sábado, 2 de febrero de 2013

The foreign companies’ problem in Argentina

The foreign companies’ problem in Argentina
Ezequiel Eiben
November 2012

In Argentina there is a big problem as regards foreign companies which can be divided in two parts: the activity of foreign companies itself, and the pollution that many companies’ activities produce.
First of all, we have to understand that nationalism is a very strong element in Argentina´s political parties, therefore it´s usual to hear speeches claimed by politicians full of rage and xenophobia. Here comes the problem with foreign activity itself. Some politicians and their intellectuals are always trying to convince people that citizens must support local industry, that foreign enterprises are a threat, and that “imperialism” or the “international capital” are trying to make a fortune and leave Argentineans in poverty. There are three reasons why politicians do this:
1) They have dark contracts with some local businessmen which consist of legal privileges in exchange of favors. So, they want to protect some local companies from foreign competition, and keep making illegal and immoral profits.
2) They are convinced of the statist ideology. So, they use the concept of “national sovereignty” in order to justify that the State owns natural resources, no matter if human intelligence has been applied by a company that is transforming them into a useful social product.
3) Without some kind of political control over the resources, they can’t survive as they wish in a system called “populism”, where they dress up as “heroes” who protect some “national interest” for the welfare of the people.
So here we have the scenario of our first problem: foreign companies are seen as a modern picture of colonialism, and despite the fact that they can bring jobs and wealth, a lot of people reject them and try to boycott them. It´s not unusual that, if you support foreign companies, you may be pointed out as a “traitor to your homeland”, and as an “imperialist agent”. Nationalism is not an archaic concept in Argentina; it’s an always useful platform for demagogy.
Now we have to focus on the second problem: pollution. There are some activities that companies develop which produce contamination. The open cast mine methods, the toxic waste thrown into rivers, etc. are examples of it. Of course, I´m not suggesting that they contaminate because they are foreigners (local industry does that too), I´m just pointing out that they do it. We have to ask ourselves: why does this happen? We will find that the answer is related to the lack of strictly determined property rights. Government does not recognize full property rights over the resources and lands where they are located; only property rights on the product that the company produces. So, there is no absolute property right that stimulates an ownership to maintain its property. Therefore, there is no economic stimulation for companies in order to maintain the capital value of the resource, since they don’t own it; and they don’t have to worry a lot about the future, so they want to produce as much as they think they should today without thinking they could sell the resource in the market tomorrow. Also, if property belongs to the government, we know that bureaucracy members don’t have economic stimulation neither, because they don’t personally own the resource, so the result is that they don’t care about fighting pollution as a true proprietor would do.
On the other hand, we have local governments that make contracts with companies in order to exploit resources. This situation leads to the sanction of laws that protect the companies’ current methods, even if they generate pollution that affects property of other people, because government businesses are at stake. So, the result is legal protection for pollution, instead of the defense of the property rights of those who suffer contamination in their person or goods. This does not stimulate the search for better methods, but the continuation of the current technology.
The issue is that nationalists and environmentalists take advantage of this situation and declare that we should not allow the activity of foreign companies in our country because of pollution. They criticize the activity itself, not just the pollution. Nationalists want us to live with local products, more expensive and of lower quality; and environmentalists want us to live in caverns like in the Stone Age. They don’t recognize the importance of defining property rights for those who produce and for those who may be affected with the bad effects of the production methods. If we concentrate on the property rights, we will be able to solve the problem of production and pollution by stimulating the search of new technologies, not by interrupting the full activity of companies because of troglodytes’ whims, and allowing the ownership of resources that encourage their preservation.
To conclude, Argentina must move on from xenophobia and anti-industrial positions, allow the activity of foreign companies in the country but keep government out of the economy so their members don’t use their positions in the wrong way, and recognize full and absolute property rights on natural resources to generate the conscience of preservation and environmental care. 

The Libertarian Manifesto; Murray N. Rothbard.
Capitalism: The Unknown Ideal; Ayn Rand.

No hay comentarios:

Publicar un comentario