The Problem:
Riyad Salameh pinpoints the Lebanese state’s destructive borrowing practices as the root cause of the country’s economic woes. He likens it to a Ponzi scheme, where the state borrows heavily from banks and individuals, using the funds to sustain itself rather than investing in the economy. This borrowing creates an unsustainable cycle of debt and stifles economic growth.

The Banks’ Role:
Salameh suggests that banks play a complicit role in this borrowing process. They lend money to the state, knowing that the state will continue to borrow to pay the interest on its existing debts. This creates a mutually beneficial arrangement where banks generate profits from interest payments while the state’s financial situation worsens.

Patronage and Corruption:
Salameh identifies patronage and corruption as significant problems within the Lebanese state. Patronage refers to the practice of granting contracts and favors to friends and associates, often bypassing legal procedures. This leads to inefficiencies and hinders economic development. Corruption, in the form of commissions and bribes, further exacerbates the situation, draining resources from the economy and undermining the rule of law.

The State’s Ineffectiveness:
Salameh criticizes the state’s inability to effectively control the economy. He argues that the state does not have the necessary expertise or oversight mechanisms to manage economic affairs effectively. This leads to poor decision-making, misallocation of resources, and a lack of accountability.

Addressing the Issues:
Salameh suggests several measures to address the country’s economic challenges. These include reducing the budget deficit, imposing taxes on banks to share the burden of interest payments, and combating patronage and corruption by implementing transparency and accountability mechanisms. He also emphasizes the importance of state intervention to promote economic growth and development.

Patronage:
Riyad Salameh emphasizes the detrimental effects of patronage in governance, where sects and individuals seek favors and influence at the expense of economic progress. He describes the pervasive nature of patronage, requiring countless permits and approvals for simple tasks like starting a company. This patronage system stifles economic activity and leads to corruption, with some individuals shamelessly admitting to theft while holding political power.

The Consequences of Patronage:
Salameh highlights the negative impact of patronage on economic life, resulting in migration and discontent among citizens burdened with debt. He criticizes the state’s failure to provide basic services like electricity and waste management, leading to a decline in living standards.

The Myth of Civil War:
Salameh dispels the notion that sectarian tensions in Lebanon would inevitably lead to civil war if the current system were dismantled. He emphasizes the need to hold corrupt individuals accountable and imprison them, stressing its importance for the success of the Arab revolution and the well-being of citizens.

Subsidiarity as a Solution:
Salameh proposes the principle of subsidiarity as a means to combat patronage and decentralize decision-making. He advocates for a system where responsibilities are delegated to the lowest appropriate level of government, starting with municipalities and ascending to regional and state authorities. This approach aims to reduce the burden on the state and improve efficiency in governance.

Fear of Marxist-Arabian Socialism:
Salameh expresses concern about the potential resurgence of Marxist-Arabian socialism, which he views as a threat to economic prosperity. He criticizes the ideology for its centralizing tendencies and its failure in countries like Egypt, Syria, and Iraq. He emphasizes the importance of learning from past mistakes and avoiding policies that have led to economic collapse.

The Example of Venezuela:
Salameh draws parallels between Lebanon and Venezuela, highlighting the dangers of socialism and its negative consequences. He refutes the argument that Venezuela’s problems are solely due to sanctions, asserting that the country’s decline began before the imposition of sanctions. He warns against implementing socialist policies, citing the historical failures of socialism worldwide.

The Failure of Socialism:
Salameh emphasizes the consistent failure of socialism wherever it has been implemented. He argues that socialism leads to centralization, stifles economic growth, and ultimately results in the collapse of economies. He cites the example of Aleppo, once a prosperous region, which was deliberately weakened by centralized policies.

State Intervention in Economy:
Free economy with state intervention is preferred over socialism, which has largely failed. China itself does not fully implement socialism.

Political Systems at Different Levels:
Riyad Salameh advocates for different political systems at different levels of society: Communism within the family Socialism within the village Democracy at the county level Libertarianism at the state level Republicanism at the national level

Fractal Principle in History:
The fractal principle, where similar patterns repeat at different scales, has been applied in history. Nation-states adopted this principle before other regions, leading to problems in some cases.

Arab Socialism and Federalization:
Arab Socialism, emphasizing unity and solidarity, has failed due to a lack of consideration for dynamics and what works in practice. Federalization, as seen in many countries, has not been successful in the Arab world.

Limits of Communes:
Communes of up to 300 people can be successful in fostering a sense of community, but larger communes face challenges.

Localism and Nationalism:
Localism is often compared to nationalism, but they are fundamentally different. Nationalism, as seen in the case of France, can lead to the suppression of regional identities and cultures. Localism, in contrast, celebrates local autonomy and diversity within a larger national context.

Localism vs. Nationalism:
Localism focuses on the individual and their village, prioritizing diversity and freedom of expression. Nationalism, on the other hand, emphasizes a centralized state with a singular identity, often associated with fascism and socialism.

Diversity and Nation States:
Nation states can be problematic when they enforce a singular identity, leading to conflicts and homogenization. Smaller nation states allow for more diversity and autonomy, preserving the unique identities of different regions.

Principia Politica:
Principia Politica is a 25-page book with a 2,800-page insert, exploring political principles beyond Lebanon’s context. It proposes innovative concepts, such as employee ownership of companies and restrictions on politicians’ salaries. The book aims to promote social equality and prevent individuals from profiting financially from politics.