Freedom from Risk:Explaining the Election Outcome in Mongolia

Last week voters in Mongolia cast 53% of their votes in favour of presidential candidate Nambaryn Enkhbayar of Mongolia's former communist ruling party. Economic growth in Mongolia has averaged over 10% per year during the past few years, but many voters did not like the chaos that existed under the Democratic Party coalition from 1996 - 2000.

For most of her 53 years, she has lived as a nomadic herder under Mongolia's wide blue skies, raising nine children, surviving snowstorms and drought, and hauling the family's white felt tent to a new site each season in search of grass for their sheep. But never did Tsahiriin Daariimaa think life would be as hard as it is now, on the eve of Sunday's presidential elections.

With the end of communism in Mongolia 15 years ago, Daariimaa said she and her husband are no longer guaranteed monthly wages from a government farm, but must sell their wool in a market of fluctuating prices and nervy Chinese traders.

Under communism, "everyone worked for the collective farm," Daariimaa said. Today, none of her children has a steady job.

"Communism was much better," she said.

... When the country was under Russia's influence, all schoolchildren learned Russian, and Soviet aid made up as much as one-third of Mongolia's gross domestic product. That aid disappeared overnight with the Soviet Union's collapse, and Mongolians miss it.

"In the old times, the government took better care of us ordinary people," [shepherd] Choijav said. "Now, the government is very far away from us, especially if you live in the countryside and take care of sheep."

These views represent human sentiments that explain a great deal about what is happening in North America. Many of us do not want to take risks of loss to our future welfare; we do not want (or are unable) to learn how to use the market to hedge these risks; we want others (via the gubmnt) to insure us against these detrimental risks; and yet we feel fully entitled to the upside (or beneficial) risks.

As a result, we vote for more and more gubmnt intervention in the marketplace. The conservative revolution of the 1980s may have slowed the growth of gubmnt interventionist policies, but it did not reverse this tendency.

If we do not learn how to explain that more risk with a bigger pie is better, even for the unlucky, than interventionist policies, we will have a much smaller pie in the future. Doing this is not easy, if it is even possible.

And now I understand one of my motivations for all this blogging.