Bringing real hope to Haiti (or why can’t Haiti be more like Singapore…?)

Published by Christopher Lingle

With brutal regularity, new comes from Haiti that elicits an outpouring of pity.  Now after an endless stream of aftershocks from a massive earthquake that left scores of thousands dead or injured, hapless Haitians are reeling from the destruction.

Before the first tremor shook the earth there to leave scores of thousands dead or injured, Haiti suffered from manmade causes that made it a perpetual “disaster zone”. When not being ravaged by nature, Haiti has been beset by relentless criminal activities or endless political corruption & infighting.

As soon as news filtered out about the catastrophic event, international aid agencies & NGOs began to descend on the shattered tropical isle. Unfortunately, the efforts of do-gooders & opportunists are unlikely to bring long-term benefits to Haiti.

Fortunately, the “software” that should be introduced to Haiti to bring sustainable recovery is quite simple & shovel-ready. Unfortunately, it is unlikely to be in the toolkits of erstwhile aid workers or their supporting institutions.

Clues for what Haiti needed and needs now more than ever can be found in the most important books on public policy from the late-20th Century. In “The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else”, Hernando De Soto showed how Haiti & other failed economies suffer from a lack of property rights that undermine the operation of markets.

While codifying property rights would take a long time, immediate benefits could come by declaring the entire country a duty-free port with zero income taxes. This would transform the country overnight, especially if combined with a stated commitment of protecting private property.

There is no secret behind the successes of Singapore and other Asian “tiger” or “dragon” economies. Markets work best when supported by “institutional infrastructure” based on the Rule of Law that establishes & protects both property & contracts.

While Haiti may continue to be buffeted by onslaughts of nature, Haitians can better cope with it all if they can become richer within a market economy.

Spontaneous observations to promote human justice

Published by Christopher Lingle

“Every individual necessarily labors to render the annual revenue of society as great as he can. He generally neither intends to promote the public interest, nor knows how much he is promoting it. He intends only his own gain, & he is, in this, as in many other cases, led by an invisible hand to promote an end which was not part of his intention.”

Adam Smith (Wealth of Nations)

Inaugural comments & opening salvos arising from peripatetic peregrinations in a global search for truth, justice, individual rights & freedom….

While entries to this blog might emanate from any location in the world, its heart & soul will reside in Universidad Francisco Marroquín (UFM) in “la zona viva” of Guatemala City. No other university in the world has a clearer institutional commitment to promoting individual freedom than UFM. (“The mission of Universidad Francisco Marroquín is to teach and disseminate the ethical, legal and economic principles of a society of free and responsible persons.”)

Perspective: We will report on & discuss emerging spontaneous orders arising from voluntary interactions of self-interested & free individuals.

We will be guided by the presumption that freedom forms the foundation of human dignity & that only a system of private property ownership can support individual or collective liberty. As such, an open society with a market economy & minimal interference from outside parties, including governments, is seen as generating a self-correcting social order requiring neither direction nor control.

Historical links for the spontaneous emergence of order: Murray Rothbard credited Chinese Taoist Zhuangzi (BC 369 to BC 286) as having first identified the notion of a spontaneous order: “Good order results spontaneously when things are let alone.”

This idea was reworked during the 16th Century by scholars of the School of Salamanca (e.g., Francisco de Vitoria, Domingo de Soto, Martín de Azpilcueta, Tomás de Mercado, & Francisco Suárez).

These Spanish theologians opined on various economic matters taking on new views supported by principles of natural law. In turn, they presaged important contributions often associated with the Scottish Enlightenment. For example, they deemed that merchants act in a way that serves the general good as expressed in Adam Smith’s “invisible hand”.

Similarly, they saw a natural order arising from free movement of people, goods, & ideas so people could interact to increase “brotherly connections” to support a free-market economy.  And they laid groundwork for Adam Ferguson who articulated that most critical institutions of mankind evolved from “human action, but not the execution of any human design.”

Among the institutions or systems that evolved spontaneously from coordinated actions of independent humans are the free-market economy, languages, law, money, & Wikipedia.

Austrian economists (e.g., Carl Menger, Ludwig von Mises & Friedrich Hayek) refined & applied spontaneous order as the centerpiece for their social & economic thought. They saw that extensive human liberty is necessary to allow human interactions leading to the discovery of social arrangements that best serve an entire community.

Policy implications: Individual market participants use dispersed information of greater detail & accuracy & deliver more benefits to a community than decisions made by centralized authorities. In particular, spontaneous order within a market economy leads to more efficient & superior resource allocation than under any designed system.