financial vehicle to transfer the wealth; and the Federal Reserve provided the easy money necessary to finance it. Patrocinados por el gobierno a entidades como Fannie Mae y Freddie Mac, que compró y garantiza cerca del 50 por ciento del mercado total de la hipoteca de EE.UU., que ofrece el vehículo financiero para la transferencia de la riqueza, y la Reserva Federal siempre y cuando el dinero fácil necesarios para su financiación. In addition, the US government was borrowing and spending money at an all-time record in order to finance its warfare/welfare policies. Además, el gobierno de EE.UU. los préstamos y el gasto de dinero en un registro de todos los tiempos con el fin de financiar su guerra / las políticas de bienestar.

Stéphane Hessel
"For Hessel, if politicians and bureaucrats had more power than they currently have, the system would be less corrupt." "Para Hessel, si los políticos y los burócratas tenían más poder que tienen actualmente, el sistema sería menos corrupto".

In Europe the situation was not that different. En Europa la situación no era tan diferente. The creation of a single currency, again a government decision that in many cases was not even submitted to popular scrutiny through a referendum, enabled countries like Greece, Portugal, and Spain to borrow money at very low interest. La creación de una moneda única, una vez más una decisión del gobierno que en muchos casos no se presentó hasta el escrutinio popular mediante un referendo, los países habilitados como Grecia, Portugal y España para pedir dinero prestado a un interés muy bajo. The market rightly assumed that if some of these countries defaulted, Germany and France would rescue them. El mercado asume que si bien algunos de estos países en default, Alemania y Francia para rescatarlos. This explains why private investors considered Greek bonds to be as good as German bonds. Esto explica por qué los inversionistas privados consideran los bonos griegos a ser tan bueno como los bonos alemanes. Using this unique opportunity, politicians in southern countries started an orgy of credit. Usando esta oportunidad única, los políticos de los países del Sur comenzó una orgía de crédito. Their purpose was to win more elections through the promise of more welfare policies. Su objetivo era ganar las elecciones con la promesa de las políticas de bienestar más. Meanwhile, the European Central Bank was keeping interest rates artificially low, inflating housing bubbles in Spain and Ireland. Mientras tanto, el Banco Central Europeo mantenía los tipos de interés artificialmente bajos, inflando las burbujas inmobiliarias en España e Irlanda. For a time everyone was happy: politicians were being reelected, the people were getting new government benefits every year, bankers were making tons of money, and industries were booming. Por un momento todos estaban contentos: los políticos de ser reelegido, la gente estaba recibiendo beneficios del nuevo gobierno todos los años, los bancos estaban haciendo toneladas de dinero, y las industrias estaban en auge. It was all an illusion. Todo fue una ilusión. When the bubble burst in the United States, it quickly became clear that Europe's economic and fiscal situation was also unsustainable. Cuando la burbuja estalló en los Estados Unidos, rápidamente quedó claro que la situación económica y fiscal de Europa fue, además, insostenible.

Now it's time to pay for the party. Ahora es el momento de pagar la fiesta. Inevitably, this means a dramatic reduction in our standard of living. Inevitablemente, esto significa una reducción drástica en el nivel de vida. Because people do not understand that the source of the crisis was government, as Bastiat predicted, they now go on the streets demanding even more of what caused the problem in the first place: government. Debido a que la gente no entiende que el origen de la crisis fue el gobierno, como Bastiat predijo, ahora ir a las calles para exigir aún más de lo que causó el problema en primer lugar: el gobierno. That is the paradox of the outraged. Esa es la paradoja de la indignación.

Hessel and those who join him show the same ignorance as those who demonstrate against spending cuts when they ask for more welfare programs and more government involvement in the economy. Hessel y los que le unen mostrar la misma ignorancia que los que se manifiestan contra los recortes de gastos cuando preguntan por los programas de bienestar cada vez más la participación del gobierno en la economía. To support his claim, Hessel sustains that it cannot be true that there is not enough money for more government programs because our quality of life is now better than it was fifty years ago. Para apoyar su afirmación, Hessel sostiene que no puede ser cierto que no hay suficiente dinero para los programas de gobierno más, porque nuestra calidad de vida es mejor ahora de lo que era hace cincuenta años. True, there has been much progress brought about by capitalism despite all the problems previously mentioned. Es cierto que se ha avanzado mucho provocada por el capitalismo a pesar de todos los problemas mencionados anteriormente. But what Hessel does not seem to understand is that it does not matter how rich a country is: if it lives beyond its means it will go bankrupt. Pero lo que Hessel no parece entender es que no importa cuán rico sea el país es la siguiente: si se vive más allá de sus medios que irá a la quiebra. That is the exact problem in Europe and the United States. Ese es el problema exacto en Europa y los Estados Unidos. Governments have spent too much money for too long, much more than they could collect in taxes. Los gobiernos han gastado mucho dinero durante mucho tiempo, mucho más de lo que podrían cobrar en impuestos. That is why they have so much debt. Es por eso que tienen tanta deuda. There is in fact almost no country in the EU that is respecting the debt limit of the Maastricht treaty, which established a 60 percent–of-GDP limit for public debt and a 3 percent–of-GDP limit for fiscal deficit. De hecho, hay casi ningún país de la UE, que es respetar el límite de deuda del Tratado de Maastricht, que estableció un 60 por ciento del PIB límite de la deuda pública y un 3 por ciento del PIB para el límite de déficit fiscal.

The problem is not that governments do not have enough welfare programs, as Hessel argues, but that they have to many — so many in fact that if they do not start drastically cutting spending even Germany and France will be bankrupted like Greece. El problema no es que los gobiernos no tienen suficientes programas de bienestar, como Hessel sostiene, sino que tienen a muchos - tantos, de hecho, que si no empiezan a recortar drásticamente el gasto, incluso Alemania y Francia estarían en la bancarrota, como Grecia. The welfare paradigm becomes even more dramatic when the unfunded liabilities are considered, that is, the benefits politicians have promised to pay to their constituencies in order to win elections. El paradigma del bienestar se vuelve aún más dramática cuando los pasivos no financiados se consideran, es decir, los políticos los beneficios se han comprometido a pagar a sus electores con el fin de ganar las elecciones. In the United States these liabilities are equivalent to seven times GDP, while in the EU they are over four times GDP. [5] There is little doubt that the United States and all European countries will default on their social obligations at some point in the future. En Estados Unidos estos pasivos son equivalentes a siete veces el PIB, mientras que en la UE son más de cuatro veces el PIB. [5] No hay duda de que los Estados Unidos y todos los países europeos dejarán de pagar sus obligaciones sociales en algún momento de la en el futuro.

Regarding the "dictatorship" of the financial elites, denounced by Hessel and movements such as Occupy Wall Street , this is again mainly the product of government. En cuanto a la "dictadura" de las elites financieras, denunciado por Hessel y movimientos como Ocupar Wall Street, esto es otra vez todo el producto del gobierno. We have a banking system that can only work the way it does because it is based on fiat currency and is supported by a central bank — that is to say, a government-created agency of monetary central planning. Tenemos un sistema bancario que sólo puede funcionar de la manera que lo hace porque está basado en la moneda fiduciaria y con el apoyo de un banco central - es decir, un gobierno creado por la agencia de planificación central monetaria. Central banks provide private banks with liquidity, allowing them to expand the money supply in a coordinated fashion, thereby creating financial and real-estate bubbles. Los bancos centrales proporcionan a los bancos privados con liquidez, lo que les permite ampliar la oferta de dinero de una manera coordinada, creando burbujas financieras e inmobiliarias. But more importantly, banks take the money given at artificially low interest rates by the central bank and use it to speculate. Pero lo más importante, los bancos toman el dinero dado en las tasas de interés artificialmente bajos por el Banco Central y lo utilizan para especular. The dramatic rise in the price of raw materials and agricultural commodities since 2008 is basically the result of the inflation created by central banks. El dramático aumento en el precio de las materias primas y productos agrícolas desde el año 2008 es básicamente el resultado de la inflación creada por los bancos centrales. The most perverse consequence of this government-induced inflationary process is that it redistributes wealth from the middle class and the poor to the rich financial elites and governments, for whom inflation works as a hidden tax. La consecuencia más perversa de este proceso inflacionario inducido por el gobierno es que se redistribuye la riqueza de la clase media y los pobres a los ricos las élites financieras y los gobiernos, para los que la inflación actúa como un impuesto oculto. John Maynard Keynes, a champion of government intervention, understood this very well. John Maynard Keynes, un defensor de la intervención del gobierno, entendido esto muy bien. Shortly after the First World War he wrote, Poco después de la Primera Guerra Mundial, escribió,

By a continuing process of inflation governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. Por un proceso continuo de inflación los gobiernos pueden confiscar, en secreto y sin ser observado, una parte importante de la riqueza de sus ciudadanos. By this method they not only confiscate, but they confiscate arbitrarily and, while the process impoverishes many, it actually enriches some. Mediante este método no sólo confiscan, sino que confiscan arbitrariamente, mientras que el proceso empobrece a muchos, lo que realmente enriquece a algunos. The sight of this arbitrary rearrangement of riches strikes not only at security, but at confidence in the equity of the existing distribution of wealth. La vista de esta reorganización arbitraria de la riqueza huelga, no sólo en seguridad, pero a la confianza en el capital de la actual distribución de la riqueza. Those to whom the system brings windfalls, beyond their deserts and even beyond their expectations or desires, become "profiteers," who are the object of the hatred of the bourgeoisie, whom the inflationism has impoverished, not less than of the proletariat. [6] Aquellos a los que el sistema trae ganancias inesperadas, más allá de sus desiertos, e incluso más allá de sus expectativas o deseos, se convierten en "especuladores", que son el objeto del odio de la burguesía, a quien el inflacionismo ha empobrecido, no menos que del proletariado. [6 ]

Those who declare themselves outraged by the unequal distribution of wealth should pay more attention to government-created inflation, for this is by far one of its central causes and the origin of the "money power" they condemn. Aquellos que se declaran indignados por la desigual distribución de la riqueza debería prestar más atención a la inflación creada por el gobierno, porque esta es por lejos una de sus causas centrales y el origen de la "poder del dinero" que condenan. It is in fact striking that the "outraged" have overlooked the crucial and destructive role central banks play in the world economy. De hecho, es sorprendente que los "indignados" han pasado por alto el papel fundamental y destructora bancos centrales en la economía mundial. For they not only create money out of thin air (with which financial elites speculate); they also perform the function of the "lender of last resort." Para ellos no sólo crear dinero de la nada (con el que las élites financieras especular), sino que también cumplen la función de "prestamista de última instancia." This means that whenever a bank has been irresponsibly or poorly managed, instead of allowing its bankruptcy, like any other enterprise in the real economy, the central bank rescues the irresponsible bank with newly printed money. Esto significa que cada vez que un banco ha sido irresponsable o mal gestionadas, en lugar de permitir su quiebra, al igual que cualquier otra empresa en la economía real, el banco central rescata el banco irresponsable con el dinero recién impreso. In addition to this perverse incentive, banks work under a fractional-reserve system, which allows them to operate with very low capital reserves, so that their owners have little to lose if the bank goes broke. Además de este incentivo perverso, los bancos trabajan bajo un sistema de reserva fraccionaria, que les permite operar con las reservas de capital muy bajo, por lo que sus propietarios tienen poco que perder si el banco quiebra. As a result, bank managers have a powerful incentive to engage in highly speculative activities that are extremely profitable for themselves and stockholders but equally damaging for the ordinary people who end up paying the bill through bailouts and inflation. Como resultado, los gerentes de los bancos tienen un poderoso incentivo para participar en actividades altamente especulativas, que son muy rentables para ellos y para los accionistas, pero igualmente perjudicial para las personas comunes y corrientes que terminan pagando la factura a través de rescates y la inflación.

None of this can be blamed on the free market. Nada de esto puede ser culpado en el mercado libre. In fact, the free market stands for the complete opposite: open competition among banks; no central monetary planning agency; bankruptcy of those enterprises that have been irresponsibly and poorly managed; hard currency, which ensures the purchasing power of the people's money; and no corrupt collusion between government and economic elites. De hecho, el libre mercado representa el completo opuesto: la competencia abierta entre los bancos, ningún organismo de planificación central monetaria, la quiebra de las empresas que han sido irresponsable y mala gestión; divisas, lo que garantiza el poder adquisitivo del dinero del pueblo, y no connivencia corrupta entre el gobierno y las élites económicas.

Another source of unequal income distribution and poverty is government taxation and regulation. Otra fuente de la distribución desigual del ingreso y la pobreza son los impuestos y regulaciones gubernamentales. High taxes and excessive regulation hinder productivity and destroy incentives for job creation as well as competition. Los altos impuestos y la regulación excesiva obstaculizan la productividad y destruyen los incentivos para la creación de empleo, así como la competencia. While rich people can escape the immediate effects of these taxes by taking their money and investing it abroad, the middle class and the poor have to suffer the consequences of fewer jobs, less income, and a lower quality of life. Mientras que los ricos pueden escapar de los efectos inmediatos de estos impuestos por tomar su dinero e invertirlo en el extranjero, la clase media y los pobres tienen que sufrir las consecuencias de menos puestos de trabajo, menos ingresos, y una menor calidad de vida. Economic liberty, which also includes the rule of law and solid property rights among others, is thus a necessary condition for improving the very quality of life of the masses that Hessel longs for. La libertad económica, que también incluye el estado de derecho y los derechos de propiedad sólidos, entre otros, es una condición necesaria para mejorar la calidad de vida de las masas que Hessel anhela. It is no coincidence that poor people in the ten countries with more economic liberty have an average income ten times higher than the income of poor people in the ten countries with the lowest degree of economic liberty. No es casualidad que la gente pobre en los diez países con mayor libertad económica tienen un ingreso promedio de diez veces superior a la renta de las personas pobres en los diez países con menor grado de libertad económica.

Inequality and Outrage La desigualdad y la indignación

It has been argued that inflation and the lack of economic liberty are central causes of poverty and inequality. Se ha argumentado que la inflación y la falta de libertad económica son las causas centrales de la pobreza y la desigualdad. Hessel does not acknowledge this fact, declaring himself outraged by inequality in general. Hessel no reconoce este hecho, declarándose indignado por la desigualdad en general. He says it is outrageous that in poor countries people live on less than two dollars a day. Él dice que es indignante que en los países pobres la gente vive con menos de dos dólares al día. Two things have to be said in response to such claims. Dos cosas hay que decirlas en respuesta a estas reivindicaciones. In the first place, there is a reason to be outraged only when inequality is the result of arbitrary confiscation, fraud of any sort, or bad economic policy. En primer lugar, hay una razón para estar indignados cuando la desigualdad es el resultado de la confiscación arbitraria, el fraude de cualquier tipo, o una mala política económica. But when inequality is the result of freedom, there is no reason to be outraged at all, especially when everyone has enough. Sin embargo, cuando la desigualdad es el resultado de la libertad, no hay ninguna razón para estar indignados por todos, especialmente cuando todo el mundo tiene suficiente. Only envious people can be outraged by the wealth some have legitimately gained. Sólo los envidiosos pueden estar indignados por la riqueza que algunos han ganado legítimamente. What the people who claim to seek "social justice" fail to understand is that those who have become rich by honest means have served society more than any one else. Lo que la gente que dice buscar la "justicia social" no entienden es que los que se han enriquecido por medios honestos han servido a la sociedad más que cualquier otra persona.

Bill Gates for instance, for a long time the richest man in the world, has improved the lives of all of us with his inventions. Bill Gates, por ejemplo, durante mucho tiempo el hombre más rico del mundo, ha mejorado las vidas de todos nosotros con sus inventos. We have freely decided to buy Microsoft products because they are useful; thus everyone has benefited. Hemos decidido libremente comprar los productos de Microsoft porque son útiles, por lo que todo el mundo se ha beneficiado. In the same manner, when we go to the baker next door and buy some bread, both parties to the transaction are benefiting: the baker because he has money to buy other goods and services he needs for himself and his family, and we who now have delicious bread to eat. De la misma manera, cuando vamos a la puerta del panadero que viene y comprar el pan, las dos partes de la transacción se benefician: el panadero porque no tiene dinero para comprar otros bienes y servicios que necesita para sí y su familia, y que ahora tienen abundancia de pan delicioso para comer. It does not make any difference if this baker becomes a millionaire by selling his bread. No hace ninguna diferencia si el panadero se hace millonaria vendiendo su pan. Actually, it would mean that he is good at his job, so he expands his business in order to satisfy the demand. En realidad, esto significaría que él es bueno en su trabajo, por lo que amplía su negocio con el fin de satisfacer la demanda. Why should we be outraged if he becomes rich in the process? ¿Por qué debemos estar indignados si se hace rico en el proceso? We should celebrate the fact that he was prosperous. Debemos celebrar el hecho de que fue próspero. His prosperity means more jobs and more bread for more people. Su prosperidad significa más empleos y más pan para más personas. From every point of view, the millionaire baker is performing a social function. Desde todo punto de vista, el panadero millonario está realizando una función social. In the same fashion, Bill Gates's inventions increased productivity, bringing millions of people over the poverty line around the world. De la misma manera, los inventos de Bill Gates aumento de la productividad, con lo que millones de personas en el umbral de la pobreza en todo el mundo.

Here we come to the second point Hessel makes. Aquí llegamos al segundo punto Hessel hace. It is true that millions of people still live in poverty. Es cierto que millones de personas aún viven en la pobreza. What should also be said is that there is no period in history where fewer people — as a percentage of the total population — have lived under such conditions than today. Lo que también hay que decir es que no hay ningún período de la historia que haya menos personas - como porcentaje de la población total - han vivido en condiciones tales que en la actualidad. In China alone, more than 300 million people have surpassed the poverty line in the last 30 years. En China, más de 300 millones de personas han superado la línea de pobreza en los últimos 30 años. India, Chile, Vietnam, Brazil, Russia, Peru and many other countries have also experienced dramatic reductions of poverty in the last decades. India, Chile, Vietnam, Brasil, Rusia, Perú y muchos otros países también han experimentado una dramática reducción de la pobreza en las últimas décadas. This is due to the free-market policies these countries have implemented, the same policies that explain the economic success of Japan, Europe, and the United States. Esto se debe a las políticas de libre mercado en estos países han aplicado las mismas políticas que explican el éxito económico de Japón, Europa y los Estados Unidos. In absolute terms, people in developing countries are not worse off but better off than before. En términos absolutos, las personas en los países en desarrollo no están en peor situación, pero mejor que antes.

Finally, it has to be pointed out that there is nothing wrong with inequality per se . Por último, hay que señalar que no hay nada malo con la desigualdad per se. It is much better to have an unequal society where everyone is wealthy than an equal society where everyone is poor. Es mucho mejor tener una sociedad desigual donde todos son ricos de una sociedad equitativa donde todos son pobres. Equality is not and end in itself as Hessel seems to suggest; if it were, we should destroy all our wealth so we would become all equally poor. La igualdad no es un fin en sí mismo como Hessel parece indicar, si lo fuera, hay que destruir toda nuestra riqueza por lo que se convertiría igualmente pobres. Some poor African countries have a more equal income distribution than European countries. Algunos países africanos pobres tienen una distribución más equitativa del ingreso de los países europeos. Does that mean their situation is preferable? ¿Eso significa que su situación es preferible? The question is thus not how to prevent some people from having much more than others, but how to create the conditions to make everyone wealthier. La cuestión no es tanto la manera de impedir que algunas personas tienen mucho más que otros, pero la forma de crear las condiciones para que todos los ricos. This is the difference between a society based on true solidarity and freedom and one based on coercion and envy. Esta es la diferencia entre una sociedad basada en la solidaridad y la libertad verdadera y la otra basada en la coerción y la envidia.

Informed Outrage Indignación informado

Hessel is right when he says that outrage is necessary for action and resistance. Hessel tiene razón cuando dice que la indignación es necesaria para la acción y la resistencia. More important however is to understand the real reasons on which the outrage should be grounded. Más importante sin embargo es de comprender las verdaderas razones en que debe ser el ultraje a tierra. If people get outraged for the wrong reasons, they will inevitably demand the wrong solutions, making the problem worse. Si la gente se indignó por las razones equivocadas, es inevitable que la demanda de las soluciones equivocadas, empeorando el problema. It is especially irresponsible, in these times of social upheaval, to call for outrage and resistance without first a clear examination of what is wrong and how the problem should be approached. Esto es especialmente irresponsable, en estos tiempos de agitación social, para pedir la indignación y la resistencia sin un examen claro de lo que está mal y cómo el problema debe ser abordado. This is the role of intellectuals and opinion leaders. Este es el papel de los intelectuales y líderes de opinión. If a false message sets in and people believe it, only ruin will come out of outrage. Si un mensaje falso se establece y la gente lo cree, sólo la ruina va a salir de la indignación. Hessel has done his best, yet the ideology he is promoting, rooted in old collectivist attitudes, can only lead to more serious trouble. Hessel ha hecho todo lo posible, sin embargo, la ideología que él está promoviendo, con raíces en la vieja actitud colectivista, sólo puede conducir a problemas más graves. He is right to denounce a situation that is indeed outrageous and unsustainable, but he is wrong about everything else. Tiene razón al denunciar una situación que es verdaderamente escandaloso e insostenible, pero se equivoca en todo lo demás.

What we need then is informed outrage. Lo que necesitamos es, entonces, la indignación informado. In order to demand the right solutions, people first have to understand how it is we have come so far. Con el fin de la demanda de las soluciones correctas, primero la gente tiene que entender cómo es que hemos llegado tan lejos. They have to be aware that giving more power to governments will only make things worse. Tienen que ser conscientes de que dar más poder a los gobiernos sólo empeorará las cosas. The possibility of a better future lies not in the hands of bureaucrats and politicians but on self-reliance, creativity, and individual freedom. La posibilidad de un futuro mejor no está en manos de los burócratas y los políticos, sino en la autonomía, la creatividad y la libertad individual. It requires courage to be responsible for oneself without expecting endless benefits from government. Se requiere coraje para ser responsable de uno mismo sin esperar beneficios sin fin del gobierno. This is a much more dignified and fruitful path than the current one, and it is also the viable alternative to the present outrageous situation. Este es un camino mucho más digna y fructuosa que la actual, y también es la alternativa viable a la escandalosa situación actual.

Notes Notas

[1] Isaiah Berlin, "Two Concepts of Liberty," in Isaiah Berlin, Four Essays on Liberty (Oxford: Oxford University Press, 1969), p. [1] Isaiah Berlin, "Dos conceptos de libertad", en Isaiah Berlin, Cuatro ensayos sobre la libertad (Oxford: Oxford University Press, 1969), p. 1. 1. Descargar PDF

[2] John Locke, Second Treatise of Government (Indianapolis: Hackett Publishing Company, 1980), p. [2] John Locke, Segundo Tratado de Gobierno (Madrid: Compañía Hackett Publishing, 1980), p. m46. M46.

[3] Henry David Thoreau, Walden and Civil Disobidience (New York: Barnes & Noble, 2003), p. [3] Henry David Thoreau, Walden y Civil Disobidience (New York: Barnes & Noble, 2003), p. 61. 61.

[4] Frédéric Bastiat, "Government," in The Bastiat Collection , Vol. [4] Frédéric Bastiat, "Gobierno", en La Colección de Bastiat, vol. II (Auburne, Alabama: Ludwig von Mises Institute, 2007), pp. 101–102. II (Auburne, Alabama: Ludwig von Mises Institute, 2007), pp 101-102.

[5] See Jagadeesh Gokhale, Measuring the Unfunded Obligations of European Countries, National Center for Policy Analisis, Policiy Report No. 319, January 2009. [5] Ver Jagadeesh Gokhale, medición de las obligaciones no financiadas de los países europeos, el Centro Nacional de Análisis de Política, Policiy Informe N º 319, enero de 2009.

[6] John Maynard Keynes, The Economic Consequences of the Peace (New York: Harcourt, Brace, and Howe: 1920), p. [6] John Maynard Keynes, Las consecuencias económicas de la Paz (Nueva York: Harcourt, Brace y Howe: 1920), p. 92. 92.

Fuente:

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The Paradox of the Outraged

The Paradox of the Outraged

Mises Daily: Monday, October 17, 2011 by

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Time for Outrage!

A wave of social upheaval is shaking the world. In the West, the press has called the protesters "the outraged." The name is taken from the pamphlet Time for Outrage! (Indignez-vous!) by French intellectual Stéphane Hessel. The outrage by the political and economic situation in the Western world is justified. In Europe and the United States, the gap between financial elites and the rest has widened, while politicians have become a sort of modern nobility completely detached from the realities of the ordinary man. Democracies have failed to guarantee fair play among the different social actors, thus endangering their own existence.

The perception that something is fundamentally wrong in Western societies explains why Hessel has sold millions of copies of his brief and provocative pamphlet, triggering social movements in France and Spain. It also explains the emergence of Occupy Wall Street in the United States, a movement that officially declares itself to be inspired by the Spanish acampadas ("camper-protestors"). The galvanization effect of Hessel's pamphlet has reminded us that intellectuals and opinion leaders, as Karl Popper insisted, have to be particularly careful and responsible with the ideas they proliferate. One should never forget Isaiah Berlin's warning that "when ideas are neglected by those who ought to attend to them — that is to say, those who have been trained to think critically about ideas — they sometimes acquire an unchecked momentum and an irresistible power over multitudes of men that may grow too violent to be affected by rational criticism."[1] This is a lesson of the history of Marxism and National Socialism that we cannot forget.

Dangerously, Hessel has failed to recognize that he is endorsing the same attitude that ended up in Nazism and Communism: collectivism. Indeed, both National Socialism and socialism were derived from a rejection of the individualistic philosophy that laid the foundations of Western civilization.

Individualism means, in this context, that each person is considered unique, an end in himself as Kant would say, and must therefore be free to pursue his own goals. Accordingly, he is free insofar as he is not coerced by others to pursue alien ends. Liberty is thus, as John Locke famously put it, "to be free from restraint and violence from others."[2] This idea of freedom as the absence of coercion is the cornerstone of any prosperous and open society. Only where individuals are free to pursue their own ends by making the best possible use of the knowledge they possess can a civilized order of voluntary and peaceful cooperation exist. And only where coercion has been replaced by the voluntary arrangements of individuals can progress flourish. It is not an accident that the greatest achievements in history have been the product of freedom to pursue individual ends: no opera or major technological invention has ever been created under coercion.

The idea that men have to enjoy the freedom necessary to pursue their own ends is exactly what collectivism rejects. For the collectivist mind, individual interest has to be subordinated to the abstraction of the common good. Hessel's call for "a rational economic order in which the individual interest is subordinated to the general interest" perfectly summarizes the collectivist attitude. Once this idea is accepted there is no limit to government intervention. From then on, government can force individuals to follow predetermined courses of action, which are not their own, under the pretext of serving the common good, thereby undermining freedom and progress.

The Fiction of Government

The tragedy of honest left-wing intellectuals who encourage movements such as Occupy Wall Street is that, without realizing it, they are outraged by what is to a large extent the creature of their own thinking. The best example is Hessel himself. He argues that fundamental principles of a free, humanitarian, and democratic society have been replaced by a system in which maximization and uncontrolled financial capitalism prevail. A much better world, he insists, would be one in which individual interest is subordinated to the general interest. This can be best achieved if government plays a larger role in the economy.

One should first ask if there is any reason to believe that government really cares about the common good. Are bureaucrats and politicians not people like everyone else? Was Lord Acton wrong when he said that "power corrupts and absolute power corrupts absolutely"? And if he was right, is it reasonable to think that those who are in power — and therefore already corrupted — would put their own interest aside in order to serve an abstract ideal called the "common good"?

Even Hessel denounces that lobbyists have overtaken government in "the highest spheres." Nevertheless, he seems to believe that if government were to have more control over industries, corruption would not do its harmful work. In other words, for Hessel, if politicians and bureaucrats had more power than they currently have, the system would be less corrupt. History, however, shows that Lord Acton was right: the more power there is in the hands of the rulers the more corrupt the system becomes. The greatest failure of socialism was not that it brought about economic misery to the masses it was supposed to help but that it created a class system more violent and rigid than anything the Western world had ever seen. The central maxim of socialism — namely, equality — was betrayed as soon as the revolutionary leaders consolidated their power over the state. The new elite created a two-class system that rested on systematic coercion: on the one hand there were the party leaders and their friends who lived like kings enjoying all sort of luxuries, many of them imported from the capitalist world; and on the other hand there was everyone else, fighting for survival.

We may still ask what would happen if political leaders were not corruptible. Would Hessel's idea work then? Lets suppose for a minute that James Madison was wrong and that we were indeed governed by angels, that is to say, by incorruptible beings who would use their power only to seek the common good. Lets also suppose that these angels had all the material means necessary to achieve their noble ends. Now the question becomes, is the purity of intentions a guarantee for the quality of the results of someone's actions? Would morally superior and powerful men know better than we do what is best for us? And more importantly, would we be willing to accept honest men or even angels forcing us to do what they think is best?

Here it becomes even more evident that Hessel's argument rests on a falsehood: the idea that the common good or the general interest is something different from the sum of all individual interests, and that government is a separate entity that through coercion can elevate society to a higher degree of moral perfection and happiness. Few ideas in history have proved to be more appealing and at the same time more destructive than this one. Those who, like Hessel, endorse it, ignore the fact that the greatest evils are usually not the result of bad men trying to harm others but of good men trying to help others they do not even know. Henry David Thoreau fully grasped this when he wrote, "If I knew for a certainty that a man was coming to my house with the conscious design of doing me good, I should run for my life."[3] If angels were to govern humans, none of us would be spared from death for the greater good.

The fiction that government can safeguard a common good that transcends the diverse and irreducibly complex world of individual interests necessarily entails the idea that it can also provide for our necessities. This fallacy is the origin of the fatal myth of the welfare state — an idea brought about by French rationalist liberalism. This kind of liberalism, as Friedrich von Hayek noted, saw no limits in the power of human reason to plan social life and the economy, becoming thus the predecessor of collectivist movements such as socialism and fascism.

No one understood the implications of this myth better than Frédéric Bastiat, a French intellectual who is barely known in his own country. Writing shortly after the constitution of 1848 was created, Bastiat argued that unlike the Americans, who did not expect anything but from themselves, the French had transferred the province of social construction on to the abstraction of government. It was the responsibility of the state to elevate society to a higher level of morality, happiness, and material well-being. An example of this false belief, according to Bastiat, was to be found in the French constitution of 1848, which declared, "France has constituted itself a republic for the purpose of raising all the citizens to an ever-increasing degree of morality, enlightenment, and well-being." Bastiat observed that this new government was a "chimerical creation from which the citizens may demand everything." For Bastiat this could only lead to endless crisis and revolutions:

I contend that this deification of Government has been in past times, and will be hereafter, a fertile source of calamities and revolutions. There is the public on one side, Government on the other, considered as two distinct beings; the latter bound to bestow upon the former, and the former having the right to claim from the latter, all imaginable human benefits.[4]

The Causes of the Present Crisis

Bastiat' s words turned out to be prophetic. The myth of the welfare state spread from France and Germany to the rest of the Western world, leading to an explosion of welfare transfers and an equal explosion of the people's expectations with regard to their so-called social rights.

Self-reliance was progressively replaced by a mentality of rights with no duties. As a result, a gigantic disconnect arose between what people are willing to pay in taxes and what they expect in return in the form of government benefits. Because promising welfare is the easiest way to win elections, politicians kept expanding the size of government over the decades. And because the public would not have tolerated an honest increase in taxes to finance the new welfare programs, governments started borrowing the money necessary to finance them. Thus, governments became dangerously in debt. Then the financial crisis came, to a large extent caused by government actions: welfare programs to make true the progressive "homeownership-society" dream in the United States created the structural conditions. Government-sponsored entities like Fannie Mae and Freddie Mac, who bought and guaranteed around 50 percent of the total US mortgage market, offered the financial vehicle to transfer the wealth; and the Federal Reserve provided the easy money necessary to finance it. In addition, the US government was borrowing and spending money at an all-time record in order to finance its warfare/welfare policies.

Stephane Hessel
"For Hessel, if politicians and bureaucrats had more power than they currently have, the system would be less corrupt."

In Europe the situation was not that different. The creation of a single currency, again a government decision that in many cases was not even submitted to popular scrutiny through a referendum, enabled countries like Greece, Portugal, and Spain to borrow money at very low interest. The market rightly assumed that if some of these countries defaulted, Germany and France would rescue them. This explains why private investors considered Greek bonds to be as good as German bonds. Using this unique opportunity, politicians in southern countries started an orgy of credit. Their purpose was to win more elections through the promise of more welfare policies. Meanwhile, the European Central Bank was keeping interest rates artificially low, inflating housing bubbles in Spain and Ireland. For a time everyone was happy: politicians were being reelected, the people were getting new government benefits every year, bankers were making tons of money, and industries were booming. It was all an illusion. When the bubble burst in the United States, it quickly became clear that Europe's economic and fiscal situation was also unsustainable.

Now it's time to pay for the party. Inevitably, this means a dramatic reduction in our standard of living. Because people do not understand that the source of the crisis was government, as Bastiat predicted, they now go on the streets demanding even more of what caused the problem in the first place: government. That is the paradox of the outraged.

Hessel and those who join him show the same ignorance as those who demonstrate against spending cuts when they ask for more welfare programs and more government involvement in the economy. To support his claim, Hessel sustains that it cannot be true that there is not enough money for more government programs because our quality of life is now better than it was fifty years ago. True, there has been much progress brought about by capitalism despite all the problems previously mentioned. But what Hessel does not seem to understand is that it does not matter how rich a country is: if it lives beyond its means it will go bankrupt. That is the exact problem in Europe and the United States. Governments have spent too much money for too long, much more than they could collect in taxes. That is why they have so much debt. There is in fact almost no country in the EU that is respecting the debt limit of the Maastricht treaty, which established a 60 percent–of-GDP limit for public debt and a 3 percent–of-GDP limit for fiscal deficit.

The problem is not that governments do not have enough welfare programs, as Hessel argues, but that they have to many — so many in fact that if they do not start drastically cutting spending even Germany and France will be bankrupted like Greece. The welfare paradigm becomes even more dramatic when the unfunded liabilities are considered, that is, the benefits politicians have promised to pay to their constituencies in order to win elections. In the United States these liabilities are equivalent to seven times GDP, while in the EU they are over four times GDP.[5] There is little doubt that the United States and all European countries will default on their social obligations at some point in the future.

Regarding the "dictatorship" of the financial elites, denounced by Hessel and movements such as Occupy Wall Street, this is again mainly the product of government. We have a banking system that can only work the way it does because it is based on fiat currency and is supported by a central bank — that is to say, a government-created agency of monetary central planning. Central banks provide private banks with liquidity, allowing them to expand the money supply in a coordinated fashion, thereby creating financial and real-estate bubbles. But more importantly, banks take the money given at artificially low interest rates by the central bank and use it to speculate. The dramatic rise in the price of raw materials and agricultural commodities since 2008 is basically the result of the inflation created by central banks. The most perverse consequence of this government-induced inflationary process is that it redistributes wealth from the middle class and the poor to the rich financial elites and governments, for whom inflation works as a hidden tax. John Maynard Keynes, a champion of government intervention, understood this very well. Shortly after the First World War he wrote,

By a continuing process of inflation governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily and, while the process impoverishes many, it actually enriches some. The sight of this arbitrary rearrangement of riches strikes not only at security, but at confidence in the equity of the existing distribution of wealth. Those to whom the system brings windfalls, beyond their deserts and even beyond their expectations or desires, become "profiteers," who are the object of the hatred of the bourgeoisie, whom the inflationism has impoverished, not less than of the proletariat.[6]

Those who declare themselves outraged by the unequal distribution of wealth should pay more attention to government-created inflation, for this is by far one of its central causes and the origin of the "money power" they condemn. It is in fact striking that the "outraged" have overlooked the crucial and destructive role central banks play in the world economy. For they not only create money out of thin air (with which financial elites speculate); they also perform the function of the "lender of last resort." This means that whenever a bank has been irresponsibly or poorly managed, instead of allowing its bankruptcy, like any other enterprise in the real economy, the central bank rescues the irresponsible bank with newly printed money. In addition to this perverse incentive, banks work under a fractional-reserve system, which allows them to operate with very low capital reserves, so that their owners have little to lose if the bank goes broke. As a result, bank managers have a powerful incentive to engage in highly speculative activities that are extremely profitable for themselves and stockholders but equally damaging for the ordinary people who end up paying the bill through bailouts and inflation.

None of this can be blamed on the free market. In fact, the free market stands for the complete opposite: open competition among banks; no central monetary planning agency; bankruptcy of those enterprises that have been irresponsibly and poorly managed; hard currency, which ensures the purchasing power of the people's money; and no corrupt collusion between government and economic elites.

Another source of unequal income distribution and poverty is government taxation and regulation. High taxes and excessive regulation hinder productivity and destroy incentives for job creation as well as competition. While rich people can escape the immediate effects of these taxes by taking their money and investing it abroad, the middle class and the poor have to suffer the consequences of fewer jobs, less income, and a lower quality of life. Economic liberty, which also includes the rule of law and solid property rights among others, is thus a necessary condition for improving the very quality of life of the masses that Hessel longs for. It is no coincidence that poor people in the ten countries with more economic liberty have an average income ten times higher than the income of poor people in the ten countries with the lowest degree of economic liberty.

Inequality and Outrage

It has been argued that inflation and the lack of economic liberty are central causes of poverty and inequality. Hessel does not acknowledge this fact, declaring himself outraged by inequality in general. He says it is outrageous that in poor countries people live on less than two dollars a day. Two things have to be said in response to such claims. In the first place, there is a reason to be outraged only when inequality is the result of arbitrary confiscation, fraud of any sort, or bad economic policy. But when inequality is the result of freedom, there is no reason to be outraged at all, especially when everyone has enough. Only envious people can be outraged by the wealth some have legitimately gained. What the people who claim to seek "social justice" fail to understand is that those who have become rich by honest means have served society more than any one else.

Bill Gates for instance, for a long time the richest man in the world, has improved the lives of all of us with his inventions. We have freely decided to buy Microsoft products because they are useful; thus everyone has benefited. In the same manner, when we go to the baker next door and buy some bread, both parties to the transaction are benefiting: the baker because he has money to buy other goods and services he needs for himself and his family, and we who now have delicious bread to eat. It does not make any difference if this baker becomes a millionaire by selling his bread. Actually, it would mean that he is good at his job, so he expands his business in order to satisfy the demand. Why should we be outraged if he becomes rich in the process? We should celebrate the fact that he was prosperous. His prosperity means more jobs and more bread for more people. From every point of view, the millionaire baker is performing a social function. In the same fashion, Bill Gates's inventions increased productivity, bringing millions of people over the poverty line around the world.

Here we come to the second point Hessel makes. It is true that millions of people still live in poverty. What should also be said is that there is no period in history where fewer people — as a percentage of the total population — have lived under such conditions than today. In China alone, more than 300 million people have surpassed the poverty line in the last 30 years. India, Chile, Vietnam, Brazil, Russia, Peru and many other countries have also experienced dramatic reductions of poverty in the last decades. This is due to the free-market policies these countries have implemented, the same policies that explain the economic success of Japan, Europe, and the United States. In absolute terms, people in developing countries are not worse off but better off than before.

Finally, it has to be pointed out that there is nothing wrong with inequality per se. It is much better to have an unequal society where everyone is wealthy than an equal society where everyone is poor. Equality is not and end in itself as Hessel seems to suggest; if it were, we should destroy all our wealth so we would become all equally poor. Some poor African countries have a more equal income distribution than European countries. Does that mean their situation is preferable? The question is thus not how to prevent some people from having much more than others, but how to create the conditions to make everyone wealthier. This is the difference between a society based on true solidarity and freedom and one based on coercion and envy.

Informed Outrage

Hessel is right when he says that outrage is necessary for action and resistance. More important however is to understand the real reasons on which the outrage should be grounded. If people get outraged for the wrong reasons, they will inevitably demand the wrong solutions, making the problem worse. It is especially irresponsible, in these times of social upheaval, to call for outrage and resistance without first a clear examination of what is wrong and how the problem should be approached. This is the role of intellectuals and opinion leaders. If a false message sets in and people believe it, only ruin will come out of outrage. Hessel has done his best, yet the ideology he is promoting, rooted in old collectivist attitudes, can only lead to more serious trouble. He is right to denounce a situation that is indeed outrageous and unsustainable, but he is wrong about everything else.

What we need then is informed outrage. In order to demand the right solutions, people first have to understand how it is we have come so far. They have to be aware that giving more power to governments will only make things worse. The possibility of a better future lies not in the hands of bureaucrats and politicians but on self-reliance, creativity, and individual freedom. It requires courage to be responsible for oneself without expecting endless benefits from government. This is a much more dignified and fruitful path than the current one, and it is also the viable alternative to the present outrageous situation.

Notes

[1] Isaiah Berlin, "Two Concepts of Liberty," in Isaiah Berlin, Four Essays on Liberty (Oxford: Oxford University Press, 1969), p. 1.Download PDF

[2] John Locke, Second Treatise of Government (Indianapolis: Hackett Publishing Company, 1980), p. m46.

[3] Henry David Thoreau, Walden and Civil Disobidience (New York: Barnes & Noble, 2003), p. 61.

[4] Frédéric Bastiat, "Government," in The Bastiat Collection, Vol. II (Auburne, Alabama: Ludwig von Mises Institute, 2007), pp. 101–102.

[5] See Jagadeesh Gokhale, Measuring the Unfunded Obligations of European Countries, National Center for Policy Analisis, Policiy Report No. 319, January 2009.

[6] John Maynard Keynes, The Economic Consequences of the Peace (New York: Harcourt, Brace, and Howe: 1920), p. 92.


 

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Rodrigo González Fernández
Diplomado en "Responsabilidad Social Empresarial" de la ONU
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