Saturday, December 10, 2011

Mario Vargas Llosa: A Neo 21stCentrist?

I have just discovered that I feel perhaps a smidgeon smarter when a Nobel Prize winner says things that sound like me.

A little over a month ago, Nobel Prize winning author Mario Vargas Llosa gave a brave and perhaps unexpected speech, especially considering his audience.  He was asked deliver the keynote address at The Freedom Dinner, an event celebrating the 30th anniversary of the Atlas Economic Research Foundation, an organization dedicated to spreading free market and classical liberal ideas around the globe.

Most attendees probably expected a celebration of Atlas and the liberty movement it promotes so well.  But while he did that, he did more than just that.

Vargas Llosa served up an insightful and surprising critique of today's capitalism-in-practice, a warning that slammed leading capitalists for excessive greed, for lack of moral conscience, and for damaging the foundations of democratic capitalism itself.  He even went so far as to suggest that the liberty movement should spend more time defending social justice, and find ways to make liberty and social justice work together.  Keep in mind he was addressing an audience, some of whom at least, following Ayn Rand, think greed is a virtue, altruism a vice, and social justice the deceptive rallying cry of the enemy. Some attendees I spoke with went so far as to opine that - not just the welfare state - but even charitable tax deductions should be eliminated.

So for at least some of this crowd, his arguments, I'd think, might be a tough sell.

But I keep thinking, jeez, this guy sounds like me.  Not exactly, not the style, but rather the ideas, especially the parts in bold.  Consider these excerpts:
The crisis striking Western Europe and the United States ... has done the most harm to morality. It has revealed, at its core, an essential lack of ethical values and a egocentric spirit in which the fervor for profit has blinded esteemed executives and business owners, bankers and financiers, to the point to which they act with a complete lack of vision and scruples, to make decisions that hurt their clients and the very system to which they owe their power and fortunes. ...[I]f the origin of the moral decline in the system of free enterprise and open markets that this crisis revealed is not corrected, the damage will keep corrupting it from within, undermining its sources of support and depriving it of that favorable consensus –the trust and solidarity of the majority of citizens– without which no institution can survive in the long run.

The altruistic, philanthropic concept of capitalism of the American forefathers does not correspond to the spectacle that this system has offered the world in recent times...  [C]apitalism develops an appetite for material goods –consumerism– and for accumulating wealth which, within the confines of a respectable and respected legal system, is not necessarily a bad thing. On the contrary, as long as they do not go beyond the law, these are excellent incentives to keep the system functioning since they encourage invention and creation of new products, boost competition and create models and paradigms which the young will... emulate. 

However, there is a certain limit, which is hard to pinpoint, where virtue becomes vice, and the legitimate yearning for success and benefits at work turns to greed, hunger for profits, a passion so exclusive that it blinds whomever it dominates, driving them beyond the limits of decency and law, to act in a way that harms others and the system itself.  Our culture has become tolerant of those who, driven by a wild desire for profit, break the law and, instead of being punished for it, remain immune and are sometimes even rewarded by a state that rescues businesses from financial ruin triggered by their excesses. This is not the capitalist system but rather a profound distortion of what it was and what it still needs to be if we are to avoid moving backwards from civilization to barbarity.

Throughout its history, the free enterprise system has shown an extraordinary capacity to renew and reinvent itself. This is the time to do so again, following the familiar path. First, a radical, constructive self-criticism of the roots of what went wrong. In this case, the complacency and tolerance of those who have overstepped the rules of the game that the law establishes for markets and free competition. These people should be tried and punished for it. Second, an ongoing demand and effort –no holds barred– to return to the system that ethical dimension which is its strongest justification. This means defending the idea that more than just a system of economic rules, capitalism is a culture inspired by values –since it is based on respect for liberty, justice and legality– which have led to progress in human life, in the domain of the material as well as in terms of dignity, compassion, opportunities, respect for others, solidarity and generosity. It has been said, and with some truth, that liberty and justice –the latter particularly in terms of its social dimension– repel each other. Throughout its history, the great accomplishment of the classical liberal doctrine has been to replace this discord with harmony between the categories, since what we call civilization depends on their reconciliation and coexistence.

This is a difficult but not impossible task. What must gear up for it with the knowledge that the system we defend, despite its imperfections, is better than all the ones that have tried to replace it, promising paradise on earth but instead turning the societies that fell under their spell into a living hell. Let us return to political democracy and economic liberty the moral conscience it had in the best moments of its history, when progress and culture reached their greatest heights.

Vargas Llosa's argument is compelling, that capitalism in practice, which historically fostered human rights and social progress, has gone astray, ignored the importance of ethics and public spirit, while leading capitalists have given them selves over to excessive, sometimes criminal greed which threatens to shame and destroy capitalism itself.

Where Vargas Llosa and I overlap in our writing is the recognition that classical 18th - 19th Century liberalism combined concerns, not just for liberty, but for moral conscience, social justice, altruism and humanity, and that capitalism and its leaders have gone off the rails because they have forgotten this.  It is somewhat revolutionary for a defender of liberty and free markets to take this position in 2011.  For at present many on the right, some of whom call themselves classical liberals, esteem only liberty and self-interest as the highest values, and social justice, altruism and conscience set them on edge, as if these were code words for enemy ideologies.

Still, I would encourage Llosa to take his analysis farther than he does. At, I discuss this fundamental problem:  

Long story short, we have ripped the Declaration of Independence in half:  the political right now champions the rights to life, liberty and the pursuit of happiness, the left champions the overall call for social justice and appeal to equality. Llosa is right to point out (as we have here) that liberty and social justice were both abiding concerns of classical 18th -19th C. liberalism.  But the 20th C saw the rise of a right and left that concern themselves with liberty or humanity respectively and sometimes exclusively.  While communism and socialism have shown little respect for liberty, some 20th C. philosophers on the right, like Rand, have turned self-interest into a virtue and demonized altruism.  Both sides (but not Vargas Llosa) have forgotten the classical Aristotelian concept of virtue: moderation, a healthy balance of opposing qualities: liberty and humanity; self-interest and public spirit.  When Vargas Llosa points out that an excess of "virtue becomes vice," he is really quoting Aristotle, and reviving the old notion of virtue as moderation, without which modern politics becomes unbalanced and extremist.

Aristotle's ethics informed Classical Liberalism and informs 21st Centrist and Vargas Llosa, but has been largely lost by both right and left.  Is it any wonder then that some capitalists, raised on immoderate 20th C libertarian thought, have taken greed to criminal excess?  

Vargas Llosa calls on defenders of capitalism to portray it as a culture of values.  That is fine and true, but if it is all talk, and policies, ethics and outcomes don't improve, it amounts to eyewash.  Therefore, to avert the decline and fall of democratic capitalism, he should not stop there.  He should also call upon capitalism's defenders to put the values of liberty and humanity on an equal footing in their hearts and minds, because the failure to do so is at the heart of our present troubles.  Then, they should turn to the nuts and bolts task of creating actual policies that that embody the core values of BOTH liberty and humanity, policies that make that vision of liberty with moral conscience a reality.  Those who do so will claim the center, and help forge a new free market humanitarian consensus.

If the financially unsustainable, perpetual-deficit welfare state is to wind down happily and not end in a nightmare of chaos or tyranny, capitalism's defenders must have good solutions to the humanitarian concerns left high and dry. That is why 21st Centrist strives to incubate new ideas such as supply side tax cuts for clean, renewable energy and pro bono health care reform, in order to solve pressing humanitarian concerns while expanding and defending liberty.  By way of further example, other more well know proposals that combine the concerns of liberty and humanity would be educational choice, or tax free retirement and health savings accounts, among others.  

Now is a unique moment when such ideas can take center stage, and pull democratic capitalism out of the present quagmire of unsustainable debt and unaffordable entitlement programs.  The present humanitarian programs of the left cannot continue.  What will replace them?  Whoever has the best answer, wins.


  1. Fascinating account of Vargas Llosa's stemwinder at the Atlas Institute ...
    quite a powerful speech. I like the way you tie it in with your 21st Centrist
    concept. Rock on, Rod! Cheers!

  2. Thank you, Ben, for using the term "stem-winder" on my blog. Ups the tone of the proceedings, says I. Well done! Very steampunk too, I might add.