The Perils of Unchecked Power
The concentration of power opens the door to corruption, the use of state resources to reward friends and punish enemies, and pressure on the press to praise rulers and suppress inconvenient news. When open discussion of national problems is not allowed, governments make bad decisions, and even good ideas are implemented counterproductively.
It’s dangerous for the three branches of government to be under the control of a single person. Political scientists speak of the system of checks and balances, while lawyers and journalists call out the dangers to freedom of expression. While this all sounds very abstract, it’s unfortunately easy to find examples in our history. Such examples abound in a country where the democratic culture has such shallow roots that we are willing to throw democracy overboard at the first opportunity.
I will present a few live examples of power without barriers, focusing on three topics: corruption, poor decision-making, and counterproductive execution of beneficial policies. Although these examples come from my research on 1921, the centennial anniversary of independence, it’s easy to find similar instances throughout the 20th century.
It's easy to find examples of corruption in El Salvador because our politicians continuously enrich themselves at the expense of the state, even when they run the risk of being discovered. When they don't perceive that risk, corruption runs rampant. I will talk about an example that does not stand out for the amount of money involved, but rather for the cruelty of the story — cruelty that was possible due to the absence of legal remedies and auditors.
In 1921 the state coffers were empty. In previous years the government had registered extraordinary expenses using public funds to manage an election. The current president was Carlos Meléndez and the candidate he endorsed as his replacement was his brother Jorge. Once in power, Jorge significantly increased military spending to defend the dubious legitimacy of his presidency.
The treasury was already very short on funds when an economic crisis in the United States had repercussions in El Salvador. Coffee exports and customs tax revenue declined precipitously. The government stopped paying the salaries of public employees for months.
In March 1921, the General Treasury of the Republic announced it would pay the salaries corresponding to November 1920 and listed the dates on which they could be collected. One day was devoted to paying teachers, the next to judges and court clerks, then telegraphists, postmen, and so on. Behind this impersonal list were hundreds, thousands of stories of hardship and despair. Week after week, public employees started the day without knowing it they would have money to feed the family, pay rent, or buy urgent medicine.
The tragedy of the many created opportunities for the rapacity of the few. Unscrupulous individuals close to government officials, and even members of the president's family, lurked near government offices. They approached the teachers or the court and post office employees to buy the "vouchers" or treasury promissory notes. Desperate to feed their children, they agreed to sell the vouchers at a great discount, sometimes receiving only half the face value. These intermediaries then resold at full value. In a government in which the legislature could not ask questions and the judiciary was prostrate, this cruelty was possible without fear of consequences. There was total impunity.
It is hardly necessary to remind El Faro readers that corruption is also possible in cases where rulers feel protected because they can buy votes to obtain a majority of the legislature, appoint puppets in the Court of Accounts, or escape press scrutiny with measures that impede transparency. Most Salvadoran political parties have played this game.
Rulers who don’t answer to anyone, surround themselves with “yes men,” and manage to escape the scrutiny of the press create conditions practically guaranteeing bad decisions. No one dares say that an idea is bad, will not benefit the majority, will be wasteful, or that future generations will end up paying for the mess.
The disastrous 1921–22 negotiation for a loan to solve a fiscal problem is case-in-point. Desperate to obtain financing to consolidate the government’s debts and obtain investment funds, President Jorge Meléndez fell under the influence of Minor Keith, the co-owner of the United Fruit Company — the infamous banana exporter and transportation company that wielded enormous power in Central America.
Keith persuaded Meléndez that he could get US banks to extend a loan to consolidate the domestic and foreign debt and provide additional funds to finance public works. He then persuaded him to appoint René Keilhauer, who was Keith's employee, as El Salvador's representative to the bankers. He himself got representation from the banks. At the end of the day, the contract negotiation was a conversation between Keith and his employee Keilhauer. The terms of the agreement redounded to Keith's benefit regardless of El Salvador's interests.
The American tycoon made millions in the transaction while El Salvador committed 70 percent of customs taxes to pay off the loan. In addition, the country was forced to accept that a Wall Street banker would manage customs revenues and, for all practical purposes, supervise public finances. In this way, for almost two decades the payment of the loan always took precedence over crucial issues for Salvadorans, including investment in hospitals or schools.
You don't have to go back a century to find bad decisions. For me, the worst decision of the 20th century was one that is used on a recurring basis — the systematic use of the armed forces to solve problems. Property or wage disputes to be settled in court ended up silenced by army or police actions. Discussions on educational methods or working conditions ended with troops firing bullets in the street until the population felt they had no other option but to take up arms.
Good decisions poorly executed
The lack of checks and balances and open debate also creates conditions for the execution of necessary projects to be so clumsy and impetuous that it ends up backfiring. For this case we have another example from 1921: the adoption of the gold standard. According to the schedule established by the monetary law of 1919, the last step in the adoption of the new system was to stop using old-fashioned silver coins (reales, cuartillos) and replace them with nickel coins of five, ten, or twenty-five colón cents. Without thinking twice, in the midst of a serious economic crisis in which not even the soldiers could collect their salaries, the authorities warned that on February 25 all silver coins would lose their monetary value.
The day after the announcement of the demonetization of silver, women market sellers and workers called for a public demonstration of protest. More than 5,000 people responded. It was striking to see the number of elderly people who showed up in anguish when they saw their savings disappear. Protesters complained that the new measure would increase the hunger and misery of the people. The crowd demanded the resignation of the finance minister. The chronicles noted a “human torrent” that roamed through the city looking for anyone to listen to them.
On February 28 there was a second demonstration called by the women market sellers. They marched to surround the National Palace where the deputies of the National Assembly were meeting. That morning they were in session. The Blue Room and the halls of the Presidential Palace ended up crowded with indignant women and men who, shouting their discontent, forced the deputies to suspend the implementation of the monetary law that demonetized the fractional currency.
Outside the Palace the situation deteriorated rapidly. An angry group headed to the house of the Minister of Finance and hurled stones at it. Soldiers and policemen took to the streets. The city center became a battlefield on which both sides fought fiercely. The well-armed government forces encountered such resistance that some policemen, intimidated, took off their uniforms, dressed in civilian clothes and ran in terror. There were deaths and injuries on both sides; it is not known how many.
Later in the twentieth century, there were many other decisions that, while sound on paper, were carried out in such a way that they provoked hostility and even violence. The educational reform of 1968 was imposed in an authoritarian way, antagonizing schoolteachers to the extent that the teachers' union was one of the groups that fought the military governments, both before and during the armed conflict. The clumsy and implacable resettlement of the population displaced by the Cerrón Grande reservoir pushed many residents of the area to join the guerrilla movement.
Some readers will say that these are forgotten pages of history, that they don't matter. But we have to wonder why they've been forgotten. The reason has to do with the monopoly of memory on the part of the powerful, the control of the press, and the will to forget what is disturbing and distort history for the sake of convenience. Manipulated reality and state-orchestrated forgetfulness are the great instruments of dictatorships.
This can be illustrated by the longing for times when there was no corruption in El Salvador. Interestingly, there is an exact correlation in this regard. The years of illusory honesty of politicians and state employees coincide with authoritarian governments imposing strict restrictions on press freedom. When there is no free press and all instruments of power are controlled, how will we know if there is corruption?
The best allies of a government that wants to do things well are the institutions, organizations, and individuals who contribute ideas, who question and debate proposals, who verify that legal requirements are met, who monitor funds and who shed light on potential problems.
Leaders are in a unique position to manipulate history. But they can also learn from the past to build a better future. This is where the great opportunity lies. A person in a leadership position who has the talent to gain the support of the population can constructively harness power by surrounding himself with the brightest people in the country, listening, promoting informed debate on the most important issues before reaching a decision, correcting the course when necessary, contributing to the consolidation of the institutions of democracy.
Twenty years from now, a girl who will have received the best education possible could read about her father who was wise, who appreciated the trust that the people placed in him and used it not to glorify himself but to understand and help the poor, to create opportunities and correct injustices. And that was the source of his greatness.
FI name: March 2021