
The World Bank’s Broken Promise to the Poor (2015) - Geekette
https://www.icij.org/project/world-bank
======
Top19
John Cabot, an ambassador in the 1950s, had a good quote:

"The UN is meant to prevent you from going to hell, not take you to heaven."

The IMF and the World Bank were part of the world superstructure set up
alongside the UN, so this quote applies to them.

Can't speak about the World Bank, it might indeed really suck. The IMF is a
good organization that tries. They've made some bad mistakes, but have learned
from them. A good example of this was during the Southeast Financial Crisis
that in 97-98 that toppled the Indonesian government and still to this day has
left abandoned skyscrapers in Bangkok. At the beginning of the crisis the IMF
had a policy against restricting investor access to banks, believing it was
better to "let the market work". By the end of the crisis, after South Korea
had fallen (fallen meaning they were out of foreign currency reserves), and
Japan / Russia looked like it might be next, the IMF had changed positions and
was fully committed to using international law to stop irrational investor
panic.

People forget HOW HUGE THIS WAS. There was a Time magazine cover at the time
that literally read "The Committee to Save The World" with Greenspan, Summers,
and Rubin on it.

Interestingly, though this problem would later help usher in the Dot Com
bubble. The regulatory agencies had to lower investor rates to calm investor
nerves, even though other people were asking them to not too because of the
increasingly worrying NASDAQ IPOs.

[https://img.timeinc.net/time/magazine/archive/covers/1999/11...](https://img.timeinc.net/time/magazine/archive/covers/1999/1101990215_400.jpg)

~~~
marcosdumay
As a Brazilian that grew up on the 90's watching this situation unwind, I'd
thank a lot the IMF for helping us. They really did do good at that time.

But they seem to have changed their direction recently, and are really
insisting on pushing money into unsustainable places. I don't get their new
goals, they don't seem to have any stabilizing effects.

~~~
derriz
I lived in a country that recently required IMF support, Ireland, and have a
positive view of the IMF as a result.

Of course, there were conditions attached to the loans but given that nobody
else was willing to lend money to the state under any terms at all, it seemed
fair enough. And the interest rate was nothing like "payday" rates.

The alternative (a "cold turkey" end to government payments - e.g. no salaries
for police, doctors, teachers, etc.) would have caused huge long term damage
to society, the economy and would have undermined the legitimacy of the state.

On a personal level, if I were lending money to a desperate down-and-out
friend who had exhaused all the normal sources of credit including their
family, I would probably also ask for lifestyle changes before giving them
money.

~~~
pm90
> On a personal level, if I were lending money to a desperate down-and-out
> friend who had exhaused all the normal sources of credit including their
> family, I would probably also ask for lifestyle changes before giving them
> money.

While it might seem reasonable from a personal perspective, I don't think it
really applies when you're considering an entire country (or any sovereign
entity, for that matter). This mistake has been made before, and in many
fields, so I don't blame you particularly (e.g. we think of personal
indebtedness as "immoral" but deficit spending has largely been shown to be
bountiful and a net positive when managed correctly).

I'm personally not well versed in economics or genius enough to suggest
alternatives, but I just wanted to point out that kind of fallacy when
thinking about these things.

~~~
pzone
Actually in this case the analogy is completely correct. The notion that
government borrowing is wildly different from household or corporate borrowing
is only true in a limited sense, and only if we are talking about borrowing in
a currency that the government itself issues.

The IMF demands payment in Dollars/Euros, not the local currency. A country
borrowing money has a hard requirement to pay back the loan in real (as
opposed to nominal) terms. So it really is similar to any other lending.

Let me also address deficit spending. It isn't such a magic bullet that a
government can come up with more money to repay a loan by increasing its
expenditures. It's about the same idea as the Laffer Curve. Sure, if things
get extreme enough, the argument is correct. But most of the time things
aren't that extreme. Most of the time, when a government needs to repay loans,
fiscal discipline is useful and necessary.

------
azurelogic
I remember doing a long research paper on the World Bank and IMF around 2000.
They're the equivalent of "pay day loans" for 3rd world countries. It's
predatory lending at its finest. For those unfamiliar, they generally only
give money if countries cut spending on the people (education, health, etc)
and open up natural resources for exploitation by foreign corporations.

~~~
tomjen3
Do you know how much it costs to get your water and electricity turned back
on? Not to mention that you have to toss any food you have saved and you have
to find some way to live without access to toilets, etc for the duration.

Compared to that, a payday loan is cheap. Yeah being in that situation is
shitty in the extreme, and no none of your options are good, so you are
trading very bad for worse.

~~~
azurelogic
The payday loan analogy is admittedly weak. I just meant to indicate that it's
a crap deal. It is actually worse than payday loans. See, with payday loans,
you just pay ridiculous interest. With WB/IMF loans, it's more like "we'll
loan you money to keep the lights on, but you're going to have to stop taking
your blood pressure meds, and one of our friends is going to stop by and eat
some of your dinner every night".

~~~
tomjen3
Okay, that makes more sense.

I just get tired of people constantly harping on payday loans without
considering the alternatives available. Also I was kinda shocked how much an
effect it had when a collegue got his power turned of (he forgot the pay his
bills).

------
Torai
The World Bank is an organization to steal public and natural resources for
private banks and corporations, and alongside the IMF one of the biggest
generator of poverty. But I guess we can keep pretending they try to help to
Third World countries.

~~~
socratees
The article definitely points out the wrongs done by IMF/World bank. Are there
any resources you can point me to, such as data / financial reports which
highlight how the resources are misused / mishandled?

~~~
Torai
"On private water: The case for the World Bank to divest"
[https://www.stopcorporateabuse.org/sites/default/files/resou...](https://www.stopcorporateabuse.org/sites/default/files/resources/shutting_the_spigot_on_private_water_corporateaccountabilityinternational.pdf)

"Impoverishing a Continent: The World Bank and the IMF in Africa"
[http://www.halifaxinitiative.org/updir/ImpoverishingAContine...](http://www.halifaxinitiative.org/updir/ImpoverishingAContinent.pdf)

"Dismantling The World Bank’s Myths on Agriculture and Development"
[https://www.oaklandinstitute.org/sites/oaklandinstitute.org/...](https://www.oaklandinstitute.org/sites/oaklandinstitute.org/files/OurBiz_Brief_UnfoldingTruth.pdf)

------
JumpCrisscross
Based on selectorate theory [1, lending to broken governments promotes cronies
over the general population. Unfortunately, the alternative (waiting and
watching) involves risking complete state collapse. Weighing the evils of the
latter, _i.e._ the lessons from World War II, against the evils of the former,
_i.e._ our present condition of sclerotic autocrats propped up by outsiders
fearing outright anarchy, is tricky.

This analysis does not appear to do that. Instead, it just measures the cost
of being conservative with anarchy risk. The counterfactual (letting those
governments collapse through hyperinflation, foreign and/or domestic default
and/or austerity and the resulting civil strife) could be better or could be
worse, and estimating it will involve lots of speculation. But it deserves to
be explored.

[1]
[https://en.wikipedia.org/wiki/Selectorate_theory](https://en.wikipedia.org/wiki/Selectorate_theory)

------
maxlybbert
Just to play devil's advocate, I've been told that in a negotiation, it's
always important to know what your best alternative is (e.g.,
[https://ocw.mit.edu/courses/sloan-school-of-
management/15-66...](https://ocw.mit.edu/courses/sloan-school-of-
management/15-665-power-and-negotiation-spring-2014/lecture-
notes/MIT15_665S14_Class_2_Lect.pdf) ; "I've been told" because I'm terrible
at negotiating).

When a country starts to negotiate with the World Bank, generally speaking,
their best alternative is to print money; cause hyperinflation; and then pay
off their existing debts with the new, worthless, money. It seems to me that
the World Bank's terms are better for the poor than that.

~~~
throwawayjava
It's hard to tell because the World Bank is so young in the history of
nations. Certainly in the short term things are less painful, but having your
country's natural wealth siphoned off by other countries (or in many cases
absurdly wealthy individuals/companies) has the potential to create real and
systematic harms.

We could imagine, for example, a United States that became and remained very
poor after having all its natural wealth siphoned off by European firms under
predatory terms during the Great Depression. It's hard to tell if the world
would've been a better or worse place (maybe the profits would've been
reinvested into stabilizing Germany's internal politics), but certainly US
citizens would be much worse off today.

On the other hand, could a World Bank have saved Germany from Nazism and ended
the world wars after episode I? Probably. Who really knows.

~~~
pm90
This is a good point. In general, predatory lending has been a favorite tool
of imperialism, and it continues to sort of be that way even though you don't
see explicit imperialism anymore.

The crux of the problem is that non-developed nations still have something
that developed countries want: either natural resources, or human resources.
The IMF is basically a modern version of the Paris Club, and is a tool used to
make it cheap and easy to extract these resources/make them available to the
global economy, without the explicit threat of military invasion.

I don't really see a good solution for "Poor" countries. You can't have people
dependent forever on foreign aid. But perhaps the developed part of the world
becomes so productive that at least the necessities for productive lives, such
as basic education and healthcare, can be provided to "poor" nations. This is
what I view the Gates foundational work as doing.

It is in the interests of the global community to have stable and safe
economies all around the globe. I really hope we can reach that goal sometime
in my lifetime....

~~~
bostonscott
"Predatory" lending is only possible in the presence of coercion.

If Party A is such a bad credit risk that the only loan they can get is from
Party B at a high interest rate, and that requires them to dramatically change
the behavior that created the cash crisis in the first place, Party B is not a
predator.

If Party B is charging too much for the loan, surely another "greedy" party
will undercut them and offer better terms to Party A.

If Party A accepts the debt on the same conditions, but then fails to
dramatically change their behavior such that they insist the terms of the
original deal be modified or else they'll default, Party A is acting like the
predator.

~~~
sangnoir
> If Party B is charging too much for the loan, surely another "greedy" party
> will undercut them and offer better terms to Party A.

You are assuming perfect competition in the area of loans to nation-states:
this is certainly not the case. There are only a handful of lenders playing at
this level, and they are mostly driven by politics, not profit.

~~~
bostonscott
"Only a handful of lenders playing at this level"

There are many lenders playing at "this level," presuming that by "this level"
you're referring to the market for sovereign debt.

The area where there are only a handful of "players" is lending to countries
that are very high credit risks. And for good reason. What rational investor
would lend money to a party clearly unable to pay it back? None. That's a
death wish.

Except of course when governments guarantee that party's credit for political
reasons. Usually the arguments for such "support" include precepts that the
free market leaves some nations behind, and so intervention is justified.

But the intervention, as we have seen quite often with the IMF itself, can do
more harm than good.

And by the way, many "undeveloped" countries have respectable credit ratings
([http://www.oecd.org/trade/xcred/cre-crc-current-
english.pdf](http://www.oecd.org/trade/xcred/cre-crc-current-english.pdf)).

~~~
sangnoir
The tone of your comment suggests disagreement, but the meat of it is in full
agreement with my earlier comment, so much so that yours can be thought of as
a more fleshed-out version of mine.

>> There are only a handful of lenders playing at this level...

> The area where there are only a handful of "players" is lending to countries
> that are very high credit risks. And for good reason. What rational investor
> would lend money to a party clearly unable to pay it back? None. That's a
> death wish...

>> ...and they are mostly driven by politics, not profit.

> Except of course when governments guarantee that party's credit for
> political reasons

~~~
bostonscott
Your reference to lenders began with: "You are assuming perfect competition in
the area of loans to nation-states," and you said "there are only a handful of
lenders playing at this level." I disagreed because this is untrue, and
suggested your comment may only be accurate in reference to countries
representing very high credit risks.

Regarding politics and profit, we disagree here as well. Yes, I referenced
political reasons as motives for lending to these very high credit risk
countries, but it's not mutually exclusive. I believe if you dig into that
political motive you will find a strong profit motive. Maybe the "State" isn't
motivated by profit, but often the people who exert power over the State are.
What else would they be motivated by? Doing good for humanity? Please...

------
amelius
> Over the last decade, projects funded by the World Bank have physically or
> economically displaced an estimated 3.4 million people, forcing them from
> their homes, taking their land or damaging their livelihoods.

And we're finding out about this only now?

~~~
Lagged2Death
The World Bank specifically and the neo-colonialist world-view it embodies
have both been severely criticised in pretty much this vein since not too long
after the bank was founded.

~~~
bostonscott
So what's the moral of the story, practically speaking?

If you drill a hole in the bottom of your boat; Be selective about whom you
let save you?

~~~
pm90
You seem to have a prevailing view of undeveloped counties as being there
fundamentally because of their "own fault". This is very much akin to blaming
the poor to being lazy or incompetent or stupid.

While its certainly true that a lot of countries don't have their shit
together now, its also true that most undeveloped countries were either under
foreign domination (e.g. Indian Subcontinent, most of Africa) or domination by
proxy (e.g. China).

The moral of the story is: don't accept the propaganda of "International
Financial Institutions" as existing strictly for the assistance of developing
countries (their stated goal) but rather as a continuation of exertion of
power over developing counties through financial means.

~~~
bostonscott
Not at all.

Greece is not an "undeveloped" country. Their people simply supported social
policies that resulted in more expenses than revenues.

------
vivekd
This data isn't in context, it's not fair to take data like the negative
impact of resettlement on its own without also looking at the benefit provided
by the projects to the poor.

------
wonderous
If there is a full-text article on the page, I am not seeing it. Page appears
I be for a project and link to a number of other pages.

Anyone able to find a better link?

~~~
whorleater
The link is to a project by the ICIJ title "Evicted and Abandoned" which
consists of a series of articles

------
hellbanner
Anyone have a link to the paper by I think, the IMF or World Bank describing
how a cryptocurrency (like Bitcoin) could be created? From the ~70s.

------
virtuexru
This page links to a portal looking landing page; is there supposed to be an
accompanying article?

~~~
dublinben
It's a collection of articles, but this one appears to be the most relevant to
the title: [http://projects.huffingtonpost.com/worldbank-evicted-
abandon...](http://projects.huffingtonpost.com/worldbank-evicted-abandoned)

------
justinzollars
If you want to understand libertarians read: The Creature of Jekyll Island.
This goes into the function of the World Bank.

------
djschnei
Central banks create poverty and maintain power structures; this isn't news.

~~~
stephen_g
The World Bank and IMF aren't central banks.

------
virgil_disgr4ce
Capitalism: "lol sux 2 be them"

~~~
djschnei
The world bank (and central banks in general) are extremely antithetical to
the central ideas of capitalism.

~~~
throwawayjava
The World Bank pushes privatization of infrastructure, natural resource
extraction, agricultural resources, etc.

the IBRD's Articles of Agreement explicitly identify "promoting private
investment by private investors" as a goal. If that's not part and parcel with
capitalism, I'm not really sure what is.

Perhaps you protest the other investments WB makes, which fall under its goal
of producing "suitable conditions" for private investment (in practice, that
means sucking governments dry until/unless they agree to privatization and
occasionally ousting non-capitalist leaders from power.) But saying that
capitalism stops being capitalism as soon as private investment starts
controlling governmental decisions is just defining your way out of a very
real and substantive critique of capitalism. Reality and real problems don't
go away just because you're being pedantic about the definition of capitalism.

The World Bank may not embody "your" capitalism. But by any reasonable
definition that avoids this sort of No-True-Scotsman distinction, the World
Bank is aggressively capitalist. And certainly the bankers describe themselves
(earnestly!) as capitalists.

So instead of saying "that's not capitalism", we should discuss whether _any_
system which deifies private investment will eventually end up with
organizations like the World Bank. And how to curb those excesses.

(Also, the world bank is not really a central bank. If the World Bank is a
central bank then we might as well call any very large bank a central bank as
well. In both cases, there are analogies but also important distinctions.)

~~~
djschnei
Would you not agree that distinguishing between free-market capitalism and
crony-capitalism brings important value to the discussion?

The inclusion of government force or government collusion is hardly a
secondary consideration. The ability to wield what is essentially a monopoly
on force, is THE most important factor when discussing capitalism vs cronyism.
The world bank is the physical embodiment of cronyism, and I maintain, not
capitalism.

I think it's kind of BS that you can point to THE distinguishing factor
between something I argue for and something I argue againsts and say
"pedantics"...

~~~
throwawayjava
_> Would you not agree that distinguishing between free-market capitalism and
crony-capitalism brings important value to the discussion?_

As I said,

 _> > saying that capitalism stops being capitalism as soon as private
investment starts controlling governmental decisions is just defining your way
out of a very real and substantive critique of capitalism_

Money can buy political power, and in a system that incentivizes profiteering,
that political power _will_ eventually be used to generate profit.

You call that cronyism. I claim it's the logical conclusion of human nature
unfolding within an unabashed free market.

You're more than free to re-define terms, but it doesn't change the reality
that free market systems invariably cycle through periods of cronyism.

Playing around with the definition of capitalism is terminally non-responsive
to the claim that free markets, given enough time, invariably breed this style
of cronyism.

It's like claiming that sugary/fatty foods can't cause coronary artery disease
because heart disease is caused by plaque. Technically true, but literally
everyone's response is going to be an eye-roll.

 _> The ability to wield what is essentially a monopoly on force_

Ugh. There's no such thing as a "monopoly on force". It's literally the great
equalizer among not just humans but all organisms.

You're more than free to go out and build an unbeatable military and take down
the evil crony-(not?)-capitalist world order. Who's gonna stop you? If you
can't or won't build up the resources and mind share to do so, well, welcome
to reality.

~~~
djschnei
Completely illogical...

> You call that cronyism. I claim it's the logical conclusion of human nature
> unfolding within an unabashed free market.

A free-market is _reliant_ on government power to protect/enforce property
rights. You claiming a system which strictly enforces property rights always
leads to a system which disregards property rights is absurd.

Are you arguing that in order to keep people from wielding governmental power
against others, we need to strengthen government? Really? Why not make it so
government power being wielded is a non-issue?

> It's like claiming that sugary/fatty foods can't cause coronary artery
> disease because heart disease is caused by plaque. Technically true, but
> literally everyone's response is going to be an eye-roll.

A terrible analogy... What you're arguing is that a diet that avoids
sugary/fatty foods will cause heart disease because people end up ignoring
diets. That's not a good argument against dieting...

~~~
throwawayjava
_> Completely illogical..._

Agreed.

Your argument is logical but vacuous[1]. Mine is logical, and what's more,
proceeds from assumptions that aren't oblivious to empirical observation.

 _> You claiming a system which strictly enforces property rights always leads
to a system which disregards property rights is absurd._

My claim is that political power is dynamically allocated, not statically
allocated. In free markets, money buys power. Power is then abused to rig the
rules of the game.

So even if you start in an ideal free market state, you'll quickly converge to
cronyism. in this sense, opposition to "crony-capitalism" and advocacy for
"free market capitalism" is an inconsistent position. Again, not as a matter
of your definitions and logical derivations. But as a matter of _observed
reality_!!! If you definitions and derivations contradict reality, the problem
is not with reality but with your model of reality.

 _> Are you arguing that in order to keep people from wielding governmental
power against others, we need to strengthen government? Really?_

No. Where do you find me advocating for "strengthen[ing] government" in this
thread? In fact, I think my critique of the World Bank is most commonly read
as a critique of how strong (certain) governments have become. But actually I
don't have any strong ideological advocacy, and even the World Bank/IMF have
benefits and drawbacks that aren't so easy to categorically praise or condemn
in broad strokes (see: various other threads).

I'm not the one claiming a theory of utopia. I'm just pointing out the
absurdity of make such a claim by carving out increasingly arbitrary and anti-
empirical definitional distinctions.

 _> What you're arguing is..._

What I'm arguing is that definitions and logical derivations exist in service
to describing reality. You have these two things -- reality and the tools we
use to model reality -- the wrong way around.

Again, stop arguing about definitions and logical derivations stemming from
those definitions. Answer the claim that free markets beget cronyism _as a
matter of empirically observable fact_. Anything else is vacuous.

[1] in the sense of
[https://en.wikipedia.org/wiki/Vacuous_truth](https://en.wikipedia.org/wiki/Vacuous_truth)

~~~
djschnei
hmmm...

> No. Where do you find me advocating for "strengthen[ing] government" in this
> thread?

Everytime you say "free markets beget cronyism" you're implying a less free-
market would beget less cronyism. That claim strongly suggests a less free-
market is preferable; the only way to regulate interpersonal cooperation is
through growing government.

> Power is then abused to rig the rules of the game.

Then why is it vacuous to argue for limiting said power? You are correct,
people will always work in their own self interest. If there is some super
powerful tool for them to increase their fortune/profit/power of course they
will use it. That's entirely the point.

Saying free-markets become less free overtime and eventually foster cronyism
isn't an argument against free-markets; it's an illustration of their
importance. Healthy eating and its advocates aren't _less_ important because
unhealthy people exist.

~~~
throwawayjava
_> Everytime you say "free markets beget cronyism" you're implying a less
free-market would beget less cronyism_

No, I'm not. I'm claiming that free markets sans cronyism aren't a steady
state (or even exist), so distinguishing between "free market capitalism" and
"crony capitalism" is anti-empirical.

 _> the only way to regulate interpersonal cooperation is through growing
government_

Ideology, marketing, religion, and non-state violence, for example, are all
also powerful mechanisms.

Also, limiting government might actually _INCREASE_ the power of government...
and what's worse, _someone else 's_ government! This is particularly relevant
in the case of the World Bank.

 _> Then why is it vacuous to argue for limiting said power?_

See above. The choice might be between US gov't/corporate power and local
governance. Limiting the power of local governments in the face of extremely
powerful foreign governments and corporations doesn't actually reduce the
power of government writ large.

 _> Saying free-markets become less free overtime and eventually foster
cronyism_

No, and if you re-read the thread, you'll notice that I'm not even making an
argument against free markets. I'm making an argument against your distinction
between "free market capitalism" and "crony capitalism". Again, the central
claim from my original reply was:

 _> >>>> The World Bank may not embody "your" capitalism. But by any
reasonable definition that avoids this sort of No-True-Scotsman distinction,
the World Bank is aggressively capitalist._

I think you're now violently agreeing -- or at least you've stopped making any
sort of coherent argument that crony capitalism is "not capitalism" in
anything but a sort of vacuous sense.

As for the rest of your post, I don't get it. You're still just playing with
definitions! Free markets aren't a cure-all for corruption, and your approach
to corruption seems to be using definitions to bury your head in the sand.
Seems dangerous.

If you're opposed to the World Bank, then you're opposed to an artifact of
free market capitalism. It's that simple.

~~~
djschnei
No, I'm not agreeing. The distinction between cronyism and free-market
capitalism is important. You're claiming it isn't - I'm claiming it is.
Simply:

Property rights = Free-market =/= Cronyism

It's like if I commented on an article about sodium and water exploding saying
"water is generally pretty great, don't mix it with sodium though" then you
respond with "don't be pedantic, water explodes."

Semantics are extremely important, especially in this arena. Never would have
thought I'd get into an argument today with someone arguing against
distinguishing between free-markets and cronyism... wow.

Acknowledging the presence of a force is not "playing with definitions"...
unbelievable...

~~~
throwawayjava
_> Property rights = Free-market =/= Cronyism _

Free-markets without Cronyism doesn't actually exist in the real world... no
matter how cute your definitions and logical derivations are, they're also
vacuous.

If we're going to advocate for impossibilities, why not skip the free market
middle man and simply advocate for universal happiness? Empirically dubious
and we have no idea how to actually _implement_ it in reality, but apparently
that doesn't matter.

(Also, I've heard water does in fact exist without sodium. So, not analogous.)

~~~
djschnei
Crony-capitalism is literally the opposite of a free-market! So, you think
property rights are a made up impossibility? Advocating for them is a waste of
time? Nothing lives on a spectrum? Don't care how you answer. This is a waste
of my time.

~~~
dragonwriter
> Crony-capitalism is literally the opposite of a free-market!

But it's what the capitalist system of property rights consistently produces
in the real world.

> So, you think property rights are a made up impossibility?

No, they are made up but quite possible. The idealized free market the
capitalist model of property rights is supposed to deliver is, OTOH, an
impossibility (or, at any rate, an unstable condition unlikely to ever be
achieved which would decay immediately if it was.)

~~~
djschnei
> But it's what the capitalist system of property rights consistently produces
> in the real world.

No... ignoring property rights consistently produces crony-capitalism.

> they are made up

as are ethics and morality. Doesn't mean they aren't endlessly important.

> be achieved which would decay immediately if it was

As in, property rights are pointless because people ignore them. Got it. What
do you propose?

~~~
dragonwriter
> No... ignoring property rights consistently produces crony-capitalism.

No, the original capitalist system (that is, the dominant system of the
mid-19th century system developed West for which critics coined the name
“capitalism”) fully embraced the capitalist model of property rights—again,
the capitalist model of such rights was defined by what was observed in that
system as distinct from a other historical systems—and was deeply and
pervasively characterizes by cronyism.

Now, if you have some other model of property rights in mind _other than_ that
embodied in the real historical system for which “capitalism” was coined as a
label, you might argue have an argument that deviation from that model, such
as the deviation seen _in_ capitalism, produces cronyism. But you shouldn't
confuse that model with capitalism.

~~~
djschnei
I would be careful of suggesting the idea of property you're referring to is
somehow "the original capitalist system". Many economic and political
theorists in the mid 19th century and earlier talked about property rights in
the terms I'm referring to - these were also capitalists.

“Propriété et loi.” Originally published in the 15 May 1848 issue of "Le
Journal des économistes", Frederic Bastiat (hardly some obscure, sideline
thinker) wrote:

> Economists consider that property, like the person, is a providential fact.
> The law does not give existence to one any more than to the other. Property
> is a necessary consequence of the constitution of man.

He continues:

> It is so true that property predates the law that it is acknowledged even by
> primitive people who have no laws or at least no written laws. When a savage
> has devoted his work to building himself a hut, no one disputes his
> possession or ownership of it. Doubtless another savage who is stronger than
> he can drive him out but not without angering and alarming the entire tribe.
> It is actually this abuse of strength that gives rise to association,
> agreement, and the law, which places public force in the service of
> property. Therefore the law arises out of property, a far cry from property
> arising from law.

Point being, the property rights I'm referring to - the property rights that
the vast majority of free-market advocates speak about - have been considered
and thought about for ages. I'm not coining a new label.

[http://oll.libertyfund.org/titles/bastiat-the-collected-
work...](http://oll.libertyfund.org/titles/bastiat-the-collected-works-of-
frederic-bastiat-vol-2-the-law-the-state-and-other-political-
writings-1843-1850#lf1573-02_label_134)

