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What’s Wrong with Colombia’s Business Leaders?

By: Javier Garay - @Crittiko - May 23, 2016, 4:23 pm
(Confidencial Colombia) Colombia
The National Council is a group of unions that lobby for union privileges. (Confidencial Colombia)

EspañolOne of the general public’s main confusions facing liberalism and capitalism is the assumption that the practice of these ideas will have as much success as the theories and philosophies they are rooted in.

That is to say, the public considers the defense of capitalism equal to simply defending big companies, or supporting an unhealthy relationship between economic interests and the political arena. Thus, liberal authors like Friedrich Hayek or Ludwig von Mises have rejected the use of the term capitalism in place of alternatives like “catalaxia.”

Beyond the theoretical discussions that create this confusion, a problem exists in society wherein political and economic practices make it more difficult to explain the line that separates the defense of economic freedom from political decisions made for economic interests — and vice versa.

A clear example of this can be found in Colombia. It is perhaps the country where the most political power is connected with unions in all of Latin America.

What happen to unions?

One would hope that unions, as an expression of civil society, could serve the interests of its members, especially economic ones. But no. Since their appearance in the 1920s, they have been devoted to other, more-selfish purposes.

On the one hand, they have served a system of corporatism, the best example being Álvaro Vargas Llosa. On the other hand, they have become obstacles for businesses trying to make important economic decisions, that have frequently resulted in wasted resources.

That is to say, Colombian unions are discrediting the work of important businesses, and in a way that confuses the public about the differences between capitalism and free economy. Businesses become the instruments of political lobbying, which in turn pressure the state to maintain financial regulations — all of which perpetuates the idea that economics doesn’t happen in the business sector, but rather in government.

Some argue unions help their partners with industrial restructuring, or with regulating various business sectors. And they would be right. But unions are mostly concerned with maintaining a close relationship with those who are in power, regardless of who happens to be holding the office.

For this reason, the National Federation of Coffee Growers (Fedegan) — perhaps the first Colombian union in the 20th century — is an important player in the fluctuating price of coffee. The Farmer’s Society of Colombia and the Colombian Landowners’ Union along with Fedefan publish their triumphs in the media while pressuring the state to keep foreign competition at bay.

For example, the president of the Colombian Landowners’ Union is currently fighting to bring back a recently defunct fund that allowed them to control billions of pesos.

That’s why the National Union, (yes, a group of unions whose only intention is to pressure and defend union privileges) held a meeting with the president that resulted in their deciding to blindly support the FARC peace process.

Politicians disguised as businessmen who run the unions could care less about whether the peace process is sustainable over time. What interests them is acting in accordance with the president’s beliefs so he will continue to grant them the privileges they so enjoy.

Unions defend closed, protectionist interests and cause economic freedom to sink to the level of crony capitalism. If only it didn’t have to be that way.

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.