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In memoriam Juan Carlos Cachanosky

In memoriam Juan Carlos Cachanosky

Juan Carlos Cachanosky     With the untimely death of Juan Carlos Cachanosky (13. 10. 1953 – 31. 12. 2015) we have not only lost a very dear and reliable friend. We have also lost a brilliantly insightful and resolute free-market scholar who managed to get so many things right and who could explain real world economic behavior with incision and clarity. Among the small number of true Austrians in Central- and South-America, identified with the European liberal tradition that produced such great thinkers as Ludwig von Mises or F. A. von Hayek, ‘Cacha’ as he was called by his friends, was one of the most enterprising minds, tirelessly working hard to turn his ideas into viable international projects. Despite his remarkable academic achievements in Austrian Economics, he always remained a generous and modest chap, who came as close to the vanishing ideal of an honest mind as perhaps human frailty will ever permit. With his dry sense of humor, his striking energy and passion for spreading sound economics, and his cheerfulness it was at all times intellectually very rewarding to be with or just around him. I feel privileged indeed to have been among his friends and collaborators.

    Juan Carlos Cachanosky studied Economics at the Catholic University of Argentina and was awarded a PhD by the International College of California. Following various academic appointments he was elected Director of Research at ESEADE, a major university and free market hub in Buenos Aires, Argentina. At the same time he successfully directed the Economics Department at the Catholic University in Rosario, Argentina. Among countless other important students, Juan Carlos served as the thesis advisor for Máxima Zorreguieta Cerruti, now Queen Máxima of the Netherlands. For well over a decade Juan Carlos was Dean of Universidad Francisco Marroquín’s Business School in Guatemala City, Guatemala. It was him who helped to push this unique place into an internationally recognized university. After hard work and until his premature death, he worked not only as professor and academic President of CMT Group in Edinburgh (UK), but also as a close collaborator with ECAEF (LI) and the Liechtenstein Academy (LI). As a much sought after lecturer Juan Carlos Cachanosky was active on almost all continents, but his enterprising spirit was mostly appreciated in Central- and South America, in Scotland, and the Principality of Liechtenstein, possibly the last stand for sound economics and free market ideas. Cacha’s work developed from a comprehensive approach to various disciplines that condition and influence one another. His countless publications, especially in the field of monetary theory and the history of economic thought are fine cut jewels.

We at ECAEF and Liechtenstein Academy are very saddened and we will miss him dearly. Our heartfelt condolences go to his family.

Kurt R. Leube
Academic Director, European Center of Austrian Economics

Let Rwandans decide whether to stick with success

In a referendum last week on their country’s constitution, the people of Rwanda overwhelmingly approved an amendment that changed presidential term limits. The new rules mean that 58-year-old President Paul Kagame can run again for the presidency in 2017, and could theoretically serve until 2034, writes Prince Michael of Liechtenstein in his latest GIS publication.

Rwanda, Africa’s most densely populated country, had suffered through civil war and genocide for years until a rebel force commanded by Mr Kagame ended the slaughter in 1994. He then served as vice president and minister of defence until 2000, when he acceded to the presidency. Under a new constitution, Mr Kagame was re-elected to seven-year terms in 2003 and 2010.

President Kagame is probably Africa’s most successful leader. His goal is to develop what was once among the poorest nations on the continent into a middle-income country by 2020. Rwanda boasts few national resources, but under his leadership has achieved impressive growth rates of 7 to 8 per cent annually. Inflation has fallen to single digits. Although the majority of the population still makes its living through subsistence farming, an impressive services sector, especially in IT and telecommunications, has developed. Education and health care are priorities, crime is low and the country is safe.

Mr Kagame – in contrast to many other African leaders – has not been tainted by corruption. Though he has been accused of supporting the M23 rebels in the east of the Democratic Republic of the Congo (DRC), the extent of that support, if any, is unknown. It is important to note that the situation in the eastern DRC is extremely fragile and that the government and its troops have a track record of committing atrocities. Rebels sometimes act in defence of minorities though they may, unfortunately, also commit cruel acts.

All in all, Mr Kagame’s track record is good. Unfortunately, Africa is a place where corrupt leaders tend to cling to power, as is happening now in neighbouring Burundi. However, Mr Kagame continues to enjoy the support of a solid majority of the population – as shown by elections whose results, on all evidence, have not been manipulated.

The administration of United States President Barack Obama has come out strongly against measures taken to allow Mr Kagame to run again. ‘President Paul Kagame has an opportunity to set an example for a region in which leaders seem too tempted to view themselves as indispensable to their own countries’ trajectories,’ said Samantha Power, the US ambassador to the United Nations, at the beginning of December. ‘We expect President Kagame to step down at the end of his term in 2017.’

The initiative has also been widely criticised in Europe. But the choice does not lie with the Americans or Europeans. The decision is the Rwandans’ alone to make. The international community should abstain from judgement.

We do not know what path President Kagame will take in the future, nor the details of how his succession will proceed. We do know, however, that he has promoted integration in a country with a history of discord, and that he has a clear, positive vision for its future. No critic of Rwanda’s choice has come forward with a credible alternative. In a country at an early stage of development, continuity can be essential – and President Kagame is not yet an old man.

Europas Wertegemeinschaft ist ein Wieselwort

Wertegemeinschaft Europa

Europas Wertegemeinschaft ist ein Wieselwort

von Frank Schäffler (Prometheus – Freiheitsinstitut, Berlin)

Europa droht zu zerfallen – und die EU-Kommission beschäftigt sich mit einer Kerzen-Verordnung und einem Kerzen-Verbot. Aber geredet wird von europäischen Werten. Weiter können Sprüche und Wirklichkeit nicht auseinanderfallen.

Erst durch konkrete Institutionen werden die europäischen Werte fassbar. In diesen Tagen der europäischen Krise werden wieder die europäischen Werte beschworen. Europa sei eine Wertegemeinschaft, betonte Bundeskanzlerin Angela Merkel neulich im Parlament der Europäischen Union. Merkel bezog diese floskelhafte Aussage auf die Flüchtlingskrise. Sie forderte, Europa müsse sich an Menschenwürde, Rechtsstaatlichkeit, Toleranz, der Achtung von Minderheiten und Solidarität orientieren.


Zweifelsohne sind dies wichtige Werte, die Europa historisch verbinden. Es waren spanische Dominikaner, die im 16. Jahrhundert beim Anblick der Unterdrückung der Bevölkerung in Mittel- und Südamerika die Menschenwürde als universelles Grundrecht gegenüber dem spanischen König einforderten. Es war im 13. Jahrhundert die Magna Charta, die die Willkür des englischen Königs beschnitt und den Weg zum Rechtsstaat bahnte. Schon im 16. Jahrhundert wurden die Werte Toleranz und Achtung von Minderheiten eindrücklich verwirklicht, als etwa das Königreich Polen-Litauen verfolgten Protestanten aus ganz Europa eine neue Heimat gab. Und es war der als Sankt Martin verehrte Bischof von Tours, der im 4. Jahrhundert seinen Mantel aus freien Stücken mit einem Bettler am Wegesrand geteilt hat.

Ob Angela Merkel wohl an diese historischen Ereignisse gedacht hat? Es spricht nicht viel dafür. Doch da ist sie nicht alleine. Heute werden die Werte Europas umgedeutet und in Sonntagsreden banalisiert. In der real existierenden Europäischen Union wird unter Menschenwürde der Beschäftigung vernichtende Mindestlohn und unter Rechtsstaatlichkeit die Vertragsbrüche von Maastricht und Dublin verstanden, unter Toleranz die Regulierung von Kerzen, Ölkännchen und Glühbirnen, unter der Achtung von Minderheiten die Förderung der Nomenklatura in Brüssel und unter Solidarität die Rettung europäischer Banken. Die europäische Wertegemeinschaft ist ein Wieselwort. Erst durch konkrete Institutionen werden abstrakte Werte real und fassbar.

Die Trennung von Kirche und Staat, Marktwirtschaft, individuelle Freiheitsrechte, Rechtsstaat und Demokratie sind Institutionen, die diese Werte Wirklichkeit werden lassen. Die Trennung von Kirche und Staat ist das Ergebnis eines über Jahrhunderte ausgetragenen Machtkampfes zwischen den Kirchen und den weltlichen Herrschern. Der Drang der Kaiser und Könige, sich in innerkirchliche Belange einzumischen, und das Ansinnen der Päpste und Bischöfe, sich die weltlichen Herrscher zu ihren Untertanen zu machen, haben eine Machtbalance hervorgebracht, deren Ergebnis die tatsächliche Trennung der beiden Bereiche war. Anders als etwa in den meisten islamischen Staaten, die keine Trennung zwischen Religion und Staat kennen. Ein entscheidender Unterschied ist, dass in unseren Breitengraden das kirchliche Recht nicht über dem staatlichen Recht steht, sondern ihm untergeordnet ist. Zwar entstammt die europäische Rechtstradition auch dem kanonischen, also kirchlichem Recht, aber auch dies entstammt letztlich griechisch-römischer Rechtstradition.


Die Marktwirtschaft und der Kapitalismus haben ihre Verankerung im Privateigentum und im Individualismus. Beides verdanken wir der schottischen Aufklärung des 18. Jahrhunderts, dessen prominentester Vertreter Adam Smith war. Einige wesentliche Erkenntnisse über deren Funktionieren haben sogar bereits die scholastischen Philosophen im 13. Jahrhundert und die Gelehrten der Schule von Salamanca im 16. Jahrhundert gewonnen und formuliert.

Die individuelle Freiheit folgt der Erkenntnis, dass nicht das Streben nach gemeinsamen Zielen eine freie und offene Gesellschaft ermöglicht, sondern dass die größtmögliche Verwirklichung individueller Freiheit am Ende auch die Freiheit einer ganzen Gesellschaft mehrt.

Der Rechtsstaat sichert in der Tradition eines Immanuel Kant die Gleichheit vor dem Gesetz. Sein kategorischer Imperativ: “handle nur nach derjenigen Maxime, durch die du zugleich wollen kannst, dass sie ein allgemeines Gesetz werde” hat nicht nur die europäische Verfassungsgeschichte seit dem 18. Jahrhundert maßgeblich beeinflusst, sondern auch die amerikanische.

Das Aufbegehren gegenüber den Königen und Fürsten durch das Volk brachte letztlich auch die Demokratie hervor, deren Wurzeln wir in der Schweiz verorten können wie in Großbritannien, in den Niederlanden wie in Polen. Bald erkannte man, dass es nicht genügt, nur dem reinen Mehrheitsprinzip zu folgen, sondern dass man Demokratie einhegen muss in einen Grundrechtskatalog, der das Individuum vor der Despotie der Mehrheit schützt. Heute wissen wir, dass Fortschritt darin besteht, dass die Wenigen die Vielen überzeugen. Neue Ideen treten zuerst bei Einzelnen auf, bevor sie zur Mehrheitsmeinung werden können.

Diese Institutionen entstammen einer europäischen Werte-Tradition, die längst vergessen scheint, weil Werte und Institutionen immer wieder auseinanderklaffen. Sie wieder ans Tageslicht zu bringen, würde Europa helfen, seine Krise zu überwinden, und der europäischen Wertegemeinschaft wieder einen Sinn zu geben.

"Mit freundlicher Genehmigung des Autors: Frank Schäffler (Prometheus Institut, Berlin). Der Artikel erschien ursprünglich am Dec. 11, 2015 in den "Orientierungen" der Ludwig Erhard Stiftung."

No Diverse Populace Without Diverse Representation

Remarks about the latest Solidarity’s Shadow Report to the United Nations’ Committee on the “Elimination of All Forms of Racial Discrimination” by Herman Mashaba*

racism south africa
South Africa cannot be a diverse populace without diverse representation

This Solidarity’s Shadow Report to the United Nations’ Committee on the “Elimination of All Forms of Racial Discrimination” is more than a vital initiative. Racial discrimination has affected, over the last 300 years of our recorded history, the lives of every person living in South Africa, and unfortunately continues to do so today. It is impossible to be born black in South Africa and not to have experienced incidents of racism.

I was born in 1959 under the leadership of Prime Minister H. F. Verwoerd, known as the architect of apartheid, and by extension the unashamed advocate of institutionalised racism. I grew up in the black homeland of Bophuthatswana and experienced first-hand the results of racial segregation. Due to the apartheid policies, my parents had to travel to Johannesburg to find work, resulting in me living with my sisters in isolated rural Hammanskraal. Blacks were paid paltry wages and my widowed mother was unable to maintain a family with her R29 a month salary.

My mother stole supplies from her employer, and my sisters and I stole firewood and water from neighbouring white farmers, and we experienced being chased off these farms by gun-wielding farmers. These demeaning acts were prompted by nothing other than pure poverty, which was itself occasioned by Apartheid’s racially divisive policies. A typical day in my life might have been being told how a farmer had taught his son to shoot by using the labourers in the field to practice on, an incident in which my greatgrandfather was shot. Or waiting for my mother to come home in the middle of the night and return to work before dawn, so that her employer would not know she had left her backyard room during the night to take food to her children.

Experiences such as these engendered a deep suspicion and hatred of white people. This hatred was inflamed by my interaction with lecturers and administrative staff during my studies at the University of the North. After witnessing racial manipulation and brutality, I took a conscious decision to abandon my studies, and tried to illegally leave the country to join liberation freedom fighters in other parts of our continent. Regrettably, I did not have the connections to facilitate my desire to undergo military training and become a freedom fighter.

I have to admit that at that stage in my life, I was depressed and a very angry black youth. What depressed me the most was the thought of having to work for whites, something a detested as I was growing up. During my teens I opted to gamble and play a game of dice games in the township rather than work as a weekend gardener for a white man. But eventually reality sunk in, and I was forced to overcome my disdain for whites to the extent to which I knew I would have to work for them. I did work for whites, and Indians, and I did experience racism. But, these interactions taught me a valuable lesson. I could let that racism define the trajectory of my life, or I could avoid racial confrontation and give of my best. It was a successful strategy and I eventually saved enough money to buy myself a car so that I could become an independent operator. Although I had realised that racism exists at all levels, I also met people who weren’t racist, who judged me on my character instead of the colour of my skin. It was a philosophy that appealed to me. However, I never wanted to be employed at a level that an employer decided for me, and job reservation meant that certain jobs were reserved for whites only. I was determined to be my own boss so that I could be in control of my dignity and my destination.

In 1982, the Apartheid legislation determined that I should not be in business as a black South African. The inferior education I had received from the Bantu Education Department barely equipped me to be a clerk, never mind a businessman. Living in an economically depressed and isolated homeland could hardly be considered a nurturing environment for black entrepreneurship because there was little to no access to resources. Race-based labour controls, the limitation of movement and employment of blacks, and colour barriers in companies added to the list of how Apartheid intended to disempower black people. However, I refused to be derailed from my dream of economic freedom, and at the age of 24 I started my own cosmetics company, branding my products Black Like Me, and also inviting a fellow white South African to join the business as an equal partner. We both had skills that the business needed; this was a vital partnership. The miracle of the 1994 election and Nelson Mandela’s leadership of the country had all South Africans ready to embrace the concept of a Rainbow Nation, and our apparent harmony won the approval and admiration of the international community. Our constitution was hailed as among the most progressive in the world and our current Deputy President, Cyril Ramaphosa, travelled across the globe, sharing our country’s miracle. They were indeed times to be proud and to bask in the glow of that Rainbow Nation.

Sadly, 21 years down the line, we should be a mature democracy. Instead, the glow of the rainbow is beginning to diminish and Nelson Mandela’s great legacy is being dismantled by his own political party, the ANC. Our current government is intensifying its racial policies that are going to drag us back into the dark days of polarisation and disrepute. Undoubtedly, at the dawn of our democracy, the ANC government was compelled, or more accurately, electorally compelled to redress injustices of the past. And the government at that time took its role very seriously, taking considerable time and employing wise minds to implement policies that would create an equal society and improve the lives of the previously disadvantaged. Subsequent to 1994, employment legislation was developed to outlaw unfair racial discrimination and to redress past imbalances. Employment policies undoubtedly had to be revised, and the first step was the repealing of the Labour Relations Act of 1956 and replacing it with the Labour Relations Act of 1995, which eliminated job reservation. But the policies that I would like to unpack here, are those that resonate with me as a capitalist entrepreneur, and those that are essentially race-based. Two of the most common terms in South African labour law are undoubtedly BEE and BBBEE, and most people think they are interchangeable. They are not. The BEE or Black Economic Empowerment Act of 2003 (now referred to as the Narrow Based Black Economic Empowerment) refers specifically to the government policy whereby sections of the population who were not allowed to participate in the economy were given a chance to redress the economic imbalances of the past. BBBEE or Broad-Based Black Economic Empowerment Act of 2006 seeks to accelerate and increase the penetration of black participation in the economy at every level. BEE or BBBEE, essentially what it comes down to is affirmative action.

Essentially, affirmative action sought to “substantially and equitably transfer and confer the ownership, management and control of South Africa’s financial and economic resources to the majority of its citizens. It also sought to encourage and ensure broader and meaningful participation by black people to achieve sustainable development and prosperity”. The notion of empowering previously disadvantaged blacks is a noble ideal, noble but racist. Let’s look at why this is so. To adhere to BEE principles, businesses are compelled to consider the race and social background of potential applicants instead of considering an applicant’s skillset and qualifications. Race is thus a determining factor in securing employment in South Africa. It was unacceptable to have job reservation during apartheid and it is unacceptable now. Affirmative action is not empowering, it is limiting, degrading, and offensive to anyone who wants to participate in the economy but cannot simply because they are not black. Affirmative action is discriminatory not only against a minority, it also excludes the vast majority of black South Africans from its purported benefits, since BEE has succeeded in creating an economic network of privileged manipulators and cronies.

Additionally, affirmative action has created a skills shortage crisis as many qualified and economically active whites, and sometimes blacks, left the country because of being excluded. Affirmative action serves a few politically connected black elite; it has seen the rise of extensive corruption, but has still left millions of black people, in particular the youths, unemployed and in dire poverty. Affirmative action creates an illusion job creation and racial integration that doesn’t exist. Instead affirmative action has divided South African society in two, highlighting the divide between the white haves and the black have-nots. Affirmative action has enhanced the racist perceptions of blacks and whites. Poor blacks are under the illusion that the whites are still the only beneficiaries of business. Whites feel that the tables have turned, and that they are excluded from economic activity based on race. The cost of affirmative action to the poor has been substantial in that it has diverted money from education and infrastructure projects that would have been beneficial, and instead created bloated agencies and departments that don’t contribute to the economy in any meaningful way.

Affirmative action supports the racism’s bedfellow, namely tribalism, where favoured politically connected businessmen are able to benefit from government tenders and contracts. It promotes and create an impression that to succeed, you must be first politically connected. Political patronage becomes a vehicle to get closer to state resources. Any policy that supports this racial divisiveness must be abandoned. South Africa must be governed according to the constitution that states that citizens should not be unfairly discriminated against, either directly or indirectly, on one or more grounds, including race, gender, sex, pregnancy, marital status, ethnic or social origin, colour, sexual orientation, age, disability, religion, conscience, belief, culture, language and birth. If South Africa’s citizens are to flourish and the country is to develop into a stable, strong economic nation, then all forms of discrimination must be abandoned. Further tweaking the affirmative action policy will result in further divisiveness, it will obstruct the flow of skills and capital and diminish the growth, entrepreneurship, and investment necessary to elevate millions of South Africans into the middle class. Most importantly it will exacerbate racial disharmony. The government must remove all racebased legislation from labour and commerce.

Currently, employment in South Africa is now being shaped by the legislated exclusion of racial minorities. It is contradictory to claim that we are aiming for a non-racial society and then on the other hand implement discrimination. It is my opinion that any form of racism, including affirmative action, should be scrapped from the statute books to uphold our constitution of no discrimination. My solution is job creation through a booming capitalist economy where investors feel safe and employers and employees are able to contract without state intervention. Allow all South Africans to exploit their God-Given talents without these discriminatory practices. The most effective tool the state can use to redress the ills of the past of inequality, unemployment and poverty, is to follow the spirit of our constitution, which is not to discriminate against other members of society. In a society like that, the economic potential of the country will be unleashed. Economic growth would mean more taxes for the state. More taxes for the state, will mean more money and resources to address and provide good quality education, healthcare and overall infrastructure. In an environment of an accountable and effective government, black people of our nation are naturally going to be the biggest beneficiaries. The country will over time have an educated, sustainable and harmonious society. We need a government that does not look for shotgun solutions to this challenge, but long term nation building ones. It is possible and necessary for the country to adopt such policies. Racial policies are the cancer that is directly responsible for this unacceptable levels of unemployment.

Unemployment is directly responsible for the breakdown of our family structures. We cannot build a nation without first building our families. Give our people the dignity and respect. Allow parents to support their families. Allow children to grow up as children and see their parents waking up in the morning. Let us strive to teach the nation the value of hard work, as opposed to this dependency on governments. The future of South African society will rest on fair
representation of all South African across all sectors. The strength of a democratic South Africa relies on the wellbeing of its citizens and the benefits that are available for every citizen to enjoy. After 21 years of democracy, race-based legislation can no longer be a vehicle that drives out the effects of discrimination. Race-based legislation is actually the bus that drives discrimination and it must be rejected and terminated. It is ironic that the compensatory mode and restorative justice of race-based legislation has become the leading instrument in racial disharmony. No balance can be struck between promoting such legislation and avoiding discrimination. When minorities are alienated, no equality exists. South Africa cannot be a diverse populace without diverse representation. Finally, if South Africa is to avoid the tribalism, dictatorship, genocide, poverty and demagoguery that plagues other African countries, we must eradicate every form of racism. And we must do it now.

Please allow me to wish you success with this important initiative to save our country.

* Herman Mashaba is Director of Liberty Lane Trading at the Assessment College of South Africa (Pty) Ltd. He also serves as Chairman, CEO and Director of several other enterprises. In 1985 he founded the Cosmetics Company “Black Like Me”.

Tags: No Diverse Populace Without Diverse Representation, Herman Mashaba