Failures of Socialism in Latin America

well our speaker tonight is a keen observer of the ongoing battle between socialism and freedom in Latin America she is a member of the editorial board at The Wall Street Journal where she writes editorial columns on Latin America trade and international economics she is also editor of the weekly column the Americas which focuses on Latin America and Canada she is the recipient of numerous awards for her work including the Walter Judd Freedom Award from the fund for American Studies the Thomas Jefferson Award from the association of private enterprise education and the Basquiat prize for journalism from the international policy Network would you please welcome to the podium Mary Anastasia O'Grady [Applause] good evening thank you Tim for that very generous introduction it's really a thrill for me to be here with Hillsdale tonight you know growing up in New York all the Irish are big Notre Dame football fans most of those fans didn't go to the school and a lot of them have never been out of Brooklyn but they used to call themselves the subway alumni because they were so into Notre Dame football and by extension the school that's a little bit how I feel about Hillsdale I didn't have the privilege to attend the school but I'm a big fan and I like to consider myself the subway alumni so it's it's really great honor to be here tonight now the title of my talk is socialism in Latin America but that's a little vague so I'm going to reframe it with a title lessons from Latin America how the triumph of bad ideas has poisoned the well of prosperity now I'm always a little bit amused when I talk to Americans who don't know that much about the region and the United States tends to look east west not north south so people generally don't know about the region it's kind of a black box for them but there are some fashionable explanations for Latin American under development there are things like corruption lack of education poor infrastructure and my favorite a shortage of money which i think is called poverty but let's be honest all of these things corruption lack of education poor healthcare infrastructure even poverty are symptoms of something else and that something else is bad policy and that policy I think can be best summed up by what I call the three P's of populism that is I'm sorry the three P's of poverty and that is populism protectionism and prohibition these are the things that we proponents of Liberty often find ourselves talking about when we struggle to make things better in the region how to open markets how to keep politicians from making us all dependence of the state and of course how to change the drug laws so that organized crime doesn't keep growing and overwhelming our institutions but I am increasingly convinced that we're still very far from the source of the troubles and the under development Latin America when we address threats to Liberty and progress in this way the three P's of poverty populism prohibition and sorry the three populism prohibition and protectionism are but symptoms of something that I think is a much bigger problem in the region and I think threatens Liberty in the US and in Europe as well so I ask you to focus on two things first to borrow a fundamental principle of classical liberals ideas matter and I don't mean only their existence matters but what I mean is which ideas prevail in society which ideas are considered legitimate and moral secondly I want you to consider the fact that without entrepreneurship without producers who make things and sell them and in the process earn a profit a society not achieve prosperity I'm going to argue here tonight that it is bad ideas from academia and from intellectuals more broadly that have played the key role in undermining the entrepreneurial culture in Latin America over the past century it's bad ideas that are hostile to entrepreneurship that have moved from the intellectual sphere to government institutions the popular culture and society more broadly that have eaten away at the region's promise the ideas that hold profits are morally and ethically suspect ownership is not justified self-determination is selfish these ideas strike at the heart of all that human beings ought to hold dear the right to the fruits of one's own labor the right to self-discovery and self-determination and even the right to fail this thinking has deprived hundreds of millions of Latin Americans of the most basic human rights of life liberty and the pursuit of happiness and it has undermined their hope for prosperity so how did this happen in Latin America after all the 19th century was a time of more or less classical liberalism in the region well I will begin with a famous quote and those of you who are economists in the room know it well from John Maynard Keynes in which he described the power and influence of intellectuals he said the ideas of economists and political philosophers both when they are right and when they are wrong are more powerful then as commonly understood indeed the world is ruled by little else practical men who believe themselves to be quite exempt from any intellectual influence are usually the slaves of some defunct economist madmen and authority who hear voices in the air are distilling their frenzy from some academic scribbler of a few years back I am sure that the power of vested interests is vastly exaggerated compared with the gradual encroachment of ideas now latin americans didn't understand this until it was too late and it is where we north of the Rio Grande too will lose out if we don't pay attention to the importance of making the moral case for the market does not exist in Latin America Latin Americans is probably most of you know have no problem being entrepreneurial immigrants to the US have long histories of starting their own businesses once they've landed in the u.s. so how come this doesn't happen at home I submit to you that's because intellectual forces in the region have been and still are hostile to entrepreneurship Enrique Crossy is the Mexican historian he wrote a book on the history of ideas and power in the region in the late 19th century and throughout the 20th century the book is called Redeemers the book Profiles twelve individuals who Kraus they believe represent the major political ideas in the region from the middle of the nineteenth century through the 20th century the book begins with Jose Marti and ends with ago Chavez it includes profiles on Ava Peron che guevara Gabriel Garcia Marquez was a Colombian writer and friend of Castro Bishop Samuel Ruiz who was a Catholic bishop in the south of Mexico during the Zapatista uprising and soup comandante DeMarcos who is also part of the Zapatista uprising in the 1990s in the south of Mexico the overwhelming ideology of the period is collectivist these individuals Crowley tells us to find the most influential ideas of their time those ideas rose to prominence and formed the intellectual framework that then supported the region's secular institutions now there were during this whole time risk takers entrepreneurs innovators builders and merchants in Latin America they were around somewhere but it was the ideas of these guys who hated capitalism profits and private ownership that molded the norms and values of the laws in these countries I should note that Krauss a also includes Mario Vargas Llosa and Octavio Paz and Redeemers their to individuals who began on the Left but slowly gravitated toward classical liberalism but they're the oddballs in the group and I think but agasi us in particular is included for his opposition to military dictatorship the power of ideas was well understood among intellectuals on the left throughout the 20th century in Latin America they made it their business to get control of academia and they succeeded and in the classroom a new narrative emerged it gave the moral high ground to the state and denounced the market as immoral millions of Latin American students have been marinated in the values of the left of central economic planning and state redistribution but what is more important to understand is they absorbed it not purely as economic doctrine but as the morally legitimate framework for society this has had a profound effect on the political climate in the region as Krauss a shows and Redeemers an intellectual movement opposed to classical liberalism mainly because it was associated with the US and and he discusses the roots of that being the spanish-american war the u.s. victory in the spanish-american war and in favor of something that he calls Latin American nationalism began to crop up in the earliest years of the 20th century nationalisms economic counterpart socialism was given a huge boost in the Great Depression that's because the smoot-hawley Tariff hit the region very hard in Latin American policymakers retaliated by closing Latin American markets for those who had resisted nationalism and socialism until then u.s. protectionism made it more and more difficult not to give in now you may say ok well but today the ideas of Che Guevara and Ava Peron are discredited and I agree modern socialists and by this I mean those who reject communism and fascism but favor collectivism in some form do not attack private enterprise head-on that would be suicidal because the market has created so much prosperity and I think there's a wide recognition of that Arthur Selden outlined just how defeated the Socialists were on a practical level by the end of the 20th century in his great book the virtues of capitalism Selden you'll recall was the brains behind the Thatcher Revolution here's what Selden said about the relationship between capitalism and progress the supreme task humanity is faced down the centuries has been to discover and mobilize the abilities talents and genius of individuals in the creation of civilized society the rationale and vindication of decentralized initiative independent of the state described popularly as private enterprise historically as capitalism and technically as the market economy is that has proved more effective with better results in living standard than any other system from the benign mixed economy of social democracy to the rigorous centralized planning of communism now that's pretty tough to argue with and the intellectuals in latin america do not try to argue with it they know that that would be too difficult and it's widely recognized that the market has delivered a lot of goods but they do not surrender instead they ask young people to look not at the wealth of nations but instead of what they call the morality or perhaps more accurately the immorality of the inequality produced by liberty this issue of equality is the single most insidious ideology in the region right now for socialism it's the soft underbelly of the market economy Latin America can show us what happens when the morality the market is not defended and here is where there are even lessons for the US and and this is something that you will notice if you look at Chile today which has moved from an underdeveloped country to developed country in 30 years it created enormous prosperity but even if a society makes economic gains by adopting Pro market policies if the population is not convinced of the morality of the system that did this for them it will say if it's not convinced that the system is ethical let me put it that way that the system is fair that it's ethical it will want to destroy what it has achieved even if it has achieved great prosperity in Chile in the recent years where the Communist Party has been behind student demands for free university education and claiming that those who won't give in to that demand are immoral the behavior of the students is easy to understand they want something for nothing it's sort of run-of-the-mill rent-seeking but what about the broader support that they get from Chilean society Chile's made massive economic gains and well-being but the society has been supporting the students and I think this is because of the fact that the establishment has not been able to defend the market economy and to unpack the connection between entitlements and the loss of Liberty save for a few brave intellectuals most of the country's leadership has been back on its heels apologizing for the market model because of the inequality and this is Chile the poster child of liberal ideas and values and prosperity outside of Chile things are even worse and I blame a lot of this on the link between intellectuals and constitutions in most of the region intellectuals bought this idea of equality as the highest goal from their ivory towers they brought it to big government through the regions constitutions these constitutions which are perpetually rewritten by academics and the intellectual elite always strive to make state-sponsored equality the law and of course who can object to making the poor child equal to the wealthy entrepreneur the problem with the Constitution written with the objective of creating equality of outcomes is that it cannot guarantee individual rights and that means that the world that Arthur Selden described that world of glorious prosperity is not possible because you cannot have it both ways latin-american constitutions are hundreds of pages long they have objectives like guaranteeing National Development eradicating poverty and substandard living conditions reducing social and regional inequalities and promoting well-being the 1988 brazilian constitution gave citizens the constitutional right to education health work leisure security social security protection of motherhood and childhood and assistance to the destitute the Constitution guaranteed rights to minimum salaries year-end bonuses overtime and vacation pay it guaranteed free assistance for children and dependents from birth to six years of age in daycare centers and preschool facilities the culture section of the 1988 Brazilian Constitution charged the government worth protecting Brazil's cultural heritage by means of inventories registers vigilant monument protection decrees expropriation and other forms of precaution and preservation in the section dedicated to sports yes there's a section dedicated to sports in the Brazilian Constitution it specified that the government shall encourage leisure as a form of social promotion if you look at the unemployment rate I think they're doing a pretty good job now if you think about all the since trying in the Constitution you can easily see that the government has not only the power but the obligation to use coercion to reach its goals this is the fundamental cause of Latin American under development there's a lack of Liberty of the kind Arthur Selden describes which emanates from constitutional mandates aimed at equality not under the law but equality of outcomes which intrude on every aspect of human action now let me just say one quick thing about special interests because I do not hold them blameless even though Kane's kind of downplayed their importance what I've been describing here originates with the intellectual class but it's also clear that these ideas might not have gained so much influence if not for the business and communities enthusiasm to join in the game isn't that always what happens its interests were of course purely pragmatic let's take Venezuela the 1961 Venezuelan Constitution was by most accounts a reasonably sound document but that didn't mean that factions as Madison might have called them didn't have reason to try to pick it apart and they did for 40 years the Constitution was under assault particularly private property of course the left wanted to undermine the rule of law and property rights but the business community helped here's what the late Venezuelan journalist Carlos wrote about the slow deterioration of property rights in the 1961 Constitution this is a quote many in the business community did not rebel against growing state intrusion because they saw it was easier to convince one cabinet minister than a market of consumers I'll never forget watching Venezuelan businessman cheering the nationalization of foreign oil companies not realizing that the politicians would soon come after them with more controls regulations and taxes and as we know the government of Olga Chavez and now Nicolas Maduro subsequently has done much worse so I'll just conclude by saying when the state gets the moral high ground in matters of personal decisions and property rights there is no end to the steps it will take to contain Liberty in the name of social justice and equality once this happens standard of living standards of living will necessarily decline thank you [Applause] take questions Thank You mrs. O'Grady we now have time for a few questions please raise your hand and the microphone will be brought to you thank you how does religion affect economics in Latin America well let's take Cuba for example there is no religion in Cuba it's an atheist state the communist government actually worked to out outlaw religion in 1959 when they took over so in a case like Cuba I guess you could say that it that there were certain members of the church that tried to fight back during the Revolution they were either killed or exiled so at this point it doesn't really have much of an effect the church has been trying to get back into Cuba in my opinion making too many concessions to the regime but with the idea that that they would have a chance to have some open spaces and minister in Venezuela the church has been very strong against Chavez and Maduro and mother they have openly been fighting with the regime last good friday a bunch of thugs working for the regime burst into the cathedral and started beating people up so there you have a big conflict between the church and the government it's hard for me to just sort of do a blanket statement about the whole region I mean there's some more competition and religion than there was a hundred years ago in Latin America there's the evangelical churches have made big inroads but it hasn't seemed to make a big difference I mean there's quite a bit of competition in Central America between the church and Protestant denominations in Central America but the but it hasn't changed the politics very very much there is a theory held by you know most famously Max Weber that the Protestant colonies developed better than the Catholic colonies because of Catholic views of economics and development but I'm not entirely convinced of that theory a very good book to read on that is empire of the Atlantic which talks about the similarities and differences between the US and Latin America during colonial times I I guess I would say one other thing which is Liberation Theology which was a Catholic was was a let's see was a Catholic idea coming but not not sanctioned by the church in Central America I think was very bad for the region and because the liberation theology is backed Marxism basically and so I think pretty early on john paul ii spoke out against liberation theology and and sanctioned those priests but you know there's one theory that says that the the catholic church has a more collectivist view of the world but if you read the Scholastic's i don't think that's true so it's open to interpretation and it's rather long discussion but anyway I hope that helps a little bit I'm sure you know about Francisco marroquín University in Guatemala I'm just wondering if you've seen any influence from that school which is very much a free-market school sort of an anomaly in Central America have you seen much influence from that school in the reason thank you um it's kind of interesting because I think the idea of the founders of the motto Keane the motto Keane is a University in Central America founded in the 1970s by a guy who saw the kinds of problems I described here with academia basically control the left controlling all of academia started this University wonderful amazing place full disclosure I have an honorary Doctorate from them but they've done a fantastic job I they have not yet had an influence and I think if you talk to the people from the university they will say that the idea of the university is to to develop the human capital so that when the opportunity is there like what happened in Chile in 1973 I mean if you go back to Chile in 1973 the University of Chicago had already been working with Catholic University in Santiago for many many years Ted Schultz I think was the originator of that idea and arnold harberger was working there so they had the human capital in place so when Pinochet came along he basically told the technocrats look I'm here to defeat communism but I don't know anything about the economy and then he kind of let them put in place the things but they had the human capital that they needed so the idea that mano keen is to create that human capital thus far it seems like most of the motto keen graduates are very entrepreneurial so they don't go into government but I think that's the long-term hope in Guatemala that that that they're sort of developing that over time thank you I your comment about the intellectuals of the last hundred 120 years I think it's right on and I think we the developed world exported that with the progressives but I'd like you to address just the absolute chaos when they threw off the Spanish yoke the authoritarianism of the Spanish rulers that built no civil institutions doesn't that doesn't that play a more significant role in my mind then didn't you give it credit for two so what's going on with this authoritarian viewpoint in society now yeah thank you that's a very thoughtful question I guess the reason why I don't give it as much play as you're suggesting is because if you look country by country through the region there are glimpses of institution building and moments when let's take Argentina for example has a very big British influence and it had institutions at one time those institutions didn't hold up and I have spent the last 25 years of my life trying to figure out why they cannot build institutions I mean because that's precisely what they need I I agree with you but there are two problems with blaming the sixteenth century and one of them is that you never get out of the problem you know we're here now and we're trying to figure out how do we build institutions and every time you try to build the Institute like you try to write a new constitution you end up with a mess you end up with a four hundred page document and with all these kinds of privileges and so why can't we build institutions I mean we can't erase those 400 years that's what this is where we are so what I'm trying to discuss here is why the the Constitution grows out of the norms and values of a culture and you know the United States has a lot to be proud of but we can also say that we had many moments in time when we were just lucky and so we with that luck and the right institutions we made it through that period of under development to development so part of the problem is that development takes a long time and I think sometimes we expect it to happen too fast but I think fundamentally at the very core of it is why don't people hang on to the things that are in place why do they let go of them so quickly when they hit a bump in the road and I think that has to do with the norms and values of the culture and I think that those come about through the the ideas of the intellectuals and academia I mean in Venezuela if you talk to Venezuelans they will tell you that the left was sort of threatening in the way that the hard left was threatening the country since the 1960s so what the politicians decided to do was say okay you know what we'll do we'll just give them education get them out of our hair we can go back over here and have all the other ministries we'll just let them over there and I'll pay attention to them well of course precisely where they shouldn't have been and I think like I said I spent 25 years looking at this I really think that if there's any hope for the region to change it has to be through through the education and when I say education I'm not talking about reading and writing because you can the left does that I mean Cuba's one of the most literate places in the world it has to be through the fostering of these kinds of ideas in the culture and that just doesn't exist in the real and it's very rare but I guess EOC is an exception over here oh sorry disoriented it's so good to hear you speak again I saw you speak at Hillsdale I think the last time this conference was offered there on that campus maybe 10 12 years ago and over the last two days we've heard now heard three speakers speak against free trade and I know Hillsdale has this great tradition even on their material of defending Liberty since 1844 so I ask you do you think personal liberty is aligned with free trade or is it okay if we set free trade aside and have some america-first policy well as I mentioned in the beginning of my talk protectionism is one of the three P's of poverty and you can you can trace the impoverishment both material impoverishment and intellectual impoverishment in Latin America to smoot-hawley in the 20th century and the reverse is also true you know one of the most successful countries in the region in the last ten years is probably Peru you don't hear much about it it was a very poor country it was ravaged by The Shining Path but the one thing that Alberto Fujimori did when he came in in the 1990s was he opened the markets I mean dramatically and it for any of you who read Spanish there's a very good book by Jaime de Laos called them the capitalist revolution all about the way Peru changed when they open markets there and you know when you watch this big wave of left-wing populism that occurred after Hugo Chavez came to power in 1999 and you think about the countries that had hit in the region it did not hit Peru Peru even elected a very left-wing guy by the name of a young Tamala that people were terrified this guy was going to be another Chavez but he wasn't and I think the big difference is that Peru is a very open economy as is Chile which continued to grow even through this coalition that Michele bascially had with the Communist Party and the reason is because of of the the openness so I mean you asked me your question was sort of whether I think I think your question had a moral component to it which is do people have the right to free exchange and of course I believe they do but just from a policy and development point of view I think opening markets is one of the probably the single most important thing that can be done because you don't just get the trade of goods but you get the exchange of ideas and that certainly explains why Mexico has done so well not in its GDP growth but in the changes that it's gone through since 1994 basically a bloodless revolution you know bringing down the Prix and converting to a democracy and so forth I think a lot of that is explained by NAFTA [Applause] I have two questions one personal and one future isn't the personal one is where are you from originally I was born in Philadelphia Philadelphia better stylist when you're no excuse me I think yes the future is the question is where and when do you think an american-style Republic or society will take root in Latin America first hmm well that's kind of a trick question because when you say american-style I mean can I can I go with just a prosperous society as opposed to american-style because I'm not so sure the american-style is gonna fit anywhere every country is going to kind of come up with their own ideas for example if you think about Ireland Ireland was a very poor country and it was a Catholic country two things that supposedly we you know Latin Americans are told they can't overcome because they're Catholic and they're poor and they're gonna be stuck like that forever but Ireland has changed a lot so when you say American style I mean Ireland is a parliamentary government but I think you're talking about property rights and the rule of law and so forth you have that someone in Chile and I would say the other country that I'm somewhat I'm going out on a limb here but somewhat optimistic about providing that the that our current occupant of the White House doesn't undo NAFTA I think Mexico is is promising I think you know a lot of the stuff you don't hear about it because the war on drugs is kind of like overwhelmed the news but they're doing they've done some very serious reforms in telecommunications and in energy that show they're serious about property rights and and they're also a very open economy at this point I mean if Donald Trump decides that he doesn't want to do business with Mexico they're gonna start doing more trade with countries like Argentina and Brazil they're very committed to that model so a lot can happen you know they have an election next year and it's possible that Lopez Obrador could win that election because they do not have a runoff so all he has to do is have a majority and he could win and that would be bad for the progress of the country I don't think it would entirely set it back the way things have been set back in Venezuela but it would be bad for the development but those are probably I think the two most most promising places first of all I love your column and nonsubscribers to the WSJ subscribe to the WSJ to read you but second i want to kind of push the question of the relationship between religion in the free market if you're a jp2 or Benedict Roman Catholic then you can look at those Pope's and say follow them and have economic prosperity I am a Protestant but so I don't have a dog in the hunt but as an observer I would say that that's not that the same with Pope Francis and so if if Roman Catholics in South America especially are looking to an Argentine Pope to give guidance wisdom and counsel about economic policy we have somebody who in laudato si actually railed against the the horrors of air conditioning so could you give some this is kind of a follow-up to the first question of what should Roman Catholics in South America think about their Pope visa V economics and and what does it say about the prospects for the region in terms of economic growth with our current Pope thank you well I keep telling myself that the Holy Spirit had something in mind when he chose this Pope we just it's one of one thing we Catholics call a mystery another mystery you know I I mean I'll be honest with you I think this Pope has not been good for for the region he's not been good for Cuba I mention I think I mentioned that before on the ground though I think there's something different like in Venezuela I mean I think the Venezuelan bishops have really stood up I think they came to the game late and basically most Catholic clergy over the years in my lifetime anyway have not been very good economists so yeah I think I think you know this Pope in particular I would say is an example of what I was talking about in terms of the morality issue you know because you can make all the arguments you want about producing wealth and so forth but if underneath it people think that somehow the system is unethical they'll they'll end up destroying it and so I would have to agree that he's not good for the for the region but I but I also know that for example if you take a country like Colombia I mean this is a I don't think the government there is particularly religious you know I mean their their Catholicism is sort of a nominal religion in most of these countries at this point but and there's also a very strong wing of Orthodox Catholics in particularly in places like Chile and but throughout the region those people tend to be very free market so there's a little bit of a of a tug of war going on there that's the best I can say without getting excommunicated it's the teacher again I'm over here okay sorry teacher again I've learned from my students that there is sort of a caste system that from Mexico they think they are better than the Hondurans who think they're better than the El Salvador's now they have that just reverse but the Mexicans think they are hot stuff and then you go down and they think the other groups are not as good is this based on the economy and the progress that had been made in the countries as far as economics is concerned yeah I think it is I mean basically Mexico if you look it from a point of view the World Bank is a middle-income country at this point it's not a poor country and most of Central America raagh was an extremely poor country so yeah I think that the pecking order goes exactly like that in terms of which countries are richer and those children from those countries feel like they're better off I had a friend who taught in the Los Angeles school system and she said that she told me that the Guatemalan children tried to pretend they were Mexican because that was you know something considered more high class I don't know a ton about this region and so I was talking to my friend in the history department who is an expert on Latin America and I was talking to him about capitalism and socialism and he said well you know the legacy there is the dole company coming in coercively to take and so I was wondering how much of a role does a weird crony istic coercive version of capitalism that has sometimes occurred played in the maybe the hatred of that system well gosh that's a pretty big broad question one of the problems with someone like was something like the dole company was just that and this happened with the Panama Canal also is that the Americans who went to work there generally had better living conditions than the people the local people who were hired so there grew up a lot of resentment and like I said that happened a lot with the Panama Canal but I think it's also important to keep in mind that in some of these areas in the region and of course the history that story of dole goes way back but if you fast-forward to today and you look at like for example some of the mining companies that have tried to do mining in Central America where there's very rich veins of minerals and mining was the thing that was the engine that basically began to pull Chile I mean afterwards they did all kinds of things but mining was really the beginning of it and what is mining required meat requires a lot of investment so companies go in and they do mining but in a lot of these towns in for example in Central America they still live in a very tribal fashion I mean there are indigenous people and there's a there's a hierarchy and if you all of a sudden go in there with investment and you start hiring people and they get jobs and they have money they don't have the same necessary loyalty to the head of the tribe they they basically get freedom because they start to get economic wealth and that's one of the reasons why foreign investment is resented a lot because it changes the power structure and these in these small towns so that's just one example I mean there's a lot of different examples of what foreign companies do when they go in there sometimes they're not good stewards of the property but many other cases they are but they're resented because they they change the dynamics of the political economy we have time for one more question the United States in Russia or the Soviet Union then had the greater influence on Latin America and South America both positive and negative as far as the United States is concerned what do you think the negative that the United States has contributed to the demise of those countries and surely the no existence of the Soviet Union that it played before so the question is what are the negatives of the US policy in Latin America okay well during the Cold War basically the u.s. position was that the US had a right and a reason to keep the Soviets out of our backyard and so I guess the negative would be that we at some times trying to think well sometimes we were viewed as as being on the side of a dictator and that probably was the case in Nicaragua because Somoza was our was our friend and but in the end we ended up pulling support from Somoza and helping basically helping Artega and something similar to that happened in El Salvador but I think the biggest negative that the US has played in the region in the last hundred years has been the war on drugs in the last 70 years has been the war on drugs and I say this purely is from an economic standpoint I mean there's a huge demand for drugs in this country there's a prohibition on drugs which means by definition all of those billions of dollars have to go into the pockets of criminals they go into the pockets of criminals and in very poor countries who who then can use that money to basically buy and overwhelming institutions there's no way that you can build institutions in that environment there isn't I mean a lot of people you know you look at that and you say well is the answer legalizing drugs I don't know what the answer is I'm just telling that went from a practical standpoint our policy of consuming huge amounts of drugs and then keeping the prohibition on it is by definition feeding huge transnational organized crime in Central America and it's one of the big barriers to development thank you very much mr. cocaine thank you thank you thank you very much [Applause]

Channel: Hillsdale College

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Keywords: The Wall Street Journal, Wall Street Journal, Mary Anastasia O’Grady, hillsdale, hillsdale college, economics, free market economics

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Length: 52min 27sec (3147 seconds)

Published: Fri Oct 13 2017