Sunday, December 14, 2014

Are free markets ideas strong enough in Latin America?

Economic backgrounds in the last century in Latin America economies, was built mainly based on the notion that the state has a key role in the economy.Throughout years, the markets approach was in a secondary place.The import substitutions strategy followed in the second half of last century,the Dependence Theory, and the North -South focus of world order ,were all based on the supremacy of the State . However,after the external debt crisis, (the lost decade of the eighties) ,such models collapsed. The Washington Consensus of the nineties , was an attemp to get a better framework for free markets policies.However, actually there is no elected government in key latin america countries,(aside from Colombia), which could be considered to be center right oriented.Most of those candidates with such profile ,were defeated in recent elections.(Brazil,Uruguay).- Are free market policies a weak approach to improve the quality of economic performance?.Is there some structural weakness in the leadership of free markets policies?. The first question speak by itself.Most of the richest economies in the world, have followed free markets policies with the state as a reliable complement.The worst of poverty ,is not in those economies based on markets mixed with the State as partner .In Latin America those economies which are doing better, are the ones which support markets as the driver for economic growth.- What about a structural weakness in the leadership of free markets ideas?.Perhaps this would give some explanation. There are no many Latin America intelectuals to be considered a fan of the market outcome, as there are those who can be considered to be fan of the state inspiration .This does not mean that someone is correct, while other is wrong, but the fact is that most of the intelectuals in latin america, are less prone to individuals , than what they are to the State, as the main brain of society.Thus, those who believe in freedom and individuals as the brain of society , become shy about it because it seems that there is no strong intelectual room for it.Besides there is also the permanent risk of dogmatism,as current leaders feel there is no easy way to build bridges between different positions.The outcome is that average voters, feel unconfortable with the prospect of getting rid of anything(policies,programs), which can offer them protection. So, it follows that the strenght of free markest ideas,even with no strong intelectual support, goes on the line of pragmatism.This means , markets alone are not enough.Markets and the State complementary role do matter, because they are a necessary condition for economic development.-