Hope is emerging in Latin America to roll back progressive, populist governments. However, we should take this opportunity with caution and skew excessive optimism.
Changing leaders won’t suffice; our societies need a change in mentality. No positive reform can survive if we don’t abandon mistaken beliefs. I’m referring to the ideas that turned Latin America into a region incapable of creating wealth, overcoming poverty, or setting up political institutions that promote liberty instead of threatening it.
One such misguided idea is the concept of development. The United Nations Climate Change Conference (COP21) provides the latest example. My point is not to discuss climate change per se, but rather the approach chosen to solve the problem at a global level.
In Paris, world leaders exude optimism as they deliver politically correct speeches, but the negotiations underway at the conference are really about developing countries blackmailing First-World economies, as has become usual. On the other hand, First-World countries appear to ignore how the development process works: they seek to prevent developing countries from using natural resources to improve their people’s living standards — with bribes.
It really boils down to who should foot the bill for protecting the environment, and who should be responsible for the development of poverty-ridden countries.
Let’s be honest. The negotiators’ priority is not to find a solution to the problem of climate change. Actually, world leaders have focused on justifying more state regulatory power over the economy and deciding just how much money the wealthy countries will dole out to poor ones.
This goes to show how the wrong worldview on development and poverty still prevails. Despite heaps of evidence proving that cash transfers from a rich nation to a poor one can’t eliminate poverty, the belief in wealth-creation through foreign aid still persist.
The confusion between cause and effect leads to the wrong conclusion: that a lack of capital creates poverty. In truth, however, poverty is a mere reflection of a lack of capital. As Peter Bauer and, more recently, William Easterly have shown, a lack of capital is a consequence of poverty. Wealthy countries created capital, they didn’t stumble upon it or receive it as a gift.
Leaders of less developed countries still believe in the simplistic, lazy, and wrong idea that wealthier countries should take measures that lead to development in poorer nations. This only results in the usual mistakes.
Poverty is still a problem across the world because leaders continue stripping citizens of their rights. They don’t let institutions and rules evolve toward a more inclusive model, where each individual has a true possibility of achieving his goals.
The COP21 will finish on Friday. The final agreement will probably not be what everyone expected. Failure to reach an agreement might be the best outcome, as it would at least preserve liberties that governments would have otherwise curtailed in the name of an eventual environmental catastrophe, a prospect that has become an article of faith.
If the international community’s goal is to face what they perceive is a real problem, the strategy must change. The dominant strategy since the 1990s is now obsolete. Leaders should revise the belief that climate change can be solved with regulations, international agreements, and aid.
It’s useless to change rulers if we insist on the same failed strategies based on wrong ideas.