Bolivia nationalises Silver mine

[Clawhammer]

haha, by the hints of sarcasm it sounds like a doozy. Care sharing the story or link?? i cant be bothered searching but wouldnt mind a laugh.

He sold off the country's decrepit water infrastructure to an equally decrepit US company to supply water to Bolivian households, farms and 'cough-cough' industries.
When the stupid company found out what a shambles the aging pipes, dams and sewers were in (AFTER they'd signed the contract ) they jacked up prices into triple-digit percentage increases.

When households started getting water from public water taps because they had their home water cut-off for not paying... the govt cut off supply to public water taps.
When people started gathering water from streams, the police started arresting them.
When the Govt made it illegal for people to collect the rainwater that fell on their roofs... they started rioting in the street and attacking our old mate Evo.

Hey Clawhammer, where did you get this info? Is there a doco I can watch?

Yeah, In fact It was an SBS doco on TV a few years back that 1st raised my awareness of it... I'm sure if you youtube it'll be on there somewhere. Wiki and Google will get you there quicker than I can.
[youtube]http://www.youtube.com/watch?v=c3Ffc9uBAlU[/youtube]
[youtube]http://www.youtube.com/watch?v=SjZUkK-iUkA[/youtube]

 

[Arsenal]

I've spent some time traveling in Boliva and it is an unbelievably poor country.
You can only hope that that they put the money back into the country and its people.
It's sad to see the people of a resource rich country so poor.

 

[Argentum]

i know they are the only country in the world that has a navy and no sea and no ships. Chileans took the sea access about a 100 year back but they are not giving up on it so still the navy

 

[bordsilver]

Please correct me if im wrong. But from my nieve/laymans analysis of Nationalising natural resources it can eaither mean:

A) The profit from the mine will either go into the hands of a few, (as suggested by thatguy)

or

B) Be used to build up a country, weather it be building infastructure, roads, hopitals etc.

its a gamble depending upon how corrupt the government is.

If it was a privatised mine then the profits will go to the shareholders and be shipped off-shore most likely, and the people will still see no results from the mine.

Oh my goodness! It's like reading through comments on "The Drum".

Thatguy is totally correct. Nationalisation (i.e. theft) of existing capital will provide a short term boost to those that receive the money but will only lead to less wealth creation in the future as the true investors hold off adding to the country's capital stock.

In this case it is even worse because it seems that the mine hasn't even been built yet - hence the Government will have to find money to build it (and we all know how efficient the Government is in such enterprises).

In simple terms, no wealth is EVER created by stealing someone else's. Living in Australia with a large stock of capital it is easy to forget, but it needs to be pointed out that POVERTY is the basic condition of humanity. People only get out of poverty by applying their spare time and resources (i.e. investing their savings) to increase the amount of stuff available to consume. Think about how much food you personally could grow if you were plonked Robinson Crusoe style on a deserted island. Then figure out how you would make cloth, shelter etc. Our Robinson Crusoe would need to work extra hard to save up coconuts (or whatever) so that he can spend a few days not gathering grubs and nuts and instead concentrating on crafting basic tools (sharp sticks, rope, grinding stones, or whatever). These will enable him to grow more food which will give him more time to make better tools and so on until he has a computer in a heated room where he can respond to random blogs while munching on Doritos and listening to Marduk.

A dozen farmers with metal hoes and other basic tools can produce enough food for, say, 50 people who can in turn weave cloth and make better tools for the farmers. One farmer with a tractor can produce food for 1000 people, who in turn make cars, electricity, cafes and crappy syndicated television.

By nationalising the silver mines the Bolivian Government is killing the incentive for Robinson Crusoe to save and invest (since he won't obtain any benefits). They are ripping out the heart of the mechanism that makes market economies generate true wealth with an abundance of goods for people to consume. This is why socialism NEVER works.

(Apologies for the rant.)

 

[dex]

it'd be perfect if the money went to public works, healthcare and creating skilled workers in a multitude of areas.

 

[bordsilver]

it'd be perfect if the money went to public works, healthcare and creating skilled workers in a multitude of areas.

No. These are exactly the things that the foreign investors are bringing to the table and is exactly what the Government is stealing.

However, in contrast to the wealth that the businesses will generate none of the things that the Bolivian Government will do with the same resources will truly create wealth except by accident. Why? Because the Bolivian Government does not have any objective way of measuring the value of the public works, healthcare etc that they do whereas the private businesses do (it's called profit - which can reinvested on other Bolivian projects). (In the absence of Government created monopolies) profit is ONLY obtained if the business is actually producing things that are of benefit to the people.

Although heavily caveated, you could say that profit is only generated when you are creating true wealth (i.e. freeing up scarce resources to allow more things to be made thereby lifting people out of poverty). Henry Ford got rich by making many many more cars with less labour. In contrast the Government soaks up resources by reducing opportunities.

 

[bordsilver]

take the carbon tax out of your own eye before you worry about another country that is sovereign. iraq and afghanistan are fresh arrivals to capitialism and not liking it to much.

Oh my god. Is that actually supposed to be a counter argument?
FAIL. Please try better next time.