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Earth to Colombians: More Government Means More Taxes

By: Javier Garay - @Crittiko - Jan 14, 2016, 8:51 am
Colombians must discuss whether state intervention in all aspects of daily life is desirable.
Colombians must decide whether state intervention in all aspects of daily life is really want they want. (Líder Latino)

EspañolAs a New Year’s resolution, many Colombians should aim to be coherent. At least they should try to understand that someone has to pay the costs of all collectivism.

In the first days of 2016, a politically correct majority demanded greater state intervention in the economy. They held that only the state can solve real problems, such as poverty, or imaginary ones, such as inequality.

The fact that the Colombian state is already highly interventionist matters little. This means that the state’s involvement in the economy has failed to achieve its goals. By stifling the free market, state interference has only prevented the poor from rising with their own effort into the middle class. It has also created special privileges determined by cronyism.

This year, the politically correct, but analytically wrong, consensus holds that the state itself has to finance infrastructure projects to solve the growing economic crisis through spending, and to pay for the so-called post-conflict that will result from the peace agreement with the FARC guerrilla.

Nobody doubts that these are the main goals to achieve in 2016. Few doubt that the government should pay for it all.

This is why Colombian society not only tolerates but also demands state intervention when — as Venezuela’s dramatic example shows — this only leads to results that are worse than the original problems. Nobody, in fact, protested against price freezes for certain goods established at the end of last year, nor did anyone criticize the absurd and wrong decision to fix gasoline prices.

So, there’s a consensus around the manifold activities that the government must carry out. However, when it comes to determining who will foot the costs, it turns out that nobody wants to chip in.

Many Colombians — populist and statist politicians of all persuasions included — protested when the government decided to raise the minimum wage by “only” 7 percent. Apparently, they would have been satisfied with an increase of 15, 50, or even 100 percent.

Either they forgot or they ignore that such measures are taken constantly in Venezuela without improving citizens’ economic plight. The fail or refuse to realize that it’s market productivity, and not government fiat, that determines a salary’s true worth. If they want to benefit the poorest or to stop inflation, they should demand the end of arbitrary increases to the minimum wage.

At the same time, many Colombians — among them populist and statist politicians of all persuasions — have expressed their indignation at the sale of the state’s 57 percent share in Isagén, an energy company.

There’s no criticism about how the state’s shares will be sold. “Privatization” is portrayed as an ill in itself.

Politicians and their apologists on social media constantly claim that Isagen “belongs to all of us,” as if a majority state-owned company did not really belong to the politicians in power. In fact, the best way to get rid of responsibility and to increase the power of the state is to speak of collective property.

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It is the government’s proposed tax reform, however, that has revealed the political establishment’s eagerness to confiscate what we produce. It seems that those in power only know how to obstruct the lives of others. It is simply a case of the state — politicians and bureaucrats, that is — acting against the citizens.

There is no visible indignation concerning Colombia’s growing foreign debt. Perhaps most citizens don’t realize that it is they and their children who will have to pay that debt. This type of expropriation is not as apparent as a tax increase.

In both cases, the reaction must be coherent. If citizens demand collective action from the state in order to solve all important problems, then they should be willing to assume all the costs.

Otherwise, we should start to discuss whether the state should be in charge of solving problems, such as poverty or inequality, or whether the state should directly finance infrastructure problems, or whether it should pour money into the “post-conflict.”

It might be that, in some cases, state action is indeed the most effective option, but the debate must take place. This would strengthen the values and ideas of freedom in society.

Meanwhile, the combination of incoherence and good intentions leads only to much indignation.

Translated by Daniel Raisbeck.

Javier Garay Javier Garay

Javier Garay is a professor at the Externado University of Colombia. He has written two books on international issues, such as development, after his doctoral dissertation focused on the same topic. Follow him on Twitter @crittiko and through his personal blog, Crittiko.