EspañolVenezuelans remained the most miserable people on Earth in 2015, according to the latest World Misery Index. This ranking is published annually by Johns Hopkins University economist Steve Hanke, who told the PanAm Post that Venezuela topped all other countries in the world in terms of misery while previewing the results for the Americas.
The Misery Index score is the sum of the unemployment rate, the lending rate, and the inflation rate, minus the annual percent change in real GDP per capita.
Hanke, a Senior Fellow at the Cato Institute in Washington, DC, who is considered to have been Ronald Reagan’s privatization guru, shared an exclusive preview of the results for 2015 in the Americas with the PanAm Post. The main source for the economist’s data is the Economist Intelligence Unit (EIU). The case of Nicaragua is an exception, since the unemployment data was taken from the World Bank.
In this latest edition, Venezuela leads the world ranking for the third consecutive year, mainly due to this country’s rocketing levels of inflation. In Hanke’s view, the solution for Venezuela is to adopt the US dollar.
“The only sure fire way to permanently fix Venezuela’s money mess, which has been going on for many years, is to dollarize,” Hanke tells the PanAm Post. “The politician or political movement that does this will win the prize and will stand a good chance of remaining in power for many years,” he continues.
Moreover, Brazil has displaced Argentina and now follows Venezuela as the second worst performer in the Americas, increasing 23.8 points since 2014. The main reason for this, according to the index, is the country’s interest rates.
“When interest rates are the major contributing factor to the Misery Index, it implies that the banking system is either not competitive, or there is a great deal of credit risk and uncertainty about inflation — or both,” Hanke asserts.
He further states that Panama, El Salvador, and Ecuador — “the dollarizers,” as he calls them — continued to do relatively well this year, although Ecuador is showing signs of economic deterioration.
“The [Rafael] Correa government has adopted a socialist-interventionist model. This is a formula for failure. If Ecuador was not dollarized, it would be closely following Venezuela towards the bottom of the abyss,” he adds.
As for the 19 other countries on the Americas preview, Hanke explains that those who got Misery Index scores over 20 — such as Uruguay, Paraguay, Colombia, Peru, and Honduras — are in need of “serious structural economic reforms,” including a major overhaul of its money and banking regime, and “a good dose of free-market reforms.”
“In the world of economic reforms, one has to be big and bold. The best way to proceed is to adopt a foreign currency (i.e. dollarization), or clone a sound foreign currency via a currency board,” Hanke says.
Hanke also points out that Latin America “failed to make hay while the sun was shining.”
“Yes, Latin America failed to reform and modernize during the ‘boom’ years. Now, the region will pay the price,” he says.
“Indeed, there are many headwinds in the region. Indeed, 2016 could prove to be a very difficult year, and the 2016 Misery Index scores could be worse than this year’s. There will be exceptions, of course, like Argentina, where a Marxist-populist government has finally been thrown out after ruining the country,” Hanke concludes.
Editor’s note: updated at 8:40 a.m. EDT, January 13, 2016.
EspañolBy Carlos Clemente I believe that age is only a whimsical number. Age alone does not explain anyone's complex universe. I do not intend to behave like a teenager, and "try some stupid things I did not do when I was 23," to paraphrase a popular ballad of the Uruguayan band Cuarteto de Nos. The point is that, perhaps with less intensity than in the past, certain social mandates weigh on the shoulders of that large group of men who turn 40. This is a random number. It is clear that an individual does not change his habits and customs from one day to the next, and much less his way of seeing things. His ability to interact with others when he is 39 or 41 does not change either. The thing is that, when we turn 40, it is assumed that we have already had the opportunity to come a long way, and to assimilate enough life experiences to be able to consider ourselves in the "plenitude of maturity." In the popular imagination, an anarchist is a destructive fellow, unable to listen to reason or to express his dissent in fluid dialogue. Conservatives seem to think that an anarchist uses any opportunity he has to throw stones at the windows of a McDonald's restaurant while concealing his face under a hoodie. The stereotype of the anarchist is limited to the image of a punk, gang member, or a teenager who, unsatisfied with everything and everyone, needs to reaffirm his individuality by dying his hair green. An anarchist lives in his parents' basement, despite the fact that he hates them, listens to loud music, is not looking for any job or responsibility, and is generally grumpy. If he happens to be in another mood, it's due to his use of psychoactive drugs. In short, an anarchist is associated with the most exaggerated defects of youth. Such ideas, however, are based on the absolute ignorance of anarchist theory, of the different currents of anarchist thought, and of the history of its major advocates. The mistaken equation of anarchism with chaos feeds sentiments based on a mistaken assumption that is certainly convenient to the groups in power: that the state is essential. In truth, however, anarchism means political maturity, if by maturity we understand the loss of any illusion with or attraction to the unreal. Anarchists, in fact, are under no sort of illusion regarding collectivism. [adrotate group="7"] We are fully aware that politicians, that minority entrenched in the institutions which supposedly represent "the people," never act against their own interests. Simple logic dictates that their own interests often diverge from the welfare of those who pay taxes to support the political caste. We are aware that to pin our hopes of individual or collective prosperity in the alleged goodness of a leader, despite how elevated his discourse may be, is an irrational act. We infer, too, that the "social contract" we did not sign is nothing but a mere euphemism to conceal the guns with which they force us to adapt to this perverse order. I believe that anarcho-capitalists are in a better condition to offer alternatives to statism than those who are skeptical of private property or free exchange. Often, enemies of free trade become entangled in deep contradictions when trying to support their proposals. I am also aware of the naive, sectarian attitudes, and childish pretensions of some libertarian groups, many objectivists, or certain orthodox followers of the Austrian school of economics, who aim to explain the universe with three or four axioms. Those biased positions sometimes lead to reductionism, or they avoid addressing some issues in depth. For example, they can omit all analysis of the state privileges enjoyed by large economic groups. As a result, they strengthen the stereotype that portrays anarcho-capitalists as pro-cronyism. Beyond this, I would like anarchists to concentrate on what unites us, so that we can work together. We are united by the pursuit to overcome statism, which we understand as a means by which the unscrupulous deceive the naive. I just turned 40, and I am more proud to be an anarchist than ever. Carlos Clemente lives in Montevideo, Uruguay. He holds a PhD in psychology. Clemente is also a translator and a university scholar. He considers himself a left libertarian. Translated by Rebeca Morla.