Spain is becoming the second home of the Free Market Road Show
by Federico N. Fernández *
I’ve spent a week in Spain with the Free Market Road Show.
The Spanish lap is comprised of five cities now. We visited Gran Canaria, Madrid, Seville, Santiago de Compostela, and Gijón.
I had the privilege to spend some time with Ron Manner, John Chisholm, Gloria Álvarez, Enrique Fonseca, María Blanco, Andrea Martos, Fernando Nogales, Fernando Díaz de Villanueva, Asís Timermans, Almudena Negro, and many more!
So many interesting topics were discussed, so many new ideas and points of view…
What else can you ask for?
Things have definitely changed in Spain since my last visit. The macroeconomics of the country is more stable and the same can be said of the political environment. Podemos, the repulsive populist party financed with the blood, sweat, and tears of the Venezuelans, is out of the government. Leftist, it seems, are against globalization except when it has to do with their money.
Dynamic Duo
Anyway, John Chisholm gave magnificent talks about the importance of free trade. This is very important, particularly these days when Trump’s anti-trade rhetoric is being applied as policy.
Speaking of John… he’s the author of “Unleash your inner company.” If you’re thinking to start your own business, you’re already an entrepreneur, or you just want to know how it feels to be an entrepreneur, you have to read that book. I believe all his life experience is turned over in that book.
But I digress… Coming back to trade, John framed the issue following a public choice approach. “Beneficiaries of free trade are broad, long-term, but diffuse. On the contrary, beneficiaries of trade barriers are readily identifiable, immediate, and vocal. So we need to make the benefits of free trade as specific and tangible as possible.”
He then presented a series of myths that seem to point in favor of protectionism. The first was the one that claims that “Exports are good. Imports are bad.” John explained that “imports increase our choices, saving us money, improving quality, or both.” And, what is more, “saved money can be spent on other goods or invested.”
Afterwards, he dealt with one of the most widespread myth against trade: “Trade barriers protect industries.”
Chisholm dismantled this argument explaining that “few industries, if any, can rely only on inputs from a single country.” Besides, imported inputs are responsible for lowering costs and make industries more competitive. A device like the iPhone contains about 75 elements of the periodic table. No country in the world could produce it without relying on imported goods since no country in the world can mine for all those elements within national borders.
He finally tackled the myth that says that “Imports reduce GDP per capita and thus Quality of Life.”
His reasoning was twofold.
On the one hand, he said that “imports reduce GDP but also costs of goods, making goods more affordable, increasing consumption and thus GDP.”
On the other, he claimed that measuring GDP is problematic. “As metrics, GDP per capita and Quality of Life are diverging.”
In a couple of Spanish cities (Gran Canaria and Madrid) we also had the great Ron Manners.
Ron has a privileged mind and a sharp tongue. That is why he tells it like it is. He doesn’t speak about “public spending over GDP.” No, he said on many occasions: “The government steals 43 per cent of your money.”
Marxists, Marxists everywhere!
Although the event is called the Free Market Road Show, Karl Marx was present in many ways.
María Blanco talked about the three ways in which Marxists have tried to put their ideology into practice. When doing this, she followed the ideas of another friend of mine, Stephen Hicks.
María, Stephen, and me are united by free markets indeed. María is both a regular speaker at the FMRS, the Academic Director of Fundación Internacional Bases, and a member of the Honor Committee of the International Austrian Economics Conference I help organize every two years. Stephen co-organized with us a Road Show event in the US and he also spoke -twice- at the Austrian Conference. We’re global freedom fighters!
María, however, went too far I believe. One of her slides in Gijón claimed that Stephen was the sexiest philosopher in the world. I disagree. I would give the tile to Rachel Weisz as Hypatia…
In any case, According to María “there have been three attempts to apply Marxism in the West.” “The first was through revolution. The second with intellectual vanguards. The third and contemporary consists in trying to change our ethical and epistemological premises.”
In her opinion, the new Marxist epistemology is based upon the School of Frankfurt and the ideas of Sigmund Freud. “What they do is to analyze the ‘pathologies’ of capitalism. And since capitalism opresses the masses they are justified in using violence. That is why the left so often justifies violence and even terrorism.”
María raised very interesting points. In fact, it’s very necessary to discuss why the left is always in favor of every violent “ism.” I believe that the unifier is their hatred towards the Western tradition.
Enrique Fonseca, from Visual Politik, is one of the most popular political youtubers in the world. His talks had to do with marketing… from a Marxist point of view.
Fonseca believes that political reality is very complex and that populist have an opportunity when economies are going up. “It is when differences appear that populists can act.”
Following the post-Marxist philosopher Ernesto Laclau, Fonseca explained what “problematization” means. Populists and Marxists tell people what they problem is but they do not offer any solution. What the bring instead is who to blame.
He offered an example to clarify this concept.
“Let’s think of three different persons. One is from Detroit and is unemployed because his factory moved to China. The second is a businessman from San Francisco who cannot compliment his secretary due to political correctness. And the third one is a police woman from Texas.
“Trump’s work was to make these people believe that they have a common enemy.
“Here is where Laclau’s ‘empty signifier’ enters.
“Make America Great Again means different things to different persons of our example. For the gentleman in Detroit it means his job will be back. For the businessman in San Francisco, that political correctness will be abolished. For the police woman, that she will not have to deal with Mexicans.
“Nonetheless, this empty signifier, Make America Great Again, gives them an identity. And when this identity becomes majoritarian, you achieve cultural hegemony.”
And on top of this came Gloria Álvarez, who also talked about Marxism and the so-called 21st Century Socialism.
When in some years we study how the populist / socialist wave was stopped in South America, I believe a few chapters will be about what Gloria did. She played a very important role giving voice to millions in the region who could identify themselves with her famous speech. What is more, she was a catalyst for the anti-populist movement all across Latin America.
Gloria explained how populism gained ground in Latin America. She claimed that the “Foro de Sao Paulo” in 1990 was key to change the leftist strategy. “When the Soviet Union fell the communist parties and the guerrillas lost the Russian finance. So they moved from Marx to Gramsci.” The marxist prophecies were substituted by an aggressive and messianic statism that promised to lift people out of poverty.
At the same time, all across Latin America the “neoliberal wave” came to power and people started talking about “Washington Consensus.” This consensus was comprised of ten points. However, only one was applied: privatization. Therefore, she believes that people were deceived by a Gramscian cultural strategy that demonized a liberalism that was never put into practice.
At this point she explicitly compared liberalism and communism: “Unlike communism, ‘neoliberalism’ was a mere straw man and was never fully applied. Marxism was applied in many countries with catastrophic results.”
In 1998, Hugo Chávez proposed 21st Century Socialism as a response to the “imperialist yankee neoliberalism.” And he initiated a wave that reached Venezuela, Argentina, Brazil, Ecuador, Bolivia, and Nicaragua.
She also mentioned that in her native Guatemala 21st Century Socialism did not get to power but it is indeed a threat. That is why she is part of a civic movement that wants to revive the concept of republic and limitation of power. “It is the republican order the one that enables us to protect our life, liberty, and property.”
Sharing Economy?
I’ve been talking about the sharing economy in most of these Spanish events.
Running the risk of saying too much, one of my conclusions is that the so-called sharing economy is nothing more than the free market economy at its best. Many other have reached a similar conclusion before me. My friend Eduardo Remolins wrote this amazing post a few years ago. And Juan Manuel López Zafra mentioned this last year at the Road Show. These guys have definitely influenced me.
Nonetheless, I believe I have made several additions to the case in favor of the “sharing” economy. I will eventually write a full post about this. In the meantime, make sure to join to the FMRS event in your city so we can talk about it.
All these talks about Uber and AirBnB are finally paying off…
After the event in Amsterdam — where I’m writing these lines — some of the speakers and a few members of the audience went to have dinner. To get back to the hotel I called an Uber, naturally. A Jaguar came for me! I’ve never ridden a Jaguar before and it was very cool.
We had a talk with Ricardo about Jaguars, Teslas, and the price of fuel — which in the Netherlands is very expensive due to… yes, you got it, taxes!
See you on the road!
* Federico N. Fernández is senior fellow of the Austrian Economics Center (Vienna, Austria), and vice president of Fundación Internacional Bases (Rosario, Argentina).
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