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Exit, Voice, and Loyalty

Exit, Voice, and Loyalty

by William H. Benson

January 10, 2019

     Economic and political ruin strikes one country after another. Yes, it seems that, on occasion, the world’s nearly two hundred countries will suffer a disaster, a disintegration of the country’s stabilizing political and economic forces that pushes its citizens into the very center of chaos.

     For example, the civil war in Syria drags on. An estimated 500,000 people have lost their lives since 2011, and another 13 million have found themselves displaced and forced to flee the country. Once the U. S. troops leave, the Syrian people can expect more barrel bombs, bullets, and bloodshed.

     Venezuela’s economy has disintegrated. Since 2014, at least 2.5 million people, possibly as many as 5.0 million, have packed their few belongings, walked away from homes and jobs, and migrated to neighboring countries. The reason: Venezuela’s inflation rate now stands at 1,299,744%.

     The country’s previous ruler, Hugo Chavez, and its current ruler, Nicolás Maduro, engineered a complete economic collapse by draining the national treasury and then borrowing billions. Today, $50 billion of their bonds are in default, and “90% of the population live in poverty.”

     Officials in South Sudan, the world’s newest country, also looted some $7 billion from its national treasury and parked the funds in bank accounts in Kenya and Uganda. A war over who will control the country, has caused “perhaps half a million deaths, mostly aggravated by hunger and disease.”

     In Yemen, the rebel Houthi party controls the prized western region, including the ports on the Red Sea, while the government controls the central and eastern regions. The war between the two factions has caused mass starvation and disease for the people. A writer for the Economist said last week, “There are many who do not want peace. Powerful people on all sides are profiting from the conflict.”

     These calamities in these four countries are today’s disasters, and one can predict that at some point in the future, each will subside, and then other calamities in other countries will appear and replace the current crop. Nothing bad stays bad forever, even if the current inflation rate exceeds 1.2 million%.

     Time levels all. An American physicist named John Archibald Wheeler pointed out, “Time is what keeps everything from happening at once.” 

     This brings up a question. “If we know that today’s disasters will recover, what will cause a nation to turn itself around?”

     The English language has an interesting phrase: “The worm has turned.” It describes how a situation can change, when a person, an institution, or even a country that has been weak, unlucky, and unsuccessful can become strong, lucky and successful.

     Two weeks ago in the New York Times, a columnist named Ruchir Sharma pointed out that bubbles happen—think tulips in Holland, emus in Texas, and last year’s bitcoin craze. The bubble’s mood is greed, defined by mania and driven by hype.

     But then the same columnist pointed out that there are “anti-bubbles,” and their mood is fear, trepidation, and suspicion—think war, rumors of war, looting public coffers, famine, disease, an exodus, hyperinflation, a busted economy, and onerous debts.

     Sharma says, “Bubbles and anti-bubbles share one thing; they don’t last forever.” When greed turns to fear, or when fear gives way to hope, then we say, “the worm has turned.”

     The economist Albert O. Hirschman wrote of “exit, voice, and loyalty.” In most market economies, people have a choice, and if they do not like the choices, the products and services offered, they will head to the exit signs. They are free to leave the shop or pack up and leave the country.

     In most democratic countries, people will not leave if dissatisfied with their leaders’ political decisions. Instead, they will speak their minds, and voice their opinions, hoping that others will listen and change the political status quo.

     A third option: people neither leave or say anything. Instead, they choose silence and remain loyal. They adopt a wait and see position. Hence, exit, voice, and loyalty.

     Yes, time changes all. It will heal gaping wounds, rectify deep injustices, knock down the powerful and mighty, and lift the downtrodden. The 18th century writer and thinker William Blake said, “Eternity is in love with the productions of time. In seed time learn, in harvest teach, in winter enjoy. The cut worm forgives the plow.”