David Beito posted an interesting article to Libprofs-announce
regarding the problems in Somalia, and how most business owners
seem to think that the re-establishment of govt will make those
problems go away.
My challenge to fellow libertarian anarchocapitalists:
How could they better re-direct their energies, resources,
words, etc. to solve those problems? Could they in fact take
this opportunity to avoid imposing a State and to create the
world's first anarchocapitalist "country"?
It's our position that anything (ethically legitimate) that
govt can do, a fully free market can do better. Well, now's
our chance. Can we save Somalia from Statism?
Step 1: outline a feasible plan that _could_ work.
Step 2: massively broadcast it to the Somalis and convince
enough of them to give it a chance.
The current challenge is to do Step 1. If we can't do that,
we've lost the game. It may be likely that Step 2 is much more
difficult, if not impossible, but it sure would be a good
thing if we could prove Step 1.
Comments?
$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$
------- Forwarded message follows -------
Date sent: Tue, 15 Aug 2000 21:14:17 -0700
From: "Daniel Klein" <dklein@scu.edu>
To: <gtk1000@cam.ac.uk>,<heicholz@libertyfund.org>,
"Daniel Klein" <DKlein@scu.edu>
Subject: "Too-Free Enterprise" in Somalia
Friends, Here's a NYT article with my comments in CAPS. ----
Dan
Foreign Desk; Section A
Mogadishu Journal
Somali Business Thwarted by Too-Free Enterprise
By IAN FISHER
08/10/2000
The New York Times
Page 4, Column 3
c. 2000 New York Times Company
MOGADISHU, Somalia, Aug. 7 -- There are five competing airlines here;
three phone companies, which have some of the cheapest rates in the
world; at least two pasta factories; 45 private hospitals; 55
providers of electricity; 1,500 wholesalers for imported goods; and an
infinite number of guys with donkeys who will deliver 55 gallons of
clean water to your house for 25 cents. What Somalia does not have is
a government, and in many ways, that makes it the world's purest
laboratory for capitalism. No one collects taxes. Business is booming.
Libertarians of the world, unite! [LET'S NOT SCRUPLE ABOUT ANY
POSSIBLE CULTURAL CONTEXT OF LANGUAGE.]
So it may come as a surprise that business people in Mogadishu, the
wrecked and lawless capital, are begging for a government [ONLY
SOMEONE CLUELESS ABOUT POLITICAL ECONOMY WOULD REGARD THIS AS A
SURPRISE --- IT IS AMAZING HOW OFTEN SILLY PEOPLE TAKE BUSINESS PEOPLE
TO BE THE SPOKESPEOPLE OR REPRESENTATIVES OF FREE MARKET CAPITALISM].
They would love to be taxed and would gladly let politicians meddle at
least a bit in their affairs. [THIS JOURNALIST SHOULD READ PAUL
WEAVER'S THE SUICIDAL CORPORATION.]
''The thing is,'' Abdi Muhammad Sabria said, ''it's a lot better to
pay a tax than to go through what we are going through.''
Last year Mr. Sabria and his partners opened a pasta factory here, and
at the moment they cannot make enough to meet demand.
But they pay $3,000 a month just for gunmen, including the one who
sits with an AK-47 across the factory's spotless concrete floor from
the pasta cutting machine. [DOES LACK OF GOVERNMENT DEFINE FREE MARKET
CAPITALISM, OR DOES FREEDOM FROM COERCION? IN THE NORMAL CULTURAL
CONTEXT OF OUR LANGUAGE, THERE IS LITTLE DIFFERENCE BETWEEN THESE TWO,
BUT IN SOMALIA THERE IS A LOT.] Because there is no port, they lose
up to 10 percent of their imported supplies on the beach. [IT SOUNDS
LIKE THERE'S A PROFIT OPPORTUNITY IN BUILDING A PORT FOR WHOEVER OWNS
THE BEACH.] They had to dig their own well. They generate their own
power. [MORE PROFIT OPPORTUNITIES THAT WOULD CALL FORTH SUPPLY UNLESS
PROPERTY RIGHTS ARE NOT SECURE.]
''You have to provide everything for yourself,'' Mr. Sabria said.
''You have to collect the garbage on your own street.'' Even this
requires a payment to local toughs, who often block private garbage
trucks.
Established business people here are all too aware of the paradox they
face: what helps make their business so good -- freedom from
government -- is exactly what will kill their businesses in the long
run. [AS THOUGH "FREEDOM FROM GOVERNMENT" COLLIDES WITH PROPERTY
RIGHTS ENFORCEMENT!] It may be true that the government that is best
governs least. But at least it governs.
''Security is the doorstep for development,'' said Muhammad Ahmed
Hirabe, an economist collecting statistics on the business climate in
Mogadishu.
His partner, Muhammad M. Sheik, added: ''Lack of government is not
good for the economy and the whole business environment. That is the
bottom line.''
And so businesses are among the key supporters of the peace conference
in the neighboring country of Djibouti, in which some 2,000 Somalis
are gathered to try yet again to establish a government. Businessmen
are backing various candidates for top posts, in ways that make other
Somalis nervous about the influence they may have on a new government.
But the business people argue that their success has irreversibly
altered the way government is viewed in Somalia. The unavoidable
reality is that business will shape whatever government is formed,
most likely by making it far smaller than its predecessor.
Business has been one of the few sources of stability in Somalia since
the military dictator Muhammad Siad Barre was overthrown in 1991 and
no one rose to replace him. In anarchy deepened by local warlords,
private interests swooped in to provide essentials like water,
telephones and electricity, though not in the most efficient ways.
The three telephone companies, for instance, operate entirely
independently of one another. Having access to all people with phones
means having three telephone lines -- one from each company. [AS
THOUGH THIS IS PRIMA FACIE INEFFICIENT. HOW ARE WE TO KNOW WHICH
COMPANY DOES IT BETTER WITHOUT HAVING THREE LINES?]] Drinkable water
is delivered mostly by donkey.
Smuggling thrives, in everything from guns to cigarettes to
electronics. [IF THERE'S NO GOVERNMENT, WHY IS IT "SMUGGLING"? EXCEPT
IN THE CASE OF STOLEN GOODS, SMUGGLING IMPLIES GOVERNMENT
INTERVENTION.] One of the major exports is charcoal, to the Persian
Gulf states. The trade has caused an environmental disaster as well as
battles between tree cutters and herdsmen whose camels eat from the
trees.
But the market's invisible hand has worked in remarkable ways:
competition is so fierce that international phone calls are just $1.50
a minute. The main market downtown is jammed with goods. And after Mr.
Sabria's factory opened last summer, a price war sharply cut the cost
of pasta, one of the staples in this former Italian colony.
The company started off selling high-quality pasta at about $8 for a
10-kilogram (22-pound) box. Then importers moved to undercut them,
selling a lower-grade pasta shipped in from Dubai at $5 a box. Not to
be outdone, Mr. Sabria's company introduced its own lower-grade line,
for about $4.60 a box. Now, three months later, he says he has wrested
the market back from the importers.
''They are crying,'' Mr. Sabria said with predatory glee. ''We still
hold them, and there is no way they can get out.''
It is striking that Somalia, unlike many parts of Africa, has achieved
this thriving business climate on its own, without the usual aid and
advice from rich nations [WELL, WHAT DO YOU KNOW?]. They have all but
disengaged from Somalia since the failure of the United Nations
operation here in the early 1990's. Somalis have learned that they are
pretty good at making money.
''It's entrepreneurism that's doing it,'' said Ahmed Abdisalam Adan,
director of programs for Horn Afrik, Somalia's first independent radio
and television station, established last year. ''It's who has more
creativity. It's who is willing to take risks. Before it was the
government. The government could make you rich one day and poor the
next.''
Indeed, in General Siad Barre's heyday, the government controlled
nearly all commerce, from airlines to sugar factories to hotels. It
was consequently one of the most corrupt on the continent -- typical
of African governments, whose leaders often run publicly owned
industry into the ground as they siphon profits into private bank
accounts.
If the Somali businessmen's smaller-is-better vision becomes reality,
it will be a radical departure. [THE BUSINESSMAN'S ATTITUDE TOWARD
COMPETITION IS LIKE THE AVERAGE PERSON'S ATTITUDE TOWARD EXERCISE ---
IT IS SOMETHING THAT IS GOOD FOR OTHER PEOPLE. --- GEORGE STIGLER.
IT IS THE RARE BUSINESSMAN WHO RISES ABOVE THIS ADAGE.]
In general, these businessmen say, government has a strong role to
play as a regulator of existing industries. For example, it might
force the telephone companies to integrate their lines [HOLD ON TO
YOUR WALLETS. EMPIRICAL EVIDENCE SHOWS THAT MULTIPLE ELECTRICITY OR
CABLE LINES IS CORRELATED WITH LOWER PRICES], or ban the export of
charcoal [REAL FREE MARKETEERS, THESE BUSINESSMEN]. But they argue
that any new government should focus on essentials like roads,
education and health [SURE, LET'S SOCIALIZE THE MOST IMPORTANT
INDUSTRIES IN SOCIETY. WHY NOT? EVERYONE KNOWS THAT THE CLASSIC
ARGUMENTS AGAINST SOCIALISM DON'T APPLY TO THESE SPECIAL SECTORS].
''A lot of services can be covered by the private people,'' said Abdul
aziz H. A. Sheikh, managing director of Somalia Telecommunications,
one of the three phone companies.
But the economist, Mr. Sheik, argues that a small government is an
impossibility, given the state of Somalia's public works nearly a
decade after the government fell. There are few roads, no central
power plants, no water and hardly any habitable public buildings.
''If it is very small, who is going to rehabilitate?'' he asked. ''The
private sector can't do that.'' [THE CLASSIC "WHO IS GOING TO . . .?"
QUESTION. IT IS PRECISELY BECAUSE THESE THINGS ARE UNKNOWABLE THAT
THEY SHOULDN'T BE SOCIALIZED OR RESTRICTED. PRIVATE ENTERPRISE BUILT
MORE THAN 2,000 TOLL ROADS IN 19TH CENTURY AMERICA. AND THEY DIDN'T
HAVE MEANS TO CHARGE ELECTRONICALLY.]
The private sector is clearly hard pressed. Mr. Adan, 40, who started
his radio and television company with two people who like him had fled
to Canada, said that at the outset his security guards had been forced
into firefights with the gunmen of a local warlord. The telephone
company chief, Mr. Sheikh, says thugs regularly prevent him from
digging trenches for phone cable. [HOW TYPICAL: THE PROBLEMS THAT
ARISE FROM THE SOCIALIST PORTIONS OF THE SYSTEM (EG, WHERE THEY DIG
TRENCHES) ARE SET DOWN AS FAILURES OF FREE ENTERPIRSE. THREE GUYS
ONCE WROTE A BOOK ABOUT JUST THIS MISUNDERSTANDING IN THE CONTEXT OF
URBAN TRANSIT. THEY EXPLAINED THAT THE FAILINGS OF STREET-BASED URBAN
TRANSIT (BUS, TAXI, AND JITNEY SYSTEMS) DERIVED FROM THE SOCIALIST
STATUS OF CURB ZONES, BUS STOPS, WAITING AREAS, AND ROADS.]
Smaller entrepreneurs, too, find it difficult to work in chaos: Abdi
Muhidin, 23, who goes to the beach near the ruined downtown nearly
every day to dig flakes of gold from the volcanic rock there, can make
as much as $10 a day, a good wage here. But bandits often rob him.
''Yeah, it happens,'' he said, as he scraped the rock with a metal
rod. ''What I would like to have is peace.''
One of the eight gunmen guarding a reporter (at $200 a day) squatted
down and told Mr. Muhidin, ''I don't want a government.''
Mr. Muhidin did not bother to look up.
''Yes,'' he told the gunman, ''for you it's better not to have one.''
[THE JOURNALIST SEEMS TO MISS ENTIRELY THE OBVIOUS IRONY: THE THUGS
AND GUNMEN ARE THE GOVERNMENT, AND THEY DON'T WANT COMPETITION.]
Photo: Somalis walking through the downtown market in Mogadishu.
Businesses are thriving, but without a government, so are thugs and
shakedown artists. Merchants say law and order, and public works,
would help. (Tyler Hicks/Liaison, for The New York Times) Map of
Somalia highlighting location of Mogadishu: Entrepreneurs in Mogadishu
wish their country had a government.
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Received on Thu Aug 17 11:47:39 2000
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