The news that Peruvian novelist Mario Vargas Llosa won the Nobel Prize for literature has gratified me beyond words. The award is a huge boost for liberty in Latin America. Through his literary genius, prolific essays, and ceaseless activism, Vargas Llosa long established himself as perhaps Latin America’s most well-known public intellectual, and certainly its most well-known classical liberal. For decades, he has used his ability to reach a mass audience to promote the principles of the free society, becoming the region’s foremost advocate of democratic capitalism.

It was not always so. In the 1960s when his first novels appeared to wide acclaim, Vargas Llosa was representative of the Latin American intellectual establishment in his admiration of the Cuban revolution and his advocacy of radical leftist politics. Even then, however, anti-authoritarianism and a concern for the individual were prominent themes in his novels. In an example of independent thinking that characterizes Vargas Llosa’s commitment to the truth, he broke with the intellectual establishment in the early 1970s, strongly denouncing Fidel Castro’s revolution and turning away from statism in general. His increasingly forceful defense of individual liberty was strengthened by his discovery, by the 1970s, of the work of Nobel laureate Friedrich Hayek, whom Vargas Llosa cites as one of the three biggest intellectual influences on his thinking (the others being Karl Popper and Isaiah Berlin)

An extremely versatile communicator, Vargas Llosa has explored Latin America’s deepest social problems and has demystified the utopian vision of demagogic leaders so common in Latin American history. A major theme of his 1981 novel, The War of the End of the World, for example, was that collectivist promises of a better life, or happiness, can only end in fanaticism—especially if various brands of collectivism are pitted against each other—precisely because civilization depends on the primacy of the individual and a close regard to the real world as opposed to dogmatic reliance on abstract but erroneous ideas of how the world might work. 

In places like Russia or Latin America where there is little or no tradition of individual liberty and people place little trust in the main institutions of society, the novelist often holds a special, almost God-like place. Fair or not, he is viewed as trustworthy because his ideas are his own and because he has somehow managed to remain independent from the corrupting influences of society. This has given Vargas Llosa a standing from which he has regularly offered up statements that have instantly provoked debate and that have often passed into national lexicons. In 1990, for example, during a visit to Mexico, he famously referred to the system of government under Mexico’s long-ruling PRI party as the “perfect dictatorship.” That scandalized the political class and the intelligentsia through much of Latin America, but any Mexico City cab driver would tell you that it was absolutely true. 

Last year at a conference organized in Caracas by the market-liberal CEDICE think tank and at a time when Hugo Chavez was radicalizing his socialist revolution, Vargas Llosa declared, “We don’t want Venezuela to become a totalitarian communist state.” That provoked Chavez to challenge him and the “neoliberals” to a nationally televised debate, in what turned out to be a ploy that Chavez backed out of once Vargas Llosa accepted the challenge. Vargas Llosa thus won the debate without holding it. The whole episode was prominently reported in the region and was a blow to Chavez, emphasizing the closed and cowardly nature of his regime.

When Vargas Llosa writes and speaks about economics, the effect is similar, as when he explains that historically in Latin America capitalism never existed. For those wishing to understand how Latin American economies really work, and how the free market is the most compatible economic system with the way Latin Americans live, I still recommend Vargas Llosa’s prologue to the early editions of Hernando de Soto’s classic, The Other Path, as one of the clearest statements about the region’s political economy. 

Perhaps the best example of Vargas Llosa’s influence in setting the agenda is in his native Peru. At the end of the 1980s, after President Alan Garcia had driven the country to ruin, Vargas Llosa decided to run for president, having already rallied mass protests against Garcia’s plans to further socialize the country. Vargas Llosa articulated an explicitly libertarian campaign platform, calling for radical market reforms. He lost the 1990 election to Alberto Fujimori, who ran a gradualist platform and relied on scare tactics and dirty tricks to win over the electorate.

But Vargas Llosa’s ideas won. After Chile, Peru became the Latin American country that implemented the most radical and comprehensive set of reforms in a short period of time. The reforms led to high growth and were highly popular. When Fujimori then abrogated the constitution and closed the Congress, Vargas Llosa rightly criticized the move and the abuses that followed. But the economic reforms that subsequent democratic governments stuck to or deepened have transformed the country and so far turned it into a Latin American success story. As such, Peru is showing Latin Americans the superiority of market democracy as opposed to populist authoritarianism. It is no wonder that Alan Garcia, currently Peru’s president for a second time, is the bitterest of rivals with Hugo Chavez. Alan Garcia is now yet another of Vargas Llosa’s converts.

I owe a debt of gratitude to Vargas Llosa, a fellow Peruvian. I have been influenced by him from a young age and, when studying at Northwestern University during his run for president, his libertarian platform informed my studies and ran in stark contrast to the lectures given by my leftist professor of Latin American politics. I’m honored that Vargas Llosa has since become a friend, generously supportive of Cato’s efforts and helpful as always to all of us throughout the region who promote liberal principles. Through his conduct and his ideas, he continues to be a teacher.

Gracias Mario.

Here’s a chart from Veronique de Rugy’s new article on federal revenues vs. spending in The American. Amazing how the problem becomes obvious when you look at real numbers and don’t get trapped into using “baseline” math (as I explain in my latest video).

By the way, find out when John Stossel’s program on Fox Business News airs in your area. Veronique is a guest this week talking about these issues.

Bloomberg’s Caroline Baum has a great column on ObamaCare. It leads off with House Speaker Nancy Pelosi’s oft-repeated remark, “We have to pass the bill so that you can find out what is in it.”

Truer words were never spoken. Heck, ObamaCare gives HHS Secretary Kathleen Sebelius so much arbitrary power to reshape the health care sector that Congress had to pass the law so that Pelosi could find out what is in it.

Baum explains why such discretionary power is dangerous:

Discretion may be the better part of valor, but it’s not something businesses can rely on for planning purposes. Corporations are already hunkered down because of (take your pick) weak demand, hurt feelings as a result of presidential persecution, or uncertainty over future health-care costs and tax rates. It won’t help business confidence to learn the HHS secretary can make and break rules on a case-by-case basis.

“The secretary can decide what you have to purchase, but if you are in a presidential swing state, the secretary has the authority to undo everything she just did,” Cannon says.

Wait, how’d that last sentence get in there? Anyway, read the whole thing.

Marie Arana, the Peruvian-born former editor of the Washington Post’s Book World, writes a thoughtful and moving analysis of Mario Vargas Llosa’s work that has just been awarded a Nobel Prize. She explores at some length Vargas Llosa’s political views and whether they might have prevented him from winning the prize much earlier. But there’s one word that curiously doesn’t appear in her article. Curious, because it’s a very common word, the word that describes his political philosophy, a word that he himself uses frequently. You may want to read the article and see if you can find the missing word before reading further here.

Arana writes:

When asked by an editor several years ago why the prize had eluded him, he replied with a wry smile that he was hardly the politically correct choice.…

According to the Nobel committee, he has won the award “for his cartography of structures of power and his trenchant images of the individual’s resistance, revolt, and defeat.”

For years, the gossip was that Stockholm would never recognize him because his politics were conservative, though many of his positions — on gay rights, for example — have been to the left of center.…

For all his bracing work decrying totalitarian strongmen, Vargas Llosa is no radical revolutionary. He has been described as an intransigent neoliberal, a man with unshakable convictions that his country and people need strict economic discipline, membership in the world market and tough austerity measures at home.

What’s the missing word? Give the article one more read.

Here’s the missing word: Mario Vargas Llosa is a liberal. This is not hard to determine. The Encyclopedia Britannica defines liberalism as the “political and economic doctrine that emphasizes the rights and freedoms of the individual and the need to limit the powers of government.” That seems to cover all the details Arana laid out.

And Vargas Llosa himself has made his liberalism clear. When he received the annual award of the American Enterprise Institute, his lecture was “Confessions of a Liberal.” He may have created some discomfort in the largely conservative audience when he said:

Because liberalism is not an ideology, that is, a dogmatic lay religion, but rather an open, evolving doctrine that yields to reality instead of trying to force reality to do the yielding, there are diverse tendencies and profound discrepancies among liberals. With regard to religion, gay marriage, abortion and such, liberals like me, who are agnostics as well as supporters of the separation between church and state and defenders of the decriminalization of abortion and gay marriage, are sometimes harshly criticized by other liberals who have opposite views on these issues.

Indeed, AEI left this part out in their own excerpting of the speech yesterday. But he got them back as he went on:

The free market is the best mechanism in existence for producing riches and, if well complemented with other institutions and uses of democratic culture, launches the material progress of a nation to the spectacular heights with which we are familiar.…

Thus, the liberal I aspire to be considers freedom a core value. Thanks to this freedom, humanity has been able to journey from the primitive cave to the stars and the information revolution, to progress from forms of collectivist and despotic association to representative democracy. The foundations of liberty are private property and the rule of law; this system guarantees the fewest possible forms of injustice, produces the greatest material and cultural progress, most effectively stems violence and provides the greatest respect for human rights. According to this concept of liberalism, freedom is a single, unified concept. Political and economic liberties are as inseparable as the two sides of a medal.…

We dream, as novelists tend to do: a world stripped of fanatics, terrorists and dictators, a world of different cultures, races, creeds and traditions, co-existing in peace thanks to the culture of freedom, in which borders have become bridges that men and women can cross in pursuit of their goals with no other obstacle than their supreme free will.

Then it will not be necessary to talk about freedom because it will be the air that we breathe and because we will all truly be free. Ludwig von Mises’ ideal of a universal culture infused with respect for the law and human rights will have become a reality.

Arana did mention that Vargas Llosa has been called a “neoliberal,” whatever that is. In his essay “Liberalism in the New Millennium,” in Global Fortune: The Stumble and Rise of World Capitalism (and reprinted in Cato’s anthology Toward Liberty), Vargas Llosa had some fun with the scare word “neoliberalism.”

Wikipedia stumbles a bit, as well, variously describing his views as liberal, neoliberal, or classical liberal. Can you be both classically and neo liberal? It does mention his break with the People’s Party of Spain over its illiberal conservative views. A story the New York Times must have missed this week in describing him as a conservative.

Of course, Vargas Llosa’s political views — against authoritarianism of any stripe, support for free markets, social tolerance, peace, the rule of law, and democratic governance — might best be described these days as libertarian. But that’s not a word that Vargas Llosa, a man of Latin America and Europe, seems to use. So for now let’s allow the great writer to describe his own views: Mario Vargas Llosa is a liberal, one of the great liberals of our age.

As for his literary standing, I’ll return to Marie Arana for the last word:

Too often, a Nobel morning has a literary critic running for cover or, at the very least, for Google, to learn exactly who, in the capricious eyes of the Swedish Academy, has merited the coveted award. Not so on Thursday. The 2010 Nobel Prize in Literature has gone to a writer whose name is well known to and widely venerated by the global literary community: the deeply intellectual, undeniably talented Peruvian novelist Mario Vargas Llosa.…

But perhaps the most winning aspect of Vargas Llosa’s career is his deep and abiding humanity. Generous in friendship, unfailingly curious about the world at large, tireless in his quest to probe the nature of the human animal, he is a model writer for our times. It is such a pleasure for me to write at last: This year, the Nobel Prize in Literature goes to an indisputable winner.

I’m thrilled to be participating in a day-long conference on Capitol Hill next week to coincide with the release of a new book from the University of Chicago, Cutting the Fuse: The Explosion of Suicide Terrorism and How to Stop It. Co-authored by Robert Pape and James Feldman, the book builds on Pape’s earlier pioneering work, including here and here, into the causes of terrorism. Drawing on data compiled by the Chicago Project on Suicide Terrorism (CPOST), the book includes chapters on Iraq, Afghanistan, Pakistan, Lebanon, Israel and Palestine, Chechnya and Sri Lanka.

The authors’ concluding observations offer some hope for those of us who have been calling for a new narrative pertaining to counterterrorism, one that begins with the presumption that fear is the terrorists’ true weapon. A strong, resilient society retains the ability to kill or capture those who would harm innocents to make a political point, as the United States has done since 9/11. But a country of more than 300 million people shouldn’t cower before a few hundred individuals with delusions of world domination, but who are too frightened and weak to show their faces for years.

I think that the book’s conclusions might be a bit too optimistic as far as the politics of counterterrorism goes. There are still ample incentives for people to hype the threat of terrorism, and not enough competing pressures to dial back the most extreme claims of impending doom. But perhaps we are approaching a “period of understanding” as Pape and Feldman claim?

I certainly hope so.

The new unemployment data have been released and they don’t paint a pretty picture — literally and figuratively.

The figure below is all we need to know about the success of President Obama’s big-government policies. The lower, solid line is from a White House report in early 2009 and it shows the level of unemployment the Administration said we would experience if the so-called stimulus was adopted. The darker dots show the actual monthly unemployment rate. At what point will the beltway politicians concede that making government bigger is not a recipe for prosperity?

They say the definition of insanity is doing the same thing over and over again while expecting a different result. The Obama White House imposed an $800-billion plus faux stimulus on the economy (actually more than $1 trillion if additional interest costs are included). They’ve also passed all sorts of additional legislation, most of which have been referred to as jobs bills. Yet the unemployment situation is stagnant and the economy is far weaker than is normally the case when pulling out of a downturn.

But don’t worry, Nancy Pelosi said that unemployment benefits are stimulative!

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