Just wondering what people here thought about the farmer's strike Argentina is having.

 

Apparently, the president wanted to up export tarriffs on all foodstuffs by 50%, which has not been taken well by farmers.

 

http://www.cnn.com/2008/WORLD/americas/03/25/argentina.strike/index.html

 

"It is the sector that exports almost everything," she said. "About 95 percent of soybeans are exported. They're not exported in Argentine pesos, they're exported in euros, in dollars. But the costs are Argentine costs."

... and the investments those farmers are going to make will very likely be Argentine investments. The products these farmers purchase will likely be Argentine products.

But of course, statist reasoning says national governments know best how to spend money for the people. Farmers are absolutely right on to demand no such thing be implemented. Seems to be plain government greed at work there.

 

Sphairon:

But of course, statist reasoning says national governments know best how to spend money for the people. Farmers are absolutely right on to demand no such thing be implemented. Seems to be plain government greed at work there.

 

That is a nice and conveniently libertarian explanation, but I think it is at best an incomplete truth. Methinks the complete truth is that Argentina is, like every other country, experiencing rapidly rising food prices and, in an effort to avoid food shortages and riots, the government is trying to restrict the market where farmers can sell their goods, reducing effective demand and lowering prices. A native population with productive farms all over the place can starve if demand in wealthier foreign markets is such that they will pay more than the starving natives are capable of.

JCFolsom:

 

That is a nice and conveniently libertarian explanation, but I think it is at best an incomplete truth. Methinks the complete truth is that Argentina is, like every other country, experiencing rapidly rising food prices and, in an effort to avoid food shortages and riots, the government is trying to restrict the market where farmers can sell their goods, reducing effective demand and lowering prices. A native population with productive farms all over the place can starve if demand in wealthier foreign markets is such that they will pay more than the starving natives are capable of.

The "government greed" thing may be a libertarian reflex, but the point remains that excessive tariff increases due to looming food shortage are just another slide down the spiral of interventionism:

First, central banks create artificial booms with low interest rates, later, after the party's over, misallocated capital is hedging against inflation by investing in commodities which increases the price for nutrition. Politicians then force their domestic producers to stop exporting, hoping this will drive down prices at home. If just one country acts that way, it might even work, unfortunately copy-cats will soon step in and restrict their food exports until, in the end, every nation is close to self-sufficiency. Needless to say, prices in such a scenario will be much higher than when governments decided they were too high to allow exports, at least for countries where agriculture only accounts for a marginal percentage of GDP.

I'm not sure whether we should call that an improvement?

JCFolsom:

 A native population with productive farms all over the place can starve if demand in wealthier foreign markets is such that they will pay more than the starving natives are capable of.

Not so long as they can provide labor to the farm.

Stranger:

Not so long as they can provide labor to the farm.

 

There are not necessarily going to be anywhere near enough such jobs to go around.

That being said, I don't necessarily support their actions, I just don't want us to be too glib in how we talk about this situation. People all over the world are facing dire consequences of actions they didn't necessarily have any input on.

JCFolsom:

That is a nice and conveniently libertarian explanation, but I think it is at best an incomplete truth. Methinks the complete truth is that Argentina is, like every other country, experiencing rapidly rising food prices and, in an effort to avoid food shortages and riots, the government is trying to restrict the market where farmers can sell their goods, reducing effective demand and lowering prices. A native population with productive farms all over the place can starve if demand in wealthier foreign markets is such that they will pay more than the starving natives are capable of.

No, it's not that.

The declared intention of Cristina Fernandez (the president) is to relocate the resources currently spent in soy farming to other less successful crops like corn and wheat. The real reason (confessed in a few speeches) is to make more money to finance populist politics, like the building of schools and hospitals.

Between one thing an the other, Argentinians keep less than the half of the money they make. The rest goes to the state.

The farmers decided to go on strike because the goverment has been imposing new taxes and regulations on every agricultural and cattle breeding sector for decades, until soy became the last really profitable crop to grow. If soy is busted like the others (milk, corn, wheat, etc) were, the whole Argentina is going to collapse.

Cristina and his husband are just trying to make enough to finance the populism that will give them another term, and steal as much as they can in the meanwhile. Google a little for the data on the impressive growth in the family fortune since Nestor Kirchner (the penguin) was a governor.

*************************

Milk is not a crop. I meant agricultural activities.

*************************

The Kirchners already blocked exports of foods in the past. Among other things, they almost managed to ruin the richest industry in the country: meatpacking, with everything else in the supply chain. The Kirchners gave up just in time.

Please, try to read a little before judging.

 

OT. By the way, who is going to the Austrian Congress in Rosario, Argentina?

Argentine farmers, like the rest of argentine society, are corpororatists.

Right now they are blocking 'public' roads which means that ordinary people can't move freely. These farmers are not hitting back at the government that taxes them - they are attacking their neighbors. Farmers behave in the same way that marxist unions do.

They are by no means honest free-market entrepreneurs, but rely on government subsidies and regulations. A favorite trick of them is to borrow money from state-owned banks and pay it back in devalued currency. That's exactly what happened in 2001 - farmers borrowed money when the exchange ratio between pesos and dollars was 1:1 - and payed it back at the new 3:1 exchange ratio. Their debts were 'magically' reduced by 66%...As a matter of fact, farmers were one of the groups behind the coup of 2001.

Products from Brazil like pork and chicken have been banned because, you see, they were damaging 'our' local producers...and the list goes on and on.

Yes, the export duties are ridiculous and will of course cause more damage. Problem is, farmers have no economic or moral arguments to oppose them.

JCFolsom:

Argentina is, like every other country, experiencing rapidly rising food price

Yes, and that's because of homegrown inflation and 'global' inflation. It seems to me that inflation does benefit farmers and other producers of commodities and raw materials, so they are quite comfortable with thatkind of interventionism. Problem is, when the government that caused inflation asks them to share the spoils, they are not happy...

Hi Juan. I agree with you. I think the really effective measure would have been to refuse to sell grains or burning the farms in a "Wyatt's Torch way".

I think the really effective measure would have been to refuse to sell grains or burning the farms in a "Wyatt's Torch way".

But Gus, the problem is that farmers here are not Rand's heroes - if anything, the system they prefer is that of James Taggart's.

Juan:

Problem is, when the government that caused inflation asks them to share the spoils, they are not happy.

Here I come to think you don't really know the reality of agriculture. The government has been killing farmers for ages. They are benefited by inflation (that's why they are giving me a hard time paying 30, 60 or 90 days later for the machines I sell) but that's a side consequence of the government's measures to boost macroeconomic indexes and its own finances, not something the government did to help them.

Juan:

farmers here are not Rand's heroes - if anything, the system they prefer is that of James Taggart's

And I agree again. If the government really wants to f*** them, the only thing they need to do is to free imports on beef, chicken, pork, milk, soy, corn, rice, etc. But the penguins lack imagination for that. It would break the ideologic inertia.

gussosa:

The declared intention of Cristina Fernandez (the president) is to relocate the resources currently spent in soy farming to other less successful crops like corn and wheat. The real reason (confessed in a few speeches) is to make more money to finance populist politics, like the building of schools and hospitals.

 

Bah. You do realize that saying you're doing this to help poor wheat farmers or building schools sounds better than saying "We're doing this to avoid future food riots," right? Less likely to cause panic and economic retraction? Governments, whether in the US or Argentina, do not want people thinking things could get that bad, for fear that it will hasten the collapse as people hoard and otherwise fortify their positions. Governments are desperately trying to convince people that nothing is wrong, or that it is at most a passing thing, a dip into a recession at worse.

JCFolsom:

You do realize that saying you're doing this to help poor wheat farmers or building schools sounds better than saying "We're doing this to avoid future food riots," right? Less likely to cause panic and economic retraction?

Now tell me...

Raising taxes will decrease profit and decreasing profit will decrease supply.

Prices are almost fixed, as regulated by a huge international market, so the prices of grains can be kept low only artificially by a presidential decree and thus lowering farmer's profits even more. That will reduce the grain supply even more.

Then you have a famine, created by government regulation.

Let's say the people start urging the government to nationalize farms and put the State in charge of supplying food. Too late, it takes a year to grow crops again, and the government was too busy before raising taxes.

Dude, I'm not supporting their actions. I'm just trying to explain why. I know they're mistaken, I know all the theory.

gussosa:

Raising taxes will decrease profit and decreasing profit will decrease supply.

Too simplistic an analysis. Just because farming becomes less profitable doesn't mean it's unprofitable. In any case, if current demand for Argentine crops would support farming on more land than is available to farm, than the actual amount of farming won't decrease. That is to say, farmland is a limited resource, and demand for it must be decreased to the point that other land-use demands will be greater before it is converted. It is entirely uncertain that this will occur, and even then, total farming can be reduced and, if it reduces by less than the market loss by cutting off exports, more will end up on domestic markets.

 I am beginning to see a trend here. Bear with me a minute please.

Gussosa is absolutely right in pointing out that it boils down to a "fundraising" drive to provide cash for populist programs. There are many persons with strong family and business ties in Argentina in my town (our emigrants went almost exclusively to Argentina and Brazil) and they are kept well informed by relatives there. The moral basis for this latest robbery is the usual: the farmers are making more profits by "price gouging" and "luck". They need to be punished, wealth needs to be distributed. I also suspect that these populist programs will be aimed at providing "something" to urban populations, which are still suffering from the recent grave Argentinian economic crisis and provide a very large mass of voters, at the expenses of rural populations, which are seen as "profiters", taking advantage of high foodstuff prices ("starving the poor") and a favorable international situation.

Bear in mind that I have very little sympathy for the modern farmer (my grandfather was one and I fully subscribe to Mencken's comments about the American farmer of the '30s) but as I always say "pick your own friends very carefully". Can you really trust the government as a friend? Perhaps for a few years, until they need your help and "your man" is in power but absolutely not in the long run. To quote a line from the Judge Dredd comics "I forgot to tell you: your new friends are cannibals". Guess what they'll do when they run of food.

This also point to a new and disturbing trend in politics worldwide: the "just profit" as an excuse to increase taxation on some sectors. Apart from Argentina there are talks about introducing new "Robin Hood taxes" (sic) in Europe, particulary on the oil and insurance companies. The excuse is always the same ("price gouging" and "unethical profits") and the end result is always the same: the money will be used to "buy consent" by providing small handouts to some political relevant categories, like retired persons on government pensions. Of course multiply the "small" part by a few millions and add the usual inefficiency and you get the result. You'll say "it's just government at work, nothing new under the Sun". But I'll tell you: what do you have to say about Populism meeting Socialism? Pretty scary in my opinion.

Kakugo:

the "just profit" as an excuse to increase taxation on some sectors.

They don't know their economics then. Economists have this concept called tax incidence, which I don't see why Austrians would disagree with. Sometimes the seller might share the burden of a tax by cutting on profits, working harder or something (and, by the way, taxes like on income, like any other cost of doing business, will be reflected in the price as well), but, very rarely, this taxes won't be passed to the consumers; sometimes at 100%. If people start eating less because of food costs rising, then farmers might find it is to their benefit to reduce their price to make up in the extra sales. This might be true for meat, chocolate and other stuff you can get by not eating. But for stuff that people do need to eat, then it won't hurt much demand, and consumers will bear the taxes. Furthermore, food is one of those items that when it gets expensive, there is more demand for it: for instance, if the price of rice, potatoes, etc rises, then people might not afford meat to eat along with it, and will buy more rice, potatoes, etc to make up for it.

Government interference is more or less, but always disastrous. Prices serve a function of motivating people to invest into going to that market. The government only has to get out of the way, don't put entry costs or distorce the playfield by giving tax benefits and stuff to a few. What Argentina seems to need is more people investing in farming, until the pay of the farmers is equal to that of any other job. In static equilibrium, firms don't make profits or suffer loses.

JCFolsom:

That is to say, farmland is a limited resource, and demand for it must be decreased to the point that other land-use demands will be greater before it is converted. It is entirely uncertain that this will occur, and even then, total farming can be reduced and, if it reduces by less than the market loss by cutting off exports, more will end up on domestic markets.

Please, please, rewrite that. You lost me.

If farming becomes less profitable than, say, French government bonds, farmers will sell their lands to put the money on bonds. But what will the land buyer do? Not farming, that doesn't make money. A country-side resort and spa then. Or maybe a retirement village for the retired 1st worlders.

In the end the result is less farming and less food.

OK. Let's do some algebra.

So, we have the current level of farming, which, profitable as farming has become with rising prices, we can assume to be near the maximum level possible with available land resources. We will represent this current level of farming with the variable m. However, because it is near the maximum possible based on limited land resources, it is probably quite a bit less than the maximum would be based on demand. This is to say, the amount of farming that could be supported by domestic demand (d) and foreign demand (f) would be greater than the land they actually do support, as represented in this inequality.

                    m < d + f

Export tariffs will effectively lower foreign demand, let us say eliminate it, for the sake of simplicity. However, no decrease in production will occur so long as

                   m < d

We do not have enough information, at this time, to know if the inequality above is true or false. However, if it is false, we know that

                   m > d

...is true. This means that production can drop below land-limited maximal levels and still meet domestic demand, and at a lower price than it would before.

However, as you pointed out there are other demands on land use. This means that there are competing demands, which we'll denote c. However, so long as no c is falsifies this inequality

                    c < d

You cannot establish that there will be any such c, so it is premature to state with such certainty the outcome of the export tariff. The theories you base your conclusions on are correct in general, but they are based on idealized situations. They fail to take into account many variables that exist in the real world. 

JCFolsom:

OK. Let's do some algebra.

You left out government price ceilings to keep the poor from starving in the cities and doing the old 'Off with their heads!!!' thing that poor starving people like to do on occasion.

Prices stay stable and the new taxes cut into the 'profiteering' to the point where it costs more money to plant and harvest a crop than you can sell it for at official rates.

JCFolsom:

The theories you base your conclusions on are correct in general, but they are based on idealized situations. They fail to take into account many variables that exist in the real world. 

As do you...

----edit----

Venezuela is a good example of this in actual practice.

Hugo has to threaten people with capital punishment to keep them from 'illegally' exporting foodstuffs since they can't make a profit within their own country.

JCFolsom:

People all over the world are facing dire consequences of actions they didn't necessarily have any input on.

So you support the 'poor downtrodden' mentality? These same people do not have 'input' (aka CHOICES) that they can make which affects their lives directly?!? They can't voluntarily NOT create more people which could effectively decrease demand, they can't put a few seeds in a small piece of ground to grow something to eat? They can't decide to make their own life choices a priority (and taken care of first) instead of choosing to participate in the hand out lotto that is government?

Yep, dire consequences are just over the horizon in many forms, but isn't the choice to just sit and wait for these to come and hit ya pretty well throwing in the towel? Sorry, but I can't feel sorry for those that won't make any effort to help themselves. I'm busy enough taking care of the little world I am effectively functioning in and rely on others to do what's best for themselves, themselves. Natural disasters aside of course, but mankind still has the ability to choose and plan IF s/he so chooses to do so. That is the human races greatest strenght, and by the looks of it, one not too well utilized.

Jain

 

 

Jain Daugh:

So you support the 'poor downtrodden' mentality?

 

Randroid, right? I am generally happy that there actually aren't that many of your sort on these forums.

There are innumerable ways that humans could rightfully go about supporting themselves which are prevented by the force of law regulating commerce and encouraging monopoly. There are poor and downtrodden people in this world, and alas, it is largely driven by the "first-world" nations that fund their oppressors and keep them in power. But, I don't know why I'm even talking to an Objectivist fanatic in the first place. There's no point to it.

JCFolsom:

Randroid, right? I am generally happy that there actually aren't that many of your sort on these forums.

There are innumerable ways that humans could rightfully go about supporting themselves which are prevented by the force of law regulating commerce and encouraging monopoly. There are poor and downtrodden people in this world, and alas, it is largely driven by the "first-world" nations that fund their oppressors and keep them in power. But, I don't know why I'm even talking to an Objectivist fanatic in the first place. There's no point to it.

Wow, that's so amazingly helpful, I am generally happy that there actually aren't that many of your sort on these forums.

From what I can tell the agorists are also "prevented by the force of law regulating commerce and encouraging monopoly" from engaging in their activities, I suppose they should just accept their victimhood and go see a ball game or something too, huh?

 

JCFolsom:

There are poor and downtrodden people in this world, and alas, it is largely driven by the "first-world" nations that fund their oppressors and keep them in power.

Are you kidding? Governments in poor countries in Africa and South America only have themselves to blame. Their participation in international trade is minimal; we are talking of very isolationists here. They have high tariffs (30% and more) and are very adverse to general to foreign investment. These governments are mammoths that care more about providing services like transport, communication, education and health care services rather than having a sound police and judicial system. It takes you months to get a business permit or a property title; you have no room for entrepeunership there. This creates such big governments that makes every Marxist rebelds salibating to the thought of controling it themselves, and of course, you have there the most corrupt countries in the world. Poor countries will only get rich when they get a better position in this index.

Economist Tim Harford has written about poverty in Africa (and he has actually done research in the ground). Here's an article of his.

Wall Street Journal has had the best coverage of the happenings in Argentina.

http://online.wsj.com/public/search/page/3_0466.html?KEYWORDS=argentina&mod=DNH_S

Watch Out for Sovereign Debt Risk

From Breadbasket to Basket Case

Argentina's Failing Populism

 

JCFolsom:

Jain Daugh:

So you support the 'poor downtrodden' mentality?

 

Randroid, right? I am generally happy that there actually aren't that many of your sort on these forums.

 

WRONG! I don't think the sun rose and set over Alice Rosenbaum or what ever her real name was. Plus you totally missed what my objection was to the violin music that the original poster was playing - that as long as a person is ALIVE, its by making choices and using their brains as best they can. The minute one accepts the cloak of 'poor me', they might as well step into the gulag on their own.

 

I am assuming that there are some members here that do live in Argentina. I would love to hear what they have to say about living/surviving during the last currency 'collapse' (if they were old enough to remember that is). I remember thinking at the time of that event - Whoa ho! Isn't this just the type of event that the U$A is heading for?!? And please, no political theory answers, I want actual, practical and usable responses. Its bad enough that the so-called citizens (aka tax slaves) are relegated to the position of peon cradle to grave, but HELD there by the monopoly grip of the 'money system' needs to be seen too.

OK, how did one survive, even thrive?, when a money system collapsed (hooray!)?!???

Jain

BlackSheep:

Are you kidding? Governments in poor countries in Africa and South America only have themselves to blame.

Perhaps. What about in the Middle East, which has been manipulated, created, detroyed, tortured and controlled by one power or another for the full length of living memory and beyond? Are you seriously going to claim that their suffering is not in part because of the petty tyrants we prop up, or in some cases, even put in place?

Jain:

 

I could ask my father for more direct answers, but here's how I think my family survived.....

 

Most of the places down there go ahead and accept dollars.  It's a kind of dual-currency system.  My grandmother has a secret compartment in the dresser in the living room holding a stash of a lifetime's worth of dollars (a lot more stable than the Argentine equivalent....I'm not sure if holding gold is a crime).  One of my uncles is the equivalent of an H&R Block, so the '50%' tax rate is a lot more neglible for the family (I have a feeling that it works on a system of elaborate bribes to certain officials, bribing is a lot more accepted there (I personally think this is one of the few things Argentines have going for them)).  Another one of my uncles is a farmer, so there's usually enough food for everyone.  All the houses are made of concrete or sheet metal.  So, if a disaster does occur, it's really cheap to rebuild, or there's a good chance you've weathered the storm.  My two uncles and grandmother down there live together, so they can get along.  If things get too bad, sometimes my father will wire money he's made from the U.S..

 

The last uncle was a little smarter and moved to Brazil, and sometimes does the same as my father.

 

Edit:  And on the status of their populist measures.  From what I see, it's pretty much a front.  Sure, there are 'public clinics', but honestly, half of them aren't even staffed.  The roads that are maintained by the government (save for one that is a major road between Brazil and Argentina) are pothole-tastic.  Most of the roadways are private (I really don't understand these statistics saying most roadways are public, 90% of the time I've traveled there are on private toll roads), and speaking of the private roads debate, from what I've seen they internalize costs via bussing (if a road ups their tolls too much, the bus companies start to bypass it).  Almost all of the firefighters are volunteer.

 

But seriously, I would characterize the government as a gigantic 'window shop'.  There are roads that are funded a certain amount on paper that obviously can't be the case, there are clinics that are bare, regulations that ensure (take the telecoms, for example) a single company is only able to work, and it is the most croniest $#@! system I've ever seen.

Jain:

OK, how did one survive, even thrive?, when a money system collapsed (hooray!)?!???

Nobody thrives here except government officials and their friends. And in the long run all people, including those in the government, suffer - but they are too stupid to understand that, or too selfish, or something...

I would argue that the monetary system never really collapses. Thirty years ago or so you could trade a 1,000,000 pesos bill for a candy! In the last thirty years the name of the currency has been changed twice I think, and it dropped NINE zeros or more.

Here it is - a bill from 1983
http://oferta.deremate.com.ar/id=20398088_billete-de-1-millon-de-pesos

In such an environment there can be no honest wealth creation, so the people who 'thrive' do so thanks to the massive wealth redistribution that inflation entails.

As to survival...people here keep their savings in dollars, but a lot of selling and buying is done in local currency. The ones hit harder by inflation are of course the poor.

The government here is corrupt and inefficient - however that doesn't mean that people are left alone and are more free. If you think that a collapsing currency implies more freedom, I'm afraid you're too optimistic.

Fephisto:

Jain:

I could ask my father for more direct answers, but here's how I think my family survived.....

 (etc. edited out for brevity - you can read original post)

Thank you very much for your reply Fephisto. I really do appreciate that insight - that when the Argentina money 'collapsed', people simply switched over to U$ dollars as a replacement currency. While I am happy that your family had that resource, isn't it amazing that time after time the government can create a 'money' system, run it into the ground (or should I say suck it dry?), simple say OOPS!, and then go right back to making (printing) more lousy fiat currency and because it looks 'new' or differnet, voila! its better?!? And changing to dollars isn't all that great if those who cling to them figure out that the U$A is pulling the same stunt with its dollars too. New colors, changing the pictures and all that don't make one bit of difference in the IOU value of the paper. Heck the U$ COINS have been phonied of late because the actual base metals (copper, nickel, silver) are WAY more worth the face value printed on them.

Again, sadly, because democracy is a numbers game, and the bulk of the sheeple cling to the ideas of control directed by aughorities, they choose to remain blind to the facts that putting someone in 'charge' is handing the keys to the treasury to them. And the 'authorities' love the fact that the vast numbers of sheeple support them - talk about self serving.

At least your family did retain access to important daily items like food and housing. Weathering such a storm is smart.

 

Thanks again for your input - Jain

 

 

Juan:

Jain:

OK, how did one survive, even thrive?, when a money system collapsed (hooray!)?!???

Nobody thrives here except government officials and their friends. And in the long run all people, including those in the government, suffer - but they are too stupid to understand that, or too selfish, or something...

I would argue that the monetary system never really collapses. Thirty years ago or so you could trade a 1,000,000 pesos bill for a candy! In the last thirty years the name of the currency has been changed twice I think, and it dropped NINE zeros or more.

Here it is - a bill from 1983
http://oferta.deremate.com.ar/id=20398088_billete-de-1-millon-de-pesos

In such an environment there can be no honest wealth creation, so the people who 'thrive' do so thanks to the massive wealth redistribution that inflation entails.

As to survival...people here keep their savings in dollars, but a lot of selling and buying is done in local currency. The ones hit harder by inflation are of course the poor.

The government here is corrupt and inefficient - however that doesn't mean that people are left alone and are more free. If you think that a collapsing currency implies more freedom, I'm afraid you're too optimistic.

I agree with you Juan, just collapsing the 'money' isn't enough of a change because another 'money' just pops into being. After all its so simple to print zeros on paper! I guess I would hope that maybe, just maybe the sheeple will see that they are being held in ever barren pastures and yet still being required to grow 'fat' for the economic slaughter house that is the government. For sure the average person hasn't a clue about what money really is beyond agreeing with it being a 'media of exchange'. Why I'd go so far as to say that even university 'educated' (Keysian) economists are blind to this fact too, so how does a person who has been mass-dis-educated by the government schools have a chance to know otherwise either?

So I think that the BEST thing that any of us who don't want to be tampled by the mad milling of the lemmies is to prepare with alternatives that we actually need rather than chasing the brass ring of zeros on paper.

Best to you - Jain

 

 

This place is especially weird with respect to money. Fact is, there's never been a long period when high inflation was not the norm. Argentina is one of the poster children for hyperinflation, like Weimar Germany, except that here there was hardly any war.

It really baffles me how people seem not to realize nor care what's going on. I suppose that in the short term a part of the population (say 20%?), does indeed benefit from inflation. They are the 'educated' keynesians, wealthy landowners, inefficient local manufacturers, etc. Thanks to inflation their 'businesses' seem to be profitable, but actually they are not.

Jain, sorry about providing only a 'theoretical' explanation, but I'm afraid there is no practical way to work around this mess.

ps: Some people have off-shore saving accounts (which is now illegal I think...) in Uruguay. So there's some sort of alternative banking system, but it's used by a few 'enlightened' people only.

Juan:

Jain, sorry about providing only a 'theoretical' explanation, but I'm afraid there is no practical way to work around this mess.

Thanks really Juan! Your response was 'real' and so insightful to me. I think how people DO respond is the practical aspect and only possible solution. What amazes me is to realize and understand (accept?) how what you described regarding how some benefit at the expense of others and that will continue because the 'others' won't make the changes needed to STOP that for themselves. Oh well, its good to know that some like yourself do keep a clear eye out as well as chose the best options available to themselves.

Jain

 

BlackSheep:

Are you kidding? Governments in poor countries in Africa and South America only have themselves to blame.

Or to take this even more bluntly, the politics and economics in these countries are merely the results of their people's mentalities, preferences and attitudes. At present we often argue about people like Mugabe in Zimbabwe. Consensus is that this is a corrupt regime in defiance of the rule of law. A shining example of tyranny, if you want. Now some people would argue, that "things will go better, after Mugabe disappears". Actually I'm not so sure about that. If Mugabe dies tomorrow their will be infighting about who is going to be the next bull in the kraal. So their is a good possibilty for a full blown civil war.On the other hand even with more stability anyone following will follow with the culture of entitlement. They've seen how it works and will have the taste for it as well.

So after all Ian Smith was right with opposing "majority rule" - That is by the way misleading, since Blacks in Rhodesia were perfectly allowed to do their own things on the lands they traditionally owned. For South Africa things are developing in the same direction. I've had already "incidences" of (Black) cops wanting bribes and I was already harassed by police twice. And then I am also aware of many corrupt practices of the present administration.

BlackSheep:

Their participation in international trade is minimal; we are talking of very isolationists here. They have high tariffs (30% and more) and are very adverse to general to foreign investment. These governments are mammoths that care more about providing services like transport, communication, education and health care services rather than having a sound police and judicial system. It takes you months to get a business permit or a property title; you have no room for entrepeunership there.

... The high tarrifs are a means of exploiting the people purchasing products that they no ways can produce locally. They are not even "protectionist", since they hamper national development as well. High tarrifs are of course another incentive for corrupt practices as well. As for delaying permits and title transfers. Simply try paying them a substantial amount for speeding up the process. Now wouldn't that be nice, if they really cared about the provision of services at all? And as for foreign investment, perhaps these investors should consider increasing the payrolls of the politicians - they might become more agreeable after all. As above, this all the result of certain mentalities that are dominant in those societies. Rule of Law is a concept/principle that is inherently alien to Blacks - For them it is about exchanging favors and gaining wealth by exercising power. The strong man is revered, as long as he is benficial to those he ought to feel benevolcence for (his family, friends and tribe). That is not to say, that there are no goog business opportunities in Africa - There are, but you need to know how the system works - And of course you need to leave behind any egalitarian biases as well.

BlackSheep:

Economist Tim Harford has written about poverty in Africa (and he has actually done research in the ground). Here's an article of his.

Thanks, I'm thinking of James Shikwati as well.

Rule of Law is a concept/principle that is inherently alien to Blacks - For them it is about exchanging favors and gaining wealth by exercising power.

Of course! You are so amazingly clever !! Black politicians are corrupt - WASP politicians are not !! I'm so enlightened now.

I've had already "incidences" of (Black) cops wanting bribes and I was already harassed by police twice.

However, white cops are, like Jesus, angels...or something.

Or to take this even more bluntly, the politics and economics in these countries are merely the results of their people's mentalities, preferences and attitudes.

But this principle doesn't apply to the rest of the world ? ...why ? Also, the massive violation of individual rights that politics entails is just a consequence of 'preferences', so government is voluntary after all. All is good and well.

UPDATE:

http://es.wikinews.org/wiki/El_Senado_argentino_rechaz%C3%B3_las_retenciones

 

TRANSLATION:

The good guys won!  ^_^