The urge to snatch: emerging market blues

What do Evo Morales, Fidel Castro, Robert Mugabe and Joseph Stalin's Soviet Communist Party have in common with the rump of the Pomeranian [British] so-called leftist crowd who gathered in London this past week to adore Hugo Chavez: their new hero-?

One could argue that they are popular with the poor and the dispossessed and they all acted heroically against forces that seem faceless and brutal and symbolised the inchoate nature of subjugation. Certainly some came to power through the gun and some through the ballot through that flash stress point that de Toqueville called the 'tyranny of the majority'-These though are not the core elements that bind them-

Apart from many other things they are all responsible for the compulsory hi-jacking of strategic blocs of their respective country's key private sector owned productive assets: Motor vehicles, coal mines, oil, sugar, productive farmland and the entire Russian state

The British [Pomeranian] Left presided over the annihilation of the British Motor industry, which was ill prepared to handle Japan's competitive onslaught. The coal industry suffered a similar fate, as did the railroad transportation industry, which has still not recovered.

As we all know the great Lenin/Stalin inspired Soviet Kollektive collapsed in such ignominy that nearly two decades later the remnants are still scratching to pick up the pieces and Mr Putin the new Post Soviet Kommissar is reintroducing the old system by stealth and sending State controlled alleged market business entities, more commonly known as State sponsored monopolies like Gazprom, into the liberal democracies of Europe to wreak havoc or market dominance whichever comes first..

One has only to see the crippling effect that the ongoing Telkom monopoly has had on S.A's development to know where that neo-soviet Putin restored model will take Russia.

Chavez and Morales will find themselves increasingly frustrated by the sheer incompetence that is as much the Achilles heel of the tyrannical state as the tyranny of the majority is to the democratic state.

The metaphor that comes to mind here is that media favoured shot of fifties style American vehicles plying the streets of Havana. Should history again repeat itself and both Chavez and Morales rearrange the balloting procedures to avoid losses then both of these worthy gentlemen will, decades from now, be found presiding over a collapsing infrastructure with no way of extending the life of the products they have stolen.

While all the above are [or were] 'redistributing' the wealth that previously rewarded the owners of Capital: like for instance, pensioners, widows, unit trust holders and those with share options, and was otherwise retained for purposes of maintaining competitive profitability, those businesses that fall outside their loop continue to evolve.

There is no solution to this problem. Even Bill Gates famously remarked that his apparent Microsoft monopoly is an illusion that could be shattered by some chance discovery of some new technological marvel by a thirteen-year-old tinkerer.

Monopoly structures breed incompetence. There is almost no escaping it. They become the repository of freebies. In democratic states philanthropic n.g.o,s and sponsored apparent private sector grouping are eased into existence as lobbying groups`, to be repositories for the favours-to-mates thing. In tyrannical states opportunities are naturally by definition less, so the Pals have to be shunted into all the key jobs where they classically under perform, and the 'profits' are assiduously stripped over ages for purposes of 'redistribution'.

The rest of the story is well worn and as well observed and as seemingly obvious as the idea that the runner who sits down on the pavement to experiment with footwear anatomy during the Comrades Marathon will probably miss the cut. So why do so many people keep reinforcing the idea that the private sector is evil and the public sector automatically good: and that it is sound econommics to snatch whjat you need.

If the human race has been around in its present form for some 200,000 years, as many genetic 'fingerprinting' specialists are increasingly claiming, then we must know that for about 190,000 years the entire race lived in poverty and squalor. Over the past ten thousand years a tiny fraction contrived a method to raise themselves above the squalor, and over the past five hundred years the benefits of that method have gradually come to be extended, so that today there are probably a fifth of the global population that no longer live in abject squalor.

The method is privately driven initiative. Those places where private initiative thrives, thrive; those where it doesn't do not. This is a simple observable fact of modern existence.

Castro has kept his populace in the stone-age and his principal modern export is third world standard doctors: under trained human resources. Chavez rides high for a time and may use his sudden windfall to rapidly upgrade the infrastructure for the poor in his nation-but few will invest in a place where investments are subject to gratuitous theft so his infrastructure will gradually unwind. As for Morales, he will find that the cupboard is really quite bare. Ironically the biggest loser in the grabbing game is his neighbour, last year's darling of the Left, Mr Lula of Brazil. One imagines he is not all that happy-a prime leftist out 'lefted'. [Perhaps last weekends 'gangland revolution' in Brazil was a convenient ploy to distract Brazilians from the larger scale theft of their goodies by the new 'gangster on the block' Evo Morales.]

In SA the increasing global drift to formal State control over the economy has taken a more subtle form, nationalisation by stealth it was recently called in a leading article I heard being discussed on the radio. Our new system may even work for a time: we have to experience a major economic downturn to know if it will have an attack of hiccups.

What we also know that we have our own populist demagogue who is on the comeback trail, subject to what happens at his corruption trial. Is it possible that Offshore investors watched that stunning post dénouement gathering outside the courthouse last week and wondered whether they were watching another Evo Morales when he-who-would-be-el-Presidenté held his own post-trial court last week?

This blog saw that possibility.

In fact with all the activities of Populists recently it's no wonder the world has had what we all should hope is a short bout of emerging market blues this past week.
Have fun...el Bloggo...Nik