Baloney From The Non-Aligned Movement

Chacha Manmohan’s face graces the papers again today. He is now in Egypt, addressing a Summit meeting of the Non-Aligned Movement, a Nehruvian diplomatic initiative that belongs to the Cold War era.

Of what relevance today is the Non-Aligned Movement (NAM)? With the USSR gone over 20 years, ditto the Berlin Wall, you would think that a rag-tag bunch of poor socialist nations would see the light and alter their domestic and trade policies. But no – they would rather stand opposed to Capitalism. All these nations fly the flag of poverty – they say Capitalism is for the rich, and Socialism is for the poor.

Thus, in his opening speech at the NAM Summit in Egypt, Cuban president, Raul Castro, said:

“We call for a new monetary and economic world order... we must restructure the world financial system to take into consideration the needs of developing countries.”

Poppycock!

All the world needs is “sound money” – and while Chacha Manmohan applauds Castro’s speech in poverty-stricken Egypt, back home he is up to the same old mischief.

Here is an ET editorial of today pointing out that Chacha's finance minister is “monetizing the deficit.” In simple terms: He is printing money to pay for whatever our The State buys.

Is this “sound money”? Certainly not!

Yet, the ET editorial ends pathetically, saying that “monetizing the deficit is the right policy.”

So why don’t they recommend this to all the NAM countries: let them all print and issue paper notes as money, in ever larger quantities – and call this the “new monetary and economic world order.” The central idea: We can dispel poverty by producing money. How utterly simple. No one even needs to work. Except the guys at the printing press.

Actually, poor people in poor countries need only one thing in order to prosper: Real Capitalism based on Sound Money and Legitimate Banking. This means free trade, gold, private property and the rule of law.

In an important book, The Anti-Capitalist Mentality, Ludwig von Mises had this to say on the poor nations of the world, like India and her friends in NAM, who want the poor to prosper but suffer from this very same “anti-capitalist mentality.” He said:

"The poverty of the backward nations is due to the fact that their policies of expropriation, discriminatory taxation and foreign exchange control prevent the investment of foreign capital while their domestic policies preclude the accumulation of indigenous capital.”

Such policies are what NAM is all about. These policies, coupled with the “monetization of the deficit,” perpetuate poverty.

In the first place, these policies discourage the formation, accumulation and the investment of Capital. At the other end, this business of monetizing the deficit leads to “capital consumption” – by The State.

Yet, the wages of the poor will never rise unless more and more Capital is invested. This must include foreign capital. The more capital, the merrier.

Poor countries therefore need Capitalism – real Capitalism.

They don’t need all this baloney called NAM.