A week in the land of “Podemos”

Pablo Iglesias and his mentor, Hugo Chávez (Photo Credit)

by Federico N. Fernández*

The Free Market Road Show launched in March 7th in Spain. We visited three cities in that beautiful country: Tenerife, Madrid, and Seville. Monday 7th Barbara Kolm and I left Vienna very early in the morning and arrive to the island via Madrid. By the way, the airplanes of Iberia Express are becoming more and more like a flying can of sardines.

This was the first FMRS visit to Tenerife. Our host there was the Instituto Atlántico. The event went great. A very big crowd came and the discussion was of a high level. Of great interest to me was the last panel our local partners assembled on the importance of the sharing economy and tourism. Needless to say, tourists are the main source of income in the Canary Islands.

One of the speakers at this panel was Gustavo Matos, an MP of PSOE — the socialdemocrat party of Spain. He stroke as a very reasonable fellow and a good guy. However, the devil is in the details. He praised the sharing economy because, according to him, it “democratizes” the hotel sector. I thought democracy was just a system to select and remove a government. But OK. Then he went on and said that the “new traveller” (I suppose this means the people who AirBnB, for instance) needs to be protected. Obviously, this protection necessarily has to come from Big Daddy The State.

Yours truly opening the event in Tenerife. It was a great first visit to the Canary Islands.

Now things get even more complicated. As I see it, this “protection” he wants to offer was asked by absolutely no one. In fact, and this perhaps may surprise the socialemocrats of the world, services like AirBnB, just to name one, had already taken steps in order to protect their users. There’s a very unique feature of market economy that forces providers to try to offer their consumers the best possible experience. Ratings, reviews, safety payments, etc. work all in favor of users.

Mr. Matos also mentioned the possibility that you may fall in the bathtub or get electrocuted using the hairdryer. Indeed, these are things which could happen. But are these reasons powerful enough to regulate a sector which is working very well by itself? Will the sticky tentacles of regulators cause more good or more harm when they start meddling in a sector which they don’t really understand?

Services like AirBnB confront the socialdemocrats with the two things they misunderstand the most: the market economy and non-regulated orders. They can’t simply solve the conundrum of people freely exchanging in a mutually beneficial way in an orderly fashion. How could people in different parts of the world arrange accommodation without the state interfering? Well, that’s the magic of the market! Not only enables people to trade but to make it in a secured and transparent way. The “new traveler” Mr. Matos referred doesn’t want regulators to protect him or her. S/he just wants that the great costumer service tools AirBnB provides to continue and improve.

In this sense, who got it totally right was Spanish journalist Juan Manuel López Zafra. He said something very similar to what we think about the so-called “sharing” economy. It’s market economy — pure and simple. Juan Manuel’s exact quotation was: “The sharing economy is a return to the market economy.” Clap, clap, clap.

We left Tenerife the next day (Tuesday March 8th) and had a semi-free afternoon in Madrid. The Spanish capital was beautiful as always but you could feel the tension in the air. Spain is currently trying to form a new government. The conservatives won the elections but haven’t been able to get enough sits to reelect Mariano Rajoy as prime minister. In the meantime, the PSOE with the new centrist party Ciudanados (Citizens) is trying to get into power. And patiently waiting to strike is Pablo Iglesas, the chieftain of Podemos (We can).

Full house in Madrid!

Co-hosted by Instituto Juan de Mariana and Fundación Rafael del Pino, the event in Madrid devoted a full panel to discuss populism. Populism is a term very difficult to grasp. In a nutshell, it refers to politics which could be either left or right but that have in common the following features:

  • a total lack of check and balances
  • the elimination of liberal institutions
  • the presence of a charismatic leader
  • the absolute disdain for market economy and private property
  • the polarization of society between friends and foes
  • the constant need of an “enemy,” internal or external
  • the replacement of parliaments and democratic deliberation with demonstrations and a “direct contact” between the leader and the masses

These populist recipes have been applied in many Latin American countries in the past decades. The results could not have worse. It’s very puzzling that when the Latin Americans seem to be abandoning the failed populist project, in Spain and other European countries it’s gaining ground.

Perhaps the European Union might play a role against an eventual Podemos administration in Spain. However, Greece is also a member of the EU and the “destructionist” project of Alexis Tsipras seems to be rapidly moving forward…

I once heard a lecture by Vicente Massot, an Argentinean intellectual, saying that in Argentina there was a “literally democratic regime.” With this, he meant that whoever won the popular vote could do whatever s/he wanted, with no limits whatsoever. This is basically the objective of every populist around the world. As Carlos Rodríguez Braun mentioned in Madrid, “democracy can play a big role in legitimizing governments.” The populists take this to the extreme and, at the same time, make considerable efforts to erase every constitutional and legal balance there’s against political power. Then it comes as no surprise that the Podemos gang is constantly talking of a Constitutional reform in Spain.

Barbara Kolm, Director of the FMRS, and Fernando Nogales, from Círculo Liberal Bastiat.

From Madrid we took an AVE, the fast Spanish trains which beauty and modernity is only comparable to the speed in which they consume taxpayers’ money, and went to Andalucía. In Seville, our good friends from the Círculo Liberal Bastiat, perhaps the most refreshing thing that has happened to the Libertarian Spanish scene in decades, hosted us for another terrific event.

Unfortunately, the hottest topic there was, again, the populist threat.

Fernando Díaz de Villanueva, a journalist, gave a keynote speech detailing the misdeeds, crimes, socialist economic measures, and suicidal policies of Venezuelan boss Hugo Chávez. Why? Because Pablo Iglesias is an admirer of the deceased leader. And Iglesias makes similar claims like the ones Chávez did. Díaz de Villanueva’s point was that, no matter how far-fetched and ridiculous certain claims may sound, given the chance Iglesias –like Chávez– will implement them. “If they are saying that they will nationalize industries,” concluded Díaz de Villanueva, “is because they will do it.”

Pablo Iglesias saying that Hugo Chávez was, not only a democrat, but democracy itself (in Spanish)
Hugo Chávez nationalizing real estate as he walks through Caracas (in Spanish)

Let’s turn the clocks back until the notorious “11M” which marks the March 11th 2004 terrorist attacks in Madrid. During the 90s Spain had a very rational PSOE administration led by Felipe González that was followed by eight spectacular years of the conservative administration of José María Aznar. But that terrorist attack changed the course of Spain in a way nobody could have predicted. The conservatives lost the elections and José Luis Rodríguez Zapatero won. A very grey politician until then, he implemented a series of political vendettas related with the Spanish civil war of the 1930s, applied to the letter the gender agenda, destroyed the economy, and generated the climate in which the Podemos ultra-leftist mentality grew.

The last four years of the conservatives in power under Mariano Rajoy did nothing to change all this. In fact, Mr. Rajoy’s administration possesses the sad record of the major number of tax hikes in Spanish history.

And now Spain has moved from being one of the most dynamic European economies to the possible next victim of Latin American populism — just when populism in that part of the world seems as dead as Hugo Chávez and Néstor Kirchner are. An indeed very sad turn of events.

However, not all is lost in Spain. And it’s reassuring to see groups like all our local partners working hard to spread classical liberal ideas and explain the population that free markets are the best way to achieve prosperity for all. Spain is a great country with even greater people. If the good people work together, Spain will definitely dodge the bullet of populism.

* Federico N. Fernández is Senior Fellow of the Austrian Economics Center (Vienna, Austria), and Vice president of Fundación Bases (Rosario, Argentina)

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