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The Lighthouse®

The Lighthouse® is the weekly email newsletter of the Independent Institute.
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Volume 7, Issue 13: March 28, 2005

  1. Why Latin America Must Liberalize
  2. Free Speech Under Fire
  3. Three Strikes for Empire

1) Why Latin America Must Liberalize

Latin America's reforms of the 1990s failed to bring the promised hope and opportunity. The resulting disappointment brought leftist governments to power in several countries -- a trend that may continue through next year's elections in Mexico and Peru.

What went wrong with the '90s reforms?

"Countries replaced inflation with new taxes on the poor, high tariffs with regional trading blocs, and, especially, state monopolies with government-sanctioned private monopolies," writes Independent Institute Senior Fellow Alvaro Vargas Llosa, author of LIBERTY FOR LATIN AMERICA, in an op-ed published in the NEW YORK TIMES. "The courts were subjected to the whims of those in power, widening the divide between official institutions and ordinary people -- one reason recent surveys in Latin America have pointed to such widespread disillusionment with democracy."

Things could be worse for Latin Americans. The left-leaning regimes of today are, for the most part, more practical and less interventionist than previously. Furthermore, global economic trends have been relatively kind to the region, keeping interest rates low and the demand for many countries' commodities, such as oil, some minerals, and soybeans, high.

"It would be a mistake, however, to think that all these governments need to do is stay the course," writes Vargas Llosa. "Unless Latin America's leftist governments are willing to deepen reform, the continent is unlikely to break free of its recurring cycle of economic stagnation and political disillusionment."

To create lasting hope and opportunity, Vargas Llosa urges Latin American governments to dismantle their government-favored monopolies, repeal recent sales tax hikes, and, most importantly, end the legal favoritism displayed in the region's judicial systems.

"Getting rid of these privileges could help to persuade the poor to embrace the idea of economic freedom. Significantly reducing high sales taxes that were set in times of fiscal profligacy would lift a burden from the poorest citizens. Slashing the bureaucratic requirements that force citizens to spend up to 80 percent of their annual income if they want to set up a private company would also help to empower would-be entrepreneurs."

See "The Return of Latin America's Left," by Alvaro Vargas Llosa (NEW YORK TIMES, 3/22/2005)

Also see Jorge Dominguez's review of LIBERTY FOR LATIN AMERICA, by Alvaro Vargas Llosa (WASHINGTON POST 3/13/05)

To purchase LIBERTY FOR LATIN AMERICA: How to Undo Five Hundred Years of State Oppression, by Alvaro Vargas Llosa, see
Also available in Spanish as RUMBO A LA LIBERTAD:


2) Free Speech Under Fire

Free speech is once again under fire at American universities, as controversies by academics as intellectually dissimilar as Larry Summers, Ward Churchill, and Hans-Hermann Hoppe have prompted calls for dismissal or discipline.

Free speech is under fire from both the left and the right -- but this is nothing new. (The Internet merely made these controversies more public than usual.) What's new is that some proponents of free speech are only now beginning to raise their voices in defense of the right to voice controversial views.

"Conservatives have borne the brunt of speech codes and related policies, and have comprised the vast majority of speakers who have been shouted down when they enter the campus public forum," writes Independent Institute Research Fellow Donald A. Downs, author of RESTORING FREE SPEECH AND LIBERTY ON CAMPUS.

"Too many on the left have not spoken out against such forms of censorship, probably because the other side's ox was being gored. Indeed, Churchill himself has obstructed Columbus Day parades, claiming that they represent 'hate speech.' He was no champion of free speech until his own speech came under attack.

"But the last thing American campuses need is censorship from the right piling onto the preexisting censorship from the left. Universities will not regain the public trust that they have squandered until they stand up and defend the principles of free speech and academic freedom for everyone, regardless of their politics.

See "Free Speech on Campus: Under Attack from Both Directions?" by Donald A. Downs


For information about FAULTY TOWERS: Tenure and the Structure of Higher Education, by Ryan C. Amacher and Roger E. Meiners, see

For information about THE ACADEMY IN CRISIS: The Political Economy of Higher Education, edited by John W. Sommer, see

For information about THE DIVERSITY MYTH: Multiculturalism and Political Intolerance on Campus, by David O. Sacks, Peter A. Thiel


3) Three Strikes for Empire

"Three seemingly unrelated events highlight the imperial nature of the Bush administration's foreign policy," writes Ivan Eland, senior fellow and director of the Independent Institute's Center on Peace & Liberty. Those events are the recent sale of F-16 fighter jets to Pakistan, the creation of a new "nation-building" office at the State Department, and the indefinite detention of a German citizen at the U.S. base at Guantanamo Bay.

The decision to arm Pakistan with F-16 fighter jets is troubling not only because President Musharraf has broken his promise to resign from his position as the chief of that country's military, but also because the fall of Musharraf, who has been criticized in his own country for his ties to the United States, could put Pakistan's nuclear arsenal in the hands of radical Islamists.

The new State Department agency is trouble because it suggests that the White House will embark on more military adventures not related to defending the republic.

Finally, the indefinite detention of German citizen Murat Kurnaz at Guantanamo -- despite reports that U.S. intelligence and German law enforcement agencies had concluded that he had no ties to terrorist organizations -- suggests that a U.S. district judge was correct when he opined that military tribunals are illegal, unconstitutional, and unfairly prejudicial.

"Detaining people indefinitely without a jury trial, and instead using a military tribunal that allows secret evidence and no legal representation for the defendant, may be normal practice in authoritarian regimes (such as Pakistan) but should not be used in the 'home of the free and the brave,'” writes Eland. "Empires throughout history have experienced 'blowback,' and retaliatory terrorism is the unfortunate price the U.S. Empire will continue to pay for its unnecessary meddling in the affairs of other nations and peoples. When that terrorism comes back to bite the United States, the hysteria generated allows the U.S. government to institute Orwellian practices that are clearly unconstitutional.

"In the end, as in ancient Rome, the destruction of the republic in the course of maintaining the overseas realm is the most dire consequence of empire. Worse than using arms sales to play off opposing sides against one another in volatile conflicts and institutionalizing empire by creating large imperial bureaucracies is the slow erosion of the Founders' notion of republican government. Republic and empire don't mix."

See "Three Strikes for Empire," by Ivan Eland (3/28/05)

Also see, "Free Trade vs. National Security: Is There Really a Contradiction?" by Ivan Eland (3/21/2005)

To purchase THE EMPIRE HAS NO CLOTHES: U.S. Foreign Policy Exposed, by Ivan Eland, see

To purchase PUTTING "DEFENSE" BACK IN U.S. DEFENSE POLICY, by Ivan Eland, see

"The Way Out of Iraq: Decentralizing the Iraqi Government," by Ivan Eland

Center on Peace & Liberty


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