Throughout Latin America, it is clear that the support base for home-grown populism lies in the state sector—state-owned companies created and maintained by successive governments. As a general rule, they have proved to be deficient and unproductive, and their final product is invariably a string of failures and poor economic results.
By the same token, these companies are run by state bureaucrats who essentially fear competition and strongly reject anything related to innovation and progress.
The spirit of innovation and entrepreneurs is fundamental to the growth of any country, provided an atmosphere of absolute labor freedom is assured. Those men who make a career out of overcoming state regulation are generators of competition and the engines of growth. They improve the lives of ordinary people. They are the real heroes, and plenty of them can be found all over the world.
Milton Friedman once noted that the role of think tanks is to “primarily keep options open, to have available alternatives, so when the brute force of events makes a change inevitable, there is an alternative available to change it.” Friedman’s sentiment is often cited as a kind of value proposition for think tanks around the globe.
Several Eastern European countries have been flirting with various forms of a “retailer tax.” This tax is similar (but not equal) to the value added tax (VAT) and the sales tax. The proclaimed aim of the tax is to “punish” international retail chains, who have been repeatedly blamed for problems of local farmers and the local food and beverages industry. In reality, it primarily hits consumers.
News that the World Bank’s president, Jim Yong Kim, is calling it quits to join the private sector has heightened the debate over what to do about foreign aid inefficacy. Kim made clear in an email to staff that, in his view, the “massive development finance gap” in low-income countries is best addressed by private investment. Kim’s likely successor, David Malpass, shares this view and has gone on record describing the World Bank’s financing approach as outdated due to increases in private capital available to developing countries.
In Ruhiira, Uganda, an international aid project once offered villagers $300,000 to grow maize instead of matoke, a banana-like starch. Maize, the aid experts reasoned, was better to farm because it is nutritious, drought-resistant, and produces high yields. The experts were right. At harvest time, the villagers found themselves with a bumper crop of 3,840 tons of maize.
Consumer rights represent the basic ground for functional market institutions and without the right to terminate contracts with service suppliers, non-egalitarian laws are introduced and the market suffers intense violation of freedom of contract and contract equalities are deteriorated. History cannot be eradicated and our institutions are some kind of depositors of our collective memory. As a result, many institutions in Bosnia and Herzegovina (“B&H”) are still based on a socialist institutional legacy, a legacy that we started to leave behind since the early 90’s of the last century. One example of such transformational resistance is the institution of a central heating service that is very common in the country.
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