We have stated many times that our uncompromising anti-Socialist (or anti-Communist) views are not one-sided. We are equally anti-Right-Wing or anti-Centre politics and economics. We are anti-government and for-people. We believe in you, not governments. However, reality dictates that all countries on earth at this point in time are deeply socialist (see for example any of our Socialism Indices). Consequently, we don't have the opportunity to blast right-wing politics or economics. We have disclosed this much in our article Slightly To The Right Of Attila The Hun. However, in a super human effort requiring us to spend almost all of 5 minutes searching in Wikipedia, we have found a candidate. Unfortunately, this candidate is already dead and his regime is gone. However, his history and "achievements" are current enough to serve our purposes. Welcome to Storesner's Paraguay!
A LITTLE BIT OF HISTORY
Let's begin by saying that Paraguay is a devastated country. Even today. You can read its sad history searching for "History of Paraguay" in Wikipedia. For our purposes, these are the most salient points:
Paraguay had been under iron-fist dictators between 1813 and 1989 almost non-stop. This must probably be a record of some kind.
Many of these years were spent in wars.
The outcome of the biggest war (The War of the Triple Alliance) killed 90% of all males and about 60 to 70% of all population of Paraguay, including children. It ended in 1870.
After a brief period of political instability, general Bernardino Caballero rose to power and in a desperate attempt to save Paraguay (and his job) from crippling debts, he sold about vast amounts of Paraguayan lands to private hands many of whom were "friends". By 1900 79 people owned 50% of all Paraguay. People who had acquired the land through allodial titles (see First Come First Served) were simply "displaced". This was the beginning of a powerful elite that controls Paraguay even to this day.
Time went on and after a protracted period of extreme political instability yet another right-wing faction deceptively called "Liberal" took power. During this period, the oligarchy controlled Paraguay; its economic future was entirely decided by foreign interests while people sank deeply into extreme poverty.
Several revolutions and counter revolutions followed, always ending in dictatorships. The last dictator before Stroessener in a long series was Higinio Moríñigo followed by a civilian president, Federico Chavez.
Throughout all these events, one powerful party emerged; the Colorado Party who instituted a de-facto one-party rule.
These points are important because they prepared the stage for Stroesner's climb to power in 1954 through a bloody military coup. Stroesener belonged to the Colorado Party, or, more precisely, he commanded the army and the party. His reign, The Stronato, lasted for 35 years and ended in 1989 also by a military coup.
MAINSTREAM ECONOMY
Stroesener's economy was a disaster to say the least. Take a look at the graph below. In it we can see that wealth in Paraguay remained stagnated between 1954 and 1975. Essentially, people remained poor for 20 years without any hope of improvement whatsoever.
Not only that, but when we compare Paraguay with their neighbours, we can see the fullness of the disaster. We must, however, take into consideration the utter devastation that Paraguay suffered throughout all the wars it fought, particularly the War of the Triple Alliance. Yet, even taking this into consideration, there should have been some improvement. People naturally tend to improve their lives and in so doing increasing it wealth. This was clearly not the case with Stroesner when compared to other countries. But there is more, much more.
If we now zoom in and plot the same information but for Paraguay only, we find the following picture:
In it we can see that there was indeed some improvement between 1954 and 1975. Would this indicate that people were better off? Not a chance. That improvement was mostly due to exports of soya and cotton, to which the vast majority of Paraguayans did not contribute simply because they did not own land. Even in the remote case where they did own land, they lacked the resources to exploit it. The only people that benefited were, you guessed it, the rich oligarchy (which originated in the 1900's) and their descendants (about 500 families).
Then, during the period between 1975 and 1981 we see a huge spike in GDP increase. Did people benefit from this? Not a chance. This spike was due to three factors. The first one was the policy of raw materials exports, primarily Soya, Cotton and Wood. This trend helped only those with land, which again, were not the majority of the population. The second reason was because of the policy of industrialization, fuelled by government debt. Basically, the government took on debt and gave it to "friends". This created a second group of oligarchs and "friends" of Stroessner but again, there were almost no benefits for the people. The third reason was the development of the Itaipu dam with Brazil, which did provided a temporary local economic boost but once the dam was completed, this effect mostly disappeared. As a side effect of the dam, oligarch land owners were able to exploit even more territory which was now possible to irrigate. Again, no benefits for the people.
ALTERNATIVE ECONOMY
The explanation for the fact that the spike in the 70's never dropped was the birth of the alternative economy. Paraguay is one of the most well-known centres of money laundering, drug trafficking and, more importantly, counterfeit goods. This industry is actually the only industrial activity in Paraguay that supports the standards of living of average people. It is estimated that the alternative economy is 5 times the size of the mainstream economy.
Why would Paraguayans do so? Simple. Survival. Now, let's be clear. As Libertarians we believe that any kind of copyright infringement (as in counterfeiting) as well as any development, manufacturing, distributing and usage of drugs is valid because they are voluntary transactions between free people (see for example Drugs For Everybody and Intellectual Property Compilation). But of course, in a world that has been brainwashed with socialism and where many ridiculous laws are in place, most Paraguayans involved in these activities feel ashamed. Yet, this is the only way they have not to starve to death. Again, the mainstream economy tanked privileged by right-wing policies whereby the free market was actually rescuing regular people.
Note: please see the Glossary if you are unfamiliar with certain words.
