A “Libertarian Dream” in Costa Rica

This article by Alvaro Vargas Llosa sheds some light on the Libertarian Movement’s rapid and stunning success in Costa Ricas. Llosa is a Senior Fellow and director of The Center on Global Prosperity at the Independent Institute. He is also the author of Liberty for Latin America.

The rise of the Libertarian Movement Party as a national force is the real story in the upcoming presidential election in Costa Rica. The party’s leader, Otto Guevara, has been able to do what no libertarian has achieved anywhere in the western hemisphere, including the United States.

Mr. Guevara is currently running third, with 15 percent in the polls; far behind the expected winner Oscar Arias, but a close second to Otton Solis, a classic Latin American populist. The Libertarian party is also well ahead of the Social-Christian Democrats and is set to obtain some 12 seats out 57 in Congress. As Guevara told me recently, he wants to “force the next government to negotiate with the Libertarian Movement Party its public policies for the next four years” and prepare the terrain for a presidential victory in 2010.

Since their inception, the Costa Rican libertarians have been on the rise. In 1998 they got Mr. Guevara elected as the first libertarian in Congress and in 2002, with nearly 10 percent of the vote, they managed to get six legislators elected. Now, they have become a force to be reckoned with and, without renouncing their radical views, have penetrated into the mainstream—every libertarian’s dream.

The libertarians stand for minimal taxation and regulations and have successfully blocked the current President’s attempts to raise taxes for the past three years. They believe in ending government monopolies on electricity, telecommunications, oil refining and insurance, as well as legally protected private monopolies such as vehicle inspection. They have proposed the elimination of trade barriers including support for the Central American Free Trade Agreement with the United States. And they believe in a property-owning society (they support giving titles to informal home owners); stand against foreign intervention (they stood against the war in Iraq, which the Costa Rican government supported), and in favor of decriminalizing drugs.

Except for the war in Iraq, about which there are mixed views, most libertarians would basically agree on all these issues. What is surprising is that a party with views so removed from the conventional wisdom can actually turn into a national political force.

Costa Rica is the most stable country in Latin America. It was spared much of the colonial legacy that haunts many other nations in the region. Social disparities here are less acute than in neighboring countries thanks to the fact that small and medium proprietors were allowed to cultivate much of the land. A political consensus has kept democracy functioning in Costa Rica since 1948 and the courts work with a modicum of fairness (only Uruguay and Chile have comparable judicial systems). And yet Costa Rica is a deeply socialist nation left almost untouched by the free-market waves that have periodically hit Latin America, most notably in the 1990s—which explains why, despite this edifying environment, it is still a very poor nation and why corruption, a symptom of big government, has grown so much. The socialist consensus has preserved a structure that stifles entrepreneurship, blocks the formation and the spread of capital, and encourages cronyism. It is precisely against this structure that the Libertarian Movement Party has risen.

But the significance of their efforts goes far beyond Costa Rica and shows three things.

First, it indicates that the classical liberal tradition has some potential for making a connection with the populace, because of its critique of established parties and traditional politicians—a stand very much in vogue in the developing world. The recent tendency has been for the old-fashioned populist left to seduce those vast segments of the population that feel cheated by the establishment—only to prove they represent exactly what they purport to combat.

Second, the Costa Rican experience shows principle is not necessarily a lost cause in politics. Few things have caused classical liberals more harm than muddling the message and obfuscating principle. If defenders of free markets support big spending, legally protected monopolies, crony privatization and courts that make a mockery of the principle of equality before the law, is it surprising that many people tend to associate classical liberalism with mercantilism, that is, the blurring of the line that ought to separate government and business?

Finally, Otto Guevara’s success poses a challenge to those who think politics is not a valid way to go about changing the prevailing culture, and that education needs to come before political action because until people’s minds are educated no political change is possible. The Costa Rican experience seems to contain a more complex truth: everything, including practical politics, can, in the right circumstances, become a catalyst for cultural change.

One should not, at least at this stage, read more into Guevara’s success than is necessary. But eight years of solid growth without compromising on those issues generally deemed to be an impossible sell deserve at least a second thinking with regard to politics and classical liberalism.

8 Responses to “A “Libertarian Dream” in Costa Rica”

  1. Tim West Says:

    The article is a bit misleading. The Movement down there recently underwent a split like what may happen here in the USA - the “losers” in that case were the anarchists.
    I was following it thanks to Sean Haugh’s blog carefully. The former people in charge said they wouldnt amount to anything and that the REAL libertarian movement was dead in Costa Rica. Real = no government. They denounced Otto as a sellout and a undergound statist. I had someone who can read Spanish read all the dirt to me.

    If the LP remains firmly under effective control of people who, at their core, believe in no government, there is likely to be some scenario where the movement will split here as well, maybe as early as 2008 if no compromise is found.

  2. joe average Says:

    gotta love the Costa Ricans!

  3. Don Duncan Says:

    I joined the Libertarian Party in 1973 and quit in 1980 because I am an anarchist who saw the party being taken over by statists who did not want to renounce politics,i.e., use of force, but only wanted to change the faces of those in control. At the 1974 national convention, I saw the rejection of a “tax rebellion” as too early and too extreme. “We will focus of getting rid of the IRS later, now is not the time.” party leaders said. Never, in my lifetime, have I seen a better time, than in the early seventies to challenge taxation. This was not a mistake due to lack of knowledge. This was not a lack of courage. This was a conscious decision of a mindset of politicians who use libertarian arguements to gain control while betraying the principles.

  4. Otto Kerner Says:

    I’d like to know more about the details of the dispute before I applaud or denounce the Guevara faction. Wikipedia currently claims that he now favours increasing spending on public education and building more prisons; if that’s true, then that doesn’t sound like anything to cheer about. On the other hand, this info was added recently and is unsourced, which means it’s iffy. I’d say the jury’s still out on ML and Guevara.

  5. Jacqueline Says:

    For details on whether the current Movimiento Libertario is actually libertarian or not (they’re not) I encourage you to read the following:
    http://www.sunnimaravillosa.com/archives/00000607.html
    http://jacquelinepassey.blogs.com/blog/2006/02/libertarianism_.html

  6. kabababrubarta Says:

    Cool! kabababrubarta

  7. Mel Gibson buys $25.8m ranch in Costa Rica Says:

    http://mycrestate.com/blog

  8. Netscape Says:

    http://realestate.netscape.com/story/2007/08/27/costa-rica-real-estate-by-firstrealtycrcom

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