Monday, March 7, 2011

Revolution, democracy, education and gas pains

Ed meets Fidel
About a month ago I posted a comment on the Egyptian Revolution. It was about democracy and the possibility that the Muslim Brotherhood would be involved in a future Egyptian government. Well, that revolution, or should I say coup d'├ętat, seems to have subsided, Mubarak is out, and the Army is still in control as it always had been, no need to worry about the Brotherhood there, not yet anyway. George Jonas commented on that last week in a column Intoxicated by Revolution, where he gets closer to the truth of what is going on in the current Middle Eastern unrest. Jonas points out that Americans in particular are in love with revolution because their own country was born that way. The American and Canadian media got very excited about the Egyptian "peoples revolt" and their demand for freedom and democracy even though those terms have a different meaning for the Egyptians.
I'm old enough to remember a revolution that got North Americans excited more than half a century ago. The picture shows Ed Sullivan, lord of Sunday night television back when I was a kid (in 1959), speaking to a 32-year-old Fidel Castro about his "liberation of Cuba." Some liberation, opinions on that revolution changed soon after that interview was aired.

Mr. Jonas' column discusses democracy as being a goal of the Mid-East unrest. He points out that democracy is really just a "method of succession or power-transfer." In North America we view democracy as a synonym "for individual liberty, fundamental human rights, private enterprise, separation of church and state, an independent judiciary, freedom of expression - in short, for the sum of the best ideals of Western-style societies." That is just our bias and it has never been true. Jonas continues that: "'Democracy' denotes a system in which governments succeed each other by being elected, usually for a fixed term, by a majority of qualified voters. That's all. Rule by majority mandate says nothing, in itself, about the kind of society such an impeccable mandate is going to rule." Jonas also adds that it is very unlikely for democracy to come from this current unrest "it's more likely for wealth, justice and liberty to bring people democracy," like has occurred in the West. In other words there is virtually no chance that we can expect democratic states, as we think of them in North America, to arise in Tunisia, Egypt, Yemen, Bahrain, or Libya. So what is going on there?

Two things are happening and both are related to the way government distorts the marketplace.
In both Tunisia and Egypt a post-secondary education is "free," even though the market for graduates is extremely limited. Tunisia particularly has 57% of its young people entering the labour market with a college degree, compared to the US situation with less than one-third of its young people in that situation. An education bubble fuelled by government policy has created unemployment and underemployment in both Tunisia and Egypt. The value of an education to an individual can only be determined by the price that an employer would pay to employ that individual. If the educated individual is unemployable, than of what value was the education received? That is the distortion created by these governments. Countries with groups of educated unemployables, subjugated by dictators like Gaddafi in Libya,  together with power of the internet, has created a volatile mixture. 
For us in the West the unrest across North Africa has distorted the oil market in southern Europe and as a result everywhere oil is used, "a pain in the gas." A prolonged civil war in Libya threatens to involve the armed forces of NATO and beyond, because it endangers Libyan civilians (no fly zone) and the oil infrastructure of Libya. We are all paying more for gasoline today because the market demands it. Interesting how one government distortion far away can lead to your wallet.         


  1. Those are some pretty insightful articles you link to ;-)

  2. I figured you might like one of them :-) but I did it because it was insightful.

  3. Well, I can't complain about the Mises article, either. They cite me and use my data. :-)


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