Editorial
Guatemalans Protest the IMF and Seek Liberty
by Fred E. Foldvary, Senior EditorBefore the Spanish conquest, the Mayan Indians of Central America reached high levels of civilization. Their writing, mathematics, astronomy, and architecture was as advanced or better than the other civilizations going back 1500 years. Their splendid pyramids and palaces in the midst of what is now jungle astonish us today. The Spanish brutally conquered them as they did the Aztecs and Incas. The Mayans became serfs working in small marginal fields or for the large plantations of the heirs of the Spaniards. But the Mayans retained their language, dress, and many of their customs, and even merged their religion into Spanish Catholicism.
After independence, the Mayans continued to be the lower class, the farm workers, unskilled laborers, and the foot soldiers. In the latter 1940s, a new government started to conduct land reform, but this was opposed by the landed interests, including U.S. corporate owners, and the U.S. government helped the Guatemalan military to overthrow the government. Thereafter, there was a brutal civil war between revolutionary guerrillas and the military government. The military murdered many thousands of Mayan Indians. This finally came to an end, and there is now a new regime that seeks reconciliation.
However, past and present governments have set up the usual interventionist policies, including high taxes, severe restrictions on labor, enterprise and foreign trade, corruption, uncertain property rights, and an inflating currency. The International Monetary Fund , IMF, insists on even higher taxes as a condition for loans to the government. The government of Guatemala this year increased the value-added tax from 10 to 12 percent.
This time, the Guatemalans figured they had suffered enough. In August they staged a country-wide strike and protest. They marched in the capital, Guatemala City. Business owners and managers as well as students joined the protest. Windows were broken at government buildings. The government responded in the usual way. It shut down the press and sent out the army.
The U.S. embassy sided with the government of Guatemala. Remarkably, the embassy's report examined the "intellectual origins of anti-statism" in Guatemala. The embassy blamed "the economic philosophy of the Austrian school economists, Ludwig von Mises and Friedrich von Hayek" which have taken root in the local Universidad Francisco Marroquin.
In a Sept. 27 commentary in the World Net Daily, Llewellyn Rockwell, Jr., wrote that "What the Misesians have done in Guatemala is create an intellectual infrastructure that promotes a hard-core attachment to freedom among the business class, which dovetails very nicely with the working classes' instinctive opposition to taxes."
It is a sad situation when an embassy representing United States of America, a country founded to secure liberty, places itself in opposition to the economic philosophy of free markets and in favor of taxes that oppress both business and workers. It is once again the USA policy of the early 1950s which overthrew a government that was promoting economic opportunity. The US government is once again siding with the big plantation owners, since if the Guatemalan government is unable to VAT-tax sales, the alternative would be to get the revenue from land rent, and that is evidently what the U.S. government is trying to prevent.
If Guatemala were to shift taxes to land rent, other countries might follow, and the whole structure of privilege could collapse. That is why the U.S. embassy is so alarmed at this tax revolt. After all, the U.S. revolution began with a tax revolt, and then there were revolutions and revolts in France, Latin America, and the rest of the world.
Half the population of Guatemala is still Mayan. The Guatemalans have suffered under colonial rulers for close to 500 years. The new U.S.-backed IMF rulers may now find the Guatemalans not as easy to conquer as they were 500 years ago, thanks to the spark of liberty started by the University. This shows that ideas do have power, and academia can be a source of enlightenment. This is a lesson for those seeking righteous reforms.
Copyright 2001 by Fred E. Foldvary. All rights reserved. No part of this material may be reproduced or transmitted in any form or by any means, electronic or mechanical, which includes but is not limited to facsimile transmission, photocopying, recording, rekeying, or using any information storage or retrieval system, without giving full credit to Fred Foldvary and The Progress Report.
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