From Publishers Weekly
A Peruvian journalist and research fellow at Oakland, Calif.'s Independent Institute, Vargas Llosa proposes that the shortcomings of Latin America's recent experiments with neoliberalism-which have left the elite and poor further apart than ever-reflect a deep-rooted and unshakeable pattern of state intervention in the economy, privilege and laws that have plagued these countries since their early colonial period. Despite the apparent push toward democracy and free markets, he argues, the most recent era of reform failed to address the root of the problem and ended up reinforcing governments' suppression of economic liberty and individual responsibility. Vargas Llosa offers the massive potential of the region's bustling informal economies as a sign of how far out of step the law is with economic and political realities. Not surprisingly, he calls for the abolition of unwieldy business regulations that keep ordinary, enterprising folks out of the legitimate marketplace. A short section of almost blithely outlined solutions disappoints, coming as it does after so much engaging and well-reasoned analysis, particularly since many of his proposals (tax code rewrites, school vouchers) have faced stiff resistance even in the developed country he so often holds up as a model for the region: the United States.
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What stands in the way of Latin American prosperity? According to Peruvian-born journalist and political commentator Vargas Llosa, the answer is 500 years of oppression and stagnancy, most recently defined by the "oligarchic legacy of statism." The solution? Skirt the political economists' chicken-and-egg problem by reforming both economic institutions and their underlying culture, and remove the inertial legacy of state power perpetuated by what the author calls the "five principles of oppression": corporatism, state mercantilism, privileged elitism, rigid and unjust mechanisms of wealth transfer, and the political denigration of legal authority. Vargas Llosa's is essentially a free-market, libertarian argument pursuing independence through individualism, which would dovetail comfortably with much of the last decade's rhetoric of economic neoliberalism were it not so boldly, and justifiably, critical of botched recent attempts at privatization in Latin America that actually reinforced the privileged status quo. Such willingness to criticize the regional failures of the Right, the Left, and the U.S. is refreshing, as is the author's clear concern for the poor. A work of unabashed capitalism unashamed to speak truth to capitalists, this is an important work of political economy. Brendan Driscoll
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