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How the “Informal” Economy Creates Free Markets in Bolivia

In today's discourse on Bolivia, notions of liberalism, free markets, or traditional capitalist ideals don’t ever come to mind in contrast with mainstream discussions of 21st-century socialism, Keynesian policies, and a notable lack of economic freedoms. In fact, Bolivia was ranked 117 in 2021 by the Fraser institute in the Economic Freedom of the World: 2023 Annual Report. And it scored 43.4 in the Economic Freedom Index by the Heritage foundation, making it the 175th least free country (in economic freedoms) out of 184 countries ranked in 2023, these rankings underscore the entrenched nature of statist policies and their detrimental impact on Bolivia's economic prospects.

Professor Antonio Saravia, a prominent Bolivian economist and researcher, encapsulates the prevailing sentiment regarding Bolivia's economic landscape with his observation in an article about the current economic crisis in the country that: “Bolivia has a self-destructive psyche, a statist psyche that seems impossible to banish and that plunges us into an eternal cycle in which one crisis follows another.” This sobering assessment illuminates the enduring grip of statist policies and their adverse effects on Bolivia's economic future.

Amidst this backdrop of economic constraints, the Alasitas Fair emerges as a beacon of liberalism and capitalism, offering a rare glimpse into a world where individual aspirations and economic freedom reign supreme. Held annually in La Paz, Bolivia, from the 24th of January for two weeks (though often extending beyond to the end of February), the Alasitas Fair, also known as the Feast of Abundance or the Miniature Market Celebration, is a testament to the resilience and ingenuity of a Bolivian culture that longs for economic liberty.

Originating in 1783 as a celebration of La Paz's survival and liberation from a prolonged indigenous siege that ended all commerce and prosperity of the city for a period, the Alasitas Fair embodies a fusion of indigenous customs, Catholic traditions, and republican ideals. At its core, the fair pays homage to both "Nuestra Señora de La Paz" and the “Ekeko”, the Aymara god of abundance, blending spiritual beliefs with commercial activities in a harmonious display of cultural syncretism.

The centerpiece of the Alasitas Fair is the miniature replicas of goods and commodities, meticulously crafted and displayed to represent the desires, dreams, and aspirations of Bolivians. These miniatures are more than mere trinkets; they are manifestations of the individual's longing for wealth, work, jobs, and the realization of their dreams. Each miniature symbolizes the innate human desire for prosperity and fulfillment, reflecting the capitalist and libertarian ideals of self-determination and individual autonomy.

Furthermore, the Ekeko, represented as a figurine of a merchant, serves as a powerful symbol of abundance and prosperity. As participants flock to the fair to purchase these miniature representations of their desires, many purchase miniature representations of the Ekeko and if they treat the miniature of the Andean god with respect he in exchange will offer them good fortune for a prosperous future. And the Ekeko is not represented by a beggar or a tax collector, much less by a government employee, it is represented by a merchant, giving testament to the intrinsic desire for commercial freedom in the Bolivian society.

Despite the oppressive regulatory environment of Bolivia, the Alasitas Fair thrives as a bastion of economic freedom and resilience. In the informal market created by the fair, participants engage in voluntary exchange free from government coercion, embodying the ideals of free enterprise and entrepreneurship. Here, individuals are able to pursue their dreams and aspirations without the stifling hand of authorities, demonstrating the inherent strength and ingenuity of the human spirit.

As controls and regulations increase the entrepreneurial spirit of people will find a way around it. In an article Jeffrey A. Tucker thoroughly explains this as the Informal Revolution. There he writes:

“Governments have always intervened in the economy, but today's State—armed with modern data collection as well as an interventionist ideology—has taken us to a new level of regulation and taxation.

Faced with this, people find less costly ways to work, produce, and exchange, even if it means doing so unofficially. This is one reason the State can never achieve total economic control—witness the underground economies in the socialist world.”

As of 2022 Bolivia had an 83.7% of the employed population in the informal sector. The Alasitas fair is one of the notable examples that the State is never all powerful, people will always find a way to endure, will always find a way to prosper and will never stop looking for the future that they desire.

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