The privatization of social security in Chile in the early eighties under the leadership of Labour Minister José Piñera of Pinochet's government was lauded by the Wall Street Journal at the time as the only new idea of social policy coming from the Southern Hemisphere (that is, South American or Catholic countries) in more than a century.
It remains so to this day. It should be noted that this innovative idea was not a product of the private or civic sectors of society. Rather, it was thought of by government and put into action by government. In Catholic societies all innovation comes from authority never from the free market of ideas.
I must admit that I sometimes despair with some young Portuguese economists in whom I see great potential, such as André Azevedo Alves of O Insurgente. He is so much enchanted with the Protestant kind of liberalism with its emphasis on the benefits of the market that he does not care for evidence (v.g., that the market has never been a source of innovation in Portugal).
I believe intellectually good people like AAA run the risk of ending up as cynicals like so many good Portuguese intellectuals before him (Eça de Queirós being a great symbol; Vasco Pulido Valente being another case). First, he will be waiting for the free market process to produce in his country the same benefits he sees it producing in Protestant countries. He will wait and wait and the results will not show up. He will then resort to blame the Portuguese people for being stupid or ignorant. With time, he will become resentful and cynical.
What the evidence under our eyes is telling us as economists is that the benefits brought about by the market process in Protestant countries can only be brought about in our own country by authority. If we shift the focus of our analysis from the market to authority we gain a clearer understanding of the inner workings of Portuguese society. It is only then, when we base our thought on reality, not in abstract reasoning, that we can make a contribution that is really of true value.
It remains so to this day. It should be noted that this innovative idea was not a product of the private or civic sectors of society. Rather, it was thought of by government and put into action by government. In Catholic societies all innovation comes from authority never from the free market of ideas.
I must admit that I sometimes despair with some young Portuguese economists in whom I see great potential, such as André Azevedo Alves of O Insurgente. He is so much enchanted with the Protestant kind of liberalism with its emphasis on the benefits of the market that he does not care for evidence (v.g., that the market has never been a source of innovation in Portugal).
I believe intellectually good people like AAA run the risk of ending up as cynicals like so many good Portuguese intellectuals before him (Eça de Queirós being a great symbol; Vasco Pulido Valente being another case). First, he will be waiting for the free market process to produce in his country the same benefits he sees it producing in Protestant countries. He will wait and wait and the results will not show up. He will then resort to blame the Portuguese people for being stupid or ignorant. With time, he will become resentful and cynical.
What the evidence under our eyes is telling us as economists is that the benefits brought about by the market process in Protestant countries can only be brought about in our own country by authority. If we shift the focus of our analysis from the market to authority we gain a clearer understanding of the inner workings of Portuguese society. It is only then, when we base our thought on reality, not in abstract reasoning, that we can make a contribution that is really of true value.
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