The Real Problem
Western observers seem as of yet a bit unsure whether a putsch worthy of condemnation occurred in Egypt, or if a dangerous Islamist nutcase was removed just in time before he could inflict even more damage. Widespread street protests in Cairo are widely deemed to have somehow imbued the process with the kind of legitimacy even so-called 'democrats' can live with.
One may be forgiven for concluding that if a big enough demonstration against government were to take place in Washington (we are not sure what the threshold for 'big enough' precisely is, we will have to await the judgment of the pundits on that point), the chiefs of staff should feel free to put the government under house arrest and let the army take power: it would be perfectly 'democratic'.
Note here that we have exactly zero sympathies for Islamism. We believe its proponents and supporters are reactionary medieval throwbacks who are perfectly willing to impose their views of morality on everybody by force. We do not believe that the fact that Mohammed Morsi won an election has somehow made the Islamist program 'legitimate' because it properly reflected the 'will of the people'. It is glaringly obvious that there are a great many people living in Egypt today who would be severely oppressed under the shariah. The paragraph above mainly serves to demonstrate that the virtues of democracy are greatly overrated – in fact, they are so overrated than not even avid supporters of democracy think them worth defending when it comes to Islamists like Mr. Morsi.
But doesn't the Arab world, long chafing under the rule of petty dictators, 'need' more democracy? Actually, something else is far more important, as Fraser Nelson recently pointed out in the Telegraph: What the Arab world needs far more urgently than democracy is capitalism.
Lifting the Veil of Confusion – Freedom is not 'Democracy'
Fraser has done something that most other observers have failed to do: he has looked at the cases of individuals. Namely the cases of those individuals who were driven by the injustice prevailing in many Arab nations to take truly desperate steps like immolating themselves to register their protest.
Most other political observers see a nation state, filled with an amorphous agglomeration they refer to as 'the people' and then proceed to discuss which elements of the ruling class would be best suited to exploiting said lump of people, with approval generally extended to those elements whose policies are expected to best coincide with the interests of the Western ruling class. Then, so it is assumed, 'the people' will finally be happy and see their 'political aspirations' fulfilled.
Fraser notes however that the desperate victims, whose acts of protest with their terrible finality have galvanized resistance on a broad front, generally were people who simply tried to make an honest living. It was the fact that they were denied doing so that inspired their desperate actions.
These people didn't care about 'democracy' and the associated possibility of exchanging one batch of criminals at the top against another. They only wanted to make a living by their own efforts, trying to serve their fellow men. Their main concern was the lack of enforceable property rights.
Below is an excerpt from Fraser's article including a few typical examples. As he points out, there is a crucial difference between the demand for freedom and the demand for democracy. The two are by no means synonymous.
“But the Arab Spring was a demand for freedom, not necessarily democracy – and the distinction between the two is crucial. Take, for example, the case of Mohammed Bouazizi, who started this chain of events by burning himself alive on a Tunisian street market two years ago. As his family attest, he had no interest in politics. The freedom he wanted was the right to buy and sell, and to build his business without having to pay bribes to the police or fear having his goods confiscated at random. If he was a martyr to anything, it was to capitalism.
All this has been established by Hernando de Soto, a Peruvian economist who travelled to Egypt to investigate the causes of the Arab Spring. His team of researchers found that Bouazizi had inspired 60 similar cases of self-immolation, including five in Egypt, almost all of which had been overlooked by the press. The narrative of a 1989-style revolution in hope of regime change seemed so compelling to foreigners that there was little appetite for further explanation. But de Soto’s team tracked down those who survived their suicide attempts, and the bereaved families. Time and again, they found the same story: this was a protest for the basic freedom to own and acquire ras el mel, or capital.
Bouazizi killed himself after police confiscated all his fruit and a pair of second-hand electronic scales. This was all he had. He was a gifted trader; he had hoped to save enough money to buy a car and grow his business. On the face of it, losing some fruit and a £100 pair of scales seems like an odd basis for suicide. But having made enemies of the police, Bouazizi realised he would not be allowed to trade again. His family say he felt his life had ended and that, if he died for any cause, it should be that the poor should be able to buy and sell.
For most of the developing world, no such right exists. In theory, everyone is protected by law. But in practice, the process of acquiring a legal licence is so riddled with bribery and bureaucracy that only a small minority can afford to go through with it. To de Soto, this explains much of world poverty. Step out of the door of the Nile Hilton, he says, and you are not leaving behind the world of internet, ice machines and antibiotics. The poor have access to all of these things if they really want it. What you are leaving behind is the world of legally enforceable transactions of property rights. These traders do not really break the law – the law breaks them.
Take Fadoua Laroui, a Moroccan mother, whose suicide was filmed. She explained her reasons before setting herself alight. “I am going to immolate myself,” she said. “I am doing this to protest against hogra and economic exclusion.” Hogra means contempt towards small traders, the contempt which Bouazizi was shown by the police. A similar story was told by the survivors, and the relatives of the deceased. As Bouazizi’s brother explained to de Soto: “People like Mohammed are concerned with doing business. They don’t understand anything about politics.”
Technically, the law covers everyone. But under Hosni Mubarak, for example, opening a small bakery in Cairo took more than 500 days of bureaucracy. To open a business in Egypt means dealing with 29 government agencies. The same story is true throughout the region: the average Arab needs to present four dozen documents and endure two years of red tape to become the legal owner of land or business. If you don’t have the time or money for this, you are condemned to life in the black market: no matter how good you are, you will never trade your way out of poverty. Arabs are so angry about this that they are burning themselves alive.”
Incidentally, a friend of ours ran a business in Tunisia for a few years, and we can therefore confirm that the conditions for small upstart businesses in Arab countries are truly atrocious. The jungle of regulations suffocating business in the EU looks almost like a free market by comparison. Of course it should be mentioned that having to deal with 29 different bureaucracies in Egypt before one is allowed to open a small business actually comes very close to the situation in Greece. This is likely one of the main reasons why Greece is now in a never-ending economic downward spiral that is bound to eventually spread across Europe. It is not 'austerity', but the fact that it has been made nigh impossible for people to legally help themselves that is at the root of the malaise.
The West is confused as to what would really work in the Arab world, and the confusion probably stems from the fact that Western regulatory democracies themselves are increasingly abandoning the tenets of economic liberalism that were and are the well-springs of their prosperity. Fraser concludes by reiterating a proposal made by the above mentioned researcher Hernando de Soto – simply tie foreign aid to the demand that property rights be extended.
“A few weeks ago, de Soto told the US Congress that the West has fundamentally misread the Arab Spring and is missing a massive opportunity. Bouazizi, and the five Egyptians who self-immolated, spoke for 380 million Arabs who lack property rights or any legal protection. This applies to Britain: if we were to become champions of these people, and demand the extension of property rights in return for our foreign aid, it could be the most effective anti-poverty strategy ever devised. And it might make us millions of new friends in the Arab world.
This is not a new idea, but the revival of an old one. As Margaret Thatcher once put it, “being democratic is not enough – a majority cannot turn what is wrong into right”. Freedom, she said, depends on the strength of the institutions: law and order, a free press, the police and an army that serves the government rather than supervises it. History is proving her right – in Russia, Afghanistan, Iraq and now in Egypt. The façade of democracy can be horribly deceptive; it is the strength of institutions that decides if nations rise or fall.”
Of course, ideally there would be no such thing as 'foreign aid' at all. Nevertheless, Fraser's larger point is not diminished: economic freedom is far more important to the vast majority of Arabs than the trappings of a 'democracy' that exists only at the sufferance of the army anyway. As he notes at the beginning of his article, democracy in Egypt turned out to have the qualities of a typical EU referendum: “Voters could give any answer they liked, as long as it was the right one”.
We'll see if the newly appointed interim prime minister Hazem El-Beblawi realizes what needs to be done. There is a danger that Egypt could slip into civil war, which would be very unfortunate. El-Beblawi has an inkling of economics though, and one of his first steps will likely be the dismantling of a number of subsidies. If he recognizes the importance of extending and safeguarding property rights, he may be able to avert the worst simply by finally offering genuine hope for economic freedom.
Nothing to worry about (cartoon by Steve Bell)
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