Friday, February 25, 2011

Prerequisites to True Freedom in the Middle East

There are several profound lessons in the specific event that is thought to be what triggered the spreading unrest in the Middle East. Much can be learned from the particulars of what happened and the fact that they have resonated so widely. The event and its ramifications were the subject of a recent 60 Minutes segment.

The following is how Wikipedia summarized what happened:

Twenty-six year old Mohamed Bouazizi had been the sole income earner in his extended family of eight. He operated a purportedly unlicensed vegetable cart for seven years in Sidi Bouzid 190 miles south of Tunis. On December 17, 2010 a policewoman confiscated his cart and produce. Bouazizi, who had such an event happen to him before, tried to pay the 10-dinar fine (a day’s wages or about 10 USD). In response the policewoman slapped him, spat in his face, and insulted his deceased father. A humiliated Bouazizi then went to the provincial headquarters in an attempt to complain to the local municipality officials. He was refused an audience. Without alerting his family, at 11:30 a.m. and within an hour of the initial confrontation, Bouazizi returned to the headquarters, doused himself with a flammable liquid and set himself on fire. Public outrage quickly grew over the incident, leading to protests. Bouazizi died on January 4, 2011.

Apparently a lot of people in the region identified with Mr. Bouazizi’s frustrations. Anti-government demonstrations in Tunisia inspired similar demonstrations in Egypt, Libya, and Yemen. Dictators who have ruled for decades are wondering who’s next.

It would not be possible to generalize about the various objectives of hundreds of thousands of demonstrators in a number of different countries. Replacing dictators with democratically elected governments seems to be one goal. Political freedoms such as freedom of speech and assembly are another likely objective.

However, it was not specifically political freedom that drove Mohamed Bouazizi to his desperate act. Rather, it was the absence of economic freedom. His last words before setting himself aflame were, “How do you expect me to make a living?”

Economic freedom is at least as important as political freedom, particularly in practical, day-to-day terms. Your freedoms to earn a living and freely engage in voluntary exchange are at least as important as your freedom to vote or freedom of speech.

The government took from Mr. Bouazizi his ability to earn a living. It arbitrarily took from him, and his customers as well, the freedom to engage in voluntary exchange. That is obnoxious interference with a most fundamental human endeavor. What could be a more basic economic activity than operating a vegetable cart in a village market?

It has been reported that the unemployment rate among college graduates in Tunisia and Egypt is 50 percent. Dictatorships smother the human spirit in numerous ways. Millions of people who want to be gainfully employed cannot find jobs. Centrally controlled economies are functionally incapable of delivering authentic full employment.

Human rights are inextricably connected with property rights. As Ayn Rand observed many years ago, “Just as man can’t exist without his body, so no rights can exist without the right to translate one’s rights into reality–to think, to work and keep the results–which means the rights to property…. Without property rights, no other rights are possible. The man who has no right to the product of his effort has no means to sustain his life.” Rand could well have had in mind someone like Mohamed Bouazizi when she wrote those words.

Each year the Heritage Foundation computes a “property rights index”:

A subcomponent of the Index of Economic Freedom, the property rights index measures the degree to which a country’s laws protect private property rights, and the degree to which its government enforces those laws. The index also assesses the likelihood that private property will be expropriated and analyzes the independence of the judiciary, the existence of corruption within the judiciary, and the ability of individuals and businesses to enforce contracts.

In the Mideast, Israel has a property rights index of 70, the highest in the region. Egypt’s index is 50, and Libya’s is 10. (The U.S. has an index of 85.) Raising their property rights index should be a top priority for the revolutionaries in the region. What drove Mr. Bouazizi over the edge was the confiscation of his property.

Lack of dependable property rights is a major deterrent to investing. An investment is a current expenditure for a future benefit. Reliable property rights are one of the best ways to create a predictable future.

Whether or not economic freedom is important is one of the dividing lines between liberals and conservatives. Liberals never met a regulation they didn’t like. They’re strong advocates of rent control, minimum-wage laws, and oil and gas drilling bans, for example. They believe our problems result from too few regulations rather than too many. They generally see nothing wrong with countless diminutions of property rights.

In the Middle East, as well as other parts of the world, an absolute prerequisite to true progress is the reduction of government power. The dead hand of government regulation and control is smothering human potential. If books such as The Wealth of Nations, Capitalism and Freedom, and The Road to Serfdom became widely read in the Mideast, it would greatly improve the chances for meaningful and lasting progress.

I sincerely hope that people there as well as elsewhere achieve their goal of democratically elected governments. However, even if they do, it will not assure economic freedom. The U.S. and other Western countries enjoy a high degree of democracy, but there are still far too many limitations on economic freedom and property rights.

Constrictions of economic freedom are destructive wherever they occur. Petty tyrants like the policewoman and city officials in Sidi Bouzid, Tunisia exist almost everywhere in the world. They maliciously and gleefully destroy wealth creation and the human spirit.

Almost any significant endeavor you attempt in the U.S. will necessitate having to deal with mindless regulations, interminable delays, and brain-dead bureaucrats. An oil worker who has no job because of the Obama administration’s illegal drilling moratorium could well ask, “How do you expect me to make a living?”


Prerequisites to True Freedom in the Middle East February 25, 2011

Ron Ross Ph.D. is a former economics professor and author of The Unbeatable Market. Ron resides in Arcata, California and is a founder of Premier Financial Group, a wealth management firm located in Eureka, California. He is a native of Tulsa, Oklahoma and can be reached at

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