The saddest thing about outgoing Uruguayan President José Mujica’s statement this week suggesting that capitalism is agonizing is not that he said it as the New York stock market was reaching its all-time high, but the fact that it’s an idea that is being happily repeated by many Latin American presidents as if it were an indisputable truth.
Hardly a day goes by in which Venezuelan President Nicolás Maduro and his counterparts in Argentina, Ecuador, Bolivia, Nicaragua, and several other countries do not proclaim — some more explicitly than others — the “end of capitalism.” Former Cuba ruler Fidel Castro has been proclaiming “the inexorable demise of capitalism” since the early 1960s.
Mujica, who ends his term on Sunday, was quoted by Cuba’s official Prensa Latina news agency as telling the Mexican daily La Jornada this week that “capitalism is exhausted.” His exact quote in La Jornada’s Feb. 22 interview was that capitalism “seems to have already given everything it had,” and that it is likely to be replaced by “democratic socialism.”
Trouble is, while U.S.-styled capitalism could and should be perfected, many Latin American presidents are sitting idly by waiting for its death. Meantime, China, India, Vietnam, and virtually all Asian countries are growing and reducing poverty at record rates, and they have been doing so precisely since they started embracing capitalism in the 1980s.
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Perhaps somebody should present Latin American leaders who keep talking about the end of capitalism with a framed copy of a recent news story about Apple’s market value. They should hang it on their office walls to remind themselves constantly of what’s going on in the world.
According to a Feb. 11 news story, Apple reached a record market value of $710 billion that day. To put that in perspective, that’s more than the entire GDP of Argentina ($610 billion), Venezuela ($483 billion), Colombia ($378 billion), Chile ($277 billion), or Peru ($203 billion), according to World Bank figures.
The presidents of Ecuador, Uruguay, and Bolivia should be the first to hang that framed news story on their walls. Apple alone is worth seven times more than Ecuador’s GDP ($94 billion), 12 times more than Uruguay’s ($55 billion), and 23 times more than Bolivia’s ($30 billion.) And that’s just one capitalist company.
If that’s not enough to convince them that we are living in a different world — in which technological advances are becoming increasingly lucrative, while Latin America’s raw materials or basic manufacturing goods are becoming increasingly cheaper — there are plenty of other examples to learn from.
Uber, the 4-year-old company that created a smartphone application for taxi services, has reached a market value of $41.2 billion. This amounts to more than Mexico’s total annual oil exports.
WhatsApp, the instant-messaging application for smartphones started by two 20-somethings, was sold last year for $19 billion. That’s almost 20 times the total value of Chile’s wine exports.
Unfortunately, while they keep waiting for capitalism’s definitive demise, many Latin American countries keep relying on their commodity and basic-manufacturing exports and are failing to invest in innovation, research, and development.
Latin American countries invest only 0.8 percent of their GDP in research and development of new products, compared with the world average of 2.1 percent, according to World Bank figures. Not surprisingly, Latin America has become increasingly dependent on raw materials in recent years, and its high-tech exports have fallen as a percentage of its total exports.
According to figures cited by the U.N. Economic Commission for Latin America and the Caribbean (ECLAC) head Alicia Bárcena at a Feb. 13 speech, Latin America’s exports of high-tech products has fallen from nearly 20 percent of the region’s total exports in 2000 to about 10 percent of its total exports today.
My opinion: Capitalism has many faults that should be corrected, but Latin American presidents should stop with this nonsense about its imminent death and get to work — like Asian countries have been doing in recent years — to become more competitive in the world economy.
Instead of talking rubbish about the “agony of capitalism,” Latin American presidents — especially now that their commodities’ export prices have plummeted — should be talking about improving education, innovation, and science and technology to export increasingly more sophisticated goods to world markets.
Their current ruminations about the collapse of capitalism are only helping breed complacency, inaction, slower economic growth, and more poverty.