Bolivia, the problematic South American country where I live, has been in the news again recently, worldwide. President Gonzalo Sanchez de Lozada, better known by his nickname "Goni," was this time forced to resign on October 17, by the pressure of angry mobs, after only 14 months in power, and has been replaced by his vice-president, Carlos Mesa Gisbert. In February of this year, I wrote an article for LewRockwell.com, titled: "Progressive Bolivian Income Tax Stopped by Angry Mobs." The main apparent cause for their anger this time does not seem to be as compelling: Opposition to gas exports to California, U.S.A., through neighboring Chile, and by multinational companies whom, it is thought, should pay more in royalties. This opposition was the spark that set off the social explosion. This is not a happy account but it shows what can happen when sound economic doctrines are either unknown or unaccepted.
Chile won in a war with Bolivia in 1879 and took the slice of territory that connected Bolivia to the Pacific Ocean, leaving it "landlocked." Bolivians are taught early in school that the Chileans invaded Bolivia and took the land with a much stronger army. Now countless Bolivian goods enter and exit through Chile, both governments are signing a free trade pact. Chile is already a big investor in Bolivia and it is also interested in purchasing much-needed natural gas which it now purchases mostly from Argentina.
A principal, underlying cause for the rebellion was the deep material poverty of the rebels. Also a decisive factor was the influence of a man you might have read about, Evo Morales, leader of the Movement Toward Socialism (MAS in Bolivia), and the representative in the Bolivian Congress for the Chapare region (where most of the coca leaves are grown). He is 100% Indian, and Indian in varying degrees is practically all of Bolivia's population, including this writer whose other family names are local. It was mostly the pressure of very poor Indians that brought the government down. The "upper class" of La Paz, mostly mestizo, joined the rebellion as a group but mostly when it looked like it was going to win.
La Paz is the capital city with about a million people, located at an altitude of approximately 3600 meters, a very exotic place built literally in a big hole with the huge Altiplano region above it (a vast expanse of mainly flat, desert-like land), at an altitude of 4000 meters. Bordering La Paz, is the Altiplano city, El Alto ("The tall one/place"), the poorest city of Bolivia with a population of about a million also. It is quite a treat to descend on La Paz at night from its airport – located in El Alto – and see the La Paz lights below. It is unfortunate that social disturbances usually concentrate in this capital city.
When the people in the highlands get angry, watch out. My observation has been that the people who live at 4000 meters high are much more moody than the people who live at ocean level.
I live in the city of Santa Cruz, Bolivia's most prosperous city, a pacific, fun loving city, part of the oriental and lowland region of Bolivia (400 meters high). The people of Bolivia's lowlands, which encompass roughly half of Bolivia, only watched the conflict in La Paz from afar and did not cause the resignation of the president. There are strong federalist movements in Santa Cruz and even some small groups that want the lowlands to become an independent nation. The differences between the highlanders and lowlanders in Bolivia are in some ways starker than the differences between, say, Texans and New Yorkers. Latin Americans are more different amongst themselves in their characteristics and personality than is commonly acknowledged.
I'll give you an example of this. I studied at San Diego State University back in the 80s. Walking through one of the hallways there once, I recognized the gesture made by a Hispanic fellow who was talking with someone. It was only a slight nod of the head and an expression in his eyes that made me recognize him. I could not hear him but knew, solely based on the gesture (never having seen the man before), that he was a Bolivian lowlander, either from Santa Cruz, Pando or Beni and of no other Bolivian location, let alone another Latin country. I thought I might be the only Bolivian there, plenty of Mexicans and Central Americans though – racially he could have passed for one of them easily. Sure enough, he was from Beni. My sense is that many other Bolivians would have spotted him likewise.
And the rebels who actually knocked down the government were from El Alto and from La Paz. Most of the people gunned down by the government during the uprising (about 82 deaths) were from El Alto and it was there that the revolution started. In the end, more than 100,000 of its citizens came down to the "ollada" (cooking pot), as La Paz is often called, to get the President out of power. Some foreign journalists called the rebellion a "peasant rebellion"; urban poor is what it was.
Some say that if Sanchez de Lozada had ordered the killing of more violent strikers and marchers, he could have prevailed. Hardly. That would have made the crowds even more angry. Also, the loyalty of the army to the president is not traditionally 100% assured. He waited until the problem became too big for him. The uprising forced the stoppage of all commercial activities in La Paz; nobody could work at all for several days. Sanchez de Lozada may have used excessive force in his final response to the uprising but it was his duty to try to stop the marchers and strikers that were starving the city of La Paz, foods being air-lifted into supermarkets during several days because the main roads were closed by the rebels.
The European Parliament forgets that now and has branded Sanchez de Lozada as ineligible for political asylum, only a political statement since he did not seek asylum from them anyhow. However, it will not be surprising if the International Criminal Court tries to convict him later.
Sanchez de Lozada is often called a "gringo" here because he was brought up in the United States and returned to Bolivia as an adult with a strong American accent that he never lost. "Gringo" is not an insult here and it is even a common and affectionate nickname for people who look kind of blond. It actually helped Goni to be a gringo the first time he ran for president in 1993 but this time his incompetent policies made his accent and his cocky, jocular ways that seemed charming the first time around, a liability.
Goni may have had the best of intentions in his political career but they were always obstructed by his arrogant ways. An Argentinean journalist described him accurately as "the man with the arrogant gaze" and if you only see him once on television you'll know why. Typically, he doesn't even look at you when he shakes your hand to say good-bye. Coincidentally or not, he owns the biggest gold mines of Bolivia and always had lots of political power. He says he is worth 49 million dollars but he probably has much more money than that.
When the rebellion began, I was for him completely even though I deplored his FDR-type policies (I can't really fathom why the international media calls his policies "free market policies"). I favored "law and order" in the streets, hoping that he would finish his term as preordained, in 2007, and I did not like it when most of the Bolivian media described the unruly mobs as a sign of democracy in action and attempts to restore order in the streets as "tyranny."
It looked very much like a planned left-wing revolution, the material poverty of the crowds on the ground notwithstanding, but perhaps it was the spontaneous culmination of many previous acts of defiance. The press was like a serpent circling the president, fanning the flames of conflict to sell more newspapers and because most of them didn't like the president personally. One kept waiting for Goni to use the "bully pulpit" to frame the terms of the struggle. He never did. I thought he should work to put in jail the leaders of the violent rebellion that cut off the food supply to La Paz, he never did that either. Eventually I too preferred that he resign the presidency. I couldn't help changing my perspective when Goni and his men proved incompetent before the constitutional crisis, and it affected me also to know that he sought to duplicate Bolivia's external national debt in five years.
He had legislated a fascist program that created a "hospital for companies" – private enterprise companies. The essence of it was that the government would somehow determine which indebted companies were salvageable and it would assist those by buying their debts and gaining shares in the companies as payback. It would facilitate the training of management to make sure the companies did not fail in the future. It would not force companies into the program. That would be up to the patients to decide. The program never got off the ground. Too many suspicious patients. Strange economists like Jeffrey Sachs of Columbia University, an adviser to Sanchez de Lozada, endorsed this and other economic follies before a disoriented World Bank and IMF.
In retrospective, one Movement Toward Socialism had fought and beaten another Movement Toward Socialism. I told a friend here seriously – let's hope the mobs in La Paz keep kicking bad leaders out of power until good leaders come along. Goni fled Bolivia the day of his resignation, together with his Defense Minister. He declared after landing in Miami that he was still "recovering from the shock and the scare." Several of his top aides fled the country also, admitting they feared for their lives. His economics expert declared that he would come back to Bolivia from Buenos Aires when things cool down and explained that their main goal had been to stimulate the "aggregate demand" but that, once in power, they found out they didn't have enough money to do that, lamenting that the international loans were too slow in coming. He also regretted that they had not tried to raise taxes sooner (than February), "when we had the people's good will on our side." You can see how these politicos deserved to be chased out.
By forgetting or perhaps by not being aware that the State is the only proper "apparatus of coercion and compulsion," as Ludwig von Mises described it, invested authorities here lost a sense of direction and all sense of priorities and became too busy with economic theories they didn't understand. Like dummies they allowed Evo Morales to become the undisputed champion of coercion and compulsion. His example is being followed independently by many others. Now many poor peasants, in several regions of the country, have began to invade private lands and it is likely that private property owners will have to defend their property by themselves. President Mesa has said that, for ethical and moral reasons, he can not kill a single person and will not kill a single person; it hurt law and order that the new president disarmed himself only a day before he accepted the presidency.
I hope Friedrich von Hayek is right about "spontaneous order," that classical liberalism will take center stage in Bolivia in an unplanned fashion because liberalism is not even remotely considered as an option yet. It's socialism, or heavy-handed interventionism by socialist means, as far as the eye can see, both in Bolivia's Congress and in all the political parties without exception. Many sensible citizens here understandably visualize more socialist policies in Bolivia for at least the next twenty years and also the continued mass emigration of young Bolivians to other countries.
It may be a good omen that the people have had it with being poor and now obviously demand good results from their politicians, as promised – or otherwise they demand their immediate resignation. It is hard to justify violent insurrections against democratic systems, and it definitely isn't civilized to harm innocent bystanders, but frankly, for different reasons, most Bolivians seem to be greeting with satisfaction the departure of Gonzalo Sanchez de Lozada, even with the violent precedent established already causing negative consequences at this time. Nonetheless, most people are happy he is gone. It would be unreal to expect all the best motives to coincide. This wasn't a revolution like that of 1776 in the United States, with a wonderful balance between reason and force, ideology and action, but people seem happy that the ultimate goal of the revolt, the ouster of Sanchez de Lozada, succeeded.
The matter of the exportation of gas was only the final spark that ignited the explosion. Bolivia lives in an economic depression for many years already, one much worse than the Great Depression of the United States. Most Bolivians are desperately poor even though Bolivia is a land rich in natural resources. Having brought down a "democratic government" (Goni got only 22% of the vote and formed alliances with other parties to get the presidency), you can bet the disenchanted sectors of society feel that they can do that again any day now and that the traditional political parties are feeling enormous pressure to show satisfactory results. I understand this particular Bolivian rebellion shocked and worried political establishments all over South America.
Democratic formalities degenerated drastically after Mesa took over. Evo Morales commended the good intentions of the new government and gave it three months to get going and show results, otherwise mass demonstrations will resume. There was silence from the new government in response to this threat. Another radical leader – there are several of those rising – told all congressmen via TV news that if they did not support the good measures that Mesa may advocate before them, "they would be swept from the floor of the congress" and I wish you could have seen his authoritarian demeanor when he said that, I can assure you that he didn't mean something that would happen in the next election. No response to that from any congressman either, but they certainly took him seriously. It will be very difficult for President Mesa to complete his term in the year 2007. He will have to be one darn good president – in their view – to survive politically. He actually already showed a predisposition to call for earlier elections during his inauguration speech.
Will the radical leaders install a socialist government like that of Cuba when their turn at the political controls arrives? I think Evo Morales will win the next election. Morales, impressively unafraid of the U.S. drug war and of the Bolivian government and its army, seems for now more moderate than Castro though still far from economic reality. He says that charges that he called for seizing private property during the rebellion, are libelous charges. A friend of mine, who has known him personally, tells me that Morales is not a socialist like Fidel Castro and that the term "socialism" in the movement must be understood in another sense, like as in the search for equality and justice. His Movement Toward Socialism may not mean much more than the agenda of the Democratic Party of the United States. As a saying goes here optimistically, something is something (algo es algo).
The right of private property is suffering because the last three Bolivian presidents – Banzer, Quiroga and Sanchez de Lozada – had smaller convictions than Morales and were no match for a leader they underestimated. It is still incredible that he was not placed in jail for his many strikes which caused millions of dollars in losses, cumulatively, to the traders who could not transit roads filled by the strikers with obstacles. Now he is a stronger political leader than ever, and I gather a popular political figure in Europe. One can only hope that Evo Morales may become more civilized in the future. He won't be jailed for his past misdeeds. To the contrary, Goni stands a bigger chance of being jailed.
Without Evo's daring and aggressiveness, I have no doubt Sanchez de Lozada would still be president of Bolivia today. Evo has been accused of taking money from drug cartels, of being on their payroll, albeit not ever formally so charged by American or Bolivian legal authorities. No proof has ever been forwarded by his accusers, and Morales denies any association with drug cartels. Though he is surely aware that coca leaves are being used also to produce cocaine, Evo Morales clearly prefers that the Chapare peasants prosper from that trade and therefore does not want to hinder it. He proposes to end the eradication of coca leaves and expelling the Drug Enforcement Administration (DEA) from Bolivia. Some of us may prove to be nave in thinking that there is a chance he doesn't take money from the drug capos. Many peasants earn much more from the drug trade than from raising fruits and vegetables, that's for sure.
All considered, it remains troublesome that the principle of presidential transition through violent means was established here on October 17, breaking the pattern of peaceful democratic transitions that existed since only 1982, even after acknowledging the reality that democracy here certainly has been like a false God that a majority worships excessively, and that it has mostly served as a means to expropriate wealth. But if all the political options available are of a socialist nature, perhaps the faster we live through them all, the better.
In the near term, there is plenty of racial rancor in Bolivia due to, in the words of Evo Morales, an exploitation of the Indian (by the mestizo) that goes back 500 years, which I believe will find an outlet at the ballot box, where anyway no significant ideological differences can be found. If a movement toward more socialism wins and becomes way too radical and chaotic, and unpopular enough as a result, the army may eventually start longing, too, for the days of military dictatorships.
Whatever the politics, I think it is only a matter of time before the punches and bullets start flying again. A humorous columnist from La Paz recently tried to encourage foreign investments by inviting all foreigners to come to Bolivia as tourists now to enjoy "dangerous adventures" and see some "real Indians." Things are peaceful right now and you can come visit and not worry about stray bullets and punches, but three months from now all hell may begin to break loose again in La Paz and El Alto.
I am sure that, as a result of the mayhem in those cities, the movements toward more federalism and autonomy will pick up speed in the lowlands of Bolivia. There are also signs that the peaceful and productive citizens of La Paz are becoming intolerant of the constant marches of protest in their city. Even political secessions are a possibility if an anarchic state of affairs persists. Hopefully the doctrines of liberalism will be recognized eventually as the solution to the problem of poverty.
