How important are key individuals in shaping the success or failure of economies? …Neil Monnery’s A Tale of Two Economies is in some sense a polemic against historical determinism, at least insofar as promoting economic reforms is concerned.It stresses the importance of two single individuals, one a great man for many, one an obscure official and political unknown to the most, in shaping the destiny of their respective countries. …Ernesto “Che” Guevara and John Cowperthwaite. …Monnery insists that both of them were “deep and original thinkers.” …The key difference between the two was perhaps that Cowperthwaite had a solid education in economics… Neither the way in which Hong Kong progressed, nor Cuba’s, were thus inevitable.
Monnery points out that Hong Kong’s success happened not because Cowperthwaite and his colleague were trying “to plant an ideological flag,” but because they were “professional pragmatists.” …Then the success of relatively libertarian arrangements in Hong Kong perpetuated itself. …Cowperthwaite tested what he knew about classical economics when he “first arrived in Hong Kong, in 1945” and “was put in charge of price control.… He soon realized the problems with attempting to set prices low enough to meet consumer needs but high enough to encourage supply, and in a dynamic environment.” He opposed subsidies that he saw as “a brazen attempt to feed at the trough of government subsidies.” …Cowperthwaite is a hero to Monnery, who emphasises his competence, and even more, his integrity.
Pursuing life, liberty & happiness must be accomplished by individuals, and can’t be granted to us by bureaucrats or gov’t programs.
Milton Friedman understood this and trumpeted this message throughout his life.
People in wealthier nations, on average, live longer and better lives than residents of poorer nations. …government policy makers should consider the adverse effects on health and mortality of economic policies that impose costs on the productive sector of the economy.
It then puts forth the sensible hypothesis about the economy-wide implications of onerous red tape.
Lutter and Morrall (1994) attribute to Aaron Wildavsky, see for example Wildavsky (1980), the general proposition that government programs tend to reduce economic growth, thereby interfering with the primary mechanism by which human health has improved over time. According to Lutter and Morrall, the first to apply this principle quantitatively was Keeney (1990), who calculated that an additional death occurs for roughly each $3.14 million to $7.25 million of income lost (1980 dollars). OMB on several occasions has brought health-health analysis to bear both in its review of OSHA regulations related to worker safety, and in examining regulations of other agencies, such as EPA and FDA. For example, using a finding that $7.5 million of costs induces one additional statistical death, OMB argued that although OSHA’s proposed permissible exposure limits for a large number of workplace air contaminants would offer the benefit of preventing 8 to 13 deaths per year, the regulatory costs of $163 million per year would indirectly cause some 22 deaths annually.
In the short run, though, the Venezuelan government gets to play Santa Claus. At least for 2016.
But it won’t have that option in 2017. And because the nation’s kleptocratic government is running out of victims, it’s just a matter of time before the system collapses, at which point the government either gives up power or launches a brutal crackdown.
Hopefully the former.
They deserve the latter.
Earlier this year, I borrowed from Dante’s Inferno and created the Five Circles of Statist Hell. At the time, I suggested that Venezuela was on the cusp of moving from the third circle (̶…