Thursday, January 27, 2011

Revolution in Tunisia

A dictator has to be extremely ruthless if he is to avoid being overthrown. The tyrant needs the absolute loyalty of the top military officers, and the military has to be willing to slaughter any opposition, if the dictatorship is to survive a rebellion.
Many tyrants are oppressive but not cruel enough to commit mass murder, or else their military chiefs stop being loyal. Examples abound, such as Romania, Iran, Serbia, South Africa, Uganda, Haiti, Argentina, Greece, and old Russia. So it was in Tunisia, where the protests and demonstrations drove the dictator out. Tunisians are now enjoying liberties such as being able to read previously forbidden books. Political parties that were banned have sprung back.
The ruling classes were still in government, so the protests continued, and some of the chiefs resigned. But the people of Tunisia now face a choice: what kind of government shall they have? Should they elect a president, or have a parliament select a prime minister?
Unfortunately the Tunisians will make the same mistake that was made when countries around the world gained independence or threw off dictators. They copied the mass democracy of Europe or the United States. They get campaigns with superficial slogans, mass rallies, speeches blasting the opponents, and hero worship. The result in many countries has also been voting fraud, refusals to relinquish power, and overthrow by the military. Too often, people cast ballots in a sham election, or the participation is restricted to favored parties.
What the Tunisians should do is establish democracy from the ground up. Start in the villages and city neighborhoods. A group of local councils would then elect a wider-level district council, and so on to the national legislature, which would then elect a prime minister. Decentralized small-group democracy would make it much less likely that extremist supremacists would topple the government, since they would need to take over all the small groups, not just the top chiefdom.
The economy played a big role in the overthrow of the regime in Tunisia. The restrictions on enterprise were so severe that a man could not sell vegetables, and he set himself on fire, sparking the revolution. To overcome its high unemployment and poverty, Tunisia needs economic freedom. Any peaceful and honest enterprise should be free of restrictions, taxes, and subsidies. Why should people be taxed when we can get adequate public revenue from nature?
With a chance at a fresh start, Tunisians should get their public revenue from land rent. The vegetable seller would pay rent for the space he occupies, with no tax based on his sales, profits, or value added. As a tax haven, Tunisia would attract investment from around the world.
Tunisians also have to pay attention to their money system. Imports and exports of the Tunisian dinar has been prohibited. The export of foreign currency has been restricted. The central bank of Tunisia should eliminate these restrictions and let the dinar trade freely.
If the economy of Tunisia thrives, real estate prices will rise further and capture much of the gains. Foreigners have been buying properties that are cheap relative to other Mediterranean countries, and much of the benefit from an economic expansion would go to foreign landowners, but even domestic landowners would get unearned windfalls. By tapping the rent or land value for public revenue, and a bottom-up governance that serves the people, the benefits from a better economy would go to all Tunisians rather than the few landed interests.
In 2006, the “Economic Freedom of the World” ranked Tunisia as 82 out of 141 countries, number 1 being the most free. Tunisia scored 6.4 on the freedom scale, 10 being the most free. The bureaucracy is excessive, and restrictions create corruption and bribing. In the economic freedom index of the Heritage Foundation and Wall Street Journal, Tunisia ranks 58.5 out of 100, with an index of 30 for financial freedom and 35 for investment freedom. Tunisia has high tariffs, import restrictions, a high income tax plus a value-added tax, and restrictions on foreign investment.
The governments of France, the U.S., and other powers had supported the dictatorship. They cannot promote complete economic freedom and small-group democracy, because the Western powers themselves don’t have it, and the chiefs don’t want it. It is unlikely that Tunisians will be influenced by this article, but the lesson for us is that because Tunisians will adopt mass voting and economic intervention, they will experience unemployment, inflation, poverty, and conflict. In the end, the Jasmine Revolution will turn out to be conservative, and not really revolutionary.


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