Tag Archives: Inflation

How a small, poor country became the top economy in Latin America

South America Map
South America Map

One way to learn about whether specific economic policies work or not is to look at different countries that have tried them. Believe it or not, patterns do emerge about what works and what doesn’t work, as you look across different times and places. I’ve been reading a book called “Money, Greed and God” with my friend Carla, which talks about what has worked to reduce poverty.

The author basically outlined two approaches. In the first approach, the government 1) confiscates the wealth of the most productive workers, 2) nationalizes (takes control of) the businesses of the most successful entrepreneurs, 3) restricts trading between citizens and with other countries, with minimum wage, price controls and tariffs. In the second approach, the government does the opposite: 1) lowers taxes on the most productive workers, and 2) lets entrepreneurs compete to provide goods and services to consumers, and 3) lowers restrictions on internal trading and trading with other countries, e.g. – eliminating minimum wage, tariffs and price controls.

Let’s take a look at two Latin American countries that went in opposite directions. Venezuela and Chile. Then we can finally find out which policies actually achieve results for the people.

Here is how Chile started out in 1973.

PROBLEM: Price controls and tariffs:

Prices for the majority of basic goods were fixed by the government in 1973. Even though Chile was and still is a small economy, the level of protection­ism was high. By the end of 1973, the nominal average tariff for imports was 105 percent, with a maximum of 750 percent. Non-tariff barriers also impeded the import of more than 3,000 out of 5,125 registered goods. Just as economic theory predicts, large queues in front of stores were usual in Santiago and other cities in Chile as a result of the scarcity caused by price controls.

PROBLEM: Government taking over private businesses:

The decline in GDP during 1973 reflected a shrinking productive sector in which the main assets were gradually falling under government control or ownership through expropriations and other government interventions in the economy.

PROBLEM: Deficit spending and government printing money:

The fiscal situation was chaotic. The deficit reached 55 percent of expenditures and 20 percent of GDP and was the main cause of inflation because the Central Bank was issuing money to finance the government deficit.

SOLUTION: lower or eliminate restrictions on trade:

The most important economic reform in Chile was to open trade, primarily through a flat, low tar­iff on imports. Much of the credit for Chilean eco­nomic reforms in the following 30 years should be given to the decision to open our economy to the rest of the world. The strength of Chilean firms, productive sectors, and institutions grew up thanks to that fundamental change.

SOLUTION: let competing entrepreneurs in the private sector provide goods and services to consumers:

A second fundamental reform was to allow the private sector to recover, adding dynamism to the economy. In fact, important sectors such as elec­tricity generation and distribution and telecommu­nications were still managed by state companies. After we implemented a massive privatization plan that included more than 50,000 new direct share­holders and several million indirect (through pen­sion funds) shareholders, these companies were managed by private entrepreneurs that carried out important expansion plans.

SOLUTION: let people take responsibility for their own lives instead of depending on government:

The 1981 reform of the Chilean pension fund system deserves special mention. Under the leader­ship of Minister José Piñera, an individual capitali­zation account program was designed with specific contributions, administered by private institutions selected by the workers. The Chilean Administra­doras de Fondos de Pension (Pension Fund Administrators or AFP) has been replicated in more than 20 countries, and more than 100 million workers in different parts of the world use these accounts to save for retirement.

SOLUTION: allow parents to choose the school that fits their needs from competing education providers, and push school administration down from the federal government to the municipal level, where it would be more responsive to voter’s needs:

In 1981, Chile introduced a universal educational voucher system for students in both its elementary and secondary schools. At the same time, the central government transferred the administration of public schools to municipal governments…  The financial value of the voucher did not depend on family income.

RESULTS: And I was able to find a nice short, description of how all that worked out for them on the far-left Wikipedia, of all places:

The economy of Chile is a high-income economy as ranked by the World Bank, and is considered one of South America’s most stable and prosperous nations, leading Latin American nations in competitiveness, income per capita, globalization, economic freedom, and low perception of corruption.

In 2006, Chile became the country with the highest nominal GDP per capita in Latin America. In May 2010 Chile became the first South American country to join the OECD. Tax revenues, all together 20.2% of GDP in 2013, were the second lowest among the 34 OECD countries, and the lowest in 2010. In 2017, only 0.7% of the population lived on less than US$1.90 a day.

According to the Heritage Foundation, Chile is ranked as the 18th freest economy in the world. The World Bank ranked Chile as the 50th highest GDP per capita for 2018, just below Hungary and above Poland.

Now, you can contrast those results with Venezuela. I have been blogging about Venezuela for years on this blog, and documenting how they raised taxes, banned guns, nationalized private sector companies, raised tariffs, and increased regulations. They are now ranked JUST ABOVE NORTH KOREA for economic freedom – #179 out of 180 countries measured. Basically, they did the opposite of everything that Chile did – transferring power away from parents, workers, business owners, churches and municipal governments to the powerful centralized federal government.

Wikipedia explains how Hugo Chavez took over in 1999 and enacted a communist revolution.


Since the Bolivarian Revolution half-dismantled its PDVSA oil giant corporation in 2002 by firing most of its 20,000-strong dissident professional human capital and imposed stringent currency controls in 2003 in an attempt to prevent capital flight, there has been a steady decline in oil production and exports. Further yet, price controls, expropriation of numerous farmlands and various industries, among other government authoritarian policies… have resulted in severe shortages in Venezuela and steep price rises of all common goods, including food, water, household products, spare parts, tools and medical supplies; forcing many manufacturers to either cut production or close down, with many ultimately abandoning the country as has been the case with several technological firms and most automobile makers.

They confiscated private property, took over private sector businesses, implemented tariffs and price controls, redistributed wealth via massive welfare programs, and pushed all decision-making out of families and municipal governments up to the federal government. By depriving the producers of their earnings, the country caused massive shortages of goods and services, to the point where people are fleeing the country, consuming zoo animals, and selling their bodies as prostitutes in order to get food and water.


In the next election, we are not picking a tribe because of how they make us feel about ourselves. We are not choosing in order to see ourselves as “nice” and “not nice”. We need to look at specific policies being proposed, and see what works and what doesn’t work. The examples of Chile (rags-to-riches) and Venezuela (riches-to-rags) are helpful for voters who want to get RESULTS instead of FEELINGS.

I’ll leave you with a list of links from previous posts so you can see how communism worked out for Venezuela.

Related posts

William Lane Craig debates atheist Lawrence Krauss: Does God Exist?

British Spitfire and German Messerschmitt Me 109 locked in a dogfight
British Spitfire and German Messerschmitt Me 109 locked in a dogfight

Here is the video from the third debate from Dr. William Lane Craig’s speaking tour in Australia.


  • William Lane Craig (15 min)
  • Lawrence Krauss (15 min, but was actually 21:40)
  • Moderated discussion
  • Question and answer

Dr. Graham Oppy, the moderator, is a well-known atheist philosopher. He let Dr. Krauss speak for 21 minutes and 40 seconds, which is why my summary of Krauss is so long.

The video:


After careful consideration, I decided not to be snarky at all in this summary. What you read below is what happened. There may be some small mistakes, but I will fix those if people tell me about them. I also included some quotes and timestamps for the more striking things that Dr. Krauss said.

The debate itself starts at 4:50 with Dr. Craig’s opening speech. He does use slides to show the structure of his arguments.

Dr. Craig’s opening speech. (4:50)

  1. The kalam cosmological argument:
    • God is the best explanation of the origin of the universe
    • The Borde Guth Vilenkin theorem supports the absolute beginning of the universe
    • Even if our universe is part of a multiverse, the multiverse itself would have to have an absolute beginning
    • Speculative cosmologies try to challenge the Big Bang theory, but none of them – even if true – can establish that the past is eternal
    • Only two types of things could explain the origin of spece, time, matter and energy – either abstract objects or minds
    • Abstract objects do not cause effects, but minds do cause effects (we do it ourselves)
    • A mind is the best explanation for the origin of the universe
  2. The unreasonable effectiveness of mathematics:
    • The underlying structure of nature is mathematical – mathematics is applicable to nature
    • Mathematical objects can either be abstract objects or useful fiction
    • Either way, there is no reason to expect that nature should be linked to abstract objects or fictions
    • But a divine mind that wants humans to understand nature is a better explanation for what we see
  3. The cosmic fine-tuning for the existence of intelligent life
    • There are two kinds of finely-tuned initial conditions: 1) cosmological constants and 2) quantities
    • These constants and quantities have to be set within a narrow range in order to permit intelligent life
    • There are three explanations for this observation: law, chance or design
    • Law is rejected because they are put in at the beginning or matter – they don’t emerge from matter
    • Chance must be rejected, because they odds are just too long unless you appeal to a world-ensemble
    • We do not observe what the world ensemble hypothesis predicts that we should observe
    • Design is the best explanation for finely-tuned constants and quantities
  4. The existence of objective moral values and duties
    • Our experience of morality (values and duties) is that it is objectively real and incumbent on us
    • When someone goes into a classroom and shoots at innocent children, that is objectively wrong
    • On naturalism, moral values and moral duties do not exist – they are conventional and variable by time and place
    • The best explanation for the existence of objective moral values and duties is that God exists
  5. The historicity of the resurrection of Jesus
    • There are three widely-accepted facts that are best explained by the resurrection hypothesis
    • 1) the empty tomb, 2) the post-mortem appearances, 3) the early church’s belief in the resurrection
    • Naturalistic attempts to explain these 3 boilerplate facts fail
    • The best explanation of the 3 minimal facts is that God raised Jesus from the dead
  6. The immediate experience of God
    • Belief in God is a “properly basic” belief – rational even without arguments because of experience of God

Dr. Krauss’ opening speech. (21:12)

Slides: (1234567891011121314)

  1. Religious pluralism I
    • There have been lots of different gods created by people through history
    • We’ve gotten rid of all of them by understanding how the universe works by doing science
    • Religion is just stories, and the stories are inconsistent with how the universe works
  2. Progress of naturalistic science I
    • Newtonian physics refutes the idea that angels push planets around
    • Darwinian evolution refutes design arguments, including the one that Dr. Craig presented (24:10)
    • Biochemistry hasn’t explained how life originated, but we will have the solution soon
    • Physics shows us that matter can be created and destroyed without need a God
    • Physics shows us that universes can be created and destroyed “no problem”
  3. Religious pluralism II
    • Since we have been able to disprove all the gods we’ve invented, why hang on to the last one
    • It’s unlikely that the God that Dr. Craig presented exists, because we disproved all the others he didn’t present
  4. Hiddenness of God
    • There is a complete lack of evidence for the other 999 gods, so how likely is it that the God Dr. Craig presented exists
  5. Religious pluralism III
    • There are inconsistencies between various religions, so therefore there can be no religion that is right
  6. Progress of naturalistic science II
    • Peasants had a very low level of knowledge about the world and they believed in God
    • But our level of knowledge has increased over time, so we shouldn’t believe in God now
    • Peasants thought that the Earth orbited the Sun, but this is now known to be false
    • The Scriptures said that the Earth orbited the Sun, but now we know that’s false from science
  7. Christianity plagiarizes from other religions I
    • There is nothing new or special about Jesus
    • He’s just as unpleasant as all the other gods
    • Everything particular to Jesus occurs in other religions
  8. Catholics are inconsistent about what they believe
    • I’ll bet most Catholics don’t really believe in transubstantiation
    • I’ll bet most Catholics don’t really believe in the virgin birth
  9. The resurrection is copied from many other religions
    • Dionysus, Osiris, etc.
  10. There is no evidence for the resurrection
    • The stories about Jesus were written “decades or hundreds of years after the fact”
    • The stories are inconsistent with each other
    • Dr. Craig tells me that historical Jesus scholars all accept that the resurrection happened
    • That’s like saying that all alien abductions experts agree that alien abductions happened
    • It’s unreasonable to think that the resurrection happened because no one saw it happen
    • I accept that people reported on appearances, but hallucination theory can explain that
  11. The timeline for the creation and incarnation are all wrong
    • The creation, planet formation, hominids, incarnation, etc. all take place in the wrong times
    • If God knew what he was doing, he would done everything at better times to be more efficient
  12. David Hume’s argument against miracles is sound
    • Extraordinary claims require extraordinary evidence – nothing wrong with this argument
    • Miracles are really just coincidences
    • Catholic apparitions at Lourdes disprove the historical argument that Dr. Craig made for the resurrection
  13. God is petty and jealous
    • God shouldn’t demand that we trust him, esteem him and consider his character when we make decisions
    • The atoning death of Jesus for the sins of the world also makes no sense
  14. Belief is based on geography
    • What you believe is clearly correlated with where you are born
    • There is even an Islamic clone of Dr. Craig who “uses the exact same arguments” that he does to prove Islam
    • Belief in God is decreasing in the Internet-accessible world
  15. Science can develop morals without God
    • Reason is able to guide our actions to be moral
    • Morality evolves over time, so there is no objective morality
    • Catholicism teaches things that are immoral
    • Some things are prohibited by biological revulsion, such as incest
    • But if a brother and sister have sex using condoms “is that morally wrong? I can’t say it is frankly” (37:24)
  16. Dr. Craig is irrational
    • “I came here convinced based on my past interactions and his writing that Dr. Craig was a dishonest Charlatan”
    • “Any argument that validates God is reasonable to him”
    • “And any argument against it is not only unreasonable but wrong and worth distorting”
    • “Because it must be wrong – he’s decided the answer in advance”
  17. Dr. Craig is immoral
    • Dr. Craig thinks it is OK for God to command that Canaanite children are killed
    • “So in fact if they were Canaanite children in that schoolroom that he talked about then it would be OK”
    • It’s not reasonable to justify genocide in that way, but Dr. Craig is willing to go to those lengths
  18. The cause of the origin of the space time universe need not be God
    • Dr. Craig says that if there is an explanation for the origin or space, time, matter and energy it must be God
    • But it could just as easily be turtles or Zeus
  19. Dr. Craig misrepresents the Borde Guth Vilenkin theorem
    • Alexander Vilenkin wrote me an e-mail that says that the theorem doesn’t work in all cases
    • “Dr. Craig is so convinced that these arguments must be true that he won’t listen to the fact that they’re not”
  20. Darwinian evolution explains the fine-tuning
    • “Life was fine tuned – we got rid of it with Darwin”
    • Mutation and natural selection explain the cosmic fine-tuning argument that Dr. Craig presented
  21. Suboptimal design disproves the fine-tuning argument
    • “We get back aches” therefore “This argument that [the universe] is fine-tuned for life is nonsense”
  22. William Lane Craig can be proven to exhibit homosexual behavior using logical arguments
    • Look, you can construct arguments that are clearly wrong
    • Premise 1: “All mammals exhibit homosexual behavior”
    • Premise 2: “William Lane Craig is a mammal”
    • Seems to be saying that logical arguments can prove false things “it’s nonsense”
  23. Dr. Craig distorted a podcast that some group made on pain receptors
    • Dr. Craig’s faith is so strong that it causes him to distort what this group said

Discussion: (44:35)

I will not be summarizing everything that was said, just a few main points.

The segment from 52:18 to 57:12 about the Vilenkin e-mail on the BVG theorem is a must-see. Krauss is standing up and gesticulating while Craig is calmly trying to quote a paper by Vilenkin that shows that Krauss is misrepresenting Vilenkin. Krauss constantly interrupts him. After a while, when Craig exposes him as having misrepresented Vilenkin and gets him to admit that all current eternal models of the universe are probably wrong, he quietens down and can’t even look at Craig in the face.

Cosmological argument:

  • Craig: The e-mail says any universe that is expanding, on average, requires a beginning
  • Craig: There are two models – Aguirre & Gratton and Carroll & Chen – where there is a period of contraction before the expansion
  • Craig: The two models are the ones cited in the e-mail that Dr. Krauss showed
  • Craig: In the very paper by Vilenkin that I cited, he says that both of those models don’t work
  • Krauss: (agitated and interrupting) Vilenkin said that they have to make an assumption about entropy that they have no rationale for
  • (as Craig starts to talk Krauss makes an exaggerated, disrespectful gesture and sits down in a huff)
  • Craig: Yes, an unwarranted assumption means that they don’t have EVIDENCE for their theories being correct
  • Krauss: (agitated and interrupting) “All the evidence suggests that the universe had a beginning but WE DON’T KNOW!!!!!!!” (raising his voice)
  • Craig: I’m not saying that we know that the universe had a beginning with certainty
  • Craig: I am saying that the beginning of the universe is more probably true than false based on the evidence we have
  • Craig: And you  agree with me about that – you think the universe had a beginning
  • Krauss: (agitated and interrupting) (Unintelligible)
  • Moderator: One at a time
  • Craig: In your Vilenkin e-mail slide, at the end of the paragraph where the two models are mentioned that Vilenkin specifically shows…
  • (I am guessing that Craig is going to ask why so much of what Vilenkin wrote has been cut out of the e-mail that Krauss showed)
  • Krauss: (agitated and interrupting) Because it was technical…
  • Moderator: Lawrence! Hang on a sec!
  • Craig: He specifically shows that these models are not past eternal, and that they require a beginning just like the others…
  • Krauss: (agitated and interrupting) We can do the math if you want
  • Craig: Now wait. I couldn’t help notice that there on your slide there was a series of ellipsis points indicating missing text…
  • Krauss: (agitated and interrupting) “Yeah, because it was technical!”
  • Craig: “I wonder what you deleted from the original letter”
  • Krauss: (agitated and interrupting) “I just told you!”
  • Craig: “Now wait. Could it have been something like this:  (reads a quote from Vilenkin) ‘You can evade the theorem by postulating that the universe was contracting prior to some time. This sounds as if there is nothing wrong with having contraction prior to expansion. But the problem is that a contracting universe is highly unstable. Small perturbations would cause it to develop all sorts of messy singularities, so it would never make it to the expanding phase.’
  • Craig: “That’s Vilenkin.”
  • Krauss: “In this paper, that’s absolutely right”
  • Krauss: But it’s ok for theories to assume things that we know are wrong – they are still good theories – it’s unknown
  • (Craig turns away and looks through his papers)
  • Craig: “Isn’t it true that the only viable quantum gravity models on order today involve a beginning – have a finite past?”
  • Krauss: “No”
  • Craig: “Well, can you give us one then”
  • Krauss: (talks about a variety of possible eternal models) “In my experience in science, all of them are probably wrong”
  • Krauss: “You know most theories are wrong, which is why, you know, it’s hard”
  • Craig: “Right”

I noticed that a huge number of atheist web sites are taking the Vilenkin quote that Krauss used out of context, like this one and this one. There are probably a lot more of them like that, which I think is interesting. That’s why we have these debates, I guess. To set the record straight about who accuses people of being dishonest, and who is actually dishonest.


  • Krauss tried to argue that he had explained the fine-tuning with the Higgs particle, but Dr. Craig said that only applied to the cosmological constant, not all the other examples of fine-tuning. Krauss said that it wasn’t impressive that this universe permitted life and that “It would have been much more surprising if we evolved in a universe in which we couldn’t live”. Krauss argued the fine-tuning was only for “Life like us”. But Dr. Craig explained that the fine-tuning is what allows us to have the basics of any kind of life, like slow-burning stars, chemical diversity, etc. – things that are required for basic minimal life functions in any living system. Craig said that he was working with the current physical laws of this universe (F = ma, etc.) and that he was looking at what changed if we changed those even slightly. Krauss tried to say that if he changed things like the mass of particles then the strength of forces would change. (But the forces aren’t laws!) Krauss argued that the cosmological constant would be even better for life if it was zero, and Craig said that the life permitting range did include zero, but that the range of life-permitting values was narrow.

Jesus’ existence:

  • Craig reponded to the mystery religions charge, the charge that the evidence for the minimal facts is too late/too weak, the charge that grief visions explained the evidence better, and Hume’s argument against miracles. Craig brought up the early creed from 1 Cor 15:3-7 and explained to Krauss that it was 5 years after the events, and that Jewish standards of oral transmission were strong enough to ensure that the creed was reliable, and most of the eyewitnesses would still have been alive.

Audience Q and A: (1:21:09)

The first topic is the grounding of morality. Krauss agrees that there is no objective morality and no objective moral oughts. He also said that that standards of behavior are arbitrary, and that they change over time and they are adopted for promoting social order. Dr. Craig pressed the point that science itself would collapse without ethical values. It assumes them, but cannot ground them.

The next topic was free will. Krauss is a determinist. Craig asked him how he could reconcile moral responsibility with determinism.

The next topic was the effectiveness of mathematics. Krauss didn’t have an explanation for it and didn’t think it needed one. Then they got into whether the Genesis has been verified by science and whether it is meant to be taken literally.

The next topic was whether philosophy makes any progress. Craig gave the example of verificationism being rejected as too narrow, and self-refuting. Krauss: “I’m going to come to the defense of philosophy for the first time”. Craig: “That’s amazing!” Krauss said that science provides new knowledge. Craig said there were some things that could be known apart from science.

Cosmologist Luke Barnes answers 11 objections to the fine-tuning argument

Christianity and the progress of science
Christianity and the progress of science

This is from the blog Common Sense Atheism.

Atheist Luke Muehlhauser interviews well-respect cosmologist Luke Barnes about the fine-tuning argument, and the naturalistic response to it.

Luke M. did a good job explaining the outline of the podcast.


In one of my funniest and most useful episodes yet, I interview astronomer Luke Barnes about the plausibility of 11 responses to the fine-tuning of the universe. Frankly, once you listen to this episode you will be better equipped to discuss fine-tuning than 90% of the people who discuss it on the internet. This episode will help clarify the thinking of anyone – including and perhaps especially professional philosophers – about the fine-tuning of the universe.

The 11 responses to fine-tuning we discuss are:

  1. “It’s just a coincidence.”
  2. “We’ve only observed one universe, and it’s got life. So as far as we know, the probability that a universe will support life is one out of one!”
  3. “However the universe was configured, evolution would have eventually found a way.”
  4. “There could be other forms of life.”
  5. “It’s impossible for life to observe a universe not fine-tuned for life.”
  6. “Maybe there are deeper laws; the universe must be this way, even though it looks like it could be other ways.”
  7. “Maybe there are bajillions of universes, and we happen to be in one of the few that supports life.”
  8. “Maybe a physics student in another universe created our universe in an attempt to design a universe that would evolve intelligent life.”
  9. “This universe with intelligent life is just as unlikely as any other universe, so what’s the big deal?”
  10. “The universe doesn’t look like it was designed for life, but rather for empty space or maybe black holes.”
  11. “Fine-tuning shows there must be an intelligent designer beyond physical reality that tuned the universe so it would produce intelligent life.”

Download CPBD episode 040 with Luke Barnes. Total time is 1:16:31.

There is a very good explanation of some of the cases of fine-tuning that I talk about most on this blog – the force of gravity, the strong force, etc. as well as many other examples. Dr. Barnes is an expert, but he is also very very easy to listen to even when talking about difficult issues. Luke M. is very likeable as the interviewer.