Foreign Correspondent: Guatemala

Right-wing socialism

Guatemala City. A few months ago we had presidential elections in Guatemala. The incumbent party won and has remained in power despite wide-spread accusations of electoral fraud. However, the immediate concern of the population is moral and financial survival under the present regime, disregarding the legitimacy of the elections.

Would it surprise anyone to know that in the first few months of office the Government has instituted higher taxes, maximum price controls, higher minimum salary laws and other forms of intervention? The symptom is common world-wide and the time chosen for the application of the measures—the beginning of the term—is politically appropriate, since the Government feels strong. Towards the latter months of its term, we shall be coaxed into giving our votes to the incumbents with lures of lower taxes, pompous promises, and all the other typical Government tactics.

The surprising thing about these measures is that it was the right-wing party that applied them! What the left-wing party would have been like is an open question. It is not clear that it would have been worse. However, the left-wing means to the left-wing end would have been different from the right-wing means to the left-wing end. As an example, I can cite the case of a cement factory in Guatemala which is privately owned. The Government has raised the company's taxes. The State owned electric power company has increased their electricity bill several-fold and Government price controls have not allowed the company to raise its prices in line with inflation. Presently it is losing money and will soon be bankrupt.

I foresee in the near future a "deal" being made between the company and the Government, a sort of joint ownership with the State purchasing the factory's by-then depreciated stock. So desperate will the company be that it will probably welcome the merger, especially under the threat of Government intervention in the event of refusal. If anyone has the power to make "an offer that can't be refused," it is the Government. Of course, once the State is part owner, it will lift the ceiling on cement prices and all will appear well. And it will be well, but only for the Government. The State will have continued to feed its lust for power with the extension of "public" property and deadhanded bureaucracy. Since the bureaucrats' wealth is not at stake, they will have less incentive to provide the low-cost services offered by the previous owners.

It is easy to blame the party in power for our state of affairs. But aside from serving as an emotional escape—a psychological projection—it covers part of the truth. In a democracy such as ours, the majority chooses the party, but the party does not determine our tastes, much as in a market economy, producers do not determine the consumers' preferences (John Kenneth Galbraith's assertions to the contrary notwithstanding). So in a way we have consumer sovereignty: we choose the party to rule; and in a way we also suffer from consumer servitude as even those who do not choose must accept the consequences of majority choice.

Granted that "consumer sovereignty" is an exaggerated label to pin on the brand of statism that we get, especially since the political arena is not exactly an open market. But my point is that there is presently a demand for socialism in Guatemala (and indeed in the rest of the world). Since our system is a democracy, the parties try to cater to the demand of the majority as that is the group that will get them in office. The platforms of those parties that truly want to be elected will tend to differ only inasmuch as they miscalculate the demands of the majority and, since the current of public thought is better known every day (we have better information), the platforms will tend to be more similar over time. This process of homogenization is what the late Professor Norbert Wiener called "entropy." Readers might consider if this is not also the case in their own countries. It seems to be so in the U.S.

If we are to get basically the same medicine from different political parties, perhaps we should prefer the avowedly leftist parties. The socialists at least label their actions with a familiar terminology. Going back to the example of the cement factory, I am sure that the right-wing party in power will take it over as a move of "joint cooperation." The socialists would do the same thing but without the Newspeak; they would call it by its true name: expropriation.

With the use of euphemisms, the right-wing party will blame the failures of the economy on private enterprise and it will be alleged that the entrepreneurs resisted the helpful aid of the Government. Clear and comprehensible terminology has the advantage that, when the socialistic measures fail, the public will know that it was because of Government intervention, not in spite of it. Socialism will be responsible in both cases, but in the latter it will be known.

As the situation stands now in Guatemala, we must suffer a constant deluge of statism, embalmed by a demagoguery that enshrouds who or what is responsible. We may have the government we deserve—but we do not know exactly what we are deserving.