Decalogue for a good, globalized government

Carlos Alberto Montaner

In successful nations, the relationship of power between society and state is built on the foundation that individuals and business enterprises sustain the government and institutions with the surplus of their work. In any of the variants of populism, it is the individuals and enterprises who exist at the mercy or complicity of the functionaries who capriciously manage the state. The latter is a devastating perversity.

Hereunder, ten of the basic features that should characterize a modern, globalized society on the road to modernity and progress.

In the same way that we know that markets are imperfect and unpredictable because information is dispersed and fragmented amidst millions of economic agents, we know that governments have the same constraint, with the addition of the habitual clumsiness of public bureaucracy and the permanent danger of patronage and corruption. To turn a country's economic management over to a state bureaucracy is usually the shortest path to disaster

To become part of the developed world, it is essential to possess a stable currency that preserves its value and serves to maintain savings. That requires well-managed public finances and reasonable macroeconomic balances.

These objectives can be best achieved if the Central Bank, or issuing institution, is not subject to the government's whims and is managed with technical criteria. Also, in order to protect the value of the currency, it is usually convenient to place constitutional limits on the government's power to spend or to incur debt.

English is the international language, the language of globalization, and the computer is its most widely used vehicle. Every responsible society must make a great effort to enable most people to communicate fluently in English and utilize expertly the computer.

In principle, almost every measure or institution that encourages the transfer of technology and knowledge, or commercial exchanges, is convenient, while anything that obstructs such transactions -- censorship, tariffs, excessive regulation, costly paperwork -- is harmful.

Also in principle, the operation of the state and the private sector must be subject to total administrative transparency. A society founded on competency and the observance of laws must make itself permanently available to every type of auditing, lest the citizens' trust in the system is eroded.

Among the worst enemies of prosperity are the discretionary powers of public officials -- the powers that enable them to protect their friends and harm their enemies -- and the granting of special privileges to the groups in power, whether they are the businessmen who exploit monopolies, syndicates that demand unfair revenues, or corporations that shut the doors of competition to other economic and social agents.

Particularly noxious are the public economic obligations that become so-called “permanent achievements” and ignore the dynamic nature of capitalist societies, which typically experience cycles of expansion and recession. The main function of the state is not to extend charity to the neediest but to help create the conditions so people may prosper by their own means. A state that is obliged to incur a great volume of social expenditure is a failed state.

It is essential to invite foreign capital and to abandon economic nationalism or autarchic fantasies. Prattle about food, energy or industrial sovereignty is utter nonsense. Capital investments and the installation of successful international enterprises bring know-how, competition and more efficient ways to do things.

While foreign-capital investments are vital, the investment of human capital must be equally encouraged. Immigrants are an extraordinary source of potential wealth, even if they are poorly educated peasants. Recently, someone evaluated the cost of raising a person in the United States from birth to age 18 -- a little more than $200,000. That is, at the very least, the capital brought in by a young Mexican farmer when he crosses the border. If he has a high-school education, his contribution is greater. If he's a professional, his contribution multiplies. Instead of giving in to the pressure of corporativist groups, governments should endeavor to attract good immigrants. It is always good business.

April 4, 2008

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