Say a Prayer for Freedom in Bolivia

Say a Prayer for Freedom in Bolivia 

By Lawrence W. Reed

Today—August 17, 2025—is Election Day in the South American nation of Bolivia, home to some 12.5 million people. Will the results make a difference?

Forty years ago, I visited Bolivia to observe the world’s then-highest rate of price inflation, an astonishing 50,000 percent. Tax revenues covered only 10 percent of the Bolivian government’s spending; the printing press supplied the rest. Paper money became the country’s third largest import. Bolivia’s presses couldn’t keep up with the government’s demands, so planeloads of the stuff were flown in every week from Europe.

On the day I arrived, the Bolivian peso traded at 150,000 to the dollar. Just days later, it had sunk to 200,000. I brought nine million pesos home—a million pesos (in 1,000-peso notes) in each of nine wads bound together with string by a local bank. I kept one million, which I have to this day, and sold the other eight to gold bugs and currency collectors for $500 each. Not bad, considering that, at 200,000 to the buck, I paid just $5 for each million-peso bundle and $45 for the whole nine million. That little bit of international arbitrage financed my trip.

Bolivian hyperinflation ended just four months later, in August 1985, each peso finally worth far less than its ink and paper. You can see some short, inflation-related videos here, including a glimpse of my million-peso wad.

For the next 20 years, the country muddled along as successive governments tinkered with modest reforms but never fully embraced a low-tax, deregulated, free market model. Nonetheless, even a little bit of economic freedom can accomplish a lot. Bolivia’s economy steadily grew.

In the presidential election of December 2005, however, voters elected Evo Morales, Bolivia’s first indigenous Bernie Sanders. He ran on an explicitly socialist platform, promising to emulate Hugo Chavez in Venezuela and Fidel Castro in Cuba. Morales quickly moved to nationalize industrial sectors such as energy; frighten foreign investors away; splurge on wasteful infrastructure and welfare projects; strangle the economy with bureaucracy, tax hikes, new regulations, and price controls; all while corrupting the media and rigging the political process to ensure his grip on power. Then, of course, he blamed everybody but himself for the mounting chaos. It was standard socialist playbook.

As explained at FEE.org by Tomás Fenati, a boom in world commodity prices helped to finance socialism in Morales’ early years, but when that ended and socialism had to get by on its own merits, the house of cards came tumbling down.

Morales was obliged to flee to Mexico in 2019, where he enjoyed the good life as the Bolivians he abandoned wallowed in the socialist shambles he centrally planned. But in 2020, Bolivia jumped from the frying pan into the fire when Morales-endorsed Luis Arce emerged victorious in that year’s presential election. Arce, a member of Morales’s Movement for Socialism Party (MAS), had held the post of Minister of Economy and Public Finance in the disastrous Morales administration. Arce doubled down on socialism, proving that diehard socialists never really learn anything unless and until they muster enough intellectual integrity to admit their mistakes, confess to their crimes, and wise up. Arce and Morales, once partners, now are political enemies, fighting for control of their fractured Movement for Socialism Party.

So here we are on Election Day with Bolivia mired in a 20-year socialist nightmare. Inflation is soaring, the peso is plummeting, and shortages of goods are rampant.

Arce opted not to run again, and the constitutionally disqualified Morales is forbidden to run, though he is urging Bolivians to vote “Null” to delegitimize the election. The leading candidates are considered anti-socialist to one degree or another.

Oscar Ballon, a Bolivian citizen who lives in La Paz, is an old friend. I asked him for his take on today’s vote. He wrote in response,

Twenty years of socialist/collectivist policies seem to be coming to an end in Bolivia. Completely bankrupt and severely impoverished, Bolivians will choose among the four main opposition candidates: Tuto Quiroga (LIBRE Alliance) and Samuel Doria Medina (UNITY Alliance); both leading in the polls, or Rodrigo Paz (Christian Democratic Party) and Manfred Reyes Villa (Autonomy for Bolivia Súmate). Together, they will probably gain control of the future National Assembly, with more than the 2/3 majority necessary to change current laws. The Movement for Socialism will be severely weakened. After this very bad socialist experience, hopefully Bolivia can move towards freedom and better days of prosperity.

Another Bolivian, Fabricio Antezana Duran, works for FEE (Foundation for Economic Education) as a Social Media Associate & Hazlitt Fellow. A year ago this very week, he authored a revealing article titled 5 Socialist Policies That Destroyed the Bolivian Economy. He is less optimistic than Ballon:

Bolivia’s 2025 elections may finally bury socialism at the polls, but they won’t bury statism. Even with MAS collapsing, the leading opposition candidates still cling to heavy government involvement in the economy. The real challenge is not just defeating socialism, it’s daring to trust markets, entrepreneurship, and individual freedom. Until then, Bolivia risks trading one form of interventionism for another, all while facing the shadow of political unrest, economic crisis, and instability.

Yet another Bolivian, the openly libertarian economist Jaime Dunn, who almost entered the presidential contest himself, offers a crystal clear diagnosis and a solid prescription for recovery: Scrap socialism once and for all and put freedom and free markets in its place.

My advice? Dunn is right. Whoever wins today should be honest with the Bolivian people. No weak, half-way measures that only prolong the agony. The country must take its medicine. If I were writing the new president’s first televised speech to the nation, it would read like this:

My fellow Bolivians, we’ve deluded ourselves long enough. We’ve callously put our faith in flawed and corrupt politicians who pretend they know how to run your economic life. Here, as everywhere socialism has been attempted, the results are misery and failure. Why, in the face of our own painful experiences these past 20 years, should we travel any further down that path of doom? Our model to follow is not Castro, Chavez, Peron or any of the other power-hungry buffoons that seduce you with false promises and deliver disaster and dictatorship. Our model is Javier Milei and our neighbor to the south, Argentina. President Milei is the only leader in all of Latin America who is aggressively producing change, results, and freedom at the same time. To help us follow Milei’s example, I am appointing Jaime Dunn to a senior leadership position in our new government. He wants to do for Bolivia what Milei is accomplishing for Argentina. From now on, we will be a free nation, no longer enslaved to demagogues and their stupid ideologies.

Wouldn’t that be refreshing! Following on the heels of the Argentine miracle would be the great Bolivian transformation. Such an achievement in the heart of Latin America just might kill the virus of socialism throughout the region. The very prospect brings to mind the words of Frederic Bastiat in his classic work, The Law:

And now that the legislators and do-gooders have so futilely inflicted so many systems upon society, may they finally end where they should have begun: May they reject all systems, and try liberty; for liberty is an acknowledgment of faith in God and His works.

My fingers are crossed. Say a prayer for Bolivia.

Additional Information:

Crisis in Bolivia? by Tomás Fenati

Videos on Money

5 Socialist Policies that Destroyed the Bolivian Economy by Fabricio Antezana Duran

The Milei Miracle by Lawrence W. Reed

The XYZs of Socialism by Lawrence W. Reed

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(Lawrence W. Reed is President Emeritus, Humphreys Family Senior Fellow and Ron Manners Global Ambassador for Freedom at the Foundation for Economic Education in Atlanta, Georgia. He blogs at www.lawrencewreed.com.)