Livros sobre o liberalismo e o pensamento libertário - É Realizações

 A Editora É Realizações me envia alguns títulos de seu catálogo sobre o liberalismo e o libertarianismo: 

Preparamos para você uma super seleção de títulos para compreender o Libertarianismo.

O Liberalismo - Antigo e moderno Merquior, José Guilherme José Guilherme Merquior faz uma pesquisa estimulante sobre a história e evolução da teoria liberal desde o século XVII até o tempo presente. Combina uma enorme riqueza de informações – surpreendentemente condensada – com penetrante apresentação dos temas centrais do liberalismo. Esta edição é enriquecida por vasta fortuna crítica e documentos do arquivo pessoal do autor.

A Economia Não Mente Sorman, Guy Analisando a evolução da economia de inúmeros países e comparando as políticas adotadas em cada um, este livro busca explicitar as condições políticas e culturais que propiciaram a expansão das economias ou que impediram seu crescimento.

Os Deuses da Revolução Dawson, Christopher Habitualmente imaginamos a Revolução Francesa como uma revolta contra as velhas estruturas tanto da política como da religião. Supostamente, aquele foi um ato inconformista que se opôs não só à pompa do regime monárquico, mas também à aura sacra que a ele se vinculava. Será mesmo esse espírito emancipatório absolutamente desprovido de fé? Christopher Dawson – historiador tornado célebre pela tese de que a religiosidade é a força-motriz das culturas – demonstra que por trás do movimento havido no fim do século XVIII subsistia um verdadeiro panteão.

Análise Dialética do Marxismo Santos, Mário Ferreira dos Esta obra foi censurada pela inquisição de Salazar em Portugal e considerada leitura obrigatória pelos mais expressivos militantes anarquistas da década de 1950 no Brasil: José Oiticica, Edgard Leuenroth, Jaime Cubero, entre ainda muitos outros. Ao mesmo tempo, trata-se de uma aplicação da decadialética tão fiel à sua matriz pitagórico-escolástica quanto se preconiza nos demais escritos de Mário Ferreira dos Santos.

Morte de um homem decente: André Glucksmann - Guy Sorman

Eye on the News

Guy Sorman

Death of a Righteous Man

André Glucksmann, RIP

The City Journal, November 10, 2015

My generation of French writers has a powerful image, dated June 1979, etched forever in our memories: that of an exhausted Jean-Paul Sartre climbing the steps of the Élysée Palace alongside Raymond Aron, his former friend and longtime intellectual opponent, both escorted by a tall, long-haired young philosopher named André Glucksmann. French president Valéry Giscard d’Estaing waited for them at the top. He had heard their demands and was ready to open the French borders to more than 100,000 refugees fleeing the Communist regime in Vietnam in makeshift rafts, much like the Syrians of today.
This essential moment in French intellectual history, and in European public life—inspired by Glucksmann—came to represent the end of extreme ideological conflicts and recognition of their absurdity when immediate and real evils confronted the conscience. Symbolically, it marked the end of Marxism, a worldview that had helped forge the young Glucksmann, and which Sartre had supported his entire life. Glucksmann was a leading voice of an emerging generation of thinkers, the New Philosophers. His writings not only renounced Marxism but also accused it of providing a theoretical foundation for some of the large-scale massacres of the twentieth century. Aron had always made this charge, though less forcefully. French classical liberals, alongside Aron, tended to be pessimistic, worried about the likelihood of the USSR’s eventual victory over democracy. But Glucksmann—similar to neoconservative Americans in this regard—believed Communism could be beaten with human rights, pitting morals against suffering.

André Glucksmann, Jean-Paul Sartre, and Raymond Aron in 1979

From then on, across a range of essays (including for City Journal, to which he regularly contributed) and books (including The Master Thinkers, on the roots of totalitarianism in German thought, and his autobiography, Une rage d’enfant), Glucksmann became the voice of all victims of every totalitarian ideology, up to and including Islamism, which he identified as a form of fascism in the aftermath of the September 11 attacks in New York. But another opponent of human rights also reared its head, one that Glucksmann had not predicted: cultural relativism. The West chose not to intervene in support of the Chechens while the Russians were crushing them because, well, the Russians aren’t like us, you see. We could never impose our humanist ideals upon them. Glucksmann found himself at a loss before this hypocrisy, which, more often than not, served as a mask for realpolitik. He refused ever to accept realpolitik or moral evasions. The West, he lamented, tended to rally to the cause of human rights when faced with weak regimes but stood idly by when confronted with powerful governments, such as those of the Russians or the Chinese.
Glucksmann was a historical exemplar of public morality—and also of the relative inefficiency of this morality. A quote from French poet Charles Péguy comes to mind: Moralists, he said, “have clean hands but, in a manner of speaking, actually no hands.” Glucksmann kept his hands clean until the end, yet without indulging in self-deception. He was a righteous, pure man—a rare man.

Guy Sorman, a City Journal contributing editor and French public intellectual, is the author of many books, including Economics Does Not Lie.

O Marx do seculo 21 e o seu novo Capital: mais preocupado com a igualdade via Estado do que com a eficiencia via mercados

De vez e quando surge um livro que promete salvar velhas crenças da esquerda: a de que a igualdade , ou o igualitarismo, é o objetivo da democracia, por exemplo, o que é uma tese simplesmente errada.
A democracia não tem muito a ver com a igualdade, a não ser a igualdade formal, no sentido da participação política, não a igualdade real de renda, de condição, de riqueza.
Essa obsessão, que nasceu no século 18, continua alerta e forte no século 21, atrasando sociedades e economias, como no nosso Brasil, por exemplo.
Acho que vai fazer sucesso no Brasil também, embora só tenhamos a desigualdade, e não os milionários filantropos da primeira potência econômica do planeta.
Vamos continuar num crescimento medíocre, mais preocupados com igualitarismo do que com eficiência...
O "liberals" do título se refere obviamente aos socialistas americanos, não aos liberais clássicos ao estilo europeu.
Paulo Roberto de Almeida

Books and Culture

GUY SORMAN

The Liberals’ New Hero

Why Thomas Piketty’s wrongheaded economic manifesto is all the rage

The City Journal, 22 April 2014

PHOTO BY PARTI SOCIALISTE DU LOIRET

Capital in the Twenty-First Century, by Thomas Piketty (Belknap, 696 pp., $39.95)

It’s not every day that an academic work, written by a French economist and published by a university press, is celebrated as a “watershed book,” but this is what commentators are saying about Thomas Piketty’s Capital in the Twenty-First Century—at least, liberal commentators. The New York Times’s Paul Krugman, among others, has deemed Capital the most important economic book in a decade. Less ideological readers should be more cautious. Piketty’s book is important and deserves respect: his 700-page opus, a decade in the making, brings together an incredible amount of data on the accumulation of capital since the Industrial Revolution. If you want to know, say, the relative income of a landowner in the United States or in France compared with an entrepreneur in the mid-nineteenth century, Piketty has an answer. Piketty also helps explain why the French remember their revolution and the subsequent Napoleonic period fondly: “It was an era of relative high wages for the lower class following the redistribution of land and mobilization of labor to meet the needs of military conflict.” His book is a trove of similar historical nuggets.

Piketty claims that he has not written an anticapitalist book. Karl Marx’s Das Kapital was not anticapitalist in the same fashion: it only purported to explain how and when capitalism would collapse from its internal contradictions. “The bourgeoisie will dig its own grave,” Marx wrote. Among other goals, Piketty aims to examine the circumstances in which entrepreneurship or wage employment is more or less financially rewarding than capital ownership. According to his theory, “When the rate of return on capital is higher than the economy’s growth rate, capital income tends to rise faster than wages and salaries.” This happens to be the current situation in the West. As a consequence, inequality rises, because workers’ income stagnates when capital-owner revenue accumulates. If the trend continues for years, the capital owners transmit this accumulated wealth to their heirs—and they become an entrenched oligarchy, a financial aristocracy.

“The entrepreneur inevitably tends to become a rentier,” Piketty writes, “more and more dominant over those who own nothing but their labor. Once constituted, capital reproduces itself faster than output increases. The past devours the future.” This apocalyptic vision of capitalism’s inevitable collapse is strictly recycled Marxist prophecy. (Piketty, it’s worth noting, is interviewed at length in the latest number of the Marxian New Left Review.) Piketty admits that “the American nation is not yet there,” but we might get there if the government doesn’t do something to curb the trend. Piketty’s formula here is the classic Jeremiah tactic: predict a disaster, wait for it to happen, and then proudly announce, “I told you so.”

To explain why the preordained transformation of entrepreneurs into unproductive rentiers hasn’t yet happened, Piketty adds a new twist to Marx. Wars and global crises—“shocks,” in Piketty’s parlance—wipe out accumulated wealth, allowing true entrepreneurship to start anew. The rejuvenating role of disasters may have some historical basis (Piketty argues convincingly for it in the case of the two world wars). But a more straightforward and less ideological analysis would show that, apart from such cataclysmic events, innovation—or “creative destruction,” as Joseph Schumpeter described it—opens the field to new entrepreneurs, while eradicating rent seekers. “Shocks” of the kind Piketty describes are hardly needed.

Piketty also updates Marx’s pessimism. “Are we headed towards the end of growth for technological or ecological reasons, or perhaps both at once?” he asks. Marx thought that nothing more could be invented beyond the steam engine. By including ecology among the list of concerns, Piketty expands the declinist criteria, thus dismissing those still naïve enough to believe in progress.

Piketty’s statistics are superficially impressive, but they can’t be taken at face value. His gross income figures, for instance, exclude redistribution and social programs. The inequality figures he cites would be much less striking if he computed them—as is commonly done—based on net income afterredistribution. Not doing so seriously distorts economic conditions. Piketty seems unwilling to concede that income alone, however calculated, does not account for all social reality: we all benefit from progress in multiple areas—health, transportation, consumer technologies—regardless of income.

Piketty’s book is less interested in economic efficiency than in social justice. “Building a just society,” he writes, “is the purpose of democracy.” For Piketty, “just” is the equivalent of “egalitarian.” He doesn’t explain why this should be so, though his equation of the two surely explains why Capital in the Twenty-First Century has political appeal among American academics, the media, and liberal politicians on both sides of the Atlantic—from President Obama to French president François Hollande. Offering no alternatives to the free market, the Left now fights for income equality, and Piketty’s book is thus an intellectual boon.

Piketty does not believe that free markets can spontaneously generate greater equality: government intervention is therefore needed, mostly through taxation. His market pessimism contradicts the findings of most classical economists, who see the rise of a huge middle class as an outgrowth of capitalism. Piketty rejects what he considers an optimistic illusion about markets born in the 1960s. From the end of the World War II until the late 1970s, a middle class expanded in the West, and incomes from wages and capital converged. But this convergence, Piketty argues, was a historical accident. In the long run, he says, capital owners always prevail over employees. In his insistence, Piketty sometimes contradicts himself. At one point, he argues that income divergence occurs independent of political influence. But he also writes that the current divergence was initiated by the policies of Ronald Reagan and Margaret Thatcher, who “scrapped taxes on the wealthy.” The inadequacy of his framework is powerfully illustrated by the example of France, where the gap between the so-called 99 percent and the 1 percent became wider under a socialist government during the 1980s. Was François Mitterrand a hidden Reaganite?

This contradiction between ideological judgments and objective data is the book’s fundamental flaw. The emergence of a super-wealthy minority (closer to 0.001 percent than to 1 percent, as Piketty himself admits) has likely occurred for different reasons in different countries. For instance, the new oligarchies in Russia, Nigeria, or China can’t be explained as a consequence of the free market. Inequality in these nations results from corruption, a one-party system, and kleptocracy. In the United States, a super-wealthy minority—“superstars and supermanagers,” as Piketty calls them—has attained financial preeminence predominantly through globalization: entrepreneurs like Bill Gates or large hedge fund managers operate in a worldwide market, gaining unprecedented profits. Their riches may be considered excessive or unfair—but that would be a moral judgment, not an economic one.

The author shows his true colors in the book’s final chapter, where he deems equality of income an end in itself. To achieve it, governments must redistribute wealth, fortifying what Piketty calls the “social state,” which embodies a better society. How to finance it? By taxing capital owners. As Piketty concedes, taxes on wage earners in the United States and in Europe have reached their limits: therefore, only capital taxation could increase the resources of the social state. But how can a nation-state levy taxes on capital owners when capital itself knows no borders? Piketty calls for a “utopian solution”: global capital taxation. Piketty reminds readers that taxing income, when initially proposed in the early twentieth century, was regarded as utopian. Now, he believes, the time has come to tax capital—massively. The European Union, he suggests, should lead the way. This is a paradoxical suggestion, since most European governments stopped taxing capital in order to stem its flight. Even France’s modest tax on capital hasn’t prevented entrepreneurs from moving to Belgium. Krugman, who fully endorses Piketty’s agenda, wants the United States to take the lead here, as it did a century ago in pioneering the income tax.

Piketty refuses to allow for any alternatives to his desired social state. Wouldn’t a negative income tax, as proposed by Milton Friedman 50 years ago, be more effective in alleviating poverty and inequality than a utopian global tax on capital? Piketty starts from unproven evidence—the state is good and growth is spontaneous—to plead for capital taxation.

Piketty’s book has other flaws. The author never considers whether some degree of inequality is necessary for growth in a market economy. Instead, he attacks economists for “relying too much on mathematical models and not understanding the deep structures of capital and inequality.” He thus ignores the fact that economists whom he dislikes have identified the actual factors of growth—such as property rights and the rule of law—based on empirical observation. Without the economic models he scorns, countries like China, India, and Ghana would not have seen such spectacular growth—and their poorest citizens would have far fewer opportunities. Piketty admits that he considers economics not a genuine science, but a subdivision of the social sciences, such as history or anthropology. Such a view is much more common in socialist-leaning France (Piketty now teaches at the Paris School of Economics) than in the United States (where Piketty studied at MIT).

Capital in the Twenty-First Century couldn’t have become a bestseller in the United States without the current concern over income inequality. This concern has merit, but is the tiny super-wealthy minority whom Piketty disparages a major source of social, political, or economic unrest? Hardly. Besides, why should we care that Bill Gates is a billionaire? Piketty never asks if such billionaires, through philanthropy or by financing new economic activity, mightspread their wealth more effectively than the government does by confiscating it. Philanthropy is non-existent in France, and it goes entirely unexplored by Piketty.

As a source of knowledge, Capital in the Twenty-First Century is formidable; as an ideological pamphlet, it breaks no new ground. The book marshals new data to rekindle old socialist answers. By all indications, the Left has already fallen in love with Piketty’s book; those of other persuasions will find its remarkable trove of data useful. I found particular value in the many anecdotes Piketty shares describing the origins of wealth in various nations throughout history. He convincingly shows that wealth is more often a matter of luck than talent. The question then becomes: should one be punished for his luck? Piketty would say yes. Like a true socialist, he sees himself as a moralist on the side of the angels. Yet, hidden behind the garb of history, statistics, and social science, Piketty’s arguments are more self-righteous than moral.

Guy Sorman, a City Journal contributing editor and French public intellectual, is the author of many books, including Economics Does Not Lie.

Mandela, um cristao - a explicacao de Guy Sorman, para um homem detodas as estacoes...

Comunista, pacifista, tolerante, graças à sua fé cristã, segundo Sorman.

Paulo Roberto de Almeida 

Nelson Mandela, Christian

A little-appreciated factor in his political development

GUY SORMAN
The City Journal, 9 December 2013

Nelson Mandela lived several lives: Communist militant, pacifist prisoner, and charismatic president. He was also the only recipient of the Nobel Peace Prize to receive both the USSR’s International Lenin Peace Prize and the American Presidential Medal of Freedom. What was the thread linking these successive and somewhat contradictory lives? Let me propose a hypothesis that his prison guards would certainly confirm, as would the Afrikaners who negotiated the end of apartheid with him: Mandela’s Christian faith led him from violence to redemption.
Mandela was a Christian, as I learned during a long conversation with him at a 1992 meeting in Durban of the South African Foundation, a business-backed anti-apartheid organization. The aura surrounding him then, felt by all who spoke with Mandela, was more mystical than political. Most South Africans, whatever their skin color, are Christians. The country’s ruling Afrikaners saw themselves as a tribe of Israel in exile. They adhered to an assiduous reading of the Old Testament, and an understanding of Christianity that they spread throughout South Africa. The reconciliation between the African National Congress (ANC) and the apartheid government of F.W. de Klerk (president until 1991) was an act of shared faith between two men who belonged to the same syncretic Christian tradition. The West’s economic blockade contributed to ending apartheid but did not bring Mandela and de Klerk together. It was not only the boycott of South African oranges by European and American consumers that overcame apartheid, but also belief in Christ.
Faith also explains and clarifies the path that led Mandela from Communism to liberal democracy and from violent action to peaceful reconciliation. Recall that in 1962, Mandela was sentenced to life in prison for his role in organizing bombings of police stations—a very real crime. In the years when Mandela played a significant but not leading role in the organization, the ANC was a branch of the Communist International. With Soviet support, the ANC preached violent revolution. Mandela’s incarceration was politically unjust, but it was well-founded legally, as Mandela himself never denied. While in prison, he lost faith in revolution and in Communism. Was this because of the collapse of the USSR, as his adversaries believed at the time? Or was it the result of a personal meditation? The latter seems more likely: Mandela’s prison cell on Robben Island, filled with his books and manuscripts, had something of a monastic spirit.
Christ was not the only prophet who served as inspiration to Mandela in his cell. There was also Gandhi, who, like Mandela, had practiced law in South Africa. In his work in the Indian community of Durban, where he conceived of and applied the principle of nonviolence to overcome white racism, Gandhi acknowledged the direct inspiration of Christ’s Sermon on the Mount. The lesson was not lost on Mandela: non-violence and the force of truth (satyagraha) are more effective than violent confrontation, but only when applied within a society that shares the same Christian and humanist values. As Mandela would, Gandhi appealed to the conscience of whites, both in South Africa and beyond; he won effective recognition by the British as the figurehead of Indian independence before he arrived in India. Similarly, Mandela was “recognized” outside of South Africa as the obvious leader of national liberation, before achieving this status domestically. (Anglican Bishop Desmond Tutu, who succeeded in persuading American and British Protestants that the end of apartheid was an ethical imperative, played a key role as well.)
Mandela’s faith made possible not only the reconciliation of blacks and whites under the same national flag, but also—and this is often overlooked in Europe and America—the reconciliation of enemy groups among South Africa’s numerous black factions and communities. In the age of apartheid, hostility between the Xhosas (Mandela’s ethnic group) and the Zulus (ethnic group of the current president, Jacob Zuma), was at least as intense as that between blacks and whites. In those days, the Zulus often sided with whites against the Xhosas, Indians, and other “mixed” minorities. South Africa was then, and remains, an ethnic puzzle.
The Commission for Truth and Reconciliation, founded by President Mandela and led by Bishop Tutu, is perhaps the most concrete example of Mandela’s Christian faith. Instead of the vengeance and reprisals that were expected and feared after years of interracial violence, the commission focused on confession and forgiveness. Most of those who admitted misdeeds and even crimes—whether committed in the name of or in opposition to apartheid—received amnesty. Many returned to civil life, exonerated by their admission of guilt.
Few twentieth-century statesmen have improved our world. Even fewer were inspired by religious faith rather than ideology. The European Union’s Christian founders —France’s Robert Schuman, Italy’s Alcide De Gasperi, and Germany’s Konrad Adenauer—prayed together before making decisions. Poland’s Lech Walesa and South Korea’s Kim Dae-Jung, both fervent Catholics and Nobel Peace Prize winners, forgave their Soviet and military oppressors by explicitly referring to their faith. This is the paradox of an age we call secular, but which is in truth haunted by transcendence.

Guy Sorman, a City Journal contributing editor and French public intellectual, is the author of many books, including Economics Does Not Lie. His article was translated by Alexis Cornel.

Guy Sorman: Why Europe Will Rise Again - Wall Street Journal

Guy Sorman: Why Europe Will Rise Again

France's foremost free-market economist says that Europe's leaders won't let the euro fail, and the EU will save France from the French

By MATTHEW KAMINSKI, Paris

The Wall Street Journal, August 17, 2012

Guy Sorman is an oddity—some might say a walking contradiction. The French economist and writer has for decades championed free markets in the birthplace ofdirigisme. He is a man of the right who is guardedly upbeat about France's future under the first Socialist president in 20 years. And he's decidedly positive on the euro and the European Union.

The latest of his 25-odd books, "Journal of an Optimist," a series of diary-like essays on Europe and France, was published here this spring. His contrarian streak—a virtual job requirement for French public intellectuals going back to Voltaire—flies straight into the gloomiest headwinds. "The consensus is not always the truth," he says without hesitation.

The French economy will fall back into recession this year, says its central bank, and unemployment last month hit a 13-year high. New President François Hollande, who marked 100 days in office on Tuesday, has probably had the shortest honeymoon of any elected leader anywhere: One poll last week found 54% of the French dissatisfied with his job performance. Greece will likely run out of money to pay its bills, putting its financial saviors (the Germans, International Monetary Fund and the EU) on the spot again. Meanwhile, the markets show little faith in the ability of Spain and Italy to handle their economic messes.

Enlarge Image

Ken Fallin

Mr. Sorman, who is 68, offers his generation's longer perspective to calm nerves. "Governments act like a fireman trying to extinguish the fire of the day," he says. They should instead give the media and bond traders a better sense of where the EU plans to go.

But first he wants to recall where it's come from. "In the U.S. generally there is a kind of misunderstanding about the purpose of Europe," he says. "Europe was not built for economic reasons, but to bring peace between European countries. It is a political ambition. It is the only political project for our generation. We'll pay the price to save this project."

Mario Draghi, the president of the European Central Bank, said in July that the bank "is ready to do whatever it takes to preserve the euro. And believe me, it will be enough." Mr. Sorman seconds that motion on political, moral and—perhaps most surprisingly—free-market grounds.

In maintaining that the euro didn't cause the European crisis, Mr. Sorman echoes other conservative economists. Blame instead overextended welfare states that rang up huge debts, he says, and then the Keynesian stimulus spending after the 2008 global meltdown that added to the burden. Now, hard fiscal adjustments are finally being carried out across Europe. Deregulation in these troubled countries would be nice, too, he adds.

At the EU level, he has pushed loudly for a group of European "wise men," modeled after the EU's founding fathers of the postwar years, to draw up a revitalized "ever-closer union" originally envisioned by the 1957 Treaty of Rome, which created the common market. His new EU would move gradually but firmly toward a common European budget and tax base, and larger fiscal transfers from rich to poor areas.

These ideas were "taboo" before the crisis, he says, but are now openly debated. They remain taboo to jealous defenders of national sovereignty and to most European free-marketeers, not always one and the same group.

Mr. Sorman, who taught economics for three decades at the prestigious Sciences-Po in Paris, knows all the free-market arguments against further empowering Brussels or pooling taxes. "A federation is not the same thing as a super state," he responds. "We're talking about a federation where free-market principles are much better implemented than they ever were when decisions belonged to each nation."

Mr. Sorman says the crisis has usefully brought quick fixes to obvious euro shortcomings. Greece cooked its budget numbers for years; Italy and Spain weren't always open about the rot on their books. After Greece collapsed, the EU introduced transparent national accounting standards. When France and Germany broke through the EU treaty's ceilings on fiscal deficit without any consequences a decade ago, they unwittingly encouraged bad fiscal behavior by others. No one will make that mistake again, says Mr. Sorman, and in any case the EU has strengthened its enforcement powers.

Margaret Thatcher considered Europe to be welfarism by the back door. Contra the Iron Lady, Mr. Sorman says more Europe brings more competition and more prosperity.

Brussels has wrenched open protected markets and broken up state monopolies in transport, telecommunications, energy and more. In the Sorman view, the EU has just gotten started. Its executive arm, the European Commission, "is the major free-market agent we have in Europe," he says. The euro, unveiled a dozen years ago, "is a new kind of gold standard."

By bringing currency stability and taking away the tool of devaluation from politicians who want an easy fix, the single currency has forced "each economy to be more rational, more flexible and more productive." The ECB, he adds, "is even more free-market oriented than the Federal Reserve." Its only job is keep inflation low, while the Fed has a second mandate to bring about full employment.

Doomsday scenarios also overlook differences among EU states. The Berlin Wall was replaced by a sort of sunshine curtain that separates a healthy, growing north from the basket cases of Club Med. Visit Berlin, booming Warsaw or the Estonian capital of Tallinn to escape the depressed mood of Paris. "I think you'll have a European revival coming from Poland, the Baltic States and Finland" says Mr. Sorman. "Just look at what they've achieved."

Mr. Sorman has advised the South Korean president Lee Myung-bak since 2009 ("without much result," he says) and lived for a year recently in China. This up-close look makes him skeptical of the rising East hype and eager to halt Europe's premature burial.

Look at the number of international patents registered annually, he says, a good measure of innovation. America comes first—"the future still belongs to the U.S.," he says. Europe is next. By that reasoning, if a revitalized EU lessens regulatory, tax and other burdens on the private economy, great entrepreneurial energy is waiting to be tapped.

I suggest that he may be whistling past the graveyard, and that Greece, and possibly the single currency, could already be beyond redemption. There isn't enough money in German coffers to save all of southern Europe. The ideas for federation that he supports are long shots.

"The only tomb that's now prepared is for Greece," Mr. Sorman shoots back, But the Greeks won't willingly get into it, and in any case the EU won't let them. Greece's exit from the euro would be an economic and "political disaster," he says. Modern Greek democracy is three decades old. The wounds from the civil war are fresh, and an electoral win by the far left or fascists can't be counted out, he says. Europe can't afford to "lose Greece." He doesn't think Spain or Italy are in any danger of leaving the euro.

Mr. Sorman's case for the EU boils down to something you hear often from an Italian, or a Belgian and other citizens of ill-governed EU states and almost never from, say, a Dane or an Englishman. "Only Europe can protect the French from the French," he says. "If we weren't part of Europe, imagine our electricity bill or our phone bill. We might not even have the Internet."

This cri du coeur pour l'Europe comes three months into Mr. Hollande's presidential term. The men know each other well. In the mid-1980s, during a brief spell as a journalist at the now defunct Le Matin de Paris, the Socialist party operative attacked Mr. Sorman's essays on economic liberalism. At the time Mr. Sorman was a rare French defender of Reagan.

Three years ago, on a television talk show, the future French president suggested that Mr. Sorman take his liberal economic ideas and himself out of France. "This was a kind of anti-Semitic, bourgeois attack," says Mr. Sorman, who is Jewish. He says Mr. Hollande afterward told him he went too far and apologized, "and I said, 'I don't know if you went too far, but it does express your deep conviction.'"

"For me," he adds, "Mr. Hollande is quite the conservative bourgeois type of provincial France—the people who hate money, who hate capitalism, who hate business. They think all these ideas are quite foreign to French culture and French genius." Much of the French right has also stayed faithful to what's called "a certain idea of France." From Charles de Gaulle on, presidents have glorified the small shopkeeper and kept their distance from more cosmopolitan CEOs of multinationals.

As with Europe, Mr. Sorman takes a longer view. Upon coming to power in 1981, France's first and last Socialist president, François Mitterrand, nationalized industry and banking, thrice devalued the franc and threatened to pull France out of the European common market. Two years later, he reversed course. The current crop of Socialists "are not extremists anymore," says Mr. Sorman. "The big difference today with the 1980s is that nobody believes in socialist solutions. This alternative has disappeared. The only alternative is status quo—or a return to traditions of French entrepreneurship."

Mr. Sorman offers two hopeful scenarios. In the first, the new president uses a fresh electoral mandate to liberalize rigid French labor markets, streamline the entitlement state and improve conditions for doing business. His support from public unions can shield against a backlash. Gerhard Schröder, the center-left German chancellor, pulled off this Nixon-to-China trick a decade ago and laid the foundations for Germany's economic renaissance.

The early signs in France aren't encouraging for the small band of free marketers. In addition to various planned tax increases, the new government has proposed to protect industry and resisted spending cuts.

Yet Mr. Hollande's promise to bring the budget deficit to 3% next year from 4.5% to meet the euro-zone fiscal rules shows that the government knows it has to keep financial markets happy. His falling poll numbers reflect growing economic anxiety that might force his hand. The economy is spiraling down so fast, says Mr. Sorman, that France will be forced "to revert to free-market solutions." This is his other optimistic scenario.

"It's very rare that a nation chooses decline," he continues. "I don't think the French will choose decline. It's a young nation with many young people who want to find work."

De Gaulle had a famous line about the impossibility of governing a country with "246 different kinds of cheese." Mr. Sorman sees it differently. "The problem," he says, "is not the number of cheeses. The problem is the false consensus propagated by the chattering classes that the ruling government elite knows best what is good for the country, that the genius of France is to be ruled from above by a clairvoyant state bureaucracy, that the free market does not belong to French history—and if you are against this you are a traitor."

Before French audiences, Mr. Sorman often invokes the names of Frédéric Bastiat, Alexis de Tocqueville and Jean-Baptiste Say to show that liberal economic ideas aren't alien to French soil. "I tend to feel lonely," he says.

Mr. Kaminski is a member of the Journal's editorial board.

A version of this article appeared August 18, 2012, on page A11 in the U.S. edition of The Wall Street Journal, with the headline: Why Europe Will Rise Again.

Economia pela politica ou pelas regras? - Guy Sorman

No More Quick Fixes
Guy Sorman
The City Journal, August 1, 2012

The economy needs rules, not discretionary policies.

 

Economists, politicians, and pundits looking for answers to the economic crisis fall into two broad categories. Keynesians and statists argue for more aggressive interventions from governments and central banks. Distrusting the free market’s self-regulating processes, they promote public spending to create jobs and low interest rates to rekindle private investment and consumer spending. Thinkers of the classical-liberal persuasion, by contrast, argue that no quick fix can bring the economy out of its doldrums; only when the rules of capitalism appear stable and predictable again will markets revive. Put another way: Keynesians and statists believe in flexible, “discretionary” economic policies; classical liberals believe in set rules.
Economic history proves the superiority of the second approach, but democracy often makes the first more attractive to politicians. After all, in a crisis, people expect their leaders to do something; refraining from action and sticking to abstract principles play poorly to public opinion. As previous recessions demonstrate, however, public pressure for action usually leads to bad decisions that prolong or intensify a crisis. The situation is analogous to what happens on the soccer field when a goalie faces a penalty kick. Statistics show that the goalie should stay in the center of the net to increase his chances of blocking the shot. Yet in most cases, he jumps to the left or right just before his opponent kicks. Why? Because the crowd urges him to act, even though doing so reduces his likelihood of success.
Since the beginning of the crisis in 2008, governments have similarly lurched from side to side, to little good effect. True, some basic market-supporting rules—those that back free trade and oppose inflation, monopoly, and the nationalization of industry—have been maintained since 2008. This stability compares favorably with government responses to the Great Depression in the 1930s, which made things worse by permitting nationalization and monopolies while interrupting the free flow of goods, capital, and people. In 1974, too, wrongheaded policies magnified a crisis. After oil-producing nations formed a cartel, OPEC, and boosted oil prices dramatically, Western production costs shot up, smothering consumer spending and bringing the economy to a standstill. To reignite growth, Keynesian economists persuaded central banks to print more money than ever before. All Western governments followed this prescription, leading to an explosion of inflation. Because neither consumers nor entrepreneurs would increase their spending or investment in that climate (they rightly assumed that these were short-term, unsustainable policies), the result was disastrous stagflation—economic stagnation and inflation combined.
Governments and economists, who learn by trial and error, fortunately haven’t repeated the worst mistakes of the 1930s and 1970s. That may explain why the current crisis hasn’t become even more serious. Yet public pressure to act remains, and politicians and the media, who have only a shaky understanding of how markets work, continue to promote active government policies, such as the American stimulus bill of 2009. Most countries that went down this road (with some exceptions, including Germany and the Baltic states) have incurred huge deficits, which hamper private investment and job creation. The renewed failure of stimulus efforts confirms that Keynesian policies, in the long run, don’t work.
How can governments resist the pressure to adopt short-term policies and instead promote long-term, steady approaches to maintain economic growth? Here are some suggestions. Instead of holding an endless debate on taxes and deficits, classical liberals in the United States could promote a constitutional amendment that imposes a ceiling on total federal spending. Throughout the history of capitalism, the level of public spending has had more impact on GDP growth rates than has the deficit or the marginal tax rate. In America, a public-spending cap would calm the anxieties of entrepreneurs and consumers, make the future more predictable, and provide a strong incentive for businesses to invest the huge quantities of liquid assets now frozen or invested in unproductive bonds. The amendment would restart the innovation cycle that has always been the main driver of American economic expansion.
Long-term rules in the United States could also put an end to the excessive concentration of political and financial power in the hands of a limited number of banks—a problem that helped disrupt the world economy in 2008 and threatens to do so again. As University of Chicago economist and City Journal contributing editor Luigi Zingales shows in his new book A Capitalism for the People, the United States increasingly risks becoming, in economic terms, a “banana republic”—a place where a few big banks destroy public confidence in the free market and deplete the economy’s resources through short-term speculation instead of investing. New rules could put a stop to that by limiting the size of banks, which would reestablish competition.
Classical liberals could also push to make the Federal Reserve’s monetary policy more predictable. As Milton Friedman demonstrated half a century ago, the American economy grows steadily when the Fed injects money and credit into the economy in steady, predictable quantities. When the Fed tries to do more, it usually produces speculative bubbles, inflation, and stagnation. Stanford economist John Taylor, who writes on the importance of rules elsewhere in this issue, has proposed an algorithm for the Fed that would adjust monetary creation to the needs of the economy. The “Taylor Rule” should become a legal constraint on the Fed, preventing it from adopting discretionary and counterproductive policies.
Europe also needs firm rules, not ever-changing policies—but there, it’s less urgent to invent new rules than to create the federal institutions that will guarantee the proper implementation of existing ones. If eurozone members had respected the conventions that they had signed limiting public spending and deficits, there would be no European crisis today.
What is to be done to grow out of the economic crisis may be clearer than how to do so in a democracy. Political leaders must build constituencies that will support rules instead of discretionary policies. The best way to do that is to explain how rules reinforce the power of the people. In the United States, a public-spending cap would protect taxpayers from the politicians who bestow subsidies and from the lobbyists who seek them. Rules to jump-start competition in the financial sector would help re-democratize American capitalism, which has become too oligarchic. In Europe, too, transparency in public accounting and new federal institutions to implement euro rules would reinforce popular democratic control over the prodigal ways of the political class.
Since the crisis began, discretionary policies have thrived, and set rules have suffered. To end the crisis, we must reverse that situation, restoring rules to their rightful place in our free-market economies.

Guy Sorman, a City Journal contributing editor and French public intellectual, is the author of Economics Does Not Lie.

Krugman: da economia para a fantasia delirante - Guy Sorman

Desde quando Paul Krugman começou a escrever para o New York Times, ele começou a delirar.
Sei disso, pois havia lido e apreciado alguns livros dele nos anos 1990, sobre comércio internacional, e até escrevi a resenha de um deles, com muito prazer, aliás.
Estava nos EUA, em 1999 ou 2000, quando ele se tornou colunista do NYT, e era o início do governo W. Bush, um idiota consumado, que converteu os superávits fiscais deixados por Clinton em déficits enormes, em menos de 2 anos.
Mas Krugman não criticava isso, e sim o corte de impostos.
Desde então, considerei que ele deixou de ser economista para ser converter em político. Pior: em panfletário.
Teve um de seus livros anteriores traduzido no Brasil como "A Consciência de um Liberal", assim, literalmente, quando o sentido, nos EUA, é completamente diferente do sentido que se dá no Brasil. Neste caso, são os editores brasileiros, e o tradutor, que são idiotas.
Mas ele não merece que seja chamado de economista, pelo menos enquanto continuar a delirar como faz ultimamente.
Abaixo a crítica de Sorman a seu mais recente livro, um apanhado de ideias delirantes, como não poderia deixar de ser...
Bastaria uma pequena pergunta para derrubar todo o seu edifício: se é para os governos gastarem mais, de onde é que eles vão tirar o dinheiro para gastar?
Durma-se com uma estupidez dessas...
Paulo Roberto de Almeida 

GUY SORMAN

Paul Krugman’s Follies

The Nobel-winning economist embraces fantasy.

The City Journal, 24 June 2012

End This Depression Now!, by Paul Krugman (Norton, 272 pp., $24.95)

Paul Krugman’s new book should come with a disclaimer: there is no relation whatsoever between the ideological assertions of the New York Timescolumnist and bestselling author and the other Paul Krugman, who received a well-deserved Nobel Prize in 2002 for his scholarly research on international trade. Winning a Nobel Prize in economics doesn’t grant legitimacy to everything an economist writes, and Krugman’s book, like most of his newspaper columns, shows little connection with his past academic work.

To be fair, Krugman acknowledges that he has become a “pundit,” an implicit admission that his book is informed by his liberal views as much as by his economic knowledge. End This Depression Now! is essentially a pamphlet pretending to offer scientific answers to the U.S. economic slump. Its argument is easy to summarize: we have the knowledge and tools to revive the economy and provide jobs to millions of unemployed Americans. Consequently, those in positions of power who refuse to put Krugman’s advice into practice, themselves motivated by ideology, are the enemies of the unemployed. They want Americans to suffer for their past sins of excessive borrowing and spending. As if to emphasize that he sees the economic debate as a morality play, Krugman dedicates his book to the unemployed.

“Ending the depression should be incredibly easy,” Krugman asserts. The government must simply spend more, because the American consumer is spending less. Borrowing from Keynes, Krugman argues that the crisis, having been provoked by a decline in private demand, can only be solved by an increase in public demand. This is “a moral imperative” (the book constantly zigzags between ethics and economics). Public spending would be not only efficient, Krugman contends, but ethical.

This inflationary solution, which Krugman calls “a feel-good experience,” has been tried before. It worked, he claims, during World War II, when arms-building programs lifted the U.S. economy out of the Great Depression. Half-jokingly, Krugman says that the threat of an alien invasion should suffice to motivate more government spending. But he knows well—or should—that President Obama has already tried to rekindle growth this way. He admits that the results were not impressive, but only because public spending didn’t go far enough and wasn’t sustained.

The argument is dubious. All economies are built on confidence. An increase of the public debt now, as Krugman urges, would create a crisis of confidence, not a quicker recovery. Robert Lucas, the originator of rational-expectation theory, has shown how and why consumers and entrepreneurs reject Keynesian policies: in essence, the marketplace is wiser than the government. Entrepreneurs and consumers alike understand that an increase in public demand is artificial and short-term. Consequently, public demand leads not to increased consumption or investments but to price hikes. This unintended consequence of Keynesian demand has been repeatedly demonstrated in theory and practice. Milton Friedman and the late Anna Schwartz, in their Monetary History of the United States, showed that excessive money printing, which Krugman strongly recommends, always leads to inflation, not growth.

Krugman does not even mention these fellow economists, Nobel Prize winners all. He acts as if they did not exist, hardly a scientific attitude. Nor is it scientific to ignore that the only time Keynesian theory was truly applied—after the recession caused by the 1974 “oil shock,” when petroleum-producing countries formed the OPEC cartel and sent fuel prices soaring—it produced “stagflation,” a mix of inflation and economic stagnation. Krugman ignores this feel-bad experience, as well as the supply-side policies, based on monetary stability, that sparked the 1980s recovery. He hardly mentions the success of so-called austerity policies (which basically means balancing public accounts) in nations like Germany, which has seen strong economic growth. Krugman’s pithy dismissal: “It will not last.” His attitude calls to mind a quip from Paul Samuelson, a Keynesian himself, who observed that doomsday prophets could predict five crises for every three that actually happen.

Krugman also ignores the political consequences of the inflation he supports. Inflation may not create growth, but it does redistribute incomes. In an inflationary situation, one’s wealth depends less on what one does than on where one stands. Those able to cope with price hikes—a shopkeeper charging more, a banker raising interest rates—may become inflation’s beneficiaries. But wage earners and pensioners usually fall behind when prices rise, becoming poorer by the day. All those who lent their money at a fixed rate, usually by buying treasury bonds, are bankrupted in an inflationary era. This well-known pattern destroys all faith in government and leads to political upheaval. Throughout the twentieth century, inflation has been the death of democracy.

A modest knowledge of economics and of recent history, then, reveals that Krugman’s “feel-good experience” would not reduce America’s long-term unemployment: it would only cause more damage. With any luck, the cynical ideologues he vilifies will ensure that his solutions are not adopted. Common sense, which the author dismisses, rejects so simplistic a solution. An honest review of American history offers ample proof that economic growth does not obey government’s decrees, because the engine of growth has always been innovation and entrepreneurship. Stimulating the economy through the financing of “shovel-ready” projects and the like might sound attractive, but it has no record of success in the American experience. Paul Krugman lives in an unreal world: his book could even qualify him for another Nobel Prize—in literature.

Guy Sorman, a City Journal contributing editor and French public intellectual, is the author of Economics Does Not Lie.

Islam and Capitalism - Guy Sorman (City Journal)

Is Islam Compatible with Capitalism?
Guy Sorman
The City Journal, vol. 21, n. 3, Summer 2011

The Middle East’s future depends on the answer.

BEBA/IBERFOTO/THE IMAGE WORKS

A sixteenth-century Turkish bazaar. Muslim tradition has long accepted the marketplace, though sharia constrained its efficiency

The moment you arrive at the airport in Cairo, you discover how little Egypt—the heart of Arab civilization—is governed by the rule of law. You line up to show your passport to the customs officer; you wait and wait and wait. Eventually, you reach the officer . . . who sends you to the opposite end of the airport to buy an entry visa. The visa costs 15 U.S. dollars; if you hand the clerk $20, though, don’t expect any change, let alone a receipt. Then you make the long hike back to the customs line, where you notice that some Egyptians—important ones, apparently—have helpers who hustle them through. Others cut to the front. It’s an annoying and disturbing welcome to a chaotic land, one that has grown only more chaotic since the January revolution. It’s also instructive, effectively demonstrating why it’s hard to do business in this country or in other Arab Muslim lands, where personal status so often trumps fair, universally applied rules. Such personalization of the law is incompatible with a truly free-market or modern society and helps explain why the Arab world’s per-capita income is one-tenth America’s or Europe’s.

The airport experience, had he been able to undergo it, would have been drearily familiar to Rifaa al-Tahtawi, a brilliant young imam sent to France in 1829 by the pasha of Egypt. His mission: figure out how Napoleon’s military had so easily crushed Egypt three decades earlier, a defeat that revealed to a shocked Arab world that it was now an economic, military, and scientific laggard. At the outset of the book that he wrote about his journey, The Gold of Paris, Rifaa describes a Marseille café: “How astonished I was that in Marseille, a waiter came to me and asked for my order without my looking for him.” Then the coffee arrives without delay. Finally—most amazing of all—Rifaa gets the bill for it, and the price is the same as the one listed on the menu: “No haggling,” he enthuses. Rifaa concludes: “I look for the day when the Cairo cafés will follow the same predictable rules as the Marseille cafés.” But nearly two centuries later, the only Egyptian cafés that live up to Rifaa’s hopes are the imported Starbucks.

Egypt is, of course, a Muslim nation. Should Islam be indicted for what was in Rifaa’s time, and remains today, a dysfunctional economy? The question becomes all the more important if you extend it to the rest of the Arab Middle East as it is swept by popular revolts against authoritarian rule. Will the nations that emerge from the Arab Spring embrace the rule of law and other crucial institutions that have allowed capitalism to flourish in the West? Or are Islam and economic progress fundamentally at odds?

Muslim economies haven’t always been low achievers. In his seminal work The World Economy, economist Angus Maddison showed that until the twelfth century, per-capita income was much higher in the Muslim Middle East than in Europe. Beginning in the twelfth century, though, what Duke University economist Timur Kuran calls the Long Divergence began, upending this economic hierarchy, so that by Rifaa’s time, Europe had grown far more powerful and prosperous than the Arab Muslim world.

A key factor in the divergence was Italian city-states’ invention of capitalism—a development that rested on certain cultural prerequisites, Stanford University’s Avner Greif observes. In the early twelfth century, two groups of merchants dominated Mediterranean sea trade: the European Genoans and the Cairo-based Maghrebis, who were Jewish but, coming originally from Baghdad, shared the cultural norms of the Arab Middle East. The Genoans outpaced the Maghrebis and eventually won the competition, Greif argues, because they invented various corporate institutions that formed the core of capitalism, including banks, bills of exchange, and joint-stock companies, which allowed them to accumulate enough capital to launch riskier but more profitable ventures. These institutions, in Greif’s account, were an outgrowth of the Genoans’ Western culture, in which people were bound not just by blood but also by contracts, including the fundamental contract of marriage. The Maghrebis’ Arab values, by contrast, meant undertaking nothing outside the family and tribe, which limited commercial expeditions’ resources and hence their reach. The bonds of blood couldn’t compete with fair, reliable institutions (see “Economics Does Not Lie,” Summer 2008).

Greif’s theory suggests that cultural differences explain economic development better than religious beliefs do. Indeed, from a strictly religious perspective, one could view Muslims as having an advantage at creating wealth. After all, Islam is the only religion founded by a trader—one who also, by the way, married a wealthy merchant. The Koran has only good words for successful businessmen. Entrepreneurs must pay a 2.5 percent tax, the zakat, to the community to support the general welfare, but otherwise can make money guilt-free. Private property is sacred, according to the Koran. All this, needless to say, contrasts with the traditional Christian attitude toward wealth, which puts the poor on the fast track to heaven and looks down in particular on merchants (recall Jesus’s driving them from the Temple).

But Duke’s Kuran believes that Islam did play a role in the Long Divergence. It wasn’t the Koran, which the Muslim faithful see as written by God and unalterable, that impeded Muslims economically, he argues, but instead sharia, the religious law developed by scholars after Mohammed’s time. Not that sharia was overtly hostile to economic progress; it established commerce-friendly legal rules that, for instance, allowed for bazaars and for the arbitration of economic disputes. Rather, Kuran maintains, sharia became economically counterproductive because it was less efficient than the Western legal framework.

The most significant of the sharia-rooted economic liabilities was the Islamic partnership, which proved no match for the Western world’s joint-stock company. Partnerships were short-lived, dissolving with the death of any of the partners, and they tended to be small, often formed among family members. Joint-stock companies, which sharia prohibited, had much greater reach and risk-hedging power. Sharia inheritance rules were a second drag on economic development, Kuran explains. Since the Koran sanctions polygamy, sharia required a husband’s wealth, upon his death, to go in equal portions to his widows and children, which worked against capital accumulation. In the Roman law that held sway in Europe until the nineteenth century, by contrast, the eldest son inherited his deceased father’s wealth, creating vast fortunes that could be put to economic work. Some economists point to sharia’s prohibition of interest as another hamper on development, but this is much less significant than it appears. From at least the twelfth century on, sharia lawyers authorized “fees” that could accompany money-lending, getting around the ban.

Muslim welfare foundations to aid the poor, called waqf, also undermined economic competitiveness over time, says Kuran. According to sharia, all money given to these charities was exempt from taxation. But Muslim merchants began to establish waqf as fronts for commercial enterprises, depriving the government of sufficient funds to function properly. This tax evasion contributed to the failure of the Arab kingdoms and the Ottoman Empire to build a competent minimal state, which is essential to the effective rule of law.

For evidence that sharia had negative economic effects, consider the Egyptian city of Alexandria. Beginning in the fifteenth century, non-Muslim merchants in the city could opt out of sharia’s business rules. Those who did and embraced Western capitalist norms quickly grew richer than those who continued to follow sharia, historians have shown.

Over time, however, sharia adapted to capitalism. In the nineteenth century, it finally allowed Muslims to form joint-stock companies and to borrow other key capitalist institutions from the West. Today, Islamic banks follow the same practices that non-Islamic banks do (including the use of derivatives) but describe them differently, so that they conform with sharia. Yet despite this transformation in Islamic law, Muslim economies still lag behind Western ones. Greif and Kuran may help explain the Long Divergence, but what accounts for the fact that there is no “Arab Tiger” comparable with Asia’s remarkable success stories?

Part of the answer may, in fact, be religious: Islam’s apostasy law. Sharia holds that a Muslim who breaks with Islam becomes an apostate, an offense punishable by death. And since, at least for Sunni Muslims, there is no central theological authority—the theocratic regime in Iran establishes such authority for Shiite Muslims—any Sunni imam can define what constitutes breaking with Islam. This power may deter potential innovators, including the entrepreneurial kind, from doing anything that could conceivably get them into trouble.

But a bigger reason for the Arab world’s stagnation is political. In nearly every Arab Muslim country, the prime enemy of entrepreneurship and the free market is an abusive government—and the strong, unaccountable, and usually despotic regimes that have dominated Arab Muslim populations for decades owe neither their origins nor their legitimacy, such as it is, to Islam. All emerged from the decolonization struggles of the 1950s and 1960s, which, since the primary colonizers were Europeans, provoked angry anti-Western and anticapitalist attitudes in Muslim societies. The decolonization of the Arabs did not go well. Violent confrontations were the norm, even when full-blown war didn’t break out, as happened in Algeria. The upheavals brought military regimes to power in most of the decolonized Arab states; even when the military wasn’t officially in charge, it controlled puppet governments, as in Morocco. All these regimes espoused nationalism and resisted any rule of law that might limit state power—or give entrepreneurs a freer hand.

Worse, independence took place at a time when the Soviet Union was influential and many believed that centrally planned socialism was a shortcut to power and prosperity. Arab governments thus found it tempting to confiscate private property, eradicate the existing bourgeoisie, and create massive state monopolies in resources like copper, oil, and phosphate. In the name of national independence and economic modernization, all the wealth could be concentrated in the hands of the ruling militaries and bureaucracies.

After the fall of the Soviet Union showed socialism to be far less efficient than the free market, Arab Muslim governments began to free up markets somewhat, but without surrendering their tyrannical authority. This resulted in an Arab crony capitalism, which is now the dominant economic arrangement in the Muslim Middle East. In today’s pseudo-market Arab economies, it makes little sense to be an independent entrepreneur. If you want to open a business, you’ll need a license, and the only surefire way to obtain it is to belong to (or be close to) someone in the ruling elite; even then, you’ll share your profits with the bureaucrats. It’s far easier to seek a rent—a benefit based on your position in society. Rent-seeking is particularly prevalent in countries overflowing with natural resources like oil and gas, which bring in massive revenues that reduce the incentive to diversify the economy.

Egypt exemplifies the crony-capitalist model. During the 1990s, corrupt privatizations transferred state monopolies in energy, steel, cement, and other industries to private “entrepreneurs,” most of whom were members of President Hosni Mubarak’s family, top military officers, and other well-connected people. Meanwhile, economist Hernando de Soto has calculated, opening a modest bakery in Cairo required two years of slogging through the bureaucracy, at each stage of which the would-be owner would need to grease official palms—and if his bakery finally opened, he would then have to pay ongoing protection money to the local police. Small wonder Egypt suffers from slow growth, massive unemployment, and a large black market.

The authoritarian nature of today’s Muslim governments also generates social norms that harm entrepreneurship. For example, a survey conducted by the Casablanca-based business magazine L’Economiste compared the organizational structures of Moroccan firms with those of Western companies operating in Morocco. It found that the boss of a Moroccan firm tends to have a larger office and more assistants, secretaries, and chauffeurs than his Western counterpart does and that his behavior is more autocratic. The likely reason is that the Moroccan boss, mimicking the king and his entourage, finds power—and the exhibition of power—more compelling than profits.

The prosperity-crushing influence of government on Muslim entrepreneurship has nowhere been more evident than in Turkey. In the early nineteenth century, the Turkish sultan, like the Egyptian pasha, tried to import Western science and military methods without introducing Western rule of law. “The Ottoman Empire fell into poverty because the dominant concern of the sultans was always to avoid the emergence of a competing power,” explains Turkish economist Evket Pamuk. And the possibility that they feared the most was the birth of a Westernized Turkish bourgeoisie, its power based on private ownership.

When the empire became the Turkish Republic in 1921, little changed. The republic’s founder, Mustafa Kemal (later called Atatürk, a name he chose that means “Father of the Turks”), was fascinated by the fashionable Italian fascist ideal. The Turks lacked entrepreneurial spirit, he believed, so it was up to the government to act as a collective entrepreneur and pick those who deserved to start new businesses. Under his regime, which became a military dictatorship after his 1938 death, the Turkish economy made little progress, though a small group of well-connected businessmen grew extremely wealthy.

Islam wasn’t to blame for Turkey’s poor economy. Indeed, the new republic was fiercely secular; for decades, no openly devout Muslim could hold any significant position in public service, in the military, or even in business. Modern Turkey started to grow economically only after it began to free up the market under former World Bank economist Turgut Özal, a devout Muslim whom the military had installed as prime minister in 1987 to bring inflation under control. Özal’s reforms opened the way for the openly Islamic, pro-market Justice and Development Party, or AKP, which has ruled Turkey since 2002. Whatever criticisms one might make of the AKP—it has on occasion sought to impose religious norms on a secular society, among other troubling signs—it has brought about an astounding transformation of Turkey’s economy. The state’s budget is balanced, prices are stable, free trade is enthusiastically embraced, and crony capitalism has been constrained. As a consequence, the Turkish growth rate has been one of the world’s highest: 8 percent annually for several years now. Turkey’s per-capita income is now higher than Saudi Arabia’s—and Turkey has no oil.

Fueling this economic expansion is a new generation of entrepreneurs from Anatolia, in eastern Turkey. These businesspeople are conservative Muslims, but they aren’t extremists. The Anatolians are astonishing; no one can say for sure how they arrived on the scene as the dynamic engine of Turkish modernity. Ask an Anatolian entrepreneur about this success and he may credit a strong work ethic, combined with family values ingrained in the Muslim faith. Or he may mention the business traditions of Anatolia, a crossroads between Asia and Europe under the Ottoman Empire. Pamuk, a secular Turk, points to mundane factors like the Anatolians’ low labor costs and Turkey’s proximity to the vast European market: Turkey now exports 25 percent of its national production, up from 3 percent in 1980. Whatever the reason for the Anatolian breakthrough, Islam has not impeded it.

Will the Turkish model spread to nearby Arab countries? This year’s revolutions in Tunisia and Egypt may answer that question. Remember the man who inspired the revolutions: Mohammed Bouazizi, a young Tunisian who earned a university degree but could find no decent formal employment, a situation all too common for educated young Arabs. Bouazizi sought to make a living from a tiny fruit-and-vegetable stand, but last December, because he hadn’t registered it with the authorities, police confiscated it. Bouazizi then set himself on fire.

Bouazizi’s suicide brought millions of Arabs to the streets because they could identify with him. Human rights leaders didn’t start the revolutions; neither did long-banned Islamic movements like the Muslim Brotherhood. The upheavals weren’t characterized by Islamic banners or by Israeli flags going up in flames (though there were disturbing reports of Muslims attacking Christian churches in Egypt after the police had vanished from the streets). No, the dominant message of the Arab Spring was that the Arabs didn’t want to remain separated from the rest of the world. The Egyptian students in Tahrir Square couldn’t have put it more clearly: they wanted democracy, globalization, and market prosperity, not Islamicization. “We want a normal country, which means free enterprise and democracy,” said one of their leaders, Amr Salah of the Cairo Institute for Human Rights, in Paris this April. Even the notorious Muslim Brotherhood is on board with capitalism: “Our economic program is a free-market society in order to pursue social justice,” says Sameh al-Barqui, an American-educated economics expert with the Brotherhood.

The transition from the Arab world’s authoritarian regimes to democracy, markets, and the rule of law is far from guaranteed, of course. For a reminder of the difficulty of installing successful Western-style capitalism, consider Rifaa, who returned to Egypt after seven years in France and became the pasha’s main advisor—overseeing the translation of French scientific books into Arabic, founding the first Arabic newspapers, and opening schools for girls. Though Rifaa faced the hostility of Muslim conservatives, his reforms, accompanying the era’s shifts in sharia, inaugurated an era of modernization in Egypt. By the late nineteenth century, Cairo was starting to look like a European city, with electricity, sanitation, universities, and an independent press. But the renaissance didn’t last long, because Rifaa repeatedly failed to persuade the pasha to accept a Western-style constitution, which would have limited the ruler’s arbitrary power. What kept Egypt back was its failure to establish the rule-governed institutions familiar in the West.

It should be sobering, therefore, that the military isn’t likely to surrender its political privileges easily in any Arab country. Still, most of the political parties emerging in the ferment are supporters of free markets. (Some socialist parties remain in Morocco and Tunisia, where the French influence left its mark, but they are socialist in name only.) The young men and women behind the Arab Spring will continue to push for more open markets where millions of Bouazizis will be able to become entrepreneurs—where it won’t take two years and countless bribes to open a bakery. And there appears to be no cultural or religious reason that someday, in the not-so-distant future, we won’t find cafés in Cairo that run as efficiently and reasonably as those in Marseille.

Guy Sorman, a City Journal contributing editor, is the author of Children of Rifaa: In Search of a Moderate Islam and many other books.