An Update to Henry Hazlitt's 'Uruguay: Welfare State Gone Wild'

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Back in 1969, Henry Hazlitt’s Man Versus the Welfare State appeared. It was a valuable collection of essays, one of which was “Uruguay: Welfare State Gone Wild.”

This essay consisted largely of a series of verbal “snapshots” of Uruguay, as Hazlitt called them, in the form of quotations drawn from a variety of sources over the years 1956 to 1968. What Hazlitt described by means of the quotations was an economic system plunged into ruin by unrestrained welfare-state spending.

Having taken a tour of Montevideo, Uruguay’s capital, last month, I’d like to offer a “snapshot” as of the present year, 2007.

What I saw was a city of almost unrelieved drabness and ruin. Graffiti filled walls within a hundred yards of the seat of the country’s Congress. The city’s public parks, presented as an attraction to tourists, were overgrown with weeds; the wrought-iron fences they contained were in a state of collapse. Building after building, in neighborhood after neighborhood, was in a state disrepair. Often, only a burnt-out concrete shell was left. Hardly anything, anywhere, looked new. Much of the city was reminiscent of the South Bronx, an area devastated by more than two generations of rent controls. Only one, small area of the city, near the River Plate, appeared to be at all prosperous.

Uruguay no longer has trains. “They don’t work anymore,” our tour-guide announced. “Uruguay has been resting for the last 50 years and has made no progress in that time,” she said. The population of Montevideo and of the country as a whole are both declining. A large proportion of university graduates in particular leave, in search of better opportunities elsewhere.

From what I saw, if there are another 50 years of such “rest,” there may be nothing much left of Montevideo beyond an impoverished village.

George Reisman [send him mail] is Pepperdine University Professor Emeritus of Economics, and is the author of Capitalism: A Treatise on Economics. Visit his website.

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