La salida de la dolarizacion

Hace casi año y medio publiqué esto y de nuevo Correa comienza a hablar del bimonetarismo. Como analicé aquella vez en abril del 2007, esta medida es el Caballo de Troya para abandonar la dolarización. Ir al enlace para leer.

http://www.cambiemosecuador.com/2007/04/bravo_dr_correa.html

Every Breath You Take

Fantastic parody.

Canada's Shooting Gallery

Mary Anastasia O'grady discusses her latest column 8-27-07 on Canada's government provided drugs.

Milton Friedman did it again

Two in a row. This is another article this time an op-ed by Milton Friedman at the WSJ about the idea of Vouchers. Another practical idea in order to have less government in the education area. Once again according to Friedman an old proposal dating back to an article in 1955 on "The Role of Government in Education". Another good idea that has taken root in countries far down south like Chile.

Milton Friedman recollections on Social Security Reform

This is an interesting piece published on the SFGate regarding Milton Friedman's recollections about the begginning of a movement for Social security reform. He talked about the proposition to abolish Social Security first in 1962, with the publication of "Capitalism and Freedom", not because it was not efficient but because it was inmoral, a huge Ponzi scheeme run by the government. What I found fascinating and is not mentioned on the interview was that I always wondered how the chileans (Piñera among others) came up with the idea of changing their Social security system and to turn it into a privately funded one. Tweenty years later it has been so succesful that it has become the example for reform in the developed world. In spanish we say nobody is a prophet in their own land and I think this perfectly applies to Milton Friedman. Only if he had been heard in the USA 20 years ago like the Chileans did, how different things would be. (thanks to Marginal Revolution)

El Salvador in the Road to prosperity

Juan José Daboub former economics minister of El Salvador in this interview by Libertad y Desarrollo offers his opinion on how El Salvador in the last 15 years has positioned itself on the Index of Economic Freedom position #24. Among the sucesses achieved Daboub claims that poverty has been reduced 20%, mortality rates have gone from 47 per thousand to 25 per thousand and iliteracy have fallen from 33% in 1992 to 13% in 2004. He also outlines the work of America Libre Institute, directed by former Salvadorean President Francisco Flores.

Where would you live

Living in the Washington area I am always worried about being able to buy a home in this are. With soaring prices and yearly increases in the prices of 50 and 60% I have been looking for places outside the beltway. This WSJ graphics shows a spillover effect, sleepy cities increasingly becoming the alternative option for people that cannot afford the hefty prices. In my case I don't know if I am willing to move to Baltimore (I work in Arlington). On the TV I have seen this days ads promoting Stafford and Fredericksburg counties as good places to live south of the Capital Beltway. In any case if I decide to do something like this I will have to live close to a train and work in DC to consider it. In the meantime I will have to continue living and overpaying here.

CAFTA DR Progress

Here is an interesting link if you want to know what is going on with the Central American Free Trade Agreement (CAFTA) from the perspective of The Office of the U.S. Trade Representative (USTR). I encourage you to follow the CAFTA-DR debate as US Congress prepares to vote on the agreement. Some say that securing passage of this accord is a priority for President Bush, and it will set the stage for further achievements in advancing political and economic freedom in the Western Hemisphere. I just hope that it works and it does not becomes a straight jacket for liberalizing further the Central American countries, or an excuse to avoid doing more profound reforms in the trade aspects and other aspects.

Who is Charles Ponzi?

This is an interesting story from NPR that explains what is the story of Charles Ponzi. In my home country a Ponzi scheeme is called this "Piramidación" to make financial piramids using other people's money. That is what basically Ponzi did in the 1930's and made himself famous for that. To add an interesting twist to the story Ponzi died in Rio de Janeiro in South America, why did he went there? Listening to the story I could not stop thinking how many state institutions behave like a Ponzi scheme. Social security is the most close example. The government makes everybody pitch in, so when you are old you get in return a pension to sustain yourself. Now the problem is that as the population grows older the payments start kicking in and that is when you have a problem. Since the money that is collected was not enough to cover future desimbursements it turns out that the only way to support it is you either increase the contribution on the younger ones, break your promise of paying x amount to the older ones or start running deficits and wait until congress or the President try to salvage it so the people don't loose their savings. Why a Ponzi scheme is a crime if the government does that everyday? Check also this webpage to learn more about Ponzi

Are we better off?

Virginia Postrel author of the Book the Substance of Style has an interesting commentary on why we are better of today than 20 years ago, even if the macroeconomic numbers don't show much difference.  The key is variety and how modern world offers today more choices than before.  Just the fact of being able to choose not among 20 products but rather 100 products (what is called the consumer surplus) even if it doesn't means macroenomically speaking anything means that we are better off.  Check her commentary in NPR or on her blog where she has a transcript of the radio commentary.

Connections and all in the family

I was reading about the dead of Aaron Director, founder of Law and Economics, that is the use of economic thinking tools in Law. This last paragraph caught my attention:

He stayed at Chicago for several years as an instructor, also bringing his younger sister Rose to the University. There, she finished her undergraduate work and entered graduate school in economics, where she would meet her future husband, Milton Friedman.

It turns out that Aaron Director was also one of the great promoters of Hayek's Road to Serfdom and even convinced the editors at Chicago University Press to publish it. He also was the teacher of Supreme Court Justice candidate and legal schoolar Robert Bork.


What an influence a man can have into a movement (both through family and ideas).

Gas Prices for Washingtonians

This is an interesting website for those who live in the Washington Area

Hernando De Soto is Awarded the Milton Friedman Award

Hernando de Soto has been awarded by the Cato Institute the Milton Friedman Award that grants a prize of $500.000 US Dollars to the to an individual who has made a significant contribution to advance human freedom. Awarded every other year the prize and named to perhaps the most influential economist to advance freedom on the 20th century, Milton Friedman.


The 2002 winner was Lord Peter Bauer because of his contributions to development economics. The bitter sweet prize was a little bit too late, because Lord Bauer passed away shortly after been told about the award. John Blundel former President of Atlas economic Research Foundation and current President of the Institute of Economic Affairs received the prize on behalf of Lord Bauer.

Peter Bauer largely ignored by main stream economists was the hardest critic of foreign aid to developing nations because the horrible consecuences on the local markets and the disastrous effects that led to more dependance and to less development.

Hernando de Soto's first work the Other Path was a breakthrough of the 80's by opening the doors to study the reasons of the informal economy and how they are not the result of market economies, but of the excessive regulation. His second seminal work was on the Mistery of capital in which he argues how important are property rights to promote development of people.

Cheers to Hernando de Soto and his work. Cheers to my friend Enrique Ghersi who in the early 80's was one of the main contributors to De Soto's work as co-author of the Other Path.

Hayek passed away 12 years ago

Yesterday, March 23 was the 12th anniversary of Friederich A. Hayek passing away. Hayek was an influential figure on the Free Market movement that wrote Road to Serfdom in 1944. The book was reproduced in Readers Digest condensed book section (first and only time to appear at the front of the magazine and not at the back as usual), and featured as cartoons also. Recently there was a celebration for the 60th anniversary of Road to Serfdom . My Dad wrote yesterday some recolections about his meeting with Hayek at a Mont Pelerin Society meeting in Berlin. Dad was the first ecuadorian member of that organization in 1981.


I reproduced the article verbatin below in case the link in spanish dies (sorry in spanish):

Friedrich A. Von Hayek

Verdades Evidentes

by Rómulo López-Sabando

Hoy 23 de marzo se cumplen 12 años del fallecimiento (1992) de uno de los hombres más trascendentes e ilustres en la historia de la libertad: Friedrich A. von Hayek. Austriaco de nacimiento (1900), nacionalizado inglés en 1938, abogado, filósofo, economista, maestro universitario, dictó cátedra en lógica, historia, filosofía, economía, estadística, moral, derecho y ciencias políticas.

Se hizo acreedor al Premio Nobel en Economía en 1974, según la Academia de Ciencias de Suecia, por “su contribución pionera a la teoría del dinero y de las fluctuaciones económicas, y por su original análisis de la interdependencia de los fenómenos económicos, políticos y sociales”.
Fue miembro de la Academia británica, obtuvo sendos doctorados en Derecho y en Ciencias Políticas. Doctor en la Universidad de Viena en 1927 y poseedor de muchos Doctorados Honoris Causas en todo el mundo, Profesor en las universidades de Londres (Economía y Estadística), Chicago (Ciencias morales y sociales) Friburgo, Salzburgo y Profesor invitado en muchísimos otros claustros académicos de América y Europa. Fue también director del Instituto Austriaco de Investigaciones Económicas.

Cuando el mundo vivía el horror del totalitarismo estatista y las convulsiones morales, económicas y sociales, que aherrojaron la libertad, derivados del nacional-socialismo (Hitler), del internacional socialismo (Stalin) y del socialismo corporativo italiano (fascismo de Mussolini), escribió en 1944 su magistral obra “Camino de Servidumbre” en la que con realismo social y profundidad académica exponía que los gobiernos no debían intervenir en la economía para controlar la inflación ni otras variables económicas, excepto la oferta monetaria estatal, cuyo crecimiento es el causante de la pobreza, de la pérdida del poder de compra del ingreso, de las desvalorizaciones monetarias, el deterioro social y moral y el vector más dinámico de la corrupción.

Escribió más de 50 libros de carácter científico. Sus estudios sobre Filosofía Social y Análisis económicos son el sustento del desarrollo, progreso, avances científicos y proliferación tecnológica que asombra y beneficia al mundo contemporáneo. Sus consejos son vitales para rescatar la libertad que día a día se pierde.

En su monumental obra sobre “Derecho, Legislación y Libertad” Hayek trata sobre el concepto de orden, sobre las fuentes generadoras de orden, las propiedades y características de los órdenes espontáneos, los órdenes espontáneos naturales, y el hecho de que los órdenes espontáneos son resultado de la sumisión de sus elementos a ciertas normas de conducta, rescatando los antiguos conceptos filosóficos sobre los orígenes del orden y de la naturaleza de los órdenes espontáneos (cosmos) y las organizaciones (taxis).

Según el CEES de Guatemala, Hayek en su visión y profunda reflexión sobre la libertad., se refiere a la diferencia de sentido en dos interpretaciones de la libertad económica. La una, la concepción original, que puede interpretarse como la “ausencia de coacción” que impide al individuo a actuar libremente respetando el derecho de los demás, o bien la “ausencia del poder que obliga” al individuo a actuar en contra de su voluntad. La otra concepción a que se refiere, es la libertad económica. Siendo hoy muy común la creencia de que para liberar al hombre de preocupaciones económicas es menester responsabilizar a los gobiernos, cobra mucha actualidad el discurso de Hayek, quien nos hace ver el riesgo que corremos al adoptar tal actitud, de perder la libertad en el sentido tradicional de la palabra” por el intervencionismo gubernamental.
En mi calidad de miembro único en el Ecuador de la Sociedad Mont Pelerín, fundada en 1947 por Hayek en Ginebra, (y a la que yo había ingresado en 1981), en una de las reuniones anuales de esta institución académica (Berlín Occidental 1982), tuve el honor de conocerlo, platicar y escucharlo y mientras, junto a él, navegábamos por el Rhin conocí, asombrado y estupefacto el cruel y degradante Muro de Berlín levantado por el totalitarismo de la Unión de Repúblicas Socialistas Soviéticas (URSS).

Los muros y cortinas de hierro, que parecen cosas del pasado aun perviven, pese a las experiencias fatales, para coartar la libertad y someter al hombre a designios totalitarios y fundamentalistas, sin respeto a la vida, la propiedad y el honor ajeno. En sus obras “Fundamentos de la Libertad” y “Fatal Arrogancia” conceptúa el rescate de conceptos y valores tan necesarios en los tiempos que corren.