Principled Engagement in an Imperfect World
Piñera, José, Journal of Private Enterprise
In Latin America, as in most parts of the world today, those of us who want to create a better world must be willing to engage an imperfect world. But to be successful in that difficult quest we have to go armed with strong principles to educate about the ideals of a free market economy, limited democracy, and the rule of law. Your generous recognition will help me in this difficult cause, one that I define as a principled engagement in an imperfect world.
JEL Code: O10
Keyword: Economic freedom
Jose Piñera presented these informal remarks after receiving the 2009 Adam Smith Award from APEE at a dinner at the Universidad Trancisco Marroquín, Ciudad de Guatemala, April 5, 2009.
I am honored to receive today this Adam Smith Award from the Association of Private Enterprise Education and moved by the generous introduction of my friend Roberto Salinas. I have been asked to speak about the challenges facing Latin America, so allow me to now introduce the subject, emphasizing the conceptual framework that inspires my worldwide fight for liberty.
The Chilean Revolution, the radical dash for free markets and limited government, was successfully completed under extremely difficult internal and external circumstances in the 1970s and 1980s. As you know, those reforms, once matured and legitimated by five governments of different political perspectives, have placed Chile as number six in economic freedom in the Fraser Institute's 2008 World Report, two places above the United States.
Over the last two centuries, the political and economic history of Latin America has been in direct contrast with that of the United States. It is well known that the New World was born at almost the same time in the North and the South, that the North began poor and the South rich, and that in 500 years the positions have entirely reversed.
My hypothesis is that the tragedy of Latin America is the result of it having been an orphan continent. The Liberators of the South - generals Bolivar, San Martin, O'Higgins, and Sucre, among others - fought heroically to free their countries from Spanish political control. But they did not anchor the young republics on the values of individual liberty, did not establish the mie of law, and did not limit the delegation of authority by the people to their democratic representatives. On the contrary, they maintained the Spanish centralizing tradition. Bolivar's hero, symptomatically, was the authoritarian Napoleon Bonaparte and not a constitutional president like George Washington.
So, Latin America had Founding Generals rather than Founding Fathers. The result is that even today the region lacks the institutions and principles of a true democracy in the service of freedom. That is why progress is so unsteady and fragile.
Every lover of freedom values democracy, but not every form of democracy values freedom. As Alexis de Tocqueville's great work Democracy in America maintains, democracy must always be on its guard against popular despotism.
In Latin America a kind of tyranny of the majority, sustained by demago guery and populism, has led again and again to excessive government and threats to individual liberties. To be legitimate, majority rule must be limited by a constitutional framework that protects life, liberty, and property. Democracy and freedom can then be mutually consistent.
The United States has been so successful because it has adhered to limited government, economic freedom, and the rule of law. The Constitution of the United States is more than 200 years old and is acknowledged with universal respect. The citizens delegate certain enumerated powers to the government in order for it to be able to protect their unalienable rights to "life, liberty and the pursuit of happiness." Madison, Hamilton, and Jay explain in the Federalist Papers how and why the Federal Constitution provides a sophisticated mechanism to balance powers between the three branches of government, between the government and civil society, and between the government and individuals. …