Commentary Magazine


Socialism on the March

“Ideology matters again,” Robert Kagan writes in today’s Washington Post. “Autocracy is making a comeback.” The influential analyst focused on China and Russia this morning, but the big news this week from the world of authoritarianism comes from Latin America.

Yesterday, President Evo Morales of Bolivia nationalized Entel, the country’s largest telecommunications company and, at least until a few hours ago, a part of Telecom Italia. Morales has been attempting to take over Entel for about a year. He has been blocking attempts to have the matter settled by international arbitrators.

The nationalization by decree comes on the same day that Bolivia announced that it was acquiring controlling stakes in four energy companies. One of the acquisitions is through agreement with Spain’s Repsol, and the others were implemented by decree. The decrees affected British, German, Peruvian, and Cayman Islands firms. Bolivia claims that none of the four sales was forced. Two years ago, Morales announced that he wanted to nationalize the energy sector.

Morales was following in the footsteps of his mentor, Hugo Chavez. On Wednesday, the overstuffed Venezuelan ordered the expropriation of his country’s largest steelmaker, Siderurgica del Orinoco, from an Argentine-Italian group. This action follows Chavez’s moves to take over businesses in important sectors such as telecommunications, electric power, oil, and cement.

At this moment, the Latin American nationalizations are pinpricks. Yet it’s not too early for the West to begin thinking about how to counter assaults on free-markets—and how to work together to defend the concept of private property in a global economy. As Kagan notes, ideologies hostile to us are on the march.

And what are we doing? The West is not good at defending its private businesses. Many of these authoritarian states sustain themselves through their access to foreign investment and trade with the very nations whose property they take. Yet we are doing virtually nothing in response. Ideologues are declaring economic warfare against us, and the least we can do is return the favor.