Should governments have so much power?
Maybe the analysis of our government policy has been fundamentally wrong. Rather than focus on the fact that the people in government were fundamentally flawed, it is possible that the design and stated objectives of the state were the cause of our current economic, political and social woes.
It is worth noting that since the inception of the Republic, we have had large states. The state dictated everything, not only public policy but also social interaction and economic dominance. While this is the norm in many developing countries, maybe that formula is fundamentally flawed. Maybe the broad power bestowed upon the state harms us rather than helps us move forward. I believe it is time to consider maybe another extreme, libertarianism.
The essence of libertarian philosophy stems from this belief: if government doesn't really contribute value added services for its people, then why not get rid of government almost all together? If people fundamentally know what's in their best interest and generally that interest serves the greater good for the community, would it not be best for people to manage their own affairs and freedoms without the imposition of an external force?
In this system of thought the idea is simple: government leave us alone. In this system the government would only have one concern: security. The main idea is that the state only protects citizens, their freedoms, and their personal property. While this is supposed to be the main goal of any state, in libertarianism this is the only goal. What that entails is that the state would not lift a finger regarding public works, social welfare, social norms, or practically any other state function that we are used to here in the Middle East.
While this is a scary prospect let us consider what the government actually has done for us as citizens of Egypt.
Utilities are lacking, the public education system as we know it is an intellectual death sentence, the roads are shoddy, and finally the poor remain poor. If we really look within ourselves, we could see that all our previous governments have created more problems than they solved.
The free university era of Nasser lead to a decline in standards of university education in Egypt; the one-sided Open Door policy of Sadat led to the near death of Egyptian industry while flooding our markets with foreign goods; and finally the crony-capitalism of the Mubarak regime led to the greatest inequality amongst Egyptians since pre-1952.
In a libertarian system, it's not the government with power, but the people. The people chose what they want, and the theoretical basis is that it should lead to prosperity.
In terms of freedoms, the people decide on matters of the economy using market mechanisms; the people decide social norms by practice; and politics becomes more about governance rather than grandstanding.
In practical terms, let's consider the institution of the Central Bank. Now in a libertarian system there would be no Central Bank, interest rates would then be determined by the banks on a market basis and they would compete for a near perfect interest rate reflecting the population's desire to either grow the economy quickly or cool it down.
Without interference from the Central Bank, the idea would be that investors would have the capacity to better time investments in either short or long-term projects thus leading to a more innovative market.
Now that I have labeled all the greatness of the libertarian model should I not mention the pitfalls? No, this article was not for me to grandiosely praise the Libertarian model, merely to spur the debate. I believe it is a debate worth having if only to discuss the possibility of fundamental institutional change rather than just cosmetic application.
Ismail Ayad, Finance Graduate