578) Innovation and the Role of Government - The Economist

Closing statements
The Economist, Friday, March 26th, 2010

Defending the motion
Amar Bhidé
Visiting Scholar, Kennedy School of Government, Harvard University

People must see their government play the role of an even-handed referee rather than be a dispenser of rewards or even a judge of economic merit or contribution. Picking winners—this technology or that developer—which is an inevitable consequence of expansive schemes such as Mr Sandalow's, makes us all losers.

Against the motion
David Sandalow
Assistant Secretary for Policy and International Affairs, US Department of Energy

Will government sometimes make mistakes? Of course. So does the private sector. Innovation is about taking risks. There may be times when government should do less, but there will never be a time when it should do the "least". Government has unique and powerful abilities to promote innovation. We should recognise and embrace them.

The moderator's closing remarks
Vijay Vaitheeswaran
Mar 26th 2010

Our debate on the government's role in innovation is drawing to a close, and it is running neck and neck. The side in favour of the motion started off on the back foot, but has gained enough ground to keep this an unusually close affair. The side opposite has lost a bit of the initial starting advantage, but remains just as well positioned to pass the post first. Both debaters have ginned up their final arguments in hopes of emerging the winner.

Amar Bhidé, arguing in favour of the proposition, insists that "a minimising, no more than necessary standard, is crucial in maintaining widespread, decentralised innovation". He brings out the big guns, invoking the hero of free marketers ("Friedrich Hayek pinpointed why centralised control was an economic dead end") and the bête noire of freedom during the last century (the Soviet Union). Quirkily, he also takes aim again at the side opposite's support for advanced battery technologies, demanding to know when his uber-green bicycle is going to earn him government subsidies.

Arguing against the motion, David Sandalow offers a closing statement that is sure to please fans of government-supported innovation. With as much gusto as his rival mustered up for attacking batteries, he jumps on the Google example cited earlier by his opponent. Mr Sandalow goes back to original writings by the founders of the firm to show that, in fact, this paragon of seeming free-market virtue in fact got government money from several sources during its early uncertain days. Government, he insists, "has unique capabilities and a full toolbox for helping spur the innovative process". It must, he suggests, steer money towards innovations that serve social goals.

The hour is late, but the clouds have cleared. You must now choose which good guru you will follow on the innovation trail. Cast your vote now, as this debate promises to be a nail biter.
Thoughts?

Amar Bhidé
The proposer's closing remarks
Mar 26th 2010

Minimal government does not equal no government or even government of unchanging size. New technologies, as I argued in my opening statement, often demand new rules. Nevertheless, a minimising, no more than necessary standard, is crucial in maintaining the widespread, decentralised innovation that undergirds our prosperity.

Many who oppose the standard, such as David Sandalow, seem to argue that if some government is good then a lot must be great. For instance, they extrapolate from the value of the government's role in providing a high-quality basic education for all to demand tax subsidies for the advanced training of a few in fields that they somehow know will have large social returns.

They see no evidence of governmental overreach in California's soaring unemployment and empty public coffers. California's government does not spend too much or do too much; it is just pesky laws passed by ornery voters that prevent it from raising the taxes it needs, suggests Mr Sandalow.

But if California has it right, then governments in most other states must be too small. Why then has California chronically lagged behind in employment and income growth, long before the current crisis?

The current crisis itself owes much to governmental overreach. Politicians from both parties used the tax code and loan guarantees to pump up the construction industry and housing prices, drawing resources away from innovators in other sectors and turning those who could not afford it into reckless speculators. The boom was channelled through securities issued by two governmental agencies, marginalising traditional decentralised lending by loan officers.

Nearly 70 years ago, Friedrich Hayek pinpointed why centralised control was an economic dead-end. The decision of what to plant and when was best left to farmers who knew their soil and local weather conditions. The best judge of the product mix of an industrial enterprise was the person who was in constant touch with customers. Central planners who thought they knew better, didn't. Indeed the inability of planners to match the supply and demand for the most basic goods helped bring down the Soviet Union.

Now comes the alternative energy and battery brigade, which is confident that it can make top-down plans work with advanced and dynamic technologies. Mr Sandalow, for instance, has offered a detailed plan to end the United States' oil addiction. This is certainly a worthwhile goal both on national security grounds and in light of the grave risks of global warming. The plan sensibly proposes a gasoline/petrol tax. Unfortunately it does not stop there; that would be too minimalistic. The plan, for instance, proposes an $8,000 tax credit for buying plug-in hybrids, a ten-year extension of the ethanol tax credit and (truly) a federal battery guarantee corporation, which would underwrite insurance on batteries used in hybrid vehicles.

Now plug-in hybrids have become popular in recent years—Mr Sandalow reportedly owns one too—but before that few experts thought they held any promise. All-electric was supposed to be the technology of the future. The auto industry more or less stumbled into hybrids by chance. And who can tell whether plug-ins are really the answer? Could they be like Alta Vista's search engine to some Google-like technology that a couple of graduate students might be hacking away on? And if we don't know, why entrench plug-ins?

What about my favoured form of transportation, bicycles? They are even greener than plug-in hybrids, especially the old-fashioned non-battery-enhanced kind. A tax credit would increase ridership (and I would trade in my clunker). Better tyre and gear technologies and bicycle pumps might help too, so why not subsidise that research?

There is in fact no limit to the number of ways in which individuals and businesses could reduce the consumption of fossil fuels: reducing commuting distances, smaller homes, better insulation, sweaters and solar panels to name just a few. In the minimalist view, what we need is a simple, even-handed incentive, such as a gasoline/petrol or carbon tax, leaving specific choices to those best positioned to make them. Setting up a Soviet-style apparatus to select and promote a particular set of solutions is not the answer.

And more than technical efficiency, the right mix of energy conservation choices is at stake.

The government has a unique capacity to demand compliance. We must all pay taxes, send our children to school and obey traffic laws. Preserving the legitimacy of its coercive powers, however, requires the government to limit its use to situations where the public interest is clear and widespread support has been secured. This does not preclude the use of public funds for investments whose payoffs are intangible and long-term, in museums, public art or the study of dark matter. But taxpayers whose money is used to pay must be persuaded of the merits of such investments. Obviously this imposes limits on what is financed from the public purse.

Conversely, expansive interventions unilaterally decided by experts pervert incentives in fundamental ways. Americans are unusually idealistic and optimistic, believing that that the game is not stacked in favour of the powerful. This belief encourages the pursuit of initiatives that contribute to the common good rather than the pursuit of favours and rents.

To sustain these beliefs, people must see their government play the role of an even-handed referee rather than be a dispenser of rewards or even a judge of economic merit or contribution. Picking winners—this technology or that developer—which is an inevitable consequence of expansive schemes such as Mr Sandalow's, makes us all losers.

For the record, Mr Sandalow's asserts that I am "flat out wrong in asserting that GDP per head in Israel is lower than in Cyprus or Slovenia". The very first item that comes up in a Google search of "per capita/head GDP" is a Wikipedia page. The first column of data on this page contains the IMF's 2009 estimates of GDP per head (adjusted, as is conventional, by purchasing power parity). Cyprus ranks 26th from the top on the list, Slovenia 30th and Israel 31st.

The opposition's closing remarks
David Sandalow
Mar 26th 2010

Let's talk about Google. Amar Bhidé questions government's role.

Google's founders can speak for themselves. In 1998, Sergey Brin and Larry Page published a paper that begins: "In this paper, we present Google, a prototype of a large-scale search engine…" At page 16, Brin and Page write that their research was "supported by the National Science Foundation", with funding "also provided by DARPA and NASA". All three are government agencies. The paper makes for fascinating reading, for reasons related and unrelated to this debate.

Prof. Bhidé invokes Isaac Newton and other great figures from history, asserting that none received government grants. Yes, an apple tree may have been sufficient infrastructure for scientific discovery in the 17th century. Today, a linear accelerator is needed in some fields. Satellites and supercomputers are needed in others. Government funding—beyond the "least" amount possible—makes advances in those fields much more likely.

Furthermore, no one is arguing that all innovation depends on government funding. Knowledge has certainly been created without government support. The motion asks, instead, whether "innovation works best when government does least". The answer is no, because government has unique capabilities and a full toolbox for helping spur the innovative process.

Prof. Bhidé's most interesting argument involves Minitel, the French government-owned monopoly that launched an online service in the early 1980s, before the World Wide Web. Minitel was a success at first, providing French customers with online services unavailable to Americans at the time. Then it floundered in the 1990s, in the face of competition from the internet.

However, Prof. Bhidé draws the wrong lesson from this tale. Minitel was a monopoly. Its story stands mainly for the proposition that monopolies, public or private, do not innovate well. For example AT&T, a private telephone monopoly in the United States, once required its customers to use rotary phones leased from the company. Customers had two options: white or black. Then starting in 1968, other companies were allowed to compete in this market. Not only did the types of phones available increase dramatically, but innovative devices such as modems emerged.

And who has an important role in breaking up monopolies, thereby unleashing innovation? The government. Let us hope the government doesn't do the "least" when it comes to trust-busting.

The economic case for innovation is overwhelming. Innovation plays a central role in productivity growth and wealth creation. How can government best promote it?

First, by protecting property rights. Intellectual property protection and a stable legal system are the bedrock on which much innovation rests. If we were committed to government doing only the "least", we would stop here.

But government can do much more. How else can government help?

Second, by investing in education. An educated citizenry is the fertile soil from which innovation grows. As Prof. Bhidé correctly argued in his opening statement, this means training young people not just in math, but also in how to think independently and work collaboratively. Providing this education is a classic government function, one for which there are outsized benefits from government spending.

Third, by investing in basic research. For many research tasks, the payout is too long, benefits too dispersed and the scale too large for the private sector. When government steps in, returns can be huge. In the 1980s, for example, the US Department of Energy supported research into recovering natural gas from shale formations. Few companies were interested. But that research led to innovations that are now transforming the natural gas sector in the United States and around the world.

Fourth, by ensuring that social returns are reflected in investment decisions. Public companies have fiduciary responsibilities to their shareholders. In most cases their primary mission is not to clean the air, prevent climate disruption or pursue other public objectives. Governments have a responsibility to promote the public interest, steering capital toward innovations with high social returns.

Fifth, by protecting public safety, giving consumers the confidence to try innovative products. We expect our vehicles, food and pharmaceuticals to be safe and criticise government regulators if they fail to detect problems. This standard-setting role not only protects the public, it promotes innovation by giving consumers confidence in innovative products.

Sixth, by providing consumers with reliable information. Seventh, by purchasing output from innovators, helping innovative products scale. Eighth, by building infrastructure on which innovators depend (such as interstate highways and electric transmission grids). The list goes on.

Will government sometimes make mistakes? Of course. So does the private sector. Innovation is about taking risks. There may be times when government should do less, but there will never be a time when it should do the "least". Government has unique and powerful abilities to promote innovation. We should recognise and embrace them.

It has been almost 45 years since Bob Taylor first convinced his bosses at DARPA, a government agency, to invest in a new idea for computer communications. That led to the internet and, eventually, to The Economist online. It led to the clever managers of this site combining a classic debate format with 21st-century technologies and, in turn, to our discussion today. Many thanks to The Economist, to Prof. Bhidé and especially to all of you reading this dialogue.

577) Crises politicas e juros de titulos governamentais - Niall Ferguson

Political risk and the international bond market between the 1848 revolution and the outbreak of the First World War
by Niall Ferguson
Economic History Review, 2006

This article uses price data and editorial commentaries from the contemporary financial press to measure the impact of political events on investors’ expectations from the middle of the nineteenth century until the First World War. The main question addressed is why political events appeared to affect the world’s biggest financial market, the London bond market, much less between 1881 and 1914 than they had between 1843 and 1880. In particular, I ask why the outbreak of the First World War, an event traditionally seen as having been heralded by a series of international crises, was not apparently anticipated by investors. The article considers how far the declining sensitivity of the bond market to political events was a result of the spread of the gold standard, increased international financial integration, or changes in the fiscal policies of the great powers. I suggest that the increasing national separation of bond markets offers a better explanation. However, even this structural change cannot explain why the London market was so slow to appreciate the risk of war in 1914. To investors, the First World War truly came as a bolt from the blue.

576) Pedagogia da Idiotice...

Os países geralmente exibem com certo orgulho seus prêmios Nobel, cientistas distinguidos que deram contribuições inestimáveis ao progresso da humanidade, salvaram e continuam a salvar incontáveis vidas pelas suas pesquisas em torno de doenças, ou que permitiram avanços de tal monta no conhecimento científico, de maneira geral, que esses avanços fundamentam conquistas notórias para o bem estar de todos os seres humanos.
Poucos países costumam orgulhar-se de ditadores bárbaros do passado, que sairam por aí matando pessoas, conquistando povos, massacrando gente. Não creio que alguém possa orgulhar-se de um Hitler, de um Pol Pot, de um Stalin, embora haja gente que ainda hoje ache que Stalin, Mao Tse-tung e Fidel Castro tenham sido líderes geniais; Oscar Niemeyer, por exemplo, ainda acha que esses caras foram grandes, mas o provecto arquiteto é um imbecil consumado, um idiota dos mais grandes que possamos ter oferecido ao mundo, que além de ideias desprezíveis ainda oferece monumentos à burrice humana, totalmente disfuncionais por dentro e por fora.
O Brasil está num estágio intermediário: ainda não oferecemos grandes cientistas e inventores para o bem-estar da humanidade, mas já oferecemos músicos e futebolistas para agradar a vida aqui e ali...
Mas uma das nossas maiores contribuições ao MAL-ESTAR (duplamente sublinhado, caixa alta e toda a ênfase possível) da humanidade é essa tal de Pedagogia do Oprimido, uma bobagem monumental que só faz atrasar a educação dos jovens e que continua a imbecilizar adultos.
Não tenho tempo de escrever todo o mal -- mil perdões pela expressão -- que penso dessa coisa (inapropriadamente) chamada "pedagogia do oprimido", por isso me permito reproduzir um texto que me foi enviado por um leitor deste meu post anterior:

quinta-feira, 11 de fevereiro de 2010
1332) Construindo o atraso educacional do Brasil
Desconstruindo a educação no Brasil
Paulo Roberto de Almeida

Sou terrivelmente pessimista quanto ao itinerário presente E FUTURO da educação no Brasil. Alguns diriam que sou excessivamente pessimista. Acho que não, inclusive porque não sou do setor, não acompanho em detalhes todas as bobagens que vem sendo cometidas pelas pedagogas "freireanas" (e delirantes) que atuam supostamente em nome do MEC para deformar as orientações curriculares do ensino nos dois primeiros graus da educação pública no Brasil e por todos os demais responsáveis pelo setor no Brasil.
(...)
(continuar neste link)

Pois bem, um leitor chamado Rubens, a quem sou muito agradecido, enviou-me esta matéria sobre a nossa imbecilidade ofertada ao mundo:


Pedagogy of the Oppressor
Sol Stern
City Journal (of New York), Spring 2009, vol. 19, n. 2
[A quarterly magazine of urban affairs, published by the Manhattan Institute, edited by Brian C. Anderson.]

Another reason why U.S. ed schools are so awful: the ongoing influence of Brazilian Marxist Paulo Freire

Like the more famous Teach for America, the New York Teaching Fellows program provides an alternate route to state certification for about 1,700 new teachers annually. When I met with a group of the fellows taking a required class at a school of education last summer, we began by discussing education reform, but the conversation soon took a turn, with many recounting one horror story after another from their rocky first year: chaotic classrooms, indifferent administrators, veteran teachers who rarely offered a helping hand. You might expect the required readings for these struggling rookies to contain good practical tips on classroom management, say, or sensible advice on teaching reading to disadvantaged students. Instead, the one book that the fellows had to read in full was Pedagogy of the Oppressed, by the Brazilian educator Paulo Freire.

For anyone familiar with American schools of education, the choice wasn’t surprising. Since the publication of the English edition in 1970, Pedagogy of the Oppressed has achieved near-iconic status in America’s teacher-training programs. In 2003, David Steiner and Susan Rozen published a study examining the curricula of 16 schools of education—14 of them among the top-ranked institutions in the country, according to U.S. News and World Report—and found that Pedagogy of the Oppressed was one of the most frequently assigned texts in their philosophy of education courses. These course assignments are undoubtedly part of the reason that, according to the publisher, almost 1 million copies have sold, a remarkable number for a book in the education field.

The odd thing is that Freire’s magnum opus isn’t, in the end, about education—certainly not the education of children. Pedagogy of the Oppressed mentions none of the issues that troubled education reformers throughout the twentieth century: testing, standards, curriculum, the role of parents, how to organize schools, what subjects should be taught in various grades, how best to train teachers, the most effective way of teaching disadvantaged students. This ed-school bestseller is, instead, a utopian political tract calling for the overthrow of capitalist hegemony and the creation of classless societies. Teachers who adopt its pernicious ideas risk harming their students—and ironically, their most disadvantaged students will suffer the most.

To get an idea of the book’s priorities, take a look at its footnotes. Freire isn’t interested in the Western tradition’s leading education thinkers—not Rousseau, not Piaget, not John Dewey, not Horace Mann, not Maria Montessori. He cites a rather different set of figures: Marx, Lenin, Mao, Che Guevara, and Fidel Castro, as well as the radical intellectuals Frantz Fanon, Régis Debray, Herbert Marcuse, Jean-Paul Sartre, Louis Althusser, and Georg Lukács. And no wonder, since Freire’s main idea is that the central contradiction of every society is between the “oppressors” and the “oppressed” and that revolution should resolve their conflict. The “oppressed” are, moreover, destined to develop a “pedagogy” that leads them to their own liberation. Here, in a key passage, is how Freire explains this emancipatory project:

The pedagogy of the oppressed [is] a pedagogy which must be forged with, not for, the oppressed (whether individuals or peoples) in the incessant struggle to regain their humanity. This pedagogy makes oppression and its causes objects of reflection by the oppressed, and from that reflection will come their necessary engagement in the struggle for their liberation. And in the struggle this pedagogy will be made and remade.

As the passage makes clear, Freire never intends “pedagogy” to refer to any method of classroom instruction based on analysis and research, or to any means of producing higher academic achievement for students. He has bigger fish to fry. His idiosyncratic theory of schooling refers only to the growing self-awareness of exploited workers and peasants who are “unveiling the world of oppression.” Once they reach enlightenment, mirabile dictu, “this pedagogy ceases to belong to the oppressed and becomes a pedagogy of all people in the process of permanent liberation.”

Seldom does Freire ground his description of the clash between oppressors and oppressed in any particular society or historical period, so it’s hard for the reader to judge whether what he is saying makes any sense. We don’t know if the oppressors he condemns are North American bankers, Latin American land barons, or, for that matter, run-of-the-mill, authoritarian education bureaucrats. His language is so metaphysical and vague that he might just as well be describing a board game with two contesting sides, the oppressors and the oppressed. When thinking big thoughts about the general struggle between these two sides, he relies on Marx’s standard formulation that “the class struggle necessarily leads to the dictatorship of the proletariat [and] this dictatorship only constitutes the transition to the abolition of all classes and to a classless society.”

In one footnote, however, Freire does mention a society that has actually realized the “permanent liberation” he seeks: it “appears to be the fundamental aspect of Mao’s Cultural Revolution.” The millions of Chinese of all classes who suffered and died under the revolution’s brutal oppression might have disagreed. Freire also offers professorial advice to revolutionary leaders, who “must perceive the revolution, because of its creative and liberating nature, as an act of love.” Freire’s exemplar of this revolutionary love in action is none other than that poster child of 1960s armed rebellion, Che Guevara, who recognized that “the true revolutionary is guided by strong feelings of love.” Freire neglects to mention that Che was one of the most brutal enforcers of the Cuban Revolution, responsible for the execution of hundreds of political opponents.

After all this, murkiness may be the least of the book’s problems, but it is nevertheless worth quoting the book’s opening rumination:

While the problem of humanization has always, from an axiological point of view, been humankind’s central problem, it now takes on the character of an inescapable concern. Concern for humanization leads at once to the recognition of dehumanization, not only as an ontological possibility but as an historical reality. And as an individual perceives the extent of dehumanization, he or she may ask if humanization is a viable possibility. Within history, in concrete, objective contexts, both humanization and dehumanization are possibilities for a person as an uncompleted being conscious of their incompletion.

Roughly translated: “humanization” is good and “dehumanization” is bad. Oh, for the days when revolutionary tracts got right to the point, as in: “A specter is haunting Europe.”

Illustration by Arnold Roth.

How did this derivative, unscholarly book about oppression, class struggle, the depredations of capitalism, and the need for revolution ever get confused with a treatise on education that might help solve the problems of twenty-first-century American inner-city schools? The answer to that question begins in Pernambuco, a poverty-stricken province in northeastern Brazil. In the 1950s and sixties, Freire was a university professor and radical activist in the province’s capital city, Recife, where he organized adult-literacy campaigns for disenfranchised peasants. Giving them crash courses in literacy and civics was the most efficient means of mobilizing them to elect radical candidates, Freire realized. His “pedagogy,” then, began as a get-out-the-vote campaign to gain political power.

In 1964, a military coup struck Brazil. Freire spent some time in jail and was then exiled to Chile, where—inspired by his work with the Brazilian peasants—he worked on Pedagogy of the Oppressed. Hence the book’s insistence that schooling is never a neutral process and that it always has a dynamic political purpose. And hence, too, one of the few truly pedagogical points in the book: its opposition to taxing students with any actual academic content, which Freire derides as “official knowledge” that serves to rationalize inequality within capitalist society. One of Freire’s most widely quoted metaphors dismisses teacher-directed instruction as a misguided “banking concept,” in which “the scope of action allowed to the students extends only as far as receiving, filing and storing the deposits.” Freire proposes instead that teachers partner with their coequals, the students, in a “dialogic” and “problem-solving” process until the roles of teacher and student merge into “teacher-students” and “student-teachers.”

After the 1970 publication of the book’s English edition, Freire received an invitation to be a guest lecturer at the Harvard Graduate School of Education, and over the next decade he found enthusiastic audiences in American universities. Pedagogy of the Oppressed resonated with progressive educators, already committed to a “child-centered” rather than a “teacher-directed” approach to classroom instruction. Freire’s rejection of teaching content knowledge seemed to buttress what was already the ed schools’ most popular theory of learning, which argued that students should work collaboratively in constructing their own knowledge and that the teacher should be a “guide on the side,” not a “sage on the stage.”

In Pedagogy of the Oppressed, Freire had listed ten key characteristics of the “banking” method of education that purported to show how it opposed disadvantaged students’ interests. For instance, “the teacher talks and the students listen—meekly”; “the teacher chooses and enforces his choice, and the students comply”; “the teacher disciplines and the students are disciplined”; and “the teacher chooses the program content, and the students (who were not consulted) adapt to it.” Freire’s strictures reinforced another cherished myth of American progressive ed—that traditional teacher-directed lessons left students passive and disengaged, leading to higher drop-out rates for minorities and the poor. That description was more than a caricature; it was a complete fabrication. Over the last two decades, E. D. Hirsch’s Core Knowledge schools have proved over and over again not only that content-rich teaching raises the academic achievement of poor children on standardized tests but that those students remain curious, intellectually stimulated, and engaged—though the education schools continue to ignore these documented successes.

Of course, the popularity of Pedagogy of the Oppressed wasn’t due to its educational theory alone. During the seventies, veterans of the student-protest and antiwar movements put down their placards and began their “long march through the institutions,” earning Ph.D.s and joining humanities departments. Once in the academy, the leftists couldn’t resist incorporating their radical politics (whether Marxist, feminist, or racialist) into their teaching. Celebrating Freire as a major thinker gave them a powerful way to do so. His declaration in Pedagogy of the Oppressed that there was “no such thing as a neutral education” became a mantra for leftist professors, who could use it to justify proselytizing for America-hating causes in the college classroom.

Here and there, some leftist professors recognized the dangers to academic discourse in this obliteration of the ideal of neutrality. In Radical Teacher, the noted literary critic Gerald Graff—a former president of the ultra–politically correct Modern Language Association—took on his fellow profs, arguing that “however much Freire insists on ‘problem-posing’ rather than ‘banking’ education, the goal of teaching for Freire is to move the student toward what Freire calls ‘a critical perception of the world,’ and there seems little question that for Freire only Marxism or some version of Leftist radicalism counts as a genuine ‘critical perception.’ ” Elsewhere, Graff went even further in rejecting the Freirian model of teaching:

What right do we have to be the self-appointed political conscience of our students? Given the inequality in power and experience between students and teachers (even teachers from disempowered groups) students are often justifiably afraid to challenge our political views even if we beg them to do so. . . . Making it the main object of teaching to open “students’ minds to left, feminist, anti-racist, and queer ideas” and “stimulate” them (nice euphemism that) “to work for egalitarian change” has been the fatal mistake of the liberatory pedagogy movement from Freire in the 1960s to today.

But Graff’s cautionary advice fell on deaf ears in the academy. And not only did indoctrination in the name of liberation infest American colleges, where students could at least choose the courses they wanted to take; through a cadre of radical ed-school professors, the Freirian agenda came to K–12 classrooms as well, in the form of an expanding movement for “teaching for social justice.”

As a case in point, consider the career of Robert Peterson. Peterson started out in the 1980s as a young elementary school teacher in inner-city Milwaukee. He has described how he plumbed Pedagogy of the Oppressed, looking for some way to apply the great radical educator’s lessons to his own fourth- and fifth-grade bilingual classrooms. Peterson came to realize that he had to break away from the “banking method” of education, in which “the teacher and the curricular texts have the ‘right answers’ and which the students are expected to regurgitate periodically.” Instead, he applied the Freirian approach, which “relies on the experience of the student. . . . It means challenging the students to reflect on the social nature of knowledge and the curriculum.” Peterson would have you believe that his fourth- and fifth-graders became critical theorists, interrogating the “nature of knowledge” like junior scholars of the Frankfurt School.

What actually happened was that Peterson used the Freirian rationale to become his students’ “self-appointed political conscience.” After one unit on U.S. intervention in Latin America, Peterson decided to take the children to a rally protesting U.S. aid to the Contras opposing the Marxist Sandinistas in Nicaragua. The children stayed after school to make placards:

let them run their land!
help central america don’t kill them
give the nicaraguans their freedom

Peterson was particularly proud of a fourth-grader who described the rally in the class magazine. “On a rainy Tuesday in April some of the students from our class went to protest against the contras,” the student wrote. “The people in Central America are poor and bombed on their heads. When we went protesting it was raining and it seemed like the contras were bombing us.”

These days, Peterson is the editor of Rethinking Schools, the nation’s leading publication for social-justice educators. He is also the editor of a book called Rethinking Mathematics: Teaching Social Justice by the Numbers, which provides math lessons for indoctrinating young children in the evils of racist, imperialist America. Partly thanks to Peterson’s efforts, the social-justice movement in math, as in other academic subjects, has fully arrived (see “The Ed Schools’ Latest—and Worst—Humbug,” Summer 2006). It has a foothold in just about every major ed school in the country and enjoys the support of some of the biggest names in math education, including several recent presidents of the 25,000-member American Education Research Association, the umbrella organization of the education professoriate. Its dozens of pseudo-scholarly books, journals, and conferences extol the supposed benefits to disadvantaged kids of the kind of teaching that Peterson once inflicted on his Milwaukee fourth-graders.

To counter the criticism that the movement’s objective is political indoctrination, social-justice educators have developed a scholarly apparatus designed to portray social-justice teaching as just another reasonable education approach backed by “research.” Thus a recent issue of Columbia University’s Teachers College Record (which bills itself as “the voice of research in education”) carried a lead article by University of Illinois math education professor Eric Guttstein reporting the results of “a two-year qualitative, practitioner-research study of teaching and learning for social justice.” The “practitioner research” consisted entirely of Guttstein’s observing his own Freirian math instruction in a Chicago public school for two years and then concluding that it was a great success. Part of the evidence was a statement by one of his students: “I thought math was just a subject they implanted on us just because they felt like it, but now I realize that you could use math to defend your rights and realize the injustices around you.” Guttstein concludes that “youth in K–12 classrooms are more than just students—they are, in fact, actors in the struggle for social justice.”
Illustration by Arnold Roth.

There’s no evidence that Freirian pedagogy has had much success anywhere in the Third World. Nor have Freire’s favorite revolutionary regimes, like China and Cuba, reformed their own “banking” approaches to education, in which the brightest students are controlled, disciplined, and stuffed with content knowledge for the sake of national goals—and the production of more industrial managers, engineers, and scientists. How perverse is it, then, that only in America’s inner cities have Freirian educators been empowered to “liberate” poor children from an entirely imagined “oppression” and recruit them for a revolution that will never come?

Freire’s ideas are harmful not just to students but to the teachers entrusted with their education. A broad consensus is emerging among education reformers that the best chance of lifting the academic achievement of children in the nation’s inner-city schools is to raise dramatically the effectiveness of the teachers assigned to those schools. Improving teacher quality as a means of narrowing racial achievement gaps is a major focus of President Obama’s education agenda. But if the quality of teachers is now the name of the game, it defies rationality that Pedagogy of the Oppressed still occupies an exalted place in training courses for those teachers, who will surely learn nothing about becoming better instructors from its discredited Marxist platitudes.

In the age of Obama, finally, it seems all the more unacceptable to encourage inner-city teachers to take the Freirian political agenda seriously. If there is any political message that those teachers ought to be bringing to their students, it’s one best articulated by our greatest African-American writer, Ralph Ellison, who affirmed that he sought in his writing “to see America with an awareness of its rich diversity and its almost magical fluidity and freedom. . . . confronting the inequalities and brutalities of our society forthrightly, yet thrusting forth its images of hope, human fraternity, and individual self-realization.”

Sol Stern is a contributing editor of City Journal, a senior fellow at the Manhattan Institute, and the author of Breaking Free: Public School Lessons and the Imperative of School Choice.

575) El fracaso de America Latina en el desarrollo

¿Por qué América Latina no progresa en un mundo donde otros lo están logrando?
por Carlos Ball
Cato Institute, 15 de agosto de 2007

Carlos Ball es director de la Agencia Interamericana de Prensa Económica (AIPE) y académico asociado del Cato Institute. Este es el texto de la presentación de Carlos Ball ante la Federación Nacional de Comerciantes de Colombia el 3 de agosto de 2007 en Bogotá. También puede leer este documento en formato PDF aquí.

Agradezco a la Federación Nacional de Comerciantes de Colombia esta invitación a que les hable sobre por qué América Latina no progresa, haciendo énfasis en el caso venezolano. Muchos de los problemas y obstáculos que han impedido que nuestro hemisferio se incorpore al mundo desarrollado de Occidente son comunes o, al menos, bastante parecidos en toda América Latina.

Luego de 16 años al frente de AIPE (www.aipenet.com), una empresa periodística dedicada al análisis y discusión de los principales temas económicos y políticos que afectan a la región, estoy convencido de que a menudo comprendemos mejor lo que sucede en nuestro propio patio cuando observamos el desarrollo de problemas similares que confrontan países vecinos y demás regiones de América Latina.
Mi experiencia personal

Voy a comenzar contándoles brevemente unas pocas experiencias personales que creo reflejan algunos de los males que en diferentes grados han afectado a gran parte de América Latina.

Poco después de la muerte de mi hermano Luis Henrique, leyendo papeles suyos me encontré una historia fascinante que me hizo comprender mejor lo que el economista austriaco Friedrich Hayek llamó “el camino de servidumbre”, sendero predilecto de los gobernantes venezolanos. Mi hermano, quien era 9 años mayor que yo, relata su visita a nuestra madre en la clínica, en 1939, cuando yo nací. Cuenta que al entrar al hospital saludó a una muchacha que salía con su recién nacido en los brazos. La reconoció como trabajadora de la fábrica de nuestro padre y me enteré que, en aquellos tiempos, esa empresa pagaba el 95% de los gastos médicos de todos sus trabajadores, quienes recibían atención médica en la Policlínica Caracas, entonces el mejor hospital privado del país.

Fue después de la Segunda Guerra Mundial cuando, por presiones del Departamento de Estado, se creó en Venezuela el Instituto de Seguros Sociales para comenzar a socializar la medicina y centralizar las jubilaciones. Entonces, las Naciones Unidas recomendaron al médico chileno Salvador Allende para que asesorara al gobierno venezolano en la creación de ese instituto. Los impuestos a las nóminas de sueldos que seguidamente impuso el gobierno nacional hicieron que pronto desaparecieran todos los programas privados de atención médica a los trabajadores y sólo aquellos venezolanos con altos ingresos pudieron desde entonces tener acceso a clínicas privadas.

Las buenas intenciones políticas a menudo causan males no previstos y como la prioridad absoluta del partido gobernante suele ser ganar las próximas elecciones, se dificulta y hasta se imposibilita que a tiempo se corrijan nefastos errores.

Las estadísticas muestran de manera dramática los cambios sufridos en Venezuela entre la generación de mis padres y la de mis hijos. Por ejemplo, en 1958 el ingreso per cápita del venezolano equivalía a 78% del ingreso per cápita en Estados Unidos. Mientras en la década de los años 50 el ingreso de los venezolanos aumentó en más del doble, a partir de 1960 —bajo una política económica que el propio presidente Rómulo Betancourt definió como “socialismo en alpargatas”— la población ha crecido más rápidamente que la economía.

Hoy, a pesar del precio récord del petróleo, el ingreso promedio del venezolano fluctúa alrededor del 15% del ingreso promedio en Estados Unidos, mientras que todo lo contrario ha estado sucediendo en países ex-comunistas como Estonia y la República Checa, al igual que en los llamados tigres y dragones de Asia.

Yo me gradué de una universidad americana en 1962 y recibí varias ofertas de trabajo para quedarme allá. No las tomé en serio porque para mí el futuro estaba en Venezuela. Pero apenas un par de décadas más tarde, cuando mis hijos se graduaron de universidades americanas, ellos no dudaron en quedarse a vivir en Estados Unidos. En Venezuela se notaba ya un cambio profundo; de ser un país floreciente y próspero que atraía a cientos de miles de inmigrantes de todas partes del mundo y donde gran cantidad de ejecutivos y técnicos de las multinacionales petroleras preferían quedarse a vivir después de su jubilación, se ha convertido en un país de emigrantes, exportador neto de talento y de capital privado. Las aplicaciones de venezolanos que quieren venirse a vivir en Colombia se dispararon 300% en los últimos dos años.

En Miami, así como en los años 60 se veían a médicos e ingenieros cubanos lavando ventanas y cortando la grama, hoy vemos a muchos venezolanos jóvenes y viejos tratando de rehacer allá sus vidas de la misma manera.

Para terminar con estas breves anécdotas personales, les contaré por qué vivo y trabajo en Estados Unidos desde hace 20 años. En 1987, yo era director general de El Diario de Caracas, cuya línea editorial era muy crítica del intervencionismo y desenfrenada corrupción del gobierno del entonces presidente socialdemócrata Jaime Lusinchi. El periódico pertenecía al grupo Radio Caracas Televisión, cuya licencia de transmisión vencía en mayo de 1987. Los dueños de la empresa fueron entonces informados desde el palacio presidencial que la licencia no sería renovada a menos de que yo fuera despedido.

Cuarenta y ocho horas antes de ser despedido, una fuente cercana al partido de gobierno me informó que el ex presidente Carlos Andrés Pérez había dicho esa mañana, en la sede del partido Acción Democrática, que el problema conmigo ya había sido resuelto.

Fui despedido y la licencia de RCTV fue renovada por 20 años.

Dos días después de mi salida del periódico, mientras el presidente Lusinchi visitaba la redacción de El Diario de Caracas para celebrar su victoria y sonreído declaraba que “es pecado hablar mal del gobierno”, lo cual apareció al día siguiente como titular de primera página, yo confrontaba falsos cargos en un tribunal penal, donde el juez Cristóbal Ramírez Colmenares me informó, sin titubear y apuntando al techo con un dedo, que él necesariamente tenía que seguir “instrucciones de arriba”.

Decidí entonces emigrar a Estados Unidos y, poco después, habiendo el gobierno logrado lo que buscaba, se retiraron todos los cargos en mi contra.
Falta de respeto por las libertades civiles

Como todos ustedes saben, en mayo de este año se repitió la historia en Venezuela, pero con un final mucho más triste: Hugo Chávez no renovó la licencia de transmisión a Radio Caracas Televisión, canal que fue reemplazado por otra televisora más de propaganda gubernamental que, además, se apoderó de 130 millones de dólares en equipos y antenas de transmisión, sin pagar un centavo a los dueños.

Cuando no hay respeto por las libertades civiles ni los derechos de propiedad, surgen multimillonarios ganadores, mientras que los perdedores son aplastados, dependiendo de quién se ha ganado o comprado el apoyo oficial. Para ilustrar ese hecho y terminar con el triste caso de Radio Caracas Televisión, les cuento otra sorprendente coincidencia. Hace 20 años, Carlos Croes era el jefe de la Oficina Central de Información del presidente Lusinchi; es decir, su ministro de propaganda y censura. Hoy el Sr. Croes es vicepresidente de Información de Televen, uno de los canales privados de televisión que resultaron más beneficiados con el cierre de RCTV, empresa que a lo largo de 53 años fue el más exitoso medio publicitario venezolano.

Sí debo aclarar que no solamente Chávez y los presidentes de Acción de Democrática han sido enemigos de la libertad de prensa. El presidente copeyano Rafael Caldera me llamó públicamente “traidor a la patria”.

Un artículo mío publicado el 22 de julio de 1994 en el Wall Street Journal, relatando las fracasadas políticas estatistas del gobierno venezolano, causó la furia del entonces presidente Rafael Caldera, quien en un discurso al día siguiente, en la Décima Convención Nacional de Periodistas dijo: “A mi me duele profundamente cuando veo venezolanos que llegan a adquirir la posibilidad de escribir o informar para órganos de prensa internacional... diciendo que Venezuela va al desastre, eso es una traición a la patria, ese es un crimen contra Venezuela. Creen que por hacerle daño a un gobierno tienen derecho a presentar toda una serie de infamias. Y yo espero que algún día el tribunal disciplinario del Colegio Nacional de Periodistas le dé una sanción moral expulsando a esos criminales que usan las columnas de la prensa extranjera para denigrar de Venezuela, para presentar un panorama negativo de nuestro país”.

El presidente Caldera evidentemente ignoraba que en Estados Unidos no hay que ser miembro de ningún colegio de periodistas ni de ningún sindicato para escribir en la prensa, ya que la primera enmienda constitucional garantiza la libertad de expresión y de prensa.

En Venezuela y en muchos otros países latinoamericanos, la democracia que logramos tras la desaparición de las viejas dictaduras militares falló en garantizarnos el principal derecho humano: el derecho a ganarnos la vida en el trabajo de nuestra preferencia, para luego disfrutar libremente de la propiedad adquirida con nuestro propio esfuerzo.

El termómetro de nuestros recientes y actuales quebrantos estatistas, a la vez que el más confiable indicador del bienestar y crecimiento económico latinoamericano o, por el contrario, del aumento de la de corrupción, hambre y miseria es el grado de libertad de mercado que gozan nuestros países. Es decir, el nivel o cantidad de trabas burocráticas, permisos, aranceles, licencias, autorizaciones, cuotas, regulaciones, concesiones, franquicias, colegiaturas, sindicatos únicos y demás artificios con los que funcionarios públicos discriminan en contra del pueblo, impidiendo el libre acceso tanto al trabajo como al mercado y despojando a la gente de su más importante derecho civil, el de ganarse la vida haciendo lo que más les gusta, lo cual suele también ser lo que mejor hacen.
En nombre de la "justicia social"

En nombre de la justicia social, el gobierno venezolano anunció hace pocos días que se va a imponer por decreto una ley de Estabilidad en el Trabajo, bajo la cual nadie podrá ser despedido, trasladado de cargo o desmejorado en sus condiciones, sin la previa autorización del gobierno. Esta nueva normativa reemplazará la inamovilidad general que ha estado vigente desde el año 2003.

Con razón, la semana pasada el director ejecutivo de la Cámara de Comercio Colombo-Americana declaró a Reuters que “Chávez ha sido un gran promotor de la inversión extranjera en Colombia”, refiriéndose al traslado de Caracas a Bogotá de las sedes de varias empresas norteamericanas que temen las consecuencias del manifiesto colapso del Estado de Derecho en Venezuela.

El triste resultado del extremismo intervencionista lo muestran claramente las estadísticas de la Confederación Venezolana de Industriales: de 11.000 industrias que existían en Venezuela en 1998, quedan menos de 7.000 y el número de empleos perdidos en el sector industrial, en los últimos diez años, pasa de 500.000.

Por su parte, las estadísticas del gobierno muestran más bien una disminución del desempleo debido a que el número de empleados públicos ha aumentado 45% bajo la presidencia de Hugo Chávez. Sin embargo, más de la mitad de los trabajadores venezolanos forman hoy parte de la economía informal.

La avanzada socialista siempre enarbola la bandera de la “justicia social”, cuya popularidad se debe en parte a que no tiene una definición clara y precisa. Cada político la define según conviene en el momento, para lograr apoyo a su proyecto de ley o la regulación de alguna actividad.

La expresión “justicia social” fue por vez primera utilizada por un sacerdote siciliano, Luigi Taparelli, en 1840 y pronto se la apropiaron las élites intelectuales que aspiraban conducir el mundo a la utopía del “socialismo científico”, donde la razón y mentes privilegiadas regirían el universo. Ellos sabían mejor lo que a la plebe ignorante realmente convenía. Así, la “justicia social” desde temprano estuvo ligada a la economía dirigida y planificada. Según los políticos en ejercicio, el individuo importa poco vis-a-vis el bien común.

Al comienzo había mucho de buenas intenciones en el concepto de “justicia social”, como por ejemplo que la gente acomodada ayudara a través de fundaciones caritativas privadas a colegios y hospitales, como también a la adaptación de campesinos a los nuevos centros industriales. Pero el profesor Hayek fue uno de los primeros en denunciar la “justicia social” cuando esta dejó de ser una virtuosa y bondadosa decisión espontánea y personal de ayudar al prójimo para convertirse en imposiciones —desde las alturas del poder— de un abstracto y manipulable ideal.

Se creó así una falsa imagen de la gente común como víctimas, ya que al haber víctimas tiene que existir un victimario.

El filósofo polaco Leszek Kolakowski, en su historia del comunismo, escribió que el paradigma fundamental de esa ideología estaría para siempre garantizado porque tu sufrimiento es causado por opresores y las cosas malas que te suceden no son culpa tuya sino de los ricos de tu país, o peor aún, de los ricos de ultramar. Claro, el remedio comunista, nazi y fascista para acabar con la injusticia social condujo a hambrunas, campos de concentración y cientos de millones de muertos, resultados infinitamente peores que el mal fantasmagórico inventado por intelectuales como excusa para detentar el poder.

En el tercer volumen de su obra titulada “Principales corrientes del marxismo” (publicado en 1978), Kolakowski escribe que “el marxismo actualmente ni interpreta ni cambia al mundo: es meramente un repertorio de consignas que sirven para organizar variados intereses”.

Según Hayek: “Una de las grandes debilidades de nuestro tiempo es que no tenemos la paciencia ni la fe para crear organizaciones voluntarias con los fines que valoramos, sino que de inmediato le pedimos al gobierno que utilice la coerción (o fondos sustraídos coactivamente) para cualquier cosa que parezca deseable para muchos. Sin embargo, nada tiene peor efecto sobre la participación ciudadana que cuando el gobierno, en lugar de ofrecer meramente la estructura esencial para el crecimiento espontáneo, se vuelve monolítico y se encarga de todas las necesidades, las cuales en realidad pueden sólo ser satisfechas por el esfuerzo común de muchos”.

Para Hayek, la justicia es siempre individual y “nada ha destruido más nuestras garantías constitucionales de libertad individual que el intento de alcanzar el espejismo de la justicia social”. El mercado premia a quienes mejor satisfacen los requerimientos y necesidades de los consumidores y manipular los premios significa fomentar la ineficiencia y la pobreza misma. Ya vimos con horror los logros de Stalin, Mao y Castro bajo el lema marxista “de cada uno según su capacidad, a cada uno según su necesidad”.

Hoy es políticamente incorrecto mencionar una triste realidad, que las dictaduras militares del pasado —a pesar de haber hecho mucho daño— a menudo tuvieron la ventaja de que los gobernantes de aquella época se contentaban con ejercer el poder político con mano dura, mientras que permitían amplia libertad económica a la ciudadanía. Algunos amigos del palacio presidencial disfrutaban, desde luego, de la concesión de ciertos y determinados monopolios y oligopolios, pero predominaba la libre competencia, importaciones sin cuotas ni aranceles y, sobre todo, un creciente flujo de inversiones extranjeras, lo cual no solamente mejoraba los niveles de salarios, sino que fomentaba la creación de una fuerza laboral calificada y productiva, que no aspiraba a vivir de las dádivas de los políticos, sino del sudor de su frente.
Los pilares del "socialismo del siglo XXI"

A fines de los años 50 había más inversión norteamericana en Venezuela que en todo el resto de América Latina. Y pienso que la mejor universidad que por muchos años tuvimos los venezolanos fue la Creole Petroleum Corporation, subsidiaria de la Standard Oil. Técnicos y administradores que escalaban posiciones en la Creole solían recibir las más atractivas ofertas de trabajo de parte de empresarios criollos que querían asegurarse de contar con gerentes y administradores competentes en sus empresas. Esa concentración del talento en la industria petrolera fue una de las razones del éxito petrolero venezolano, pero el lanzamiento del cartel de la OPEP y la politización de nuestra principal industria pronto comenzaría a cambiar el panorama económico nacional.

Es importante recordar que la fundación de la OPEP, el 17 de septiembre de 1960, fue idea del entonces ministro venezolano de Minas e Hidrocarburos, Juan Pablo Pérez Alfonzo, quien convenció a cuatro mandatarios del Medio Oriente a formar un cartel para asegurar así altos ingresos para los países productores de petróleo. En 1960, las exportaciones petroleras de Venezuela representaban 60% del comercio petrolero internacional, mientras que los países árabes exportaban a unas pocas naciones europeas.

En 1974, el presidente Carlos Andrés Pérez, quien había sido ministro del Interior de Rómulo Betancourt, procedió a estatizar la industria petrolera. Allí está la prueba de que la nueva clase política venezolana que surgió a raíz de la caída del régimen dictatorial del general Marcos Pérez Jiménez, el 23 de enero de 1958, no se contentaría con ejercer el poder político, sino que también ambicionaba el poder económico.

En 1961, el presidente Rómulo Betancourt anunció que no se otorgarían nuevas concesiones a las empresas petroleras extranjeras y éstas, lógicamente, comenzaron a repatriar sus capitales y a buscar otras áreas de exploración. Esto causó una gran presión sobre el bolívar, el cual sufrió entonces su primera devaluación del siglo XX.

Uno de los pilares fundamentales de toda economía floreciente es la solidez de su moneda. El bolívar venezolano, hoy convertido en miserable “chavito”, mantuvo su valor de un gramo de oro a lo largo de 82 años, desde 1879 hasta 1961. Desde entonces, el valor oficial del bolívar con respecto al dólar ha caído 63.500% y su poder adquisitivo en más del doble de eso. Este es el verdadero termómetro del robo perpetrado por los gobernantes al pueblo venezolano. Y, como sabemos, los más afectados por la inflación no son los ricos con propiedades inmobiliarias y cuentas en dólares en el exterior, sino los más pobres que ven desaparecer sus pequeños ahorros.

Para financiar los crecientes gastos del estado, la clase política latinoamericana suele preferir la inflación al aumento de impuestos. Esta no tiene que ser aprobada por ninguna legislatura y afecta menos a los amigos del palacio presidencial. Lo que sí se requiere es la politización del Banco Central, lo cual en el caso venezolano ocurrió a mediados de los años 70, bajo el presidente Carlos Andrés Pérez. Desde entonces, el Banco Central de Venezuela ha sido utilizado para ganar elecciones imprimiendo billetes y la serie de frecuentes devaluaciones del bolívar fue comenzada por el presidente socialcristiano Luis Herrera Campins en 1983.

En la década de los años 50, la inflación en Venezuela era inferior a la de Estados Unidos. Por el contrario, en apenas el primer semestre de 1996, la inflación venezolana superó a la que habíamos experimentado a lo largo de 27 años, desde 1946 a 1973. Sin embargo, debo reconocer que los gobernantes venezolanos no han sido los más ladrones de América Latina. El Che Guevara, al ser nombrado presidente del Banco Central de Cuba por Fidel Castro en 1959, procedió a borrarle dos ceros al peso cubano y en Argentina le borraron 17 ceros a la moneda entre 1971 y 1991.

El tercer pié del trípode en que se apoyaría “el socialismo del siglo XXI” de Hugo Chávez fue la politización del sistema judicial. El general Marcos Pérez Jiménez tuvo un honorable ministro de Justicia, Luis Felipe Urbaneja, quien creó un sistema judicial regido por jueces honrados e imparciales. En el campo político se cometieron detestables injusticias durante la dictadura militar, pero eso no ocurría en los tribunales.

En 1969, el partido Acción Democrática perdió las elecciones presidenciales, pero mantuvo una mayoría en el Congreso, la cual utilizó para ponerle la mano al sistema judicial, a través de una ley que convertía el nombramiento de jueces en una función de los resultados electorales. Así se enterró en Venezuela el Estado de Derecho y la igualdad ante la ley, se politizó y se corrompió al sistema judicial, con el nombramiento de jueces según su afiliación política y en proporciones que reflejaran los resultados electorales.

La consecuencia casi inmediata de ese cambio en la selección de los jueces fue la compra y venta de sentencias. La gente influyente y los conocedores del medio sabían a cuáles abogados acudir en caso de cualquier problema legal, mientras que los venezolanos pobres languidecían en las cárceles por años sin ir a juicio. Según distinguidos abogados caraqueños, ya en los años 90 una orden de detención en las cárceles de Caracas podía equivaler a una virtual condena a muerte.

Es comprensible el culto a la democracia en una región del mundo que desde los tiempos de la independencia sufrió frecuentes y crueles dictaduras, pero como solía decir mi fallecido amigo, el brillante economista inglés Arthur Seldon: “no basta con implantar la democracia política. El mercado garantiza mejor la libertad de los ciudadanos”.

La realidad es que la libertad económica suele conducir a la libertad política, como sucedió en Chile, pero la libertad política no conduce necesariamente a la libertad económica, como vemos en el triste caso venezolano y de muchas otras naciones del hemisferio.

No hay duda de que los ciudadanos disfrutamos de nuestra libertad política en importantes pero contadas ocasiones, al elegir a nuestros alcaldes, congresistas y presidentes cada cierto número de años, pero la libertad económica la ejercemos en infinidad de ocasiones todos los días de nuestras vidas.

La incongruencia de la filosofía política que prevalece en gran parte de América Latina es que nosotros, los ciudadanos, tenemos el derecho y estamos capacitados para elegir a los gobernantes y legisladores, pero ellos, una vez encargados del poder, son quienes determinan lo que podemos hacer o no con nuestras vidas y con nuestra propiedad, por lo que con inusitada frecuencia utilizan la excusa del bien común para aplastar nuestros derechos civiles y nuestra libertad individual.
La cultura anticapitalista

Pienso que la principal razón por la cual nuestro hemisferio no avanza hacia la prosperidad económica que están alcanzando muchos países de otros continentes, que solían ser mucho más pobres, se debe a que nuestros políticos y gobernantes no creen en gobiernos limitados. Como claramente lo expresaron hace más de dos siglos los próceres fundadores de Estados Unidos, la razón de ser del gobierno es la defensa de los derechos del ciudadano a la vida, a la propiedad y a la búsqueda de su felicidad.

Los países ricos quizás se pueden hoy dar el lujo de irrespetar tales principios fundamentales, aunque hasta los políticos franceses se están dando cuenta que cuando el gasto del estado de bienestar alcanza 54% de Producto Interno Bruto, desaparece el crecimiento económico y la gente joven emigra o vive de la caridad pública porque no consigue empleo, a pesar de la políticamente atractiva jornada laboral francesa de 35 horas a la semana.

En ese sentido, algunos de los tradicionales enemigos del verdadero bienestar latinoamericano forman parte, desde hace décadas, de las burocracias de las Naciones Unidas y demás organismos internacionales. Tales voces se unen a las de reciclados burócratas latinoamericanos que antes imponían sus fracasadas ideas dirigistas en sus países de origen, mientras que hoy lo hacen desde envidiables cargos libres de impuestos y desde elegantes oficinas en Nueva York, Washington, Ginebra, París o Bruselas. La repetitiva fórmula suele ser más créditos a los gobiernos, más leyes, más regulaciones y más conferencias en los más deliciosos hoteles del mundo, donde discutir y negociar una más detallada planificación económica.

Ellos también se empeñan en tratar de imponernos las bonitas reglas de los países desarrollados, pero si estas mismas hubieran estado vigentes hace 100 o 200 años habrían logrado paralizar o destruir la Revolución Industrial, impidiendo la transición de economías agrícolas pobres a desarrolladas economías industrializadas y que hoy en día avanzan hacia economías basadas en los servicios.

Lamentablemente, la cultura latinoamericana del siglo XXI es anticapitalista porque la población ha sido convencida por nuestros locuaces políticos que el capitalismo promueve la desigualdad, mientras que sus bien intencionadas políticas públicas dirigistas y socialistas son capaces de reducir la pobreza, a través de más programas sociales y mayor redistribución de la riqueza.

Los tradicionales partidos políticos venezolanos, Acción Democrática y Copei, que antes se alternaban el poder, solían dedicarse a concentrar en sus manos el poder político y económico, dejándole prácticamente mano libre a la extrema izquierda en el campo educacional.

La sanguinaria guerrilla castrista fue derrotada militarmente en Venezuela hace años, pero muchos de sus líderes —con vista al largo plazo— se dedicaron desde entonces a cambiar la manera de pensar de la juventud, prestándoles especial atención a los jóvenes oficiales.

La educación pública promueve la idea de que la libertad es un valor perfectamente divisible y que lo importante es la libertad política, mientras que la libertad económica es algo que desean solamente los ricos y los empresarios para que los bondadosos funcionarios públicos se vean imposibilitados de proteger al pueblo.

Hoy es grato ver que los estudiantes universitarios en Venezuela son los abanderados en reclamar la libertad de expresión y de manifestar ardorosamente en contra de políticas y atropellos del gobierno, pero por varias décadas la educación primaria, media y universitaria estuvo básicamente regida por intelectuales de izquierda, quienes firmemente creen que el futuro de la nación depende de una cada vez mayor concentración del poder político y económico en manos de sus clarividentes líderes, de una ingeniería social impuesta por quienes sí saben lo que más conviene a las masas, mientras sienten un profundo desprecio por los conceptos de libertad individual, igualdad ante la ley, propiedad privada y el libre mercado.

En nuestros colegios y universidades se suele enseñar sobre las injusticias sociales ocurridas durante la Revolución Industrial, que fue justamente la primera vez en la historia universal cuando el ingreso per cápita comenzó a aumentar significativamente y cuando el nivel de vida de los obreros comenzaba a ser muy superior al de los trabajadores del campo. Esa curva ascendente del ingreso per cápita se hacía más perceptible en la medida que aumentaba el capital invertido, creciendo asimismo tanto la productividad como la demanda y, en consecuencia, los salarios y el bienestar de los trabajadores.

A mediano y largo plazo, la única manera de aumentar los salarios reales es a través de incrementos en la productividad de la mano de obra, lo cual se logra solamente con entrenamiento y mayores inversiones en maquinarias y equipos.

Ante el crecimiento de la demanda, el empresario evalúa constantemente si conviene más aumentar el número de trabajadores o invertir en maquinaria más sofisticadas. Si luego baja la demanda, la maquinaria puede ser utilizada por menos horas, mientras que en muchos países se dificulta o se hace inmensamente costoso despedir a un trabajador. Eso pareciera beneficiar a la clase obrera, pero bajo tales condiciones se crean muchos menos empleos porque los empresarios prefieren invertir en equipos y contratar menos personal.

Otra parte de esa tragedia es que las leyes laborales socialistas en la práctica imponen un matrimonio obligado entre patronos y los trabajadores, quienes entonces no saltan a mejores puestos en industrias emergentes y con gran futuro porque no quieren perder sus prestaciones y beneficios acumulados.

La globalización ha disparado el concepto de la “destrucción creativa” enunciado por Schumpeter en 1912, en la medida que las innovaciones que surgen de todas partes del mundo convierten en obsoletos, de la noche al día, a los inventarios, las ideas, las técnicas y los equipos. Si a esto le agregamos la inflexibilidad de perjudiciales leyes laborales, tenemos el fracaso asegurado.

Sin embargo, en América Latina seguimos bajo demagógicas leyes laborales que imponen altas indemnizaciones y demás beneficios contractuales, sean estos económicamente viables o no, a la vez que multiplican las regulaciones que aumentan los costos de operación, reducen la rentabilidad, incrementan la corrupción, disparan el crecimiento del sector informal, aumentan la disparidad de ingresos y ahuyentan nuevas inversiones. Esa es realmente la fórmula segura para el fracaso.

El éxito futuro depende del libre funcionamiento del mercado, a través de la oferta y la demanda, que permite el flujo de la indispensable información aportada por precios libres, que a su vez permite la óptima utilización de limitados recursos. Y al entonces concentrarnos en lo que comparativamente podemos producir más eficientemente, importando todo lo demás, avanzaríamos rápidamente hacia una mucho mayor y más generalizada prosperidad.

El mundo socialista y planificado es altamente retrógrado y conservador, en el sentido que le cierran la puerta a las innovaciones que, por definición, no pueden formar parte de un plan centralizado.
La influencia de nuestras constituciones

Nuestras constituciones socialistas han jugado un importante y negativo papel en América Latina. Aunque comenzamos la vida independiente bajo constituciones bastante parecidas a la de Estados Unidos, la cual, como dije antes, fue principalmente redactada para proteger al ciudadano de los abusos de los gobernantes, nuestras constituciones han sido reemplazadas por otras, crecientemente demagógicas y convertidas en verdaderas piñatas que supuestamente nos garantizan todos los derechos sociales imaginables. Eso en parte se debe a que son redactadas por políticos que jamás tuvieron la experiencia de verse obligados a sobrevivir en un mercado competitivo ni darle el frente al pago de una nómina salarial.

En 1961, la nueva constitución venezolana de corte claramente socialista introdujo una gran cantidad de los llamados “derechos sociales”, tales como el derecho al trabajo, a la atención médica, a la vivienda, a salarios “justos”, etc. El Artículo 99 describía la “función social” de la propiedad, mientras que los pocos artículos referentes a la libertad económica fueron suspendidos durante los siguientes 30 años de la vigencia de esa constitución.

De hecho, todas las constituciones venezolanas desde la de 1936 permiten la suspensión de derechos y garantías constitucionales en caso de “emergencia nacional”, por lo que no nos debe extrañar que nuestros gobernantes se acostumbraran a mantenernos en medio de alguna emergencia nacional para gobernar por decreto.

Otro frecuente problema constitucional latinoamericano es que cumplir con la letra de nuestras constituciones suele implicar una irremediable quiebra del Estado. Entonces, una importantísima función de los gobernantes y burócratas es decidir cómo repartir los premios y castigos entre diferentes grupos: sindicatos, la burocracia, los sin techo, campesinos, indígenas, ambientalistas, empresarios, dueños de medios de comunicación, banqueros, etc.

En Venezuela vamos por la constitución número 26, la cual está en proceso de ser cambiada por otra aún más socialista y que le permita a Chávez reelegirse de por vida, destruyendo definitivamente todo vestigio de equilibrio entre los poderes ejecutivo, legislativo y judicial. Los presidentes de Ecuador y Bolivia imitan a Chávez, quien a su vez avanza precipitadamente por el camino del miserablemente fracasado “socialismo o muerte” trazado por Fidel Castro en Cuba hace ya casi medio siglo.

Los salarios mínimos y las excesivas regulaciones producen desempleo y fomentan la informalidad; los altos impuestos del estado bienestar impiden el ahorro, mientras que los servicios públicos recibidos a cambio suelen ser deficientes; los controles de precios producen escasez; la politización del sistema monetario empobrece a la ciudadanía entera y fomenta la huída de capitales, mientras que la redistribución de la riqueza ha sido el mayor de los fraudes porque sólo los políticos y sus amigos se han beneficiado.
Culpando a otros

Nuestra clase política y nuestros intelectuales suelen culpar a Estados Unidos de los males que afectan a América Latina. Desde el fin de la Segunda Guerra hasta los años 80 prevaleció en gran parte de América Latina la llamada teoría de la dependencia promovida por la CEPAL y, especialmente, por su director desde 1948 hasta 1962, el economista argentino Raúl Presbich. Fue un abanderado del proteccionismo que definía al intercambio comercial como la explotación de los países pobres por parte de los países ricos, que nos exportaban productos manufacturados caros a cambio de materias primas baratas.

El supuesto remedio fue la sustitución de importaciones a través de la imposición de permisos, licencias de importación, altos aranceles y cuotas para proteger a la industria nacional que recibía abundante y barato financiamiento de los bancos estatales.

Claro que sin competencia extranjera, el mercado nacional tiende a la concentración y a los monopolios. Así vimos aparecer a millonarios mercantilistas que rápidamente se dieron cuenta que es mucho más fácil y remunerador convencer a un ministro o a unos pocos funcionarios encargados de fijar precios y repartir subsidios que a cientos de miles de consumidores empeñados en obtener óptima calidad a precios bajos.
Lo que trato de decir es que entre los peores enemigos del capitalismo en América Latina sobresalen nuestros pseudocapitalistas mercantilistas.
Los pseudocapitalistas

En los años 70 surgieron en Venezuela los llamados “12 apóstoles” del presidente Carlos Andrés Pérez, empresarios que gozaron de inmensos privilegios y jugosos monopolios. Su increíble habilidad se comprueba todavía hoy al ver a uno que otro de ellos enchufado con Hugo Chávez, por lo que un conocido escritor y editor venezolano afirma que “los 12 apóstoles de Carlos Andrés Pérez se han convertido en 40 ladrones de Hugo Chávez”.

En el caso venezolano, pienso que varios de los peores ministros de Hacienda y Fomento que tuvimos en los años 70 y 80 fueron altos ejecutivos de importantes grupos empresariales que utilizaban descaradamente sus cargos para beneficiar a sus socios y jefes, quienes gozaron de privilegios especiales en la asignación de dólares durante el control de cambio, licencias de importación, subsidios y créditos baratos de los bancos estatales y de la Corporación Venezolana de Fomento.

Posteriormente, las llamadas políticas neoliberales de los años 90 frecuentemente le siguieron dando la espalda al libre mercado, desprestigiando la percepción del capitalismo en la mente del pueblo, ya que los monopolios y empresas estatales, que en México llegaron a ser más de 500, a menudo se convirtieron en monopolios y oligopolios privados que aunque mejoraron la calidad de bienes y servicios, también multiplicaron sus precios y tarifas, además de que procedieron a despedir a gran parte de la innecesaria burocracia de las viejas empresas del gobierno.

El símbolo del mercantilismo continental es probablemente el mexicano Carlos Slim. En abril, la revista Forbes colocó al Sr. Slim en el segundo lugar, entre la gente más rica del mundo, con una fortuna personal de más de 53 mil millones de dólares. Pero en junio, el medio financiero mexicano Sentido Común reportó que Slim había reemplazado a Bill Gates, como el hombre más rico del mundo, con 67 mil millones de dólares, agregando que Slim y su familia son dueños de “casi el 8% del producto interno bruto de México”.

Sobre lo que no hay duda es que los mexicanos pagan las tarifas telefónicas más altas del continente y de todos los 30 países miembros de la Organización para la Cooperación y el Desarrollo, lo cual le permitió al grupo Telmex, a partir del año 2000, su agresiva adquisición de empresas telefónicas por casi toda América Latina.

El llamado neoliberalismo latinoamericano hizo bastante daño y causó mucha confusión, mientras que en Estados Unidos la izquierda ya se había apoderado desde hace mucho tiempo del término “liberal”, ilustre vocablo de origen castellano, que siempre fue el antónimo de “servil”.

La definición del verdadero liberalismo no ha cambiado mucho desde el siglo XVIII: el individuo es la fuente de sus propios valores morales; el libre intercambio entre individuos optimiza la eficiencia y la libertad; el mercado es un orden espontáneo para el mejor uso de escasos recursos; el libre intercambio entre naciones maximiza la riqueza a través de la división internacional del trabajo, al mismo tiempo que reduce las tensiones políticas y la intolerancia nacionalista; las funciones del gobierno son estrictamente limitadas a lo que los individuos no pueden hacer por sí mismos, en cuanto a la defensa nacional, a mantener un Estado de Derecho para la protección de las personas y de sus propiedades, garantizando el cumplimiento de contratos libremente acordados, con leyes claras y constantes, aplicables a todos por igual, además de la emisión de una moneda estable y confiable que estimule el ahorro y el esfuerzo individual.

Para evitar confusiones, los clásico-liberales de hoy se suelen llamar libertarios.
¿Por qué crecen otros países?

Creo firmemente que el impresionante crecimiento económico que están logrando varios países ex comunistas se debe a su rápido avance hacia ese ideal libertario. Le escuché decir a Mart Laar, exitoso primer ministro de Estonia durante dos períodos, lo complacido que se sentía de haber comprobado que “las ideas de Milton Friedman sí funcionan”. El Congreso chino reconoció este año el derecho de los ciudadanos a la propiedad privada y Albania acaba de establecer una tasa única del impuesto sobre la renta de 10%, tanto a las personas naturales como a las empresas, al comprobarse que la reducción y unificación de la tasa impositiva ha conducido en varios otros países a aumentar considerablemente la recaudación total. Eso se debe a dos razones: se reduce drásticamente la evasión y se multiplican las inversiones.

Por cierto que donde primero se instrumentó un impuesto de tasa única y pareja fue en Hong Kong, donde el ingreso per cápita equivalía en 1960 a 28% del de Gran Bretaña, pero para 1996 había aumentado a 136% del de Gran Bretaña, debido a las políticas de libre mercado instrumentadas por John Copperthwaite.

El despegue y éxito de la pequeña Estonia ha sido similarmente espectacular y su ex primer ministro Laar admite que él no es economista y que ha leído un solo libro de economía, “Libertad de elegir” de Milton Friedman, añadiendo “yo era tan ignorante que creía que los beneficios de la privatización, el impuesto de tasa única y la abolición de las barreras a las importaciones eran los resultados de reformas económicas practicadas en Occidente. Como eran de sentido común para mí, creía que habían sido instrumentadas en todas partes. Sencillamente las introduje en Estonia, a pesar de las advertencias de nuestros economistas de que no se podía hacer. Decían que era tan imposible como tratar de caminar sobre el agua. Lo hicimos y simplemente caminamos sobre el agua porque no sabíamos que era imposible”.

En América Latina tenemos el estupendo ejemplo chileno, una nación tradicionalmente pobre que al liberar la economía logró disparar un crecimiento sostenido. En ese nuevo Chile surgió la revolución mundial de las pensiones, bajo el liderazgo de José Piñera, que ya se ha extendido a 8 países latinoamericanos, donde más de 50 millones de trabajadores cuentan con más de 100.000 millones de dólares ahorrados en cuentas individuales. Asimismo, varios países ex comunistas han privatizado sus sistemas de jubilaciones y, en este campo, Colombia y varias otras naciones latinoamericanas están ya por delante de Estados Unidos.
El fracaso de la ayuda externa

Lamentablemente, el gobierno de Estados Unidos nunca se ha preocupado en vender las ventajas capitalistas de libre comercio y libertad de empresa en América Latina. Por el contrario, desde tiempos de la Alianza para el Progreso del presidente Kennedy, cualquier ayuda económica de Washington estaba sujeta a que los gobiernos latinoamericanos aumentaran los impuestos y a menudo trataban de imponernos reformas agrarias que ni siquiera Franklin Roosevelt consideró conveniente para su país.

En cualquier caso, miles de millones de dólares en ayuda extranjera no han cambiado nada en el mundo desde que comenzaron tales programas después de la Segunda Guerra. Como bien lo explicaba el más brillante economista del desarrollo, Peter Bauer: “El argumento que las donaciones externas son necesarias para el progreso de los países pobres confunde causa y efecto. Son los logros económicos los que producen activos y dinero; no son los activos y el dinero los que producen logros económicos…”

Ahora, en Estados Unidos se habla mucho de “nivelar el campo de juego”, con lo que algunos sindicatos y sectores industriales y agrícolas súper protegidos y poco competitivos aspiran seguir aprovechando actuales y futuras barreras a la importación. Nivelar el campo de juego en realidad significa aumentar el desempleo y la pobreza en América Latina.

Si Washington realmente creyera en las ventajas del capitalismo, el representante de Estados Unidos abriera las hasta ahora exageradamente largas y complejas negociaciones de los tratados bilaterales de libre comercio, diciendo lo siguiente: “Lo que claramente conviene más a los norteamericanos es poder comprar los mejores productos y servicios del mundo, al precio más bajo posible, por lo que procederemos a eliminar cualquier traba o barrera a la libre importación de productos y servicios provenientes de su país. Y en beneficio de su propia gente, les sugerimos, aunque en ningún momento le trataríamos de imponer, que ustedes hagan exactamente lo mismo. Entonces, finalizada la negociación, procedamos con el brindis”.
Conclusión

En América Latina, muchos de nuestros gobernantes y políticos siguen luchando contra enemigos imaginarios. Antes se culpaba al imperialismo yanqui que supuestamente nos obligaba a intercambiar materias primas baratas por productos manufacturados caros, hoy es la globalización, los subsidios agrícolas de los países ricos y las “asimetrías”.

En cuanto a los subsidios agrícolas, si estos, por ejemplo, permiten a latinoamericanos comprar pan más barato porque es elaborado con trigo subsidiado por los contribuyentes norteamericanos, ello debería ser más bien aplaudido y apoyado por quienes pretenden defender a los pobres de su país.

El tema de las asimetrías es todavía más absurdo. Equivale a decir que si un hombre rico, manejando su Rolls-Royce, se para en un semáforo y le compra una caja de chicles a un jovencito en alpargatas, se aprovecha y perjudica a ese muchachito.

Así como los dictadores del siglo XX nos decían que los latinoamericanos no estábamos listos para la democracia, los políticos de hoy insisten que no estamos listos para la libertad económica.

El problema latinoamericano es profundo y difícil de combatir porque las principales trabas al bienestar y a la prosperidad forman parte de nuestras instituciones: nuestros gobiernos, nuestras leyes y constituciones, nuestros sistemas judiciales politizados y una educación pública que a lo largo de varias generaciones ha deformado la manera de pensar de la ciudadanía. Lejos de promover la responsabilidad individual, la propaganda política en la educación pública enseña a los niños que el gobierno es el tío rico y bondadoso que siempre estará allí para ayudarles, cuidarlos y hacer posible su felicidad. El problema, claro está, es que el gobierno sólo puede darme a mí lo que antes le quitó a usted.

Artículo de la Agencia Interamericana de Prensa Económica (AIPE)
© Todos los derechos reservados. Para mayor información dirigirse a: AIPEnet

574) Comercio em moedas locais: uma opcao inconveniente...

Desde quando o governo brasileiro começou a planejar a substituição do comércio em dólares, adotado tradicionalmente e na quase totalidade dos intercâmbios internacionais do Brasil, por comécio em "moedas locais" -- ou seja, moedas nacionais, geralmente inconversíveis, ou possuindo diversas limitações para seu fluxo transfronteiriço normal -- venho alertando para a grande inconveniência desse tipo de procedimento, profundamente custoso para o Brasil, prejudicial à nossa economia e só adotado, me parece, por razões puramente ideológicas, tendo em vista o preconceito que exibem economistas e políticos do atual regime contra tudo o que seja americano, mesmo que seja em detrimento do próprio Brasil.
Este é o caso do sistema criado com a Argentina, absolutamente ridículo em volume e importância econômica, mas que foi obrigatoriamente forçado em cima do Banco Central contra princípios mínimos de administração de nossas contas externas.
Em primeiro lugar, isso obriga o BC a criar uma outra "janela" para operações externas, quando até o momento -- e desde o final dos anos 1930, quando passamos da área da libra esterlina para o domínio do dólar, como nossa moeda de transações externas -- usamos a moeda americana, o que unifica todo o sistema contábil de operações financeiras externas. Isso representa duplicação de procedimentos, contabilidade especial, e à parte de todas as demais, acarretando, portanto, custos adicionais a um sistema já consagrado e prático (posto que unifica todos os cálculos).
Em segundo e principal lugar, porque NÃO É FUNÇÃO de nenhum Banco Central, no resto do mundo, assumir custos e riscos cambiais em favor de agentes privados, ou seja, exportadores e importadores que fazem operações puramente comerciais.
Bancos Centrais são feitos para liquidar pagamentos externos quando -- e no nosso caso isso é um monopólio -- a moeda não é conversível e a autoridade monetária se encarrega de garantir a entrada e saída de moeda estrangeira. Ora, fazê-lo em moedas locais, sem garantia de que a política cambial não será manipulada pelos governos -- como parece ser o caso, infelizmente, da Argentina -- representa um risco adicional para o Banco Central. Sim, porque não sei se todos sabem, o comércio em "moedas locais" é liquidado pelos Bancos Centrais da Argentina e do brasil, no final do dia, em dólares, que continua a ser, assim, a moeda de referência obrigatória e de CÂMBIO entre o Brasil e a Argentina. A passagem pelas "moedas locais" é, assim, absolutamente ridícula, e só beneficia as pequenas empresas de fronteira, que podem até achar bom essa nova modalidade, mas isso representa uma parte muito pequena, insignificante mesmo, do comércio total do Brasil. As grandes empresas não tem nenhuma razão para abrir uma outra janela para suas transações externas, que continuarão a ser feitas em dólares mesmo para o comércio bilateral Brasil-Argentina. Elas não tem porque causar mais custos para seus sistemas contábeis, pois elas cuidam de seus retornos contábeis, algo que o governo parece descartar como inútil (claro, somos todos nós que pagamos).

Em terceiro e mais importante lugar, se começou tambem a falar em comércio em "moeda local" com a China, o que é abolutamente extraordinário em matéria de estupidez econômica e burrice administrativa.
Trata-se de uma regressão ao bilateralismo monetário de mais de 80 anos atrás, quando se começou a conceber o multilateralismo nos pagamentos internacionais, finalmente consagrado no sistema de Bretton Woods. Com todas as suas falhas, o sistema concebido em 1944 e administrado pelo FMI consagra a liberalização dos pagamentos correntes -- ou seja, os fluxos monetários que correspondem ao pagamento de fatores -- e a utilização de moedas conversíveis justamente para evitar o bilateralismo que tinha sido a característica, e a desgraça, dos anos 1930. Querer voltar atrás, agora, é um retrocesso inaceitável.
Em quarto lugar, uma medida dessas só poderia beneficiar a China, posto que sua moeda não sendo conversível, os saldos que o Brasil obtivesse no comércio bilateral com ela, só poderiam ser utilizados no comércio COM A CHINA, ou seja, nos condenando a comprar dela tudo o que ganhassemos nesse intercâmbio bilateral, o que reconheçamos, é de uma estupidez exemplar.
A matéria abaixo trata discretamente do assunto, mas eu me permito reproduzi-la, mesmo depois de três meses de publicada, pois o tema me parece muito importante.

Comércio em moeda local pode sair caro, diz OMC
Jamil Chade
O Estado de S. Paulo, Sexta-feira, 4 de dezembro de 2009

A Organização Mundial do Comércio (OMC) teme que a existência de várias moedas nos fluxos de bens internacionais pode encarecer as transações e aumentar as incertezas para exportadores e importadores. O assunto foi tratado em documento distribuído há poucos dias aos governos. Nele, a OMC quebra um de seus dogmas ao tratar do impacto do câmbio no comércio.

Legalmente, a OMC não tem direito de se intrometer nas questões cambiais, ainda que haja a possibilidade de os tribunais da entidade serem usados caso um país esteja prejudicando os demais ao manipular sua moeda. Pascal Lamy, diretor-geral da OMC, insiste que o câmbio deve permanecer como um assunto do Fundo Monetário Internacional (FMI). Nem a China e nem os Estados Unidos querem ver o tema desembarcando na OMC.

Mas, sutilmente, a entidade deu sua opinião sobre o fenômeno de eventuais novas moedas. A avaliação faz parte de um anexo ao seu relatório anual. No documento, a OMC admite que há uma tendência à perda de força do dólar como a principal moeda internacional. Mas ressalta que a erosão de credibilidade e de seu uso não ocorrerá de um dia para o outro e não há perspectiva de uma substituição. Não haveria nenhuma garantia de que a moeda americana vá perder seu papel de moeda internacional.

Já um relatório preparado pelo economista Joseph Stiglitz a pedido da Organizações Unidas (ONU) sugeriu que a prática adotada por Brasil e China ganhe terreno. A recomendação é permitir que os países usem moedas locais para fechar seus contratos de exportação e importação. Dessa forma, evitariam prejuízos com a variação do dólar ou com a falta da moeda americana em algum momento. Para Stiglitz, isso deve fazer parte de uma reforma do sistema financeiro internacional.

Mas o projeto enfrenta grandes problemas. O primeiro é a competitividade. Setores industriais no Brasil temem que os chineses se aproveitem do acordo de comércio na moeda local para incrementar ainda mais suas vendas ao mercado nacional. Nos últimos anos, o Brasil vem adotando uma série de medidas de restrição às importações chinesas.

Outro problema é o impacto que acordos de substituição do dólar teriam para o próprio valor da moeda americana. Os Brics (Brasil, Rússia, Índia e China) contam com reservas internacionais no valor de US$ 2,7 trilhões. Uma perda de credibilidade do dólar afetaria suas reservas.

Enquanto as análises se proliferam em relação ao futuro do dólar, a realidade é que nunca na história do sistema financeiro a moeda americana sofreu uma queda tão grande como moeda de referência como no segundo trimestre. Dados da Barclays Capital indicam que 63% das novas reservas obtidas por bancos centrais e comerciais foram em euros ou iene. No trimestre, o dólar representou apenas 37% das reservas adquiridas. No fim do anos 90, quando o euro era criado, o dólar sozinho representava 65% das novas reservas.

Em termos de estoque, o dólar ainda é majoritário. Mas nunca a taxa foi tão baixa como agora. A moeda americana representa 62% das reservas de Banco Centrais pelo mundo, calculada em US$ 4,2 trilhões. A taxa é a menor já compilada pelo FMI. No ano 2000, o dólar representava 71% dos estoques de reservas mundiais, de US$ 1,4 trilhão.

A recessão nos Estados Unidos, o déficit americano e a tentativa do banco central americano de inundar mercado com dólares para relançar a economia seriam alguns dos fatores que pesaram para a mudança.

573) Financial crisis: how it happened?

How They Killed the Economy
By Roger E. Alcaly
The New York Review of Books, Volume 57, Number 5 · March 25, 2010

Books:
Getting Off Track: How Government Actions and Interventions Caused, Prolonged, and Worsened the Financial Crisis
by John B. Taylor
Hoover Institution Press, 92 pp., $14.95

The Fundamental Principles of Financial Regulation
by Markus Brunnermeier, Andrew Crockett, Charles Goodhart, Avinash D. Persaud, and Hyun Shin
Geneva: International Center for Monetary and Banking Studies, 76 pp., available at voxeu.org/reports/Geneva11.pdf

The United States economy is slowly reviving: it grew by 2.2 percent in the third quarter of 2009 and by 5.7 percent in the fourth quarter, a trend that may signal an end to the worst recession we have had since the Great Depression. The country avoided a much more severe economic collapse only because government responses to this breakdown, both in the US and abroad, have been more effective than those of the 1930s were.

Nonetheless, housing is still depressed and nearly 10 percent of the labor force was unemployed in January. We have lost more than eight million jobs, over half of them permanently, since the recession began in December 2007; and long-term unemployment is at record highs. Even if the economy grows 5 percent a year over the next three years, which seems unlikely, the US will probably not return to full employment before 2013.[1]

That an even worse disaster has been averted, in part by people who studied the lessons of what happened in the past, underscores our need to understand what went wrong this time and what must still be done to restore the economy and avert another collapse. Almost everyone agrees that the crisis developed in part because of failures of regulation—principally of banks, mortgage brokers, and derivatives markets—and much effort is currently being devoted to revamping and shoring up the regulatory system.

Alan Greenspan's Federal Reserve bears responsibility for some of these supervisory failures; it also kept interest rates "too low too long," thereby exacerbating the dangers to the economy. The failures of the Fed's monetary policy are particularly significant—without them the need for effective regulation would have been much less urgent. This may help explain why the embattled Fed Chairman Ben Bernanke, who was confirmed on January 28 for a second four-year term in the most contested vote ever for a Fed chairman, tried to counter those who blame the Fed in a speech before the American Economic Association a few weeks before the vote. But like many of the Fed's critics, Bernanke focused only on whether the Fed should have started raising interest rates before it actually did in June 2004. He did not address a more critical issue: Did the slow and predictable pace at which it raised rates encourage the excessive risk-taking that brought down the financial system and the world economy?[2]
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By any measure, the crisis was a consequence of extraordinarily reckless behavior—by banks and other financial institutions, by governments and their financial regulators, and by consumers—behavior that continued even in the face of a widely shared sense that serious trouble was brewing. Charles Bean, deputy governor for monetary policy of the Bank of England, was not the only central banker to admit, in November 2008, that major trends of the world economy had "vexed policymakers for some time. We knew they were unsustainable and worried that the unwinding might be disorderly.... However, nothing very much was done... " (emphasis added).

Even Chuck Prince, the former CEO of Citigroup, was aware of the risks when in July 2007 he boasted that the bank was not pulling back from its aggressive lending: "When the music stops...things will be complicated. But as long as the music is playing, you've got to get up and dance. We're still dancing... " (emphasis added) —a prime example of the kind of illusions that led to disaster. Consumers, too, were carried along on the wave of easy credit and by rising home prices; they borrowed to the hilt, often by refinancing their appreciating homes, and saved almost nothing.[3]

The failure of central bankers and regulators to rein in leverage—the practice of borrowing as much as thirty or more times one's equity capital to increase investment potential[4] —and excessive risk-taking owes much to complacency that had developed over the preceding twenty to twenty-five years. This was a period that many economists call the "great moderation," when economic growth was relatively steady, inflation was low, recessions were short and mild, and serious crises were weathered without severe downturns. Partly this was because the most serious economic crises are centered in the banking and financial system, the basic source of credit, and none of those that occurred during this period involved the banking system in a major way.

The list of crises that were contained is long and impressive, including the stock market crash of 1987, the junk bond collapse of 1989–1990, the Asian crisis of 1997, the Russian default in 1998, the failure of Long Term Capital Management—a large and hugely leveraged hedge fund—later that year, and the collapse of technology stocks in 2000–2001. Quick and effective responses to these and other dangers by Greenspan's Fed appear to have induced banks and investors to rely unduly on its ability to stave off collapses that threaten the system, and to ignore the serious malfunctioning of the financial markets. These same successes may have led Greenspan himself to believe that he actually was, in the words of the Financial Times, the "guardian angel of the financial markets."

The general pattern of those years was similar to earlier extended periods of growth and great optimism. The standards for issuing credit and for supervising those who do so tend to deteriorate markedly during such prolonged periods of prosperity (as the junk bond collapse also showed on a much smaller scale). This is one reason why financial crises typically follow booms. It also is why, as an economic expansion lengthens, regulators of financial institutions should be—but seldom are—especially vigilant; and regulations should be—but were not—adapted to automatically constrain risks as the expansion progresses. (Regulations should also function "countercyclically" in downturns, by encouraging lending and investment as conditions worsen.) Because the US regulatory system was deeply flawed, reflecting pressures from powerful commercial banks, investment banks, and insurance companies, and negligently implemented, it failed to counteract the prevailing optimism and cool the housing and credit markets. Instead it fostered the inflating bubbles.[5]

Along with hubris and complacency, ideology also explains some of the supervisory negligence. In October 2008, appearing before the Government Oversight Committee of the House of Representatives, Greenspan famously confessed to being in a "state of shocked disbelief" that the "self-interest" of banks and other market participants had not prevented the "once-in-a-century credit tsunami" that was devastating the world economy. Under questioning the former Fed chairman went further, admitting that the events of 2007–2008 had revealed a "flaw" in his own laissez-faire worldview. He reminded the committee that he had been concerned as early as 2005 that "the protracted period of underpricing of risk...would have dire consequences." Yet he had done little to contain that threat, and the consequences, he said, turned out to be "much broader than anything I could have imagined."[6]

Although he has confessed to some regulatory failure, Greenspan has fiercely resisted criticisms of his monetary policy itself—especially suggestions that his policy of keeping interest rates low for so long encouraged the housing bubble and the explosion of borrowing throughout the economy. It must sting more deeply that the most forceful attacks on his monetary policy have been leveled by Stanford Professor John Taylor, an esteemed monetary economist and Greenspan's "good friend and former colleague." Taylor served in the Ford, Bush I, and Bush II administrations, including as undersecretary of the Treasury for international affairs between 2001 and 2005. His first public criticism was made two years after leaving that position in a paper presented to the annual August gathering of central bankers and monetary economists in Jackson Hole, Wyoming, that is sponsored by the Federal Reserve Bank of Kansas City. The paper is the heart of Taylor's new book, Getting Off Track.

Taylor argues that if the Fed had started raising interest rates in 2002, shortly after the end of the recession that followed the bursting of the technology stock bubble, the housing market would not have grown as wildly as it did. He bases his argument on his own "Taylor rule," a guide to monetary policy he developed in the early 1990s, that quantifies how forcefully the Fed should adjust interest rates in response to changes in inflation and GDP. Taylor rules are widely used by economists and policymakers and there are many different versions reflecting variations in the way they are applied, particularly in how inflation is measured. Taylor measures inflation by the average change in the Consumer Price Index (CPI) over the preceding four quarters, a choice that has a big impact on his conclusions.[7]

By contrast, the Fed and many economists prefer using "core" inflation measures because they exclude the effects of food and energy prices, which can be very volatile. During the late 1980s and most of the 1990s the CPI and core measures of inflation largely moved in tandem and Fed policy was very close to that prescribed by the Taylor rule. In 2002 and 2003, however, the CPI and core inflation diverged sharply, the former rising rapidly and the latter falling, leading to conflicting implications for appropriate monetary policy. Both Federal Reserve Vice Chairman Donald Kohn in 2007 and Chairman Bernanke this January pointed to the importance of Taylor's choice of an inflation measure in convincingly criticizing his suggestion that the Fed should have begun raising interest rates in early 2002—when the recovery from the 2001 recession was still anemic and the risks of deflation were clear.[8]

But Taylor's general contention that low rates after 2003 encouraged the housing bubble is largely persuasive, although mostly for different reasons than he provides. In June 2004 the Fed finally began raising the federal funds rate—the rate banks charge one another for overnight loans[9] —as the recovery stabilized and employment and inflation began rising more rapidly. It probably should have started raising rates slightly earlier. Most important, the Fed raised rates only in increments of a quarter of a percentage point (twenty-five basis points); after seventeen such increases the federal funds rate peaked again in June 2006. Fourteen of these "measured" rate rises were attributable to Greenspan and three to Bernanke, who replaced him in February 2006.

Raising interest rates so slowly and steadily promoted excessive risk-taking, and should have concerned Greenspan, according to his stated views. The Fed's policies thus seem especially peculiar. They helped to create a false sense of security and stability that enticed financial institutions and investors to leverage their investments enormously, borrowing sums that dwarfed the capital they committed.

Such blindly optimistic short-term profit-seeking dominated the investment world for at least two reasons. First, all crises over the preceding quarter-century had apparently been contained by effective Fed actions, suggesting that any new problems would be dealt with as well. Second, by telegraphing its intentions to raise rates only at a "measured" pace, the Fed eliminated concerns about a sharp rise in interest rates, a principal worry for highly leveraged investors. And because these deliberate rate increases began when the federal funds rate was only one percent, attractive rates were guaranteed to persist for some time.[]

Getting the federal funds rate to near 3 percent much more quickly would have introduced a healthy dose of caution to investors in the years when the housing bubble inflated most rapidly. Moreover, the versions of the Taylor rule used by Federal Reserve policymakers not only suggest that rate increases should have started earlier in 2004, but also show that rates should have reached 3 percent before the end of that year.

Why didn't Greenspan act more aggressively to quickly raise interest rates to 3 percent or higher? He claims that it wouldn't have mattered, that he "could not have 'prevented' the housing bubble" through monetary policy because the Fed could not influence longer-term interest rates, such as mortgage rates, which are most relevant to housing markets. In his view, the Fed was hamstrung by rapidly growing excess savings in developing countries—mainly China and oil-exporting countries—which were invested in the bond markets of both the United States and other advanced economies. By infusing so much money into these markets, China and others pushed "global long-term interest rates progressively lower between early 2000 and 2005." These capital flows from emerging to developed economies not only financed government deficits. By pushing interest rates down, they funded the US housing boom and consumption binge as well.[10]

Such global imbalances did indeed make it more difficult for the Fed to influence longer-term interest rates, but they did not render it helpless to cool the housing bubble and offset the growing risks to the economy. At the very least, as both Taylor and Bernanke argue, higher federal funds rates would have limited the growth both of adjustable-rate subprime mortgages (which are based on shorter-term interest rates) and of the derivative securities linked to them. In fact after 2004 much of the most reckless behavior leading to the meltdown originated in irresponsible lending and trading in subprime mortgages and derivatives.[11]

We will never know how effective more forceful monetary policy would have been since it was never tried. The approach taken by the Fed failed, in part because of the way in which financial institutions and investors evaluate their risks. Most measures of risk are derived from the volatility of asset prices—basically how much they fluctuate—and the extent to which portfolios contain a diverse variety of securities. During booms these estimates of risk tend to fall because asset prices—the price not only of stocks and bonds but of real estate and other assets as well—rise and volatility tends to fall or rise only slowly. The resulting decline in estimated risk is taken by investors as a signal that it is safe to increase leverage and take on more risk; but it can be a seriously misleading signal.[12]

Greenspan's monetary policy reinforced these failings of existing methods of risk control. Without the threat of a sharp rise in interest rates, estimated risks fell and restraint evaporated, encouraging the foolishly optimistic behavior of banks and investors. In such a heady environment, competitive pressures are hard to resist and financial institutions tend to gloss over the well-known limitations of their own risk models in order to pursue opportunities for short-term profit. The false precision of these mathematical models—they are well defined and superficially exact even while frequently deceptive—gave their predictions far greater credibility than they deserved and made it easier for bank executives to ignore more impressionistic judgments based on historical comparisons, anecdotal evidence, or common sense. All these would have called into question the reliability of estimates that indicated low risk amid a rapidly inflating housing bubble.

In addition, compensation schemes for managers and traders generally were linked to short-term profits, giving them outsized incentives to take risks regardless of the longer-term consequences. From some of his statements Greenspan seemed fitfully aware of some of these problems; yet he adopted policies that made them worse.

The Fed's unwillingness to raise interest rates quickly would have been less serious if regulation had been more effective at curbing the emerging risks in the financial sector and the economy. But regulations were not well enforced. For example, Greenspan explicitly rejected Federal Reserve Governor Edward Gramlich's warnings about the need for the Fed to curtail widespread abuses in mortgage markets. Earlier he also rejected the strong warnings of Brooksley Born, the head of the US Commodity Futures Trading Commission, about the many dangers of unregulated derivatives. Existing regulations also were inadequate. Partly that was because bank regulations did not cover investment banks such as Bear Stearns and Lehman Brothers, major bundlers of subprime mortgages for worldwide sale that were at the heart of the crisis. (They were regulated—quite superficially—by the Securities and Exchange Commission and the New York Stock Exchange.)

Nor did the regulations take full account of how much the "shadow" banking system added to potential losses for banks such as Citibank that sponsored "structured investment vehicles" (SIVs). These entities, which functioned much like investment funds, were established largely to circumvent regulatory limits on their sponsors. They didn't take deposits and acquired their portfolios of illiquid mortgage-related securities mainly through short-term borrowing. Hedge funds often provided equity capital for the SIVs, which were managed by their sponsors who charged a fee for their services. The sponsors sometimes provided emergency lines of credit as well. When the value of the SIVs' portfolios plunged and their funding sources dried up in the credit crunch, they had to be reabsorbed, adding to their parents' losses.

In addition to such problems of scope, the existing bank regulations—primarily capital requirements and limits on leverage—also failed to sufficiently constrain leverage and risk-taking during the buildup to the crisis. These closely related concepts are the key components of bank regulation, probably of all financial regulation, and their breakdown during the crisis was largely a consequence of the way both variables were measured. Capital, rather than being limited to a bank's tangible common equity—essentially the portion of its net assets due to its shareholders, which is subordinate to the interests of depositors and creditors—generally included intangible items such as goodwill as well as preferred shares and deferred tax credits, whose value depended on future profitability.

Similarly, capital requirements were based on different assets' supposed "riskiness," which tended to fall during the boom, and leverage ratios were calculated by comparing a bank's capital to its risk-adjusted assets. Measuring capital so generously and adjusting assets in this way made leverage appear lower and capital seem more adequate than they were.

In this respect the regulations were very much like the risk models that investors and financial firms used. Indeed, the highly influential Bank for International Settlements, an organization of central banks that seeks to coordinate bank regulations, proposed in 2004 that, in determining banks' capital requirements, regulators should rely in part on banks' own risk models as well as on data provided by credit-rating agencies such as Moody's or Standard and Poor's, agencies that were paid by the very financial institutions whose credit they were assessing.

These proposals were widely adopted—and turned out to be dangerously misleading. As a consequence of procedures like these, which justified extremely low capital requirements for AAA-rated mortgage derivatives—1.6 percent of the holdings, equivalent to leverage of more than 60 to 1 for these securities and less than half the capital required to hold individual mortgages—Lehman was thought to be well capitalized just a week before its bankruptcy. Absurdly low capital requirements also explain why banks retained such vast quantities of mortgage-related securities on their own books, setting themselves up for huge losses when the housing bubble burst.[13]

"When a regulatory mechanism has failed to mitigate boom/bust cycles," the authors of The Fundamental Principles of Financial Regulation (a "Geneva Report" by an international group of economists)[14] observe, tinkering around the edges is not likely to be sufficient. What is required is a new approach that concentrates on the need for financial regulation to moderate the business and credit cycles, acting as a "countervailing force" to the rising use of leverage and risk-taking during a boom and helping to offset the damage in a collapse. Moreover, the regulatory mechanism should be based as much as possible on clear, mandatory rules, since regulators often are loath to slow down a boom and have been susceptible to lobbying by financial firms, factors that may help to explain Greenspan's failures. The United States and most other developed countries have now endorsed the need for such new rules—although so far, it must be stressed, little has been done to implement them.

The Geneva economists propose a deceptively simple mechanism for linking capital requirements to the changing risks that major financial institutions pose to the entire banking system. They would multiply current or improved capital requirements—the Bank for International Settlements is now considering such a revamped set of requirements—by a series of factors, one based on how fast a bank's assets and leverage grow; a second geared to the extent to which a bank's assets are financed by shorter-term borrowing that might dry up in a crisis; and possibly a third based on the degree to which a bank's bonus and other compensation schemes encourage excessive risk-taking.

This approach, which could be applied incrementally to a nation's most important and interconnected financial institutions as an expansion grows, seems promising, and the elements it incorporates are critical. As the financial crises of the last two years have shown, the combination of high bank leverage, extensive reliance on short-term borrowing, and management compensation schemes that reward short-term results can be lethal.

The Geneva plan would apply to all financial institutions—commercial banks and bank holding companies, investment banks, insurance companies, and hedge funds—whose health might have a significant impact on the entire financial system. And the new capital requirements would take account of the companies' affiliates and their liabilities, even if these obligations don't appear explicitly on their balance sheets. The plan is comprehensive, straightforward, and clear—great virtues, especially in the world of opaque bank regulations. But how effective such a system would be will depend on how well the proposed new multiples are chosen.

In late January President Obama outlined several new elements that he believes should be added to the financial reform measures that are slowly working their way through Congress. The new proposals focus primarily on the problem of financial institutions that are thought to be "too big" or "too important" to fail because their failure might trigger an economic crisis like the one we're emerging from now. As a consequence, such institutions benefit from an implicit government guarantee against total collapse, one that became explicit during the crisis when many banks were rescued at great initial cost to taxpayers. As the President observed on January 21, in order to avert a worse calamity,

the American people—who were already struggling in their own right—were forced to rescue financial firms facing crises largely of their own creation. And that rescue...was deeply offensive but it was a necessary thing to do, and it succeeded in stabilizing the financial system and helping to avert that [threatened] depression.

Although a large chunk of these bail-out costs has` been repaid as the economic climate improved, Obama wants to impose a fee on the largest financial firms in order to repay the remaining cost of the rescues over the next ten years. This proposal, which has yet to come before Congress, is, if anything, too limited, since the government's need to protect major financial institutions from system-threatening disasters will not expire after ten years. A continuing fee levied on important financial firms would thus be warranted as a payment for the catastrophe insurance that the government will continue to provide. This insurance, whether implicit or explicit, allows these companies to raise capital more cheaply than they otherwise could; not surprisingly, it also has encouraged risk-taking and enhanced their profitability, a consequence of insurance that economists call "moral hazard," i.e., such insurance could work as an incentive for companies to take on risks that they may not have to pay for if they go bad. The fee would pay for some of these benefits and might constrain moral hazards.

The insurance fee could also be used to fund the operations of new "resolution authority," a critical part of most financial reform efforts, including the bill passed by the House of Representatives. Such authority would allow regulators to seize control of a shaky but important financial institution and dissolve or reorganize it without messy and lengthy bankruptcy proceedings, and do so in a way that minimizes the need for taxpayer funds. Before government funds were tapped, shareholders and creditors would have to be wiped out. The Fed and the Federal Deposit Insurance Corporation have these powers to control bank holding companies and banks, respectively, and the House legislation would make them applicable to insurance companies and investment banks such as AIG or Lehman.

In addition to the fee, Obama also proposed limiting banks' size and banning activities such as proprietary trading—trading for their own accounts—and sponsoring or investing in hedge funds or private equity funds. The prohibitions are called the "Volcker Rule" after their principal advocate, former Federal Reserve Chairman Paul Volcker. These two initiatives are intended to limit further domination of the financial sector by a small number of firms and to limit the risks that financial firms can take, in particular banks that benefit from government-insured deposits. They complement other financial reform proposals, including the insurance fee, the imposition of beefed-up countercyclical capital requirements such as those proposed by the Geneva economists, and the establishment of resolution authorities.

Some people contend that the Volcker rule is unnecessary, that its goals could be accomplished more effectively through higher capital requirements, and that it would be very difficult to distinguish proprietary trading from what the trading banks do to hedge the potential losses they take on in serving their clients. In addition, such a rule may cause firms like Goldman Sachs to give up their banking licenses—which were acquired during the crisis so that they would be eligible for Fed support. They do a lot of proprietary trading and run large hedge funds and private equity funds, but don't raise much money through deposit-taking. Moreover, the critics point out, the activities affected by the Volcker rule were not major contributors to the crisis.

There's some truth in all these comments but hardly enough to rule out Volcker's proposals, especially if institutions like Goldman Sachs would be subject to stricter new capital, leverage, and liquidity requirements, and be covered by a strong resolution authority, even if they no longer are banks. For if there's one thing we should have learned from the crisis, it's that there are no magic bullets to protect our financial systems and economies forever and that new sources of dangerous behavior may well appear. The Bank for International Settlement's elaborate capital requirements have not worked well; nor have the judgments of bank executives, investors, regulators, or the Fed's monetary policymakers been sound. In fact, many of the rules and judgments have been harmful, not helpful. We can hope that lessons from this crisis, like those from the Great Depression, will be reflected both in better rules and in better judgments. But memories will fade, financial systems will evolve, and no matter how hard we try to put in place effective safeguards, there can be no assurances that it won't happen again.

— February 25, 2010

Notes:
[1]Two pairs of economists have compared the current crisis to the Great Depression and to eighteen postwar banking crises, including five in developed economies. Although the world economy began recovering much sooner than in the Great Depression, compared to postwar financial crises the current US version is considered "severe by any metric." See Barry Eichengreen and Kevin H. O'Rourke, "A Tale of Two Depressions," September 1, 2009, available at voxeu.org/index.php?q=node/3421 ; see also Carmen M. Reinhart and Kenneth S. Rogoff, "Is the 2007 US Sub-prime Financial Crisis So Different? An International Historical Comparison," American Economic Review, Vol. 98, No. 2 (May 2008), and "The Aftermath of Financial Crises," American Economic Review, Vol. 99, No. 2 (May 2009).

[2]Ben S. Bernanke, "Monetary Policy and the Housing Bubble," speech at the Annual Meeting of the American Economic Association, January 3, 2010, www.federalreserve.gov/newsevents/speech/bernanke20100103a.htm.

[3]Charles Bean, "Some Lessons for Monetary Policy from the Recent Financial Turmoil," remarks at the Conference on Globalization, Inflation and Monetary Policy, Istanbul, November 22, 2008, www.bankofengland.co.uk/publications/speeches/2008/speech368.pdf . Prince is quoted in Michiyo Nakamoto and David Wighton, "Citigroup Chief Stays Bullish on Buy-outs," Financial Times, July 9, 2007, www.ft.com/cms/s/0/80e2987a-2e50-11dc-821c-0000779fd2ac.html .

[4]Leverage is borrowing used to finance an investment and is measured as the total value of the investment relative to the equity (nonborrowed) portion. Leverage amplifies both gains and losses and, as Robert Solow explained in these pages, played a "central role" in creating the crisis. See "How to Understand the Disaster," The New York Review, May 14, 2009.

[5]The economist Hyman Minsky has long emphasized the importance of the relationship between credit standards and the business cycle, and it is not surprising that his work has gained much attention in the last few years. See, for example, his John Maynard Keynes ( Columbia University Press, 1975) and "The Financial Instability Hypothesis," May 1992, levy.org/pubs/wp74.pdf; and Janet Yellen, "A Minsky Meltdown: Lessons for Central Bankers," FRBSF Economic Letter, May 1, 2009, frbsf.org/publications/economics/letter/2009/el2009-15.html.

[6]Testimony of Alan Greenspan, House Committee of Government Oversight and Reform, October 23, 2008, clipsandcomment.com/wp-content/uploads/2008/10/greenspan-testimony-20081023.pdf.

[7]Taylor writes that the federal funds rate, which the Fed controls, should be 1.5 times the inflation rate, plus 0.5 times the "output gap" (the difference between actual GDP and potential GDP) plus one. The output gap can also be measured as the difference between the current unemployment rate and the "full employment" rate, generally thought to be between 4 and 5 percent, making the current gap 5–6 percent.

[8]Donald L. Kohn, "John Taylor Rules," paper presented to the Conference on John Taylor's Contributions to Monetary Theory and Policy, Federal Reserve Bank of Dallas, October 12, 2007, federalreserve.gov/newsevents/speech/kohn20071012a.htm.

[9]Monetary policy typically operates through the federal funds rate. By providing money to the banking system, or by withdrawing it, the Fed can control this oversight rate and generally influence longer-term rates as well. During the crisis, however, the federal funds rate has been lowered to near zero, forcing the Fed to use more unconventional measures such as buying longer-term Treasury securities and mortgages to push the rates down.

[10]Alan Greenspan, "The Fed Didn't Cause the Housing Bubble," The Wall Street Journal, March 11, 2009, online.wsj.com/article/SB123672965066989281.html. On global imbalances, see Brad Setser, "The Savings Glut: Controversy Guaranteed," blogs.cfr.org/setser/2009/06/30/, and Ben S. Bernanke, "The Global Savings Glut and the US Current Account Deficit," March 10, 2005, federalreserve.gov/boarddocs/speeches/2005/200503102/default.htm.

[11]In his January 3 defense of Fed policy, Bernanke speculated that low interest rates may have encouraged the proliferation of exotic subprime mortgages, which drove house prices higher; but he does not consider the likelihood that the measured pace with which the Fed raised interest rates was a more fundamental element in the process.

[12]The modern approach to risk analysis evolved from work done by Harry Markowitz in the early 1950s when he was a graduate student at the University of Chicago. Markowitz won the 1990 Nobel Prize in Economics for his theory of portfolio analysis, which argued that investment portfolios could be evaluated by analyzing the tradeoff between their returns and risks, with risk measured by the variability, or variance, of returns. His analysis showed that diversification could reduce overall risk without sacrificing returns provided the elements of the portfolio truly were diverse, i.e., not closely correlated. Applying Markowitz's approach requires several important qualifications, particularly that the data used are representative of the range of possibilities. These requirements are rarely satisfied fully, which is why the models cannot substitute for judgment, especially during booms when real risks may be masked by misleading measures.

[13]"Base Camp Basel," The Economist, January 21, 2010, and John Carney, "Why Banks Bought So Many Toxic Mortgage Bonds," Business Insider, August 7, 2009, www.businessinsider.com/why-banks-bought-so-many-toxic-mortgage-bonds-2009-8.

[14]Begun in 1999, the Geneva Reports on the World Economy are produced through a collaboration between the International Center for Monetary and Banking Studies, which is affiliated with the Graduate Institute of International Studies in Geneva, and the Center for Economic Policy Research, a network of researchers based mainly in European universities. The reports focus on reform of the international financial and economic systems and are written by groups of well-known economists.