COLLECTIVIST DYSTOPIA

Fito’s Frustration with the Economic Limits of Ideology

COLLECTIVIST DYSTOPIA
Fito’s Frustration
By Dr. Nelson Jorge Mosco Castellano

The artificial subdivision of knowledge into increasingly narrow specialities has, in some cases, ended up distorting the perception of those who observe politics exclusively through the lens of their discipline, their scientistic vocation, or their ideological militancy.
Political scientists, frequently elevated today to the status of oracles and moral arbiters of public conduct, sternly judge the left, the centre and the right whenever governments fail to carry out to the letter what they promised during election campaigns.
Everything would be much simpler if politics could be reduced to an Excel spreadsheet in which campaign promises were entered in one column and their degree of fulfilment in another.
Reality, however, insists on being considerably more complex.
Unfortunately for such an excessively mechanistic conception of politics, the old habit of promising the impossible sooner or later collides with economics, financial constraints and the actual behaviour of societies.
That is precisely Fito’s problem.
His desire to classify society into ideological tribes does not always manage to reconcile itself with economic, financial and social reality.
Imagine, for a moment, what would happen if the Uruguayan government decided literally to implement every demand arising from party grassroots committees, trade-union leaderships and certain voluntarist, populist and demagogic intellectual circles.
Imagine a vast, self-referential dialogue in which all of them demanded that the Minister of Economy abandon every criterion of prudence and do exactly what partisan orthodoxy required.
It would mark the return of the reactionary conservatives of an old 1960s left that still conceives of the State as both the beginning and the end of social life.
Everything within the State.
Everything for the State.
And ultimately, a contemporary version of the famous “L’État, c’est moi”, transformed into “the State is us”.
It is paradoxical that a political scientist, driven by ideological posturing or simply by a desire to see what happens, might demand that a government pursue to its ultimate consequences a programme whose economic unviability he ought to understand.
History provides too many examples of comprehensive planning, political control of the economy and the subordination of individual freedom for us to pretend that their consequences are unknown.
Collectivist experiments associated with applied Marxism, which Fito surely knows very well, are not merely curiosities for political science.
The dictatorships of so-called twenty-first-century socialism, revolutionary autocracies and mafia-like oligarchies that perpetuate themselves in power in the name of creating a supposed “new man” have shown how far such processes can go.
They do not end merely in economic failure.
They end by destroying freedom, individual independence, pluralism and, ultimately, democracy.
It is therefore preferable to have a frustrated Fito than a bankrupt, impoverished and authoritarian Uruguay resulting from the belief that ideological consistency requires governments to “fulfil everything they promised”, or that because a government defines itself as left-wing it must implement left-wing policies at full throttle.
What Would Happen If the Government Fulfilled Fito’s Dream
Fito inadvertently puts his finger on one of the great maladies of our time: the technocratic and ideological pretension of designing societies from an electoral blackboard while ignoring incentives, scarcity, uncertainty and human nature.
When a government attempts to subject economic and social reality to the rigid dogmas of party committees, union bureaucracies or intellectuals anchored in dreams of ideological refoundation, the spontaneous order upon which a complex society operates inevitably begins to deteriorate.
Economic Collapse and the Destruction of the Productive Fabric
Ignoring the price system as a mechanism of information and coordination inevitably produces distortions.
When prices cease to reflect scarcity, preferences and costs and instead become administrative decisions, shortages, queues, parallel markets and all the familiar anomalies of centrally directed economies begin to appear.
Tax and regulatory suffocation would gradually weaken the formal economy and increase incentives to move into clandestine and underground activity.
Economic survival would increasingly shift towards black markets, informality or even elementary forms of barter, while simultaneously eroding the State’s own capacity to collect revenue.
Capital, which tends to be far more cautious than ideological, would seek safe havens.
Fito’s capital included.
There would, naturally, be an exception.
The capital belonging to those who, protected by the regime, eventually become privileged owners of what formally belongs to the people, as has happened so many times under dictatorships that proclaim their opposition to capitalism while concentrating wealth and power within their own elites.
The same process would affect young professionals, entrepreneurs and those possessing skills in international demand.
Emigration would accelerate the loss of talent and produce an increasingly serious deterioration in the country’s capacity for innovation and production.
Inflation, Distortion and Financial Collapse
The attempt to finance voluntarist promises without genuine resources would sooner or later require higher taxes, increased borrowing or monetary expansion.
When deficits become structural and the currency is used to conceal them, the consequences are well known.
The purchasing power of wages deteriorates.
Savings lose their value.
Family and business planning become increasingly difficult.
Political fixing of interest rates and growing intervention in the financial system would also distort the mechanism through which savings are transformed into productive investment.
Credit would become more expensive or disappear altogether.
Financial institutions would face growing risks of insolvency.
And it is worth remembering something that is often forgotten when people speak casually about intervening in banks.
The money deposited in them does not belong to an abstraction called “the financial system”.
To a considerable extent, it belongs to small and medium-sized Uruguayan savers who entrusted those institutions with the fruits of years of work.
Bureaucratic Hypertrophy and Operational Authoritarianism
Every economically unviable policy eventually requires a coercive apparatus capable of enforcing it.
The greater the distance between what political power orders and what reality permits, the larger the system of controls must become.
Inspectors, permits, quotas, authorisations, restrictions and increasingly intrusive surveillance mechanisms would proliferate.
Political committees or trade-union organisations could eventually become, in practice, new commissariats of social control, deciding who receives certain privileges, authorisations or even scarce goods.
The discretionary distribution of permits, subsidies and commercial quotas would then provide ideal conditions for rent-seeking, cronyism, politically connected capitalism and corruption at the highest levels.
A phenomenon which, incidentally, does not necessarily spare the intellectuals entrusted with providing ideological justification for such regimes.
Social Fracture and Institutional Degradation
The next stage would be the consolidation of a corporatist society.
Unionised groups with the greatest capacity for political pressure would obtain privileges financed by those who lack organised representation.
Informal workers, small business owners, independent professionals and the self-employed would end up paying the price of agreements struck between the most powerful organised interests and the State.
A genuine distributive war would emerge between militant organisations and the rest of the citizenry.
When the so-called “collective project” begins to prevail over individual autonomy, the citizen progressively ceases to be a citizen.
He becomes a subject.
His ability to work, save, invest, trade or start a business increasingly depends upon the discretion of whichever public official happens to hold power.
At that point, Fito would face an additional professional problem.
With individual freedoms eliminated, there would no longer be centrist or right-wing political profiles left to analyse.
Only a left monopolising power and reproducing itself would remain.
Again and again.
Attempting to govern the extraordinarily complex web of social cooperation through ideological Excel templates and committee dogmas is one of the most direct roads towards poverty, stagnation and authoritarianism.
Uruguay’s current government is not constrained merely by inaction or lack of political will.
It is constrained by a concrete economic reality, fiscal limitations, accumulated debt and the elementary need to preserve the stability of a small and open economy.
One might even credit the Minister of Economy with a healthy degree of professional egotism if that is enough to prevent him from adopting extreme prescriptions capable of subsequently condemning him to economic and intellectual ostracism.
In the end, and perhaps to Fito’s reassurance, this apparent movement of the left towards the centre may be providing a far more valuable service than its critics imagine.
It is preventing Uruguayans from being fed through the ideological meat grinder of the most antiquated, dogmatic and repeatedly failed expressions of collectivism.
There are already enough countries in which to study the results.
For the time being, it would be preferable for Fito to continue conducting those comparative studies abroad.

Ideology versus economic reality.
Collectivism and individual freedom.
State intervention and institutional decay.

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