Enterpreneurship in Peru

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State abuse against entrepreneuship in Peru

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  • 1. ENTREPRENEURSHIP IN PERU: HOW DOES THE IDEOLOGY AFFECT IT? Jos Luis Tapia Rocha If we want to defend Capitalism and save the free enterprise system, it has to be by means of morals and philosophy. In one word, economics are not enough. R.A.Childs, Jr. 1Do socially prevalent concepts and values promote or jeopardize entrepreneurship,productivity, competition and the creation of wealth? The economic results of nationalbusinesses depend on finding an answer to this question. It should not be surprising thatcontinued efforts to give entrepreneurship a greater freedom in the market have foundopposition in values and ideologies contrary to free enterprise. Moreover, these values andideologies are quite ancient, they remain in our midst and seemingly, day after day theyfind greater acceptance in Peru. If they were harmless we should not worry much, but whatwe face is actually more serious than what we imagine with respect to the attempt topermanently attack our moral right to attain to benefits from entrepreneurial activity as themean to productively live in a civilized society. This work purposes to spotlight the role ofideology in the exercise of entrepreneurship in Peru.1.- VALUESValues are guiding principles which function as premises for human behavior.2 As AynRand would say it is that for which one acts, to obtain it and/or to preserve it.3 Valuesappear to be implied in norms and patterns of conduct and they crystallize in institutions,and even in laws and constitutions. The best known, most popular, more spread out andmost practiced values are accepted by the majority of the population. For the economicsuccess or failure depend from laws and judicial and administrative decisions, but all thesein turn depend on the correlation of political trends. And likewise, politics critically dependon values and ideological influences prevailing in schools, research institutes, universitiesand press titles, on the comments of political analysts, who finally dominate in the globalsociety.Collective ValuesIn a small society, the authority or tribal chief rules on the basis of implicit rules or itsequivalent: obedience to what he says. Anyone who pretended to disturb the peace ofothersby a different behavior was expelled. It is a scarcely tolerant society with a few differentcustoms. In exchange, an open society or extended order as Friedrich Hayek calls it- is notlike the tribe where everyone knows each other, but better, being conformed by millions ofindividuals the place where it is difficult to efficiently articulate the millions of needs andpreferences without obviating its individualities. Some type of a harsh and chasing state-control would be needed to keep the cohesion like in a tribal society. Of course, that wouldnegatively affect the members of the society as it would hinder the development and Founder and General Director of Instituto de Libre Empresa (ILE). Professor of Economics at UniversidadSan Martin de Porres, in Lima, Peru.
  • 2. exposure of its individual talents including the entrepreneurial- to the best bidder with nopermission from the state authority (paternal) and the subsequent benefit for the progress ofcivilization. As Hayek says in his book Fatal Arrogance:If we would pretend to apply the rigid norms of conduct of the microcosmos (meaning thecharacteristic order of community living in the small gang, or even of the family unit) to themacrocosmos (meaning the order proper to a civilized society in all its complexity andextension) as so repeatedly recommend to us our deep inclinations-, we would endangerthis second type of order 4Chart 1 shows a summary of the main values which distinguish tribal societies fromextended or open societies. CHART 1 Values of the Society Tribals Open or Free Colectivismo, Comunitarismo Individualism People Citizenship Altruism Benevolence Solidarity Self love Communitarian Private Property Cooperation Competititon Public Moral Private Moral Social Interest Private Interest Colective Freedom Individual Freedom Social Corporate Individual Responsability Responsability Social Rights Individual Rights Social Justice Restitution Justice Elaboration: ILECollective values are attractive to any individual who favors safety, estability, and what isknown, and it is comprehensible that small communities will oppose to the change of anopen society, as the Ashaninkas would, and so would oppose change other Andean andAmazonic communities of Peru.Precisely, as part of the cultural involution, the greater Peruvian enterprises today lift upcollectivist concepts such as social responsability that stands against the spirit with whichwas created by the shreholders. Milton Friedman and Tibor Machan have afformed that it isenough for a company to be profitable to be morally recognized as a contributor to theindividuals in a society.5But some proffesional altruists pretend to blame enterpreneurs6 if they do not work for theircommunity in areas of health, environment, education, culture, indigenous peoples,
  • 3. democracy and other issues as a sort of enterpreneurial paternalism meant to replace estatepaternalism.Chart 2 shows collectives and their corresponding ideologies, although there are moreupdated versions of modern times, like eco-feminism-indigenism, new age, postmodernthinking, among others.7 Chart 2 Ideologies of Colectives Colectives Ideology Ethnic Racism, Tribalism Nation Nacionalism People Populism Proletarian Socialism Vanguard Comunism Majority Democracy Planet Ecologism Elaboration: ILEValues and IdeologiesValues are rooted in our customs and ways of reasoning, some of them are inherited andothers are learned from our culture 8. Values can also be found in ideologies which are asDouglas North explains- those subjective concepts individuals structure on the basis ofvalues culturally inherited which explain what the world is and how it should be. If it is truethat scientific knowledge can change peoples perceptions of the world, this is not enoughas people always grab certain myths9, beliefs, religion, whatever sort of cultural inheritancethat may explain what the world is and how it should be.10Graphic 1 shows the interrelation in between ideologies and the efficiency of Economics.The process starts with ideologies influencing the political sphere through public debate ofideas, arguments and opinions. But the world of Politics is the world of opinions,subjectivism and values. As Constitutionalist Dr. Jorge Astete Virhuez points:It is the world of personal emotion, of ideologies, and also of individual prejudice. It is theflame of passion and also of action; as such, if it is true that it feeds on reason, its sphere ismore the world of esthetics and of the irrational. 11 Graphic 1 Ideologa Poltica Leyes Economa Elaboration: ILE
  • 4. The third step is about the laws flowing from political power. The pretension is to enhancereality through laws, but the results are precisely the opposite. They are the cause toconflicts between entrepreneurs and workers, informal and formal entrepreneurs, it turnsinto legal action the plunder of wealth generated by productive individuals and the whole ofsociety is harmed with more violence, poverty and injustice. In this respect Dr. Virhuezpoints:It is true however, that every new law is an obstacle to economic and civil freedom of thecitizens. Laws do not enhance reality, they worsen it. They mean one more procedure, anobstacle to display my freedom, a new obstacle, more and more thorns in the way, adeceitful shortcut. The only ones who obtain a benefit from more and more laws and rulesare the estate bureaucracy, regional and local and those professionals in confusion,lawyers, architects, engineers, accountants, etc. who live either legally or illegally thanksto those obstacles. 12Hayek manifested that for an extended order to evolve, very abstract and general normsinspired in non-tribal societies