libertarian – Finance Colombia

The Reason Foundation’s Daniel Raisbeck On What Peru’s Election Can Tell Us About Economic Liberty In Colombia & Latin America

Loren Moss — Mon, 14 Jun 2021 01:39:52 +0000

There are not so many self-identified Libertarians in Latin America, but the Reason Foundation’s Senior Fellow Daniel Raisbeck is one of the most prominent. The Colombian academic has run for political office, but is better known for his academic work, and his research and writing on economic and civil liberty for the libertarian intellectual standard bearer, the Reason Foundation.

Finance Colombia executive editor first encountered Raisbeck when he was running as the Libertarian candidate for Bogotá’s mayor, 6 years ago. Now with the votes being counted in Peru’s election between a self-identified Marxist and an authoritarian daughter of a former president currently serving a prison sentence for trampling human rights and supporting death squads, the following conversation with Raisbeck couldn’t have come at a better time.

What can observers take from events in Peru? And what takeaways are relevant for Colombia’s upcoming 2022 elections, and for economic and civil liberty more broadly in the Americas? Daniel Raisbeck has some prescient observations.

Finance Colombia: I’m here with Daniel Raisbeck, and I know you are an academic here in Colombia, based in Bogota, you have a long resume. I met you when you were the libertarian candidate for mayor in Bogota, but I know that you also work with the Reason Foundation. Tell us what would you describe yourself as; what occupies your time mostly? When you meet somebody in an elevator, how do you describe yourself for the readers?

Daniel Raisbeck: Yes, well first of all thanks a lot for the invitation Loren, it’s great to talk to you again. Well, when I get that question I guess the straight answer is that I’m part academic but I’ve really worked mostly in journalism during the past few years before I was at Reason I was a chief editor at the PanAm Post for a few years and now I do also a lot of digital marketing for Reason, and I did that before as well; so I think it’s part of an editor’s job nowadays.

Finance Colombia: PanAm post is a great political publication, we’ve interacted with them before, we’ve done interviews with them before and they are a great publication for keeping up on politics down here in Latin America. So now, what I want to ask you is that this is an election year in several countries, Ecuador just had elections, Peru is in the middle of counting their final round in elections, Colombia is gearing up for elections next year, and it’s interesting because you can look at things from a free market perspective. Obviously, free people deserve free markets and we have luminaries, we have people like Hernando de Soto who was a candidate in the first round in Peru, he didn’t make it to the final round; and my question to you throughout this conversation, really what I want to ask is as we as we look at Ecuador, as we look at Peru as we look at what might be coming up in Colombia is through the lens of free markets and free trade and civil liberties as well what can we take away from these elections?

What can observers take from events in Peru? And what takeaways are relevant for Colombia’s upcoming 2022 elections, and for economic and civil liberty more broadly in the Americas? Daniel Raisbeck has some prescient observations.

I think that Ecuador, if we start with Ecuador they’ve gone from a very leftist candidate before with Correa then they went to Moreno who everybody thought was going to kind of, not everybody, but people thought was going to really pattern Correa but he went in a little bit of a different path, I wouldn’t call him a you know necessarily a free market person but he did at least go in an unexpected direction and now we have Guillermo Lasso who just beat Andres Arauz, what does that say for the region, what does that say for the prospects of governance, civil liberties? And I know this is a huge question but also if we look at trade regionally, trade within internationally and then of course, Ecuador is an interesting case because it’s a dollarized economy, can we read anything from this in some ways a surprise result, a lot of people weren’t expecting it. Maybe it says that the people in Ecuador had enough or wanted to go in a different direction. I’m not an Ecuador expert and I’m not native to the region. How do you analyze the results here in Ecuador with Lasso’s win?

Daniel Raisbeck: Well, I think it’s definitely the feel-good libertarian story of the year because Lasso is sometimes described in the mainstream media and in English, also in Spanish as a as a conservative because as far as I understand I think he’s a member of Opus Dei and maybe he’s conservative from that social perspective, but he has very strong ties to the libertarian community in Ecuador and actually not a lot of people know this outside of the country but Ecuador has one of the strongest, if not the strongest network of libertarian institutions in terms of think tanks and academics and even certain institutions like the Guayaquil Chamber of Commerce.

The people that have staffed and led it in the past few years have been very much in favor of free market ideas, which is not the case for example with a Chamber of Commerce, a typical Chamber of Commerce in Colombia, which is just usually just a croniest kind of facade for commerce but anyway, so I think yes it is a surprise because Lasso actually barely made it into the the second round into the runoff, I think he got even he was under 20% of the votes he barely beat this other guy Yaku Perez, an indigenous candidate and Andres Arauz was Correa’s protégé, or whatever you want to call him, he got over 30% of the voting, so he was the favorite.

And I think there were several things from what I saw and you mentioned it Loren, Ecuador is a dollarized economy since 2000 and in my opinion that has been their great advantage and that’s what saved them during the Correa years because Correa who was an ally, close ally of Hugo Chavez, he didn’t like dollarization he was a critic of dollarization even before he was president when he was an economics professor. So he wanted to get rid of it, he even tried with this parallel currency that he tried to introduce but it failed and the interesting thing is Arauz was even more radical than Correa. So he had a paper that he published I think before he was a candidate or a blog post in which he explained step by step what had to be done in order to de-dollarize Ecuador, which included basically very strong currency controls and other very harsh measures, and the interesting thing there is that at the beginning in 2000 when Ecuador had to dollarize with inflation, somewhere between 60%-70% of the population was against using the dollar, and now after two decades it’s around 80% or more I think it’s 88% in the last poll I saw in favor of the dollar and they don’t want to go back to the Sucre or any other new currency with someone like Arauz in charge.

And it was very radical what he was proposing, he wanted to use the reserves of the central bank to just basically hand out money and it was going to be, I think it was going to be a very difficult situation if he was elected for Ecuador so I think it’s very hopeful results, not only for Ecuador but for the region. But again you can’t read too much into it because it’s only one country, and the same day that that Lasso won, we were encouraged at first with Hernando de Soto as you mentioned in Peru who was about to qualify for the runoff, he was in second place at the beginning but they’re very slow in counting the votes and by the next day he was no longer in second place. Now its between well Keiko Fujimori, the daughter of Alberto Fujimori, but the worrying part, I mean I’m not a big fan of Keiko but the worrying part is this Pedro Castillo guy who came in first place who is an avowed Marxist…I was reading his program and I mean they’re quoting Marx, he’s praising Fidel Castro and Vladimir Lenin, they’re proposing to nationalize all the strategic sectors of the economy, regulate the free press, so I mean this is the real deal in terms of hardcore Chavismo and I think it’s very worrisome what’s happening now in Peru.

Finance Colombia: Yes, I think that you know it’s weird because we have Fujimori, Keiko’s father, Alberto Fujimori, on one hand he can take a lot of credit for defeating the Sendero Luminoso, the shining path, the Maoist rebels, on the other hand, and there are some parallels here in Colombia, but I think more stark, on the other hand he’s accused of human rights and civil liberties violations, and so it’s it’s almost like you can look at Pedro Castillo as obviously a threat to economic liberty almost certainly civil liberty, but then it’s not exactly that Keiko Fujimori has a great record for clean governance and so, Peru is almost more worrying than Ecuador.

Aside from these two candidates, and aside from this election in the past two years the governance crisis in Peru as far as the ability of anyone to govern and there’s a certain degree of instability there, not like a military coup kind of instability but in almost like a constitutional crisis, and I would wonder if either of these people whoever wins, I would bet against either one of them finishing up their term the way that things go, and I know I don’t know anything about Peru, here in Colombia at least I can say I know something about it, I don’t know much about Peru at all so what’s the prognosis, what are the options and the alternatives and what are we going to see in the next two or three to four years?

Daniel Raisbeck: Well, you’re absolutely right about the political instability in Peru because during the last few years you’ve had several presidents end up in jail or former presidents end up in jail, which is quite astonishing from a Colombian perspective because we’ve never had a president even have to resign in the middle of his term as has been happening in in Peru, let alone we have big scandals for example with ex-president Santos, there’s proof and people have gone to jail because Odebrecht financed his campaign, but he’s in the clear, at least he has been for now, you had Ernesto Samper whose campaign was financed by the by the Cali cartel and nothing happened to him either, so it’s very surprising from seeing what happens from Colombia, from one perspective you could say it’s encouraging because you can say at least there’s consequences for these kind of actions, on the other hand it has brought tremendous instability and I think that has contributed to the situation we see now because one of Castillo’s proposals is basically to get rid of the constitution, to hold a constitutional assembly and that’s always dangerous because that’s part of the classic recipe of the Chavista regime or the Chavista playbook. The first thing these guys do when they get in power, they get elected, but the first thing they do is they change the constitution and they change all the rules of the game, the first priority being holding on to power indefinitely. So I think it’s quite clear that this is what Castillo is looking for in in Peru and curiously he has the excuse of instability as a way of introducing his very drastic changes, including changing the entire constitution. And by the way Peru, besides all this political instability that we have been talking about, economically it has been pretty successful, it has introduced a lot of measures in favor of economic liberty, it ranks pretty high in the Cato Institute / Fraser Institute’s economic Freedom Index, you’ve seen tremendous growth and reduction of poverty over the last 20 years.

So I think that the problem with these, and with this obsession with politics that’s fueled also by social media, and you see of course in almost in every country is that…Chile is a very good example, that people very easily lose sight of what they actually have and of achievements that that are real over the past years and decades and then just on the spur of the moment you can have what happened in Chile which is that people actually went out and voted to change the constitution which has produced the most successful results by far, of any Latin American country. But it’s very easy especially for certain political sectors to spread frustration and I mean obviously frustration can be very legitimate and very real, but I don’t think in the case of Chile, in the case of Peru that that merits throwing the constitution out of the window, especially when in both cases the constitutions have produced quite positive results.

Finance Colombia: You know, I have explained to people looking at Latin America, I’ve explained to people that that there’s a history of going out of the frying pan into the fire as we say in English, and I said look it’s not that (Nicaraguan dictator) Somoza was good, but then you go into maybe a worse situation. It’s not that (Cuban dictator) Batista was good but then you go into a worse situation. In Venezuela you actually had maybe a decent president who was very naive and but even still, even there you had kind of like we said, in Colombia, in Peru you had that even worse, you had a very stark social division that led to the conditions that created Chavismo. I think that you mentioned Peru which is by most measures, including economic opportunity has been the most successful country in Latin America, arguably maybe Uruguay can compete with that which is an entirely different situation, but still I think that Peru like you said has been economically successful but it’s had a political governance crisis and a lot of that’s been justifiable, there’s been some corruption and things like that.

There’s been Odebrecht and different things with past presidents, but I think that even in the US, which is relatively stable, as an American I fear a constitutional convention because things can get worse. Because I think that a lot of ideas can come in from some of the worst in western Europe but I think that there are some of the bad things that can come in as far as government intrusion and erosion of civil liberties, and at least there’s a history of that where down here the intellectual pedigree of a free market you have people that are like out there preaching in the wilderness like Hernando de Soto in Peru for example, who they kept trying to blow up for writing books you don’t see a lot of that and so I think that it’s very scary, but let me ask you this, do you see a worst case scenario because it’s not like Castillo no, Keiko Fujimori might win and then we have probably economic liberty but maybe not necessarily good governance or the best human rights record as far as civil liberties either way but then let’s suppose Pedro Castillo wins is it a potential Venezuela or is that hyperbole?

Daniel Raisbeck: Well, I think you have to take these threats very seriously and you have to believe people, you have to believe what they’re saying because I mean the problem in Venezuela as you well know was that people said this will pass, this too will pass and we’re not gonna become the next Cuba, as many Cubans warned them, and in fact they did end up becoming like Cuba, and Argentina they haven’t been that far behind.

I mean the institutions were stronger, they were actually to get rid of them in 2015 and then after a very mediocre government by Mauricio Macri the traditionalists came back to power right? And you still have tremendous problems there with inflation and just terrible economic conditions, you had defaults, you name it, so I do think that what these people say and it’s also you know a case of birds of a feather flocking together so now you have for example Evo Morales gloating about his candidate winning in Peru. So I do think Castillo is part of this movement and I do think it’s very dangerous, and unfortunately as you were saying the only alternative now since de Soto didn’t qualify for the runoff, is Keiko Fujimori and you have a different set of problems as you mentioned; maybe authoritarianism of a different type. I think she’s also in it for her family right?

When I first ran for the house of representatives in 2014 and when I talked about taxes people were looking at me as if I was an alien or insane because that was not an issue in Colombian politics.

But if you’re a Peruvian voter and the problem is that Fujimori name and the family generate so much rejection that there’s a good chance I think, that Castillo can win, but the problem with that is that as I said, I think this is the real deal. His government program is just, I mean it should send chills down anyone’s spine when you read it, because they’re very open about what they want to do and it’s not for instance…

I’m sure you’ve noticed this Loren but in Colombia, Gustavo Petro, who’s our version of Chavez, he’s very skilled at evading these questions so he’s spent the last five or so years trying to disassociate himself completely from Chavez and from Chavismo and Venezuela, even though he used to boast about being an advisor to Chavez and to travel to Venezuela all the time. He brought Chavez to Colombia, to Bogota and so what Petro does for instance is say when they ask him if you want to implement the Venezuelan model, and he says no, he starts talking about climate change and how he doesn’t want to have anything to do with fossil fuels in the economy and all of this, and somehow he fools journalists all the time with that rhetoric but Castillo is very open, he’s praising or his movement is praising Fidel Castro, Lenin, he’s quoting Marx, They described themselves as a Marxist Leninist organization. I mean this guy’s not even trying to hide it so I think you have to take that seriously and if he were to win I mean the thing with these countries is that it’s never from one day to the next, if Castillo wins, the next day it’s not going to be even as—well it usually takes some time, there is some resistance it then it will be a question of how Peru’s institutions actually are able to resist that, but from what we’ve seen and especially if he somehow gets a new constitution made in his image approved, then I think it’s extremely dangerous and of course you can always have a new Venezuela as well, why not?

Finance Colombia: You know it’s scary, we have a lot of readers in the mining sector, we have a lot of readers in the petroleum sector, it’s interesting because now I live here outside of Medellin and I get into some interesting conversations and I say look I’m not Colombian, I’m not trying to take sides or even less to be an “imperialist” and tell Colombians what to do, but sometimes I’m in interesting discussions and I say “I lived in Bogota when Petro was the mayor and I remember the trash scandal and these things and what it’s like, it’s weird because we almost have kind of a Petro like situation happening in Medellin right now.”

Daniel Raisbeck: You’re like the Venezuelans who migrated to Peru.

Finance Colombia: Exactly! And it’s interesting because I talk to people, there’s a lot of people who are…and as you know in Colombia there’s a lot of, there’s like, it’s not a formal movement but I get memes sent to me and WhatsApp and Facebook and things like that and I understand because I mean in the US it’s kind of almost the same thing, it’s like “we don’t want Trump or we don’t want Hillary for different reasons” or down here it’s like “we don’t want Uribe and we don’t want Petro,” you know? Because I know people here who, it’s not that they’re lefties but they are dissatisfied with the human rights record of Uribe, and that’s okay, that’s understandable because I mean part of liberty there’s economic liberty and free trade and free markets but look at what’s happening in the US right now. There’s intrusive government, and one thing I’ve got to give you credit and I’ll go ahead and do this publicly, when I first interviewed you five or six years or seven years ago I was skeptical about your drug policies that you talked about, but you know what? You’re right because I look at the US now. New York has legalized it, the US and the world hasn’t fallen apart, and it’s not that drugs are good. Putting smoke in your lungs isn’t the best thing, but the point is that if you as a sovereign individual have the right over your body, if you want to do that as long as you don’t bother anybody else, as long as you don’t come and steal my television, do what you want to do, and as the libertarian argument has won, we don’t see the world falling apart, right?

But I don’t want to get off on that tangent, the point is still that we get this left argument which is socialism and intrusive government and then we get a right argument which is things like a restriction on social liberties and like, you know, Opus Dei and “let’s make the church a official state organ and let’s make church policies law” and it’s weird because libertarians go “no, so you can’t come and intrude on my private life, no you can’t violate my civil liberties but yes I’m a capitalist and I want to have free trade and in Latin America, the argument—and to the US to a certain degree, but I see less of a public discussion in Latin America, and to a large degree less of a public discussion in Europe too, is that it tends to be this: It’s not a matter of civil liberties and economic liberties together, but it tends to be kind of this Marxism class struggle thing versus this—and I’m not taking a position for or against the church, but kind of like ”let’s make almost like an official religion like we see in the south of the United States,” and my question: Is there a chance of candidates breaking out of that? Is there is there a chance of…I see in Central America sometimes there’s some movements, but what are the prospects, one for that breaking out and then two less…well let me ask you that first and then we’ll come to here locally here in Colombia.

Daniel Raisbeck: Well, you mentioned several points. First about the drug issue, well, I think you’re absolutely right and for instance in my campaign I never said that I’m in favor of drug consumption, it’s just a critique of the inevitable consequences of having drugs being illegal of prohibition because that just leads to just terrible things like people, innocent people being murdered for being innocent bystanders and in the middle of a drug war and of course we saw that in Colombia, especially in the 80s when I was growing up, you see it now in in Mexico and across Central America, and I mean if you think about it, it’s kind of strange because the drug war was officially launched or some scholars consider that the beginning of the drug war was under Richard Nixon and one of the first things that happened was that they were pressuring Mexico into spraying fields, not only poppy fields I think but also marijuana fields with pesticide several decades ago, but now right across the border from where you were spraying, now you have legal marijuana in all these states.

I saw a poll today in in Reason that they published an article about it, I think 66% of Americans favor the end of federal prohibition, and I mentioned that because it’s amazing that in Colombia they legalized medical marijuana a few years ago, but I know and you probably know a lot more than I do from friends in the in the industry that even though you have that on paper, in practice it’s terribly hard for instance to have a bank account opened for these companies, and that’s…I mean, I don’t think politicians should ever intrude in the economy and say we should support this industry or that industry, but this is a no-brainer in the sense…I’m not saying that you should get subsidies because that would be corporate welfare, but I’m saying if you have a product where the where they say in Colombia the brand is already created, it’s probably colombian hemp and where you have the States putting all these obstacles in front of these entrepreneurs and investors, you even have lots of foreign investment from Canada and other countries, and especially in a time like now when you have such high unemployment levels, a need for more taxation to bring in more taxes, you need to create businesses. And why aren’t they making life easy for all these businesses? It’s just mind-boggling to me at least.

Finance Colombia: I agree, I think that the other thing that happened in in the drug war is it changed the relationship fundamentally between the police or between law enforcement more broadly, and the populace because before the police went after the bad guys, they went after robbers, they went after people who did violent crimes and that relationship changed fundamentally to going after people who aren’t doing a crime against anybody, they’re not violating anyone else’s personal liberty or they’re not doing a property crime against anyone but it’s like “let’s search that car or let’s certainly stop and frisk” as they say in the United States, “let’s search that person and we’re gonna search that person for something that they own that’s theirs,” not stolen property or anything that they obtained by deceit or something like that, and in the past years it’s really changed the fundamental relationship.

Now none of this at least from my standpoint is to is to excuse any of the damage that any kinds of drugs have done or anything like that, but the way that the policing is done and the violation of civil rights and even if you say “OK, this is a crime or this isn’t” if you look at like in the US and it’s happening here in Colombia too, what happens to innocent people? Because now “I suspect you because you’re a 20 year old kid and you’ve got long hair, and you’ve got raggedy clothes,” I’m just going to stop you, versus I’ve got on a tie and I’ve got my hair cut, something like that and now it’s like you’re…it’s a crime completely who you are, not that you’ve taken any action or anything like that, and we see that down here as well.

Now you’ve been generous with your time, I do want to ask you, Colombia has elections next year and we look at obviously the perennial people like Petro who probably will be a candidate, you have some interesting things happening where you have Sergio Fajardo, who most people consider to be center left, then you have the Centro Democratico which is really not centrist at all, so my question is from a prognosis but then also looking at it through a lens of liberty, because I don’t think that…you know Petro obviously is no fan of economic liberty, what’s the prognosis as far as the panorama and aside from the three that I mentioned, if we look at other maybe candidates out there like Char, like Vargas Lleras, what do you see as the weather forecast for 2022 from a really what might happen perspective, but then also let’s look at it from an economic freedom and civil liberty perspective?

Daniel Raisbeck: Well Loren, this is something I write about often and yes, I think you’re absolutely right in terms of, I mean Petro is just hard left, he tries to camouflage that somehow or to or to hide it with his rhetoric about climate change and the environment but he—I mean he was an ex guerrilla member, I mean, last time he was a candidate he said exactly which companies he was going to expropriate, he says you have to print money, as much money as possible to get out of the of the current crisis. I mean from whatever perspective you see it, he is definitely not what you need in Colombia right now.

“Uribe is by no means a conservative in the Anglo-Saxon tradition. I mean there’s nothing Thatcherite or Reaganite about Uribe. I mean he introduced the wealth tax in Colombia when he was president, when he said as all taxes, that it wasn’t going to be permanent and it was going to be temporary, and it’s become permanent and now his party wants to make it even more permanent.”

The problem again and I think it’s similar to other countries for instance Peru at the moment, is that the alternative and I mean, by what I mean the most probable alternative which is some candidate from Uribe’s party, is that as you said their only ideology is Alvaro Uribe, so this is very difficult for people in Colombia, especially in the media to understand, but if you get rid of the whole debate around the FARC because it was when he was president he went after the FARC as you know, with a lot of impetus but if you get rid of that, if you ignore that and if you look at their actual policies, Uribe is by no means a conservative in the Anglo-Saxon tradition. I mean there’s nothing Thatcherite or Reaganite about Uribe. I mean he introduced the wealth tax in Colombia when he was president, when he said as all taxes, that it wasn’t going to be permanent and it was going to be temporary, and it’s become permanent and now his party wants to make it even more permanent.

Finance Colombia: Yes, it’s a different conversation.

Daniel Raisbeck: He created all kinds of subsidies and he was proud of it, he’s proud. He doesn’t see a welfare state as a kind of a crutch that you need to kind of help people when they need it and to get them off welfare as soon as possible. He is and his party, they are proud of the amount of people that are on welfare and they try to increase the number of people who are on welfare for electoral reasons I think, and when you see things like the debate over Uber, the sharing economy has had so many problems in Colombia and the peak absurdity in my point of view because Uber is technically or has been technically illegal, but a lot of people use it anyway, they’re taxed and they’re taxed so it’s illegal but they’re taxed.

Finance Colombia: So many government people use Uber.

Daniel Raisbeck: Yes, of course.

Finance Colombia: And the only reason Uber still functions is because if you want to get from downtown up to up north to where you live or something like that, you know, and especially in Bogota where the taxis are so well loved, and I’m being sarcastic, you know, because so many people even in the government rely on Uber that’s why they’re not shutting it down but they just harass the drivers, they grab your car and then you have the Colombian equivalent of civil forfeiture happening down here, and it’s almost a form of government sanctioned corruption.

Daniel Raisbeck: Yes, but I mean Uribe was in favor of the taxi lobby against Uber when, this was before the pandemic, because it’s…yeah it’s not the main debate anymore, and he’s been in favor of tariffs to help different industries, he’s very interventionist, he’s even ended up as an ally in the congress of Jorge Enrique Robledo, so I mean from a pro-liberty or libertarian or classical liberal standpoint or whatever you want to call it, it’s very frustrating because people associate Uribe as a right-wing neoliberal conservative, but when you look at what he actually does I mean there’s nothing of the sort, and there’s no real alternative, and from my experience at least when you try to for example to run as an independent, it’s also very difficult because there are all these barriers to entry in the market so it’s very expensive and the political parties are all about bullying for themselves and they have set up all these obstacles to prevent any real competition, much as is the case in the real economy.

Finance Colombia: So if you look at of the candidates that might run in the next election, who would you say is the, if you were to rate them obviously probably Petro would be at the far end of the scale but who would be the friendliest and we don’t know who’s going to run yet, but of the people that are kind of in the chattering class as we say or the gossip of who might be a candidate next year, who would be probably in the front runner strictly through the lens of “free people = free markets?”

Daniel Raisbeck: Yes, well, it’s difficult not to be pessimistic, I try not to be pessimistic, but I think Petro at the moment is running very strong and he’s definitely going to be a favorite and I think a lot of people write him off just because they say he’s never going to be president and I think it’s very dangerous to make those assumptions, of course you can be president and there’s nothing in fact—he came very close a couple of years ago, so that first of all. But in terms of for example who I would vote for, if the elections were today or tomorrow the only candidate who I see and we’re a pre-candidate because we haven’t even entered that primary stage or if you want to call it that, but the only one who I’ve heard making the right kinds of noises even though I’m not his biggest fan is Enrique Peñalosa, the former mayor of Bogota because he has been outspoken at least on Twitter for what it’s worth criticizing these tax reforms, criticizing this idea that you can just tax the rich to no end and that that’s the way to finance this European style welfare state that everyone in Colombia fantasizes with, and the assumption is that through wealth taxes or taxing businesses or the big businesses that already contribute the largest amounts to the state that you’re going to be able to solve all problems.

And so he’s been pretty outspoken about that, and he’s saying the obvious thing, which no politician or I usually don’t hear politicians saying, which is that, “fine you can have a punitive tax regime” which is what you already have in Colombia and they want to make it even worse, no one’s no one is stopping you from that, you’re a sovereign country you can have that, but the consequences of that are that, a) you’re not going to have capital coming in because people don’t want to, especially in a country like Colombia, people don’t want to, risk—investors who want to risk their capital in order to further their profits, to be taxed into oblivion, and on the other hand you have people who are already in Colombia but if they feel the tax pressure is overbearing then they can very easily leave because they have the money.

Finance Colombia: Exactly.

Daniel Raisbeck: Which has been happening so I would root for Peñalosa at the moment. Do I think he’s going to win? No, would I even be enthusiastic that if he were to win that he would implement these ideas? No because I also know him from Bogota. He did some good things as mayor but he’s also very statist…but he’s very statist in urban politics kind of way.

Finance Colombia: In context you’ve got I mean you can’t look at somebody, you know, we’re not going to elect Hayek so you’ve got to take it in, so I know…

Daniel Raisbeck: I completely understand, and I mean I voted for Duque four years ago, and Duque was saying, the current president his entire camp—And that’s why I feel that to a certain extent what the few libertarians in Colombia, what we’ve done has been somewhat successful in terms of setting the terms of the debates because when I first ran for the house of representatives in 2014 and when I talked about taxes people were looking at me as if I was an alien or insane because that was not an issue in Colombian politics.

I think the last politician who really talked seriously about taxes was Alvaro Gomez in the 80s and 90s, I mean of course because of the FARC situation and the security situation, but taxes weren’t really on the top of the agenda and if you look at Duque’s campaign, Duque, I mean you can see it on Twitter because people are retweeting his material from the campaign. He was promising, he was criticizing Santos’ high taxes, he was promising to lower taxes even though it came with the with the caveat of lowering taxes and raising wages, which kind of you can’t do by government fiat, but the fact that he made cutting, he was talking about austerity, about reducing the size of the state, getting rid of useless government agencies. The fact that he had to constantly mention that I think, it was a positive development during that campaign and the problem now is that he instead of doing what he said he was going to do, he did the exact opposite. He’s been raising taxes, he not only didn’t get rid of useless state agencies, but he created new ones like the Ministry of Sport among others! So right, it’s a difficult situation so even if you get a guy like Peñalosa and he wins on that platform, there’s nothing guaranteeing that he would actually implement these free market policies.

Finance Colombia: Let alone you know, getting things through congress and I think that Peñalosa is interesting because he was pretty well regarded at least in hindsight from his first term. My opinion as an outsider but as an outsider that follows Colombian politics was that Bogota politically had become so polarized that whoever gets in there, you’re going to have half of the people against you and it seems like you’re almost in a no-win situation, and I think the US is kind of going through a phase like this too where there’s a polarization to that is impinging upon governance.

I remember when Ronald Reagan and Tip O’Neill would get together and work things out, you know? I’m from Ohio and in Ohio the Republican governor Jim Rhodes would get together with Verne Riffe, who was the Democrat speaker of the Ohio House. Same situation at the state level and they had their ideologies and they had their beliefs, but they would get together and hammer out governance and they were opponents but they were not enemies, and today we have situations where we have people that look at each other as enemies and that negatively affects governance. You’ve been great with your time I really appreciate it, I hope to have you back more frequently. I mean it’s just like the saying goes free people deserve free markets and we don’t editorialize a lot in Finance Colombia but the two go hand in hand and it’s a chicken or egg thing: You can’t really in the long term have one without the other and it’s not even the most popular thing in the US but it’s even more of a rarity down here where people go: “what can we get?” or there’s this corporatism and there’s this idea of, “I’m gonna buy votes using the government,” not specifically in Colombia but really as a region and then to be fair, it’s not a Latin American problem because we look back at ancient Rome with voting in bread and circuses leading to destruction, so it’s not like picking on Latin America, it’s really a human condition and so I want to encourage you and I really am looking forward to continuing to re-engage with you to get your expert opinion on colombian politics within the region as a whole.

Daniel Raisbeck: Well thanks Loren very much and as I said at the beginning I think before we started the interview that I really admire your work at Finance Colombia, I follow you and follow the newsletters on the website and please do keep it up.

Finance Colombia: Okay, stay safe.

Cato Institute Scholar: School Choice Increases Earnings in Colombia

Editorial Staff — Sun, 11 Aug 2019 20:14:13 +0000

A just-released evaluation found that a school choice program Colombia improved vital long-run outcomes up to 20 years after students applied for private school vouchers in 1994.

Students who won a #SchoolChoice lottery placement in a private vocational high school in Colombia showed large labor market benefits up to 20 years later compared to the control group @DeAngelisCorey @BobBowdon @JasonBedrick @lina_anaya @MQ_McShane https://t.co/ipBrLVawol

— Patrick Wolf (@P_Diddy_Wolf) August 8, 2019

The research team, led by Stanford University’s Eric Bettinger, found that winning a lottery to use a voucher to attend a private school in 6th grade increased earnings by 8 percent overall and 11 percent for females by the time the students reached around 33 years of age. In other words, it looks like school choice could help close the gender wage gap in Colombia. The program also increased adult earnings by 17 percent for students who applied to vocational schools.

Higher earnings should be enough to demonstrate this voucher program’s success. But don’t drop the mic just yet.

Dr. Corey A. DeAngelis is an adjunct scholar at the Cato Institute’s Center for Educational Freedom. He is also the Director of School Choice at the Reason Foundation. (Photo courtesy of the Cato Institute)

The study also found that winning the voucher lottery reduced the likelihood of having a child as a teenager by 18 percent. Voucher lottery winners were also 17 percent more likely to complete secondary school on time and 13 percent more likely to enroll in tertiary education than the control group. The authors also reported that these long-run gains “occur at a low or possibly negative cost to taxpayers,” implying the program has a positive return on investment.

We should consider all relevant outcomes when evaluating any education policy, especially since families don’t want schools solely focusing on standardized tests. Families want schools to help their children succeed in life. And it looks like private schools in Colombia are doing just that.

By Corey A. DeAngelis, PhD

This specific contribution is reprinted, shareable and licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License. It has been generously shared by The Cato Institute, Washington D.C. The Cato Institute is the world’s leading Libertarian think-tank.

Headline photo: Sede Barragán is small and, like many rural Colombian schools, lacks resources. But the students take great pride in their school, which features the colors and design typical of buildings throughout coffee country. (Credit: Jared Wade) Headline photo copyright: All rights reserved and not covered under Creative Commons.

A Candid Conversation With Bogotá’s Libertarian Candidate For Mayor

Loren Moss — Tue, 14 Jul 2015 06:08:51 +0000

The electoral campaigns are heating up in Bogotá, Colombia’s capital. Finance Colombia endeavors to speak with every serious candidate willing to offer us their time. This year, we were able to sit down first with Bogotá’s Libertarian candidate, Daniel Raisbeck. The Libertarian movement is small, but growing in Latin America, where the traditional battles have been fought (sometimes literally) between the usually devoutly religious heirs of the vestiges of Spain’s colonial system, and the liberal movement—not the classical liberals of Adam Smith, but advocates of overthrowing the old order and replacing it with something ranging from the democratic socialism of Western Europe to the Communism of Eastern Europe. Libertarians are not the same as these liberals, but are more faithful to the free markets and unintrusive governmental ideas espoused by the likes of Hayek and Mises.

While still relatively rare in most countries, Libertarians are gaining traction in parts of Latin America, especially as people look beyond the old dichotomies and ideas are more readily diffused because of the Internet, globalization, and travel allowing people to study abroad and be exposed to new ideas. Daniel Raisbeck is an example: Born and raised in Bogotá, but studying and contrasting the politics and philosophies in both Europe and North America before returning to his home town, Raisbeck brought some fresh—and to some, radical—ideas back with him.

Finance Colombia’s executive editor, Loren Moss met recently with Daniel Raisbeck to discuss his candidacy for mayor, the state of politics in Bogotá and Colombia as a whole, and prospects for libertarian philosophy in Colombia and Latin America in general.

Finance Colombia: Tell me who you are, your background and why you decided to run for mayor.

Daniel Raisbeck: I’m Daniel Raisbeck,I was born in Bogotá, raised in Bogotá but I finished high school in the States. I did my college, my BA in DC and I did also my Masters in New Orleans at Tulane and then I lived in Germany for around 5 years where I did my doctorate, then I’ve been back in Bogotá for—this is already my fourth year. I’m a historian and I work at a university, I teach. I never had a plan as a child to become a politician, it wasn’t my dream but having this education in the States and having had a chance, especially in Washington, to see how the political system works, having done a few internships also, as well, having been also in Europe and having seen the political system there, my family is Scot, we have a Scottish background so I still have relatives in the UK and in England, in Wales especially,

So being just in touch I paid attention to American politics, I paid attention to British politics, to German politics, to European politics at the EU level, and so when I came back and I saw the level of debate in Colombian politics I was quite disappointed because it was very personal at that point and still we have Uribe versus Santos, and Uribe, Santos and Pietro, and it’s all about personalities, this good guy versus this bad guy and it depends on what band you’re in, but I mean, what are the ideas behind these people? What do they represent?

And, as I said, I interned at The American Enterprise Institute in Washington which is, the very renowned think tank on the conservative side, but I got to realize that in the end politics is about ideas and whoever controls the political grounds is usually the political group or the party or the movement that controls the intellectual narrative, so I saw that lacking in Colombia, and I also saw a lack of defense of liberty and basic ideas that maybe you would take for granted in the States, free markets, free enterprise, what you also call today The Libertarian Movement, that was missing in Colombia. But, as I also mentioned before, I think a lot of Colombians are natural libertarians without being aware of it necessarily, because no one has explained it to them well, the government should be limited and maybe there’s a lot that the state shouldn’t do that could get done in public services: things like charter schools, which already work in Bogotá actually, they can function quite well, so that was the main motivation, to be a part of the debate and to present these ideas, which is pretty much the first time in Colombia, the first time in a very long time and it’s been interesting because we’ve had a lot of very positive reactions, also a lot of opposition from people who don’t like our ideas, but that what it’s all about.

…It doesn’t matter who it is as long as they have this model of a metro system that produces surpluses, that is financially sustainable and doesn’t have to be subsidized with taxpayer money or with government debt.

Finance Colombia: As far as Latin American countries go, it has a relatively free market. It’s not a free market but it’s a relatively free market compared to other Latin American countries, compared to European countries, but when we look at Bogotá, because you’re running for mayor, which is a municipal position, within the framework, because Colombia has a much stronger national government,within the constraints of the mayoral system, it’s one thing to talk about libertarian ideas, but we’re in a city that’s not always very ideological.

We have traffic problems in Bogotá, there’s talk now about building a subway or metro, but even without that it has amazing traffic, it has crime, it has insecurity, it has the Transmilenio bus system, and then we see things like strikes going on, how would a libertarian be able to find success in a system where the government is facing demands of “give me more, give me more and give me more?”

Daniel Raisbeck: It’s a good question, and you’re right in the sense that, when I ran for congress last year, under the conservative party, we’re now creating a new libertarian movement, but when I ran last year for congress it was an easier campaign in the sense of, since it’s a national campaign, or a campaign on national issues, it is easier to make the ideological or philosophical libertarian argument in favor of a small government, limited government, more free market, etc., but campaigning for mayor is a whole different animal.

But at the same time I think that there are libertarian solutions that apply to Bogotá, and that’s what we’re trying to do. You mentioned the teacher’s strike, so what’s happening is that the Teacher’s Union is striking and they’re demanding more pay, obviously, the problem is that they want more pay in return for nothing, they don’t even want to be tested for competency, so basically, the teacher’s union wants increased pay but they’re against being examined by the state, getting tested in terms of abilities, so I mean, any way you look at it it’s completely absurd what they’re asking for, on the other hand, you do have a system in Bogotá that has worked for 15 years, it’s now in its 16^th year, of 21 charter schools: public schools run by private organizations and universities and they have done very well, much better, in standardized test results like ICFES, than public schools run by the government.

Finance Colombia: Explain what ICFES is.

Daniel Raisbeck: ICFES is basically that, an equivalent of the SATs (college entrance exams), I would put it that way.

Finance Colombia: OK, like a standardized test.

Daniel Raisbeck: A standardized test you take, I think, a few times, but the big one is called Saber Once and it’s—11^th grade is the last grade in Colombia, we don’t have 12^th grade in most schools, in the public sector definitely not, so if you look at those standardized tests, the results of these 21 chartered schools are outstanding, especially compared with government run schools in the same district, in the same neighborhoods, the parents are completely thrilled and they’re happy with the schools, they want the schools to go on, the price in these schools is also lower, considerably less, around 1.5 million pesos less than in the government run schools

Finance Colombia: That’s about 600-700 dollars.

Daniel Raisbeck: Yeah, per year.

Finance Colombia: Wow.

Daniel Raisbeck: And if you take it to around 40,000 students it’s quite a bit of money and the problem is that the Union is against these schools because it represents competition

Finance Colombia: The same as in the States.

Daniel Raisbeck: The same as in the States, the same as in England, the same as in everywhere, the same argument, they say that it’s a privatization of public education which is completely false, they simply don’t like it for ideological reasons and because they don’t want to be compared to others, because if these charter schools didn’t exist then they could blame it all on low pay, but since they have this reference then it’s very difficult for them to make that argument, so they want to sabotage these schools, they don’t want their contracts to be extended, etc., so that’s a big political issue, right now. In the last year, that’s one example of how the mayor of Bogotá has the power to implement free market or libertarian ideas, of course, as you know, school vouchers or charter schools are not 100% free market but it does mean subsidizing the consumer instead of subsidizing the producer without asking anything in return which is what traditional government education, state run education, is. And you also mentioned the metro, the subway, that’s going to be built, you also have a very free market solution to that: because most metro systems, subway systems, in the world, 99% are subsidized, New York City’s is heavily subsidized by city taxes, by city debt and Berlin, for instance, where I lived, heavily subsidized, and they’re good public systems but it means that they cost a lot and people have to pay out of their pockets to have these systems run efficiently, whereas we have the so called value capture system, that is invented and perfected in Hong Kong.

The government in Colombia, the state is present, and It’s present in an excessive fashion where it shouldn’t be like, for instance, taxes and red tape and bureaucracy, and it’s not present where it should which is, for instance, protecting people, people’s physical safety and their private property, so, in the first place, that’s a failure of government.

It’s not being applied elsewhere, where you use the real estate value of each station, which is usually in a strategic place and you build a shopping mall or you build a skyscraper. And then the company, whether it is government run or mixed or it’s in the stock market, receives utility from these stores, or apartments, or offices, and, if you have a lot of them, like the metro in Hong Kong, it produces surpluses. It had a $2 billion surplus in 2012 and that can pay for the entire metro system, it can pay for renovations, it pays to expand the line to go to places where it originally didn’t go so, I mean, that’s the solution that we’re proposing for Bogotá, whereas the discussion right now, I was at a debate today with another candidate, has been about how much it’s going to cost to build the first line, they’re talking about 15 billion to 20 billion pesos, you’ll have to convert that into dollars! But what they’re not talking about—you can find the 15 billion pesos, you can find the 20 billion pesos too, but that’s not the problem, the problem is how much it’s going to cost to run it once it’s built.

Finance Colombia: The long run, that’s the real cost.

Daniel Raisbeck: Yeah, exactly, and if it’s going to be subsidized, how is it going to be subsidized? And if we’re going to have—if the middle class in Bogotá is going to have to pay even more taxes it is going to be a problem, because the middle class in Bogotá has reached its limit with property tax and…

Finance Colombia: I’ve seen protests, you don’t want to see middle class protests, I’ve heard news that they’re complaining of the predio.

Daniel Raisbeck: Yeah, el impuesto predial, property taxes.

Finance Colombia: Well, let me ask you this, because coming to this meeting with you, even the taxi driver asked me, he said “you know, why not have a private firm, even from abroad, if necessary, come in and build the subway? Give them the concession, let them operate the subway, let them charge whatever they charge for. Why do we need to pay for it with our tax money?” Now, I can see a lot of arguments, even free market problems with doing that but, I’m not running for mayor, you answer that, why do it that way—Is that one option? Or why not?

Daniel Raisbeck: Yeah, I propose, (something like) Mass Transit Railways, which is the Hong Kong Company, it’s in the stock market but the government, Hong Kong, owns about 80% of the shares.

Finance Colombia: So it’s like ETB (Bogotá’s telephone company that trades publicly but the city owns a controlling interest) here, where it’s partly government owned and partly private.

Daniel Raisbeck: But, I mean, they’re operating subway lines, metro lines, in Stockholm, in London, in Melbourne, I think they should come here, because, they’re one of the best in the world, but if it’s not them it can be someone else, it doesn’t matter who it is as long as they have this model of a metro system that produces surpluses, that is financially sustainable and doesn’t have to be subsidized with taxpayer money or with government debt, what you mentioned, I think it’s fascinating that the taxi driver made that suggestion because, as I said, I think that there are many people in Colombia and in Bogotá that are libertarians and without realizing it.

Finance Colombia: I think that’s interesting, but now we mentioned that Bogotá, from knowing a little bit about Colombia, it’s fascinating because Bogotá—Colombia is not a leftist country, however, Bogotá has seems to be bastion of the left. You look at the universities here, they seems to be bastions of not just the left, but the extreme left.

Not that everybody who graduates from there are, but obviously there is an influence. What’s the historical context? How has that come to be? And how does that fit in the context of what you are doing, because, it probably would be easier for you in a lot of other places, but you’re here in Bogotá.

Daniel Raisbeck: Well, I think you would have to take it into perspective, the comparison would not necessarily be with Medellín, I think, because they have very special circumstances, but I’d compare it to the region, if you go to a department nearby, a department is a state in Colombia, like Tolima for instance, if you go to Tolima you’ll find that the state practically runs the economy and that in Tolima getting a job usually means working for the state.

Finance Colombia: For the government.

Daniel Raisbeck: So when there’s an election in Tolima it’s about who can control the cake and dole out the pieces, so—whereas in Bogotá, Bogotá has such a dynamic economy of almost 25% of the nation’s GDP, and most people don’t work for the government so Bogotá has been traditionally an independent city, and you have that, for instance, when Mockus won here over a decade ago, he came out of nowhere, defeated the political parties, you have the Mockus-Peñalosa phenomenon which was completely independent, you have in Bogotá what in Colombia is called voto de opinión, opinion votes which just means votes that aren’t political machinery or votes that are paid for, so on the one hand you have this scenario, on the other hand I think the big political waves of the past 12 years or so, or 13 years, the big rainmaker is Alvaro Uribe without a doubt, if you look at the approval ratings, he really splits Colombian political history in two, at least the political history of the last 30 years, so you that when Uribe came to power his approval ratings were just phenomenal, especially for Colombian politics because usually you’d have, if a president left office with 35% approval rating he did well.

Daniel Raisbeck: And suddenly you had Uribe with 60+ percent

Finance Colombia: Look at elections before Santos, I remember being here in Colombia and basically people’s campaign platform was “vote for me because I’m with Uribe,” and that was their campaign platform.

Daniel Raisbeck: Exactly. That’s how Santos won, which is a different conversation, but then you had Uribe with about 67% , after Operación Jaque, you know the—after the army rescue of Ingrid Betancourt, that had 75% of Colombians thinking that the country was headed in the right direction, today it’s down to below 30% or something.

I do think you should have some basic safety net for the poorest and most vulnerable in society, absolutely. I think at least, the problem is when that safety net becomes a form of dependency and you motivate people to not to go to work and to live off subsidies and to live off handouts, SISBEN, which is the Colombian welfare system, I think that’s a problem and it’s becoming a problem the left has exploited.

So you have that phenomenon, but at the same time you have an extreme reaction against Uribe which wasn’t huge, but it did reach the portion of 20%-22%, and If you look at Carlos Gaviria who was the candidate of Polo Democrático which is the party that formed on the left as a result of Uribe.

Finance Colombia: The anti-Uribistas, basically.

Daniel Raisbeck: Right, and it was a coalition of the leftists, leftist politicians that really didn’t have that much in common but came together just to oppose Uribe, and they got 22% in that election in 2002 which is the best presidential result of the left and then what happened was that the left was able to capitalize on that anti-Uribe, independent, basically anti-establishment feeling of Bogotá in the last 3 elections for mayor, so that’s why you’ve had 3 administrations of the left, of the more extreme left, not the violent left, but the more extreme left, I would say that the liberal democrats, the social democrats

Finance Colombia: The democratic social, European style socialists.

Daniel Raisbeck: Right, exactly, but then on the other hand you also had the huge mistake 4 years ago, where you had several center right candidates that between them won the overwhelming majority of the vote but they didn’t unite so they split the vote and they allowed Petro, the current mayor, to come in with 30% of the vote or less I think maybe 27% or something like that, so you have to take that into account, you also have to take into account that, well, something that’s quite worrying is that the last 3 leftist governments have built a client-state in Colombia, there was an article in La Silla Vacía, in the internet portal where you hake 4 million subsidized people in Bogotá, directly subsidized in some way by the city government, so that’s worrisome, but at the same time there’s a big disappointment with the last 3 governments, I mean they haven’t done—they haven’t finished—between 2000 and 2006 we had 2 phases of Transmilenio completed, each one was over 40 Kilometers, whereas from 2006 to 2015 we have barely had 1 completed and it’s less than 40—it’s 36 Kilometers, so, I mean, the inefficiency is just outstanding.

Finance Colombia: I still haven’t figured out theSiTP (Bogotá’s feeder transit system)!

Daniel Raisbeck: No, it’s just bad administration and I think that in general people are after practical solutions and a lot of people don’t want to vote for the left, they don’t want to vote for the right, but they don’t want to vote for someone just to vote against another person, so we see a very big opportunity for an independent candidate.

Finance Colombia: Ok, what I want to ask is: if this city, in Bogotá, has already had some administrations that say “this is what we’re giving you” to people, how do we say—when, look, Bogotá is an interesting city, it’s a city that has a lot of good things, a lot of nice things, but also, for very complex reasons because of moving and things like that, we have that more than half of the city is short on resources and residents are waiting to see who is going to give them something, or who is going to offer them something, and a lot of the times it’s not their own fault, it’s not that they’re lazy, but my question is, how can you apply libertarian principles to people that are saying “look, it’s not that I’m lazy but the government brought me all this stuff” or something like that, how can you tell those people—or how can you tell those people “this is society, you shouldn’t wait for us to give you something,” but what answer do you have for people in those cases?

So what do you do in a city where people who have been displaced, have come from places where they were happy, where they were self-sufficient, but now they find themselves, with through no fault of their own, depending upon the government, and now they’ve had a couple of, you know, several different administrations who were saying “vote for me because of everything I’m going to give you,” how do you apply free market solutions to somebody in that situation?” and say “look, I’m not going to promise that I’m just going to give you a bunch of handouts, but I’m going to make it better for you,” what do you say to somebody who says “look, I came here in the last government because they’re giving me this stuff,” like you said, I think 40% or more are depending upon government handouts, how do you say to somebody “that’s not the answer,” when that’s what they’re getting today?

Daniel Raisbeck: Right, well, first of all, you mentioned the displaced people problem, displaced population and I would say that in the first place you have to recognize that the problem of displacement in Colombia is a failure of government, a failure of government to fulfill its role to protect people’s lives and property. So it’s an absolute failure of government, like I said, the government in Colombia, the state is present, and It’s present in an excessive fashion where it shouldn’t be like, for instance, taxes and red tape and bureaucracy, and it’s not present where it should which is, for instance, protecting people, people’s physical safety and their private property, so, in the first place, that’s a failure of government.

It’s a failure of the state, so when you have the displaced people coming to Bogotá, and you have the state saying “well, we’re going to solve your problem,” and they’re skeptical because, I mean, if the state wasn’t able to protect them in the first place, why are they going to make the situation better afterwards, so, first of all I think you should make that clear, on the other hand, I do think you should have some basic safety net for the poorest and most vulnerable in society, absolutely. I think at least, the problem is when that safety net becomes a form of dependency and you motivate people to not to go to work and to live off subsidies and to live off handouts, SISBEN, which is the Colombian welfare system, I think that’s a problem and it’s becoming a problem the left has exploited, but I think that Bogotá is a place where you can address these issues because Bogotá is overwhelmingly a middle class city, so according—if you look at official figures from the Bogotá chamber of commerce, poverty in absolute terms in Bogotá, or the poor population, is around 10% and people in absolute or extreme poverty is less than 1 or 2% so we are talking about a minority, and you do have to address those problems but overwhelmingly you’re talking about a middle class city, and the middle class is growing more each year, so I think the libertarian message will be very appealing for that emerging middle class, the Colombian middle class, what it means to them is just being able to go to—people who come from somewhere, maybe they were also displaced but they were able to get a job, they were able to get ahead in a city like Bogotá and they’re able to take their children on a Saturday afternoon to a shopping mall and eat an ice cream.

The government and the state in Bogotá, and in Colombia, is perpetuating inequality with its bad education policies, it’s proven that the state in the majority of cases can’t run good, decent schools, so I think the government should really get out of the way. That doesn’t mean that there shouldn’t be public education, but I think parents in these schools and these neighborhoods should be given the choice of what kind of school they want or maybe they should even be given the vouchers, to say, if it costs 4 million pesos a year to educate a child then look, give them the 4 million pesos and they can choose their own private school, and they—I think they can make a better choice than the government, than the state.

And that is already something that they didn’t have before and it’s already part of beginning to belong to a middle class, so our policies are designed to help that emergent middle class and to enlarge that, enlarge that emerging middle class, and I think that the message is appealing, and especially, as I said, because the conditions in Bogotá are accepting for that kind of message.

Finance Colombia: The government has programs right now, I mean, there’s a national program, Ser Pilo Paga, you know, which is part of a scholarship program.

One of the things that I’ve seen, you know, again talking as an outsider, I’ve met many people who are the first generation in their family to go to a university, or to graduate. In libertarianism, just like in any other political movement there are levels, there are those who would say that the government has no role, there are also those who say that the government has a limited role and so on, the people that have been able to graduate or to attend university as the first in their families were not able to do so because of any kind of family resources. How does that fit into a context? Is that a legitimate use of government? Is there an alternative? Is that good? Is that bad? In your opinion, not necessarily that program in specific, but let’s talk about the theme of social inclusion.

You know if we look at Medellín, they’ve done things like they’ve put public works up into their neighborhoods that are at the very low social strata and they’ve done things to try to encourage those people to feel a sense of civil participation, is that a legitimate role for a municipal government? Or where are those limits defined in your opinion?

Daniel Raisbeck: Well, I’ll talk about the education part first. I think that particular government program, I’m not a great fan of the Santos government but I think that particular scholarship program of 10.000 scholarships for needy families to go to universities is a wonderful program, again, it’s a—if it’s not purely libertarian it is a free market idea in the sense that you’re subsidizing the consumer, you’re giving the money to the student and the student can choose the university that he likes, which I think is a much more efficient way of having accessible public education than having the government itself run the national university. So you’re empowering people and I definitely think, I do believe in public education, I went to a public university in Germany, and I was a product of a public university system, I do think that—even Margaret Thatcher was—I mean, she went to Oxford, which is also a public university, so I do believe in public education, the question is how do we run a public education system?

And one of the alternatives, an alternative that I find very appealing is precisely that, subsidizing the consumer, empowering people, especially people from lower income families, and it’s fantastic that these people can go to a university, that they can be the first generation, or the first generation in their family, to go to a university, and even my mother is the first generation woman in her family to go to a university, because then it was more traditional for just the man to go. My grandmother I think would have been a fantastic professor or fantastic student but she didn’t go to a university because she was a woman, so we do have this social progress in Colombia, maybe not as fast as some would like but we do see it, so I think that’s a good policy.

Of course there are alternatives, we have, for instance, the university where I work, El Rosario—or Los Andes, they have scholarships programs or credit programs, which are also options, I don’t think public education should be the only option, like the left claims that should be done in Colombia, but in terms of education I think that that is one way of achieving social inclusion.

Finance Colombia: You know, in Colombia, for all of its progress, Colombia has a little bit of infamy for being, even though it’s a very—much an advancing country , Colombia does have very vast and very obvious areas of inequality, and while a socialist would want to have redistribution as solution, what do you say to somebody who is at that, you know, in Colombia has the stratus system, what do you say to somebody of estrato 1 or estrato 2, in Bosa or Usme, or Kennedy or Soacha?

Daniel Raisbeck: Well, I would say, the real inequality that matters in Colombia, I’m not worried about material inequality. I’m worried about inequality of opportunity, so it’s not fair that someone born here, in Rosario, or Chicó can go to a good school, because it’s—a private school, because state schools don’t even operate in this part of the city, whereas someone born in Usme or Ciudad Bolivar is doomed because the state school they’re assigned to is terrible, the teachers are on strike half of the time, like they are today, and they have absolutely no ability to compete to go to a university or in the job market, because their school is so terrible.

The government and the state in Bogotá, and in Colombia, is perpetuating inequality with its bad education policies, it’s proven that the state in the majority of cases can’t run good, decent schools, so I think the government should really get out of the way. That doesn’t mean that there shouldn’t be public education, but I think parents in these schools and these neighborhoods should be given the choice of what kind of school they want or maybe they should even be given the vouchers, to say, if it costs 4 million pesos a year to educate a child then look, give them the 4 million pesos and they can choose their own private school, and they—I think they can make a better choice than the government, than the state. These 25 charter schools, colegios en concesión that I mentioned, are precisely located in these neighborhoods like Usme, Ciudad Bolivar, Kennedy, etc., and that’s why they’re making an impact, but parents, like I said, they really are enthusiastic about these schools, they want to keep the schools, and it’s not only the parents of children who are enrolled in these schools, but it’s parents of children in nearby public schools that would like to have a similar school, or would like to transfer their child to that school. So I think that the first step to creating a real equality of opportunity to the greatest extent possible, is by reforming the education system, and what we have in Bogotá, and in Colombia, is an archaic education system, where it’s top-down: the mayor chooses a Secretary of Education and the Secretary of Education chooses the education model for all 400 state schools in Bogotá, whether the parents like it or not,

The government is acting as an obstacle to an equality of opportunity and to social mobility, especially in the poorer parts of Bogotá, neighborhoods that really need these opportunities.

And so, one thing, a very good thing, that these charter schools have done is that they have introduced an element of technical education for their students, so their students can choose whether or not they want to have—they can graduate with the bachillerato:the regular high school degree, but they can also graduate with a technical degree or with 2 technical degrees, in mechanics or something else. And they can get a job immediately, or they can even open their own business, or they can go into university with several semesters already advanced, so this is a fantastic system, it works, it’s proven that it works, and I think we should expand it, but the left and the current government are opposed. They’re opposed, for ideological reasons, and I think that’s a scandal, because the government is acting as an obstacle to an equality of opportunity and to social mobility, especially in the poorer parts of Bogotá, neighborhoods that really need these opportunities.

Finance Colombia: We’ve talked about the people at the bottom, estrato 1, let’s talk about people of estrato 5, or estrato 6, for example, the gremios in Colombia—there’s no real direct translation of the gremio in English, but it’s like a trade—

Daniel Raisbeck: It’s like a guild,

Finance Colombia: It’s like a—yeah, it’s like an industry group. Yeah, but let’s look at that, because what happens is that we see policies, and it’s interesting because we see how they try to manipulate things, like they’ll say “Well, let’s make a law that no trucks can be on the road that are more than 7 years old,” well obviously the truck dealer’s gremio wants to sell new trucks to everybody, on the other hand, that would devastate a lot of people who can’t afford a new truck.

Daniel Raisbeck: Exactly, you expel them from the market.

Finance Colombia: Yeah, and it’s like “How do people come up with ideas like this?” and now—and they’ll say something like “Well, we care about the environment!”

Daniel Raisbeck: [laughs]

Finance Colombia: Well, no, bullshit! You want to sell the trucks, you know, but they’re very powerful in Colombia, and it’s interesting because on one hand they serve to balance against the unions, on the other hand, they are no more for a free market than the unions are because they’re saying “let’s do market distortion, let’s say you have to do B, you have to do C,” how do you balance them? Because there are pressure groups that are very powerful in Colombia that want to promote their interests on the backs of everyone else, you know, and generally it’s the left that says “well, we want to protect you against these big interests but they are really protecting some other entrenched interests,and you have this tug-o-war between left and right but neither one of them are really for a free market or a free choice, it’s really just rent seeking—who your ally is, you know.

Daniel Raisbeck: Yeah, and that’s a great question because in Colombia academics have written about this, for instance, James Robinson from Harvard, the Colombian economic system tends to create, and historically has tended to create monopolies. And these are monopolies, or oligopolies, that are extremely powerful and extremely powerful economically—because they’re protected by the government, by excessive regulation or, for instance, obstacles to trade, to foreign trade, so this is just a feature of Colombian politics, but what is very clear is that it is not a matter of left and right because, maybe you would think, at least that’s some mythology that the left protects the workers and the right is more free market and therefore they protect the rich guys,

Finance Colombia: The marketing and spin-doctoring of it all.

Daniel Raisbeck: Right, whereas in truth, you have very curious alliances, for instance, the pueblo democrático, which is very much to the left and opposed to free trade, and you have one of their main figures which is Jorge Enrique Rebolledo, and up to 3 years ago, he was openly allied with Alvaro Uribe, who is associated with a more right wing in Colombia, opposed to the free trade agreements that Uribe signed.

And you also have them allied, for instance, in the struggle against the free trade agreement with South Korea, and it turns out that one of Rebolledo’s and the Pueblo’s main allies is the local auto manufacturing lobby, so these people are supposed to protect the workers but they’re they’re really protecting, big local industrial interests, and this is the way the Colombian economy functions. So in Bogotá we have a very good example, and you mentioned the mobility problems, how difficult it is to get around in Bogotá,and then you had one solution, or a partial solution, which is the arrival of Uber, the American firm. In Bogotá, Uber has had a one of the most exponential growth rates, one of the largest growth rates for them in the world, because the transportation system is so bad that many people just began to use Uber, even though credit cards are not as widespread or widely used in Colombia as in the States, or in other countries.

One of the interesting things about being a libertarian in Colombia, is that you’re constantly attacked by the left and they call you a Neoliberal and say that you want to privatize education, public education, that you want to sell whole state assets and that you’re basically the devil, but, on the other hand, you’re also attacked by these gremios, because you are also a threat to them, because competition is beneficial for the consumer because the consumer can choose in terms of prices in terms of service, etc., But that’s not what these gremios want, they want to capture the market by force and force people to buy…

And then what happened? You had the yellow taxi lobby, which is politically very strong, and they put heavy pressure on the Santos government, Santos promised the taxi lobby or the taxi drivers two weeks before reelection that he was going to put Uber out of the market and then Uber is technically illegal, at this moment, but it’s still operating. So the government really, with this position, wants to keep the taxi votes, which are either hundreds of thousands of votes, especially in an election year, like 2015, but at the same time they know that if they really go after Uber, they’re going to have an uproar from the consumers—

Finance Colombia: But the taxis here are infamous, especially in Bogotá, for throwing people out or robbing people and—

Daniel Raisbeck: Right, the infamous millionaire´s ride!

Finance Colombia: Yeah, El Paseo Millonario, you know, it’s funny because, if I am in Zona T I won’t catch a taxi, I walk and I go to the eleventh and I walk down eleventh for a while.

Daniel Raisbeck: Yeah, because that’s the place where you get caught in a moment! I know so many people that have been victims of the Paseo Millonario. I think 2 years ago we had the case of a DEA agent who was killed in a taxi, and that’s the reason why people like Uber, because you know who your taxi is, you know that it’s safe, because they have a screening process,

Finance Colombia: No cash.

Daniel Raisbeck: No cash, you can pay with your credit card, so—

Finance Colombia: Like AirBnB.

Daniel Raisbeck: Exactly, the same with Air BnB, but going back to the question, this is a good example of how a gremio, in this case the taxi lobby, tries to use its political influence: they don’t try to improve their service in order to compete and get more customers, their modus operandi, their way of operating is to get the government, the state, their allies in the state, to basically forbid the competition. That’s the way that traditionally the Colombian economy has worked. Fortunately today, for instance, I think it would be very difficult, even technologically, for the government to forbid Uber, to get them out of the market, so with the rapid rise of mobile applications, digital applications, it’s going to be ever more difficult for these gremios to maintain their hold on power. But that’s a very big difficulty and one of the interesting things about being a libertarian in Colombia, is that you’re constantly attacked by the left and they call you a Neoliberal and say that you want to privatize education, public education, that you want to sell whole state assets and that you’re basically the devil, but, on the other hand, you’re also attacked by these gremios, because you are also a threat to them, because competition is beneficial for the consumer because the consumer can choose in terms of prices in terms of service, etc., But that’s not what these gremios want, they want to capture the market by force and force people to buy, I mean, even beer, we’re drinking Club Colombia, well, Bavaria controls—I don’t know that the percentage is now—but a few years ago it was 96% of the beer market, and then you saw the arrival of Peroni, an itallian beer, and I thought “Oh, interesting, Peroni,” and I looked at the back and I saw “Imported by Bavaria,”—

Finance Colombia: [laughs]

Daniel Raisbeck: So you have, basically in every major sector of the economy, you have these big groups and that’s the reason, and that’s what Robinson says: Colombia is a big market but it’s not a huge market, 40 million people, 50 million people, but you have 3 of the richest people in the world because Ardila Lülle in sodas, Sarmiento in financial services and Santo Domingo in beer. It was the creation of monopolies a few decades back, and the Colombian market is sufficiently big, whereby, if one person controls the entire market they can become one of the 100 richest people—

Finance Colombia: So it’s not—so even though it’s a free market compared to its neighbors, it’s not a free market because just—it’s a private market but not necessarily a free market, because we’re operating like the United States operated in 1910, where you have a more mercantilist than a capitalist system. People confuse mercantilism with capitalism, you know, and you see when they’re denouncing capitalism, they’re really denouncing mercantilism.

Daniel Raisbeck: Exactly. And we’re arguing in the libertarian movement is that what really benefits the consumer is a real free market where, fine, you can have Bavaria, they can have the same products but let people have a choice, like you have a choice of Peruvian beer or Mexican beer, of American beer, of German beer, and have a, basically, free trade, no import tariffs or quotas, or any of these ridiculous things, you don’t even need a free trade agreement, you can say—what Hong Kong did was you say, basically anyone can come here and trade.

Finance Colombia: The freest economy in the world.

Daniel Raisbeck: Exactly, and you can see Hong Kong was just about as poor as Colombia was in the 1950s and now there’s a huge difference and these are the types of policies that we’re promoting because we think that economic policies should be geared towards the consumer. It should be the consumer who’s benefitted, the consumer who can choose, based on the price, based on the quality, based on whatever he wants, and he shouldn’t have these special interest groups enriching themselves by being the only product available to consumers.

Finance Colombia: What do you tell people in Bogotá, that will say “look, the Tapahueco (a device that the current mayor purchased from Great Britain to fill potholes but has not lived up to its hype, and been mired in a malfeasance scandal) has not come to my neighborhood, I don’t care about a Tapahueco, I just want these damn holes filled?” You know, I stay up here above the Circunvalar,and if you take Calle 53, you try to go north, or you try to go up the hill and you fall into the holes!

Daniel Raisbeck: Right.

Finance Colombia: You know, I feel bad because I’m sometime in a taxi and the taxi driver is—doesn’t know the neighborhood and he doesn’t know there is going to be a big hole and boom, it’s like ¡se rompió el eje! (you broke an axle!)

Daniel Raisbeck: [laughs] yeah.

Finance Colombia: Ok, so mayors are not usually a very ideological position like congress, or even a president can be, but people who want their garbage taken out, the people that want their water, the people who want to be safe when they walk down the street, the people who want to be able to ride the Transmilenio, whether it’s a good idea or not that we have a Transmilenio, it’s there.

Daniel Raisbeck: Right.

Finance Colombia: What the people want—they don’t want to have holes in their neighborhood, you know, the people who want to deal with the insecurity so they don’t get robbed, what message do you have for them? This is not ideological, like what you’re running for as mayor is an administrative position. What do you have to say for them?

Daniel Raisbeck: Well, first of all, I would say “you’re absolutely right, it’s not about ideology, when—if you are mayor,” but, again, I do think that libertarian ideas, free market ideas, can bring solutions to these problems which you mention, and I’ll just mention, I’m not saying that this is necessarily going to be our policy, but, you know, I’ve read in the States, if I’m not mistaken, a neighboring state to Ohio, Kentucky, so what they did was that they allowed, I think it was KFC or something, if KFC gets rid of the pothole they have the ability to, or they have right to advertise over the previously existing pothole.

So we get Exito or whoever, you know—

Finance Colombia: Este hueco fue patrocinado por Exito [This hole was sponsored by Éxito] [laughs]

Daniel Raisbeck: Exactly, and I mean, that’s a practical solution, you would have to examine.

Finance Colombia: Wow. Este hueco fue tapado por KFC [This hole was filled by KFC] [laughs]

Daniel Raisbeck: But whoever it is, I mean, it doesn’t matter, and on the other hand since we do believe in initiative, we do believe in a greater participation of the citizens in decision making, we believe in digital technology, we have the ability to create applications whereby the citizen can inform whoever is in charge, whether it’s the mayor or it’s someone in the administration of getting rid of that pothole, paving the street, you can do it per application and the citizen can rate the efficiency of the Secretaría de Movilidad (transportation department), or whoever, and you just create the system where you have greater ability to communicate and it’s all faster and it gets done, and it doesn’t really matter how it gets done.

Out of every ten thieves that are caught after stealing a mobile phone, nine go free after a few hours, so, I mean this is proven also from New York during the Giuliani years, if you tolerate relatively small crimes, like graffiti, like stealing cell phones, like small muggings, you would think that it’s not such a large problem, but when you tolerate that, you create a sense of insecurity and that sense of insecurity empowers criminals and really empowers the bad guys.

I mean, these are just some examples. When you talk about security, again, I do think that it’s pretty much the main responsibility of the state. I do believe that it’s the main responsibility of the state to uphold security in the neighborhoods, on the Transmilenio; like I said, I think we only have 18,000 police officers in Bogotá. We have over eight million people, that’s far too little because, internationally, what is usually said is that you need 1 police officer per 250 people and if you take into account those 18,000 they’re not all working at the same time, they’re working in shifts, so you really have around 6,000 police officers working at the same time, so that’s far too little. I do think that we need to increase the amount of police officers in the streets. Now, how are you going to finance that? You can look at reducing the bureaucracy in other parts of the city administration, so you can transfer the resources from where they’re being wasted in bureaucracy and in creating this client-patronage system to where they’re really needed, which is providing security on the streets and in the buses.

Finance Colombia: How do you fix the culture?I go to Bucaramanga and I don’t see graffiti on the walls. I go to Medellín and nobody hops on to the metro for free.

Daniel Raisbeck: Well, I think there are 2 things, first of all, there’s a phrase I like that’s—that was used a few years ago by the current mayor of London, Boris Johnson, he might be the next leader of the British Conservative Party, in London they had to criminalize crime, and I like that phrase because we had that problem in Bogotá where the theft of cellphones, for instance, of mobile phones, basically goes with impunity. Out of every ten thieves that are caught after stealing a mobile phone, nine go free after a few hours, so, I mean this is proven also from New York during the Giuliani years, if you tolerate relatively small crimes, like graffiti, like stealing cell phones, like small muggings, you would think that it’s not such a large problem, but when you tolerate that, you create a sense of insecurity and that sense of insecurity empowers criminals and really empowers the bad guys.

So what you have to do is you have to start by having a zero-tolerance policy towards all kinds of crime, whether it’s graffiti on private or public property, or whether it’s stealing a cellphone, or whether It’s going into Transmilenio without paying your fare. When Giuliani started catching people with undercover policemen, policemen dressed as civilians, in the new metro system, they found out that the people who were going in without paying the fare were usually the same people with criminal records and it’s a relatively easy problem to deal with if you have the political will to deal with it.

Finance Colombia: But you know what? If I may, even looking at it from a libertarian standpoint, as you see in the United States, we have a problem with that going too far, we have a problem right now in the United States where people without probable cause are being harassed and the police are overstepping all kinds of 4^th Amendment boundaries—

Daniel Raisbeck: Right, no, no, no. I talked about the big mistake here that was to militarize the police in Bogotá, I’m not talking about militarizing the police, I’m not talking about searching people, I’m completely against what happened to you a few weeks again when you were just randomly stopped in Bogotá, I was randomly stopped in my car, also a few weeks ago, absolutely absurd.

Finance Colombia: But here that’s legal. There is no 4^th Amendment (to the United States Constitution)

Daniel Raisbeck: Yeah, it is.

The challenge for the libertarians in Colombia, or for groups like Students for Liberty, which is a group that’s growing across the world, Europe also, the US also, is to take these arguments from the strictly think-tank academic level where only very few people are going to be able to understand it, and really evangelize and become a citizens movement or a mass movement if need be, and I use the word evangelize on purpose, because if you look even at the rise of the conservative movement in the United States they really did use these evangelists techniques.

Finance Colombia: But at least it’s legal here, I mean, I’m not defending it but I’m saying, at least—in the States, as you know, they do it anyway and it’s even illegal.

Daniel Raisbeck: Yeah, ok, great, we agree but I’m not talking about going too far, I’m not talking about random searches on the streets, I’m talking about criminalizing crime, I’m talking about going after the people who really did it, and it’s evident that they did it, and I will admit that a big part of the problem which a mayor can’t control is the justice system, because if the justice system is broken, if the justice system is corrupt and if the police do their job and they take the people, the criminals down to the station and then nothing happens to them—

Finance Colombia: You’re right.

Daniel Raisbeck: Well, it goes beyond the mayor, it goes beyond the police, you also have to tackle corruption within the police, and it’s very common in Bogotá, when you get stopped for, for instance, pico y placa, when you drive when you’re not supposed to, given the limits and people usually get out, or many times get out, of the fine by paying—by bribing the police officer, that’s commonly known, we have to get rid of those kinds of police officers because it’s all a matter of rule of law, and that brings me to the second point which is what you mentioned about the culture in Bogotá: If you had been here under Mockus, 10 or 15 years ago, you would have found a different kind of city, where people did respect norms and people did stop where they were supposed to, in their cars, because Mockus called it Cultura Ciudadana and he made an effort for the city and the authorities to educate people, even paying mimes to be on the street—

Finance Colombia: I heard about that, he’s famous for those tactics.

Daniel Raisbeck: Publicly shaming people if they would stand on the white lines, for instance, on the street, I think that’s a good idea that should be reenacted, but I think in the end Cultura Ciudadana, if you would translate it into English, the real sense is rule of law.

Finance Colombia: How big is the Libertarian movement in Colombia?

Daniel Raisbeck: It’s very small, I wouldn’t exaggerate, as I said, the libertarian movement is growing in Colombia and in Latin America as a whole, I think this is also a result of very left wing populous governments like Hugo Chavez, like Correa in Ecuador or Evo Morales in Bolivia, you really have students, especially young people who realize that these populist policies aren’t working, they’re making their countries poor. They’re taking away opportunities for people and they’re looking for an alternative, and that’s when these free market ideas that are based on very solid academic work by lots of scholars during many generations, that’s when they really can start gaining adepts. The challenge for the libertarians in Colombia, or for groups like Students for Liberty, which is a group that’s growing across the world, Europe also, the US also, is to take these arguments from the strictly think-tank academic level where only very few people are going to be able to understand it, and really evangelize and become a citizens movement or a mass movement if need be, and I use the word evangelize on purpose, because if you look even at the rise of the conservative movement in the United States they really did use these evangelists techniques.

You really have to be a big fanatic in the sense of going, getting up on a Saturday morning and knocking on people’s doors and delivering the leaflets, saying this is what we believe and you’re going to get rejected thousands of times but you’re also going to reach people, and well that’s—

Finance Colombia: And we see in Miami, the best capitalists are those people who escaped from communism and understand what it’s really like.

Daniel Raisbeck: Right. You don’t have to be a PhD economist to realize that the kind of economic policies that lead to a lack of basic goods in Venezuela and, I don’t know, like sugar and toilet paper in Venezuelan supermarkets and, well there’s probably something wrong with that. Then they start to see “well, what’s the alternative?” or “why don’t we have those problems here?” and—

Finance Colombia: The best capitalists are former, you know, people who come from Venezuela, people who come from Cuba, people—Colombians, they look at what Chavez has done to Venezuela, what the Kirchners have done in Argentina, and they look at the FARC and ELN, Sendero Luminoso, and they think: “screw that!”