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Visiting Urubamba this past week, Oscar Ugarteche tells me that the other day he was stuck out on a farm upriver and, desperate for cigarettes one evening, got to a lonely adobe shop.
"Pack of cigs, please," Oscar says to the campesina lady.
"Sorry, no can do," the lady says.
"Well, excuse me but there's a full packet there on your shelf. That'll do fine."
It was still no can do. Oscar, a sensitive soul, understood that she might be willing to sell him the cigarettes at the price of an individual cigarette, say three or four times the per-packet price, and started negotiations accordingly. They eventually reached a deal under which she sold him 10 of her 20 cigarettes but wouldn't part with the remainder at any price.
Oscar's theory is that appearances to the contrary, the lady is not in business for the money, but because people come in and chat. She was not prepared to let down a regular customer who might pass by and lose a chance for an exchange of news and views.
Oscar, a tall, left-leaning economist into whom I had last bumped in Managua 18 years ago when he was advising the Sandinistas on how to look as though they would pay Nicaragua's foreign debt, can chat knowledgeably about globalization and the opera at La Scala or his latest novel. But he was a nonentity in the lady's world and therefore his banknotes, flourished as only a nicotine addict can flourish, were at a massive discount.
This is an example of a phenomenon that I have registered as The Peru or Urubamba Paradox. The Paradox states that: "Things Are Not Supposed To Work".
As an example, Peru (Brazil, Argentina etc) is not Switzerland. But this does not mean necessarily that Peruvians (Brazilians, Argentines etc) are congenitally lazy and incompetent. It just means that they are not and never will be Swiss. Nor will the Chileans, by the way, though they like to think they're trying.
The Paradoxx interprets these more or less consistent series --South America is and always has been Underdeveloped-- to mean that Peruvians etc prefer things as they are, more or less, whatever they and especially their politicians and economists say to the contrary.
The Urubamba Paradoxx therefore has enormous implications. For a start, no one should waste time and money trying to turn South America into, say, a downmarket version of Europe.
The Paradoxx is morally neutral. Murphy states that bread falls butter side down, whatever the statisticians say. The Paradoxx, in the same way, assumes only that the observable facts fit into a system which functions quite well.
If something does not work as advertised like, say, the Argentine army, this means only that the adverts are misleading, usually deliberately. The army, for instance, keeps thousands of generals and other dangerous unemployables off the streets and things in fact only go wrong when they decide to act like a "real" army.
We all know that schools are run for the teachers and hospitals for the doctors. Peruvian banks have studied carefully how to ensure that their branches are permanently full, meaning making office boys and secretaries queue up for hours, creating a permanent, nervous milling throng.
This demands thousands of extra employees to keep flurries of waste paper constantly moving. Raul Salazar, who I ran into in Cusco the other day, tells me that the Banco de Lima, of which he is a director, now offers Premium Service to people who who want to cut through this rubbish.
So, the municipal offices in Urubamba may not produce bits of paper quickly, or even at all, especially if they require these bits of paper, suitably scribbled on, from people like me, and will even sue you for not having them.
But the Paradoxx states that this does not mean that our town hall doesn't work.
It means merely that the main objective of the Urubamba town hall is to employ as many people as possible. These (cf Parkinson's Law --"Bureaucrats expand at a fixed rate unrelated to the work, if any, to be done") do one-tenth of the work that they should "really" do, almost all of which is pointless anyway.
The Urubamba Paradoxx is, like the Wall St Journal, international even though it has its epynonymous epicentre. Why do people in Los Angeles and Yokohama spend so much time in traffic? The Urubamba Paradoxx looks at the skill with which Americans and Japanese build comfortable, reliable cars and says, "If these people really wanted to avoid traffic jams they could do so.
"So, clearly, they like traffic. Whatever they tell their wives, they actually prefer sitting in their cars, even the cheapest of which these days is ergonomically luxurious. They listen to excellent radio stations on studio-quality sound systems, learn Russian, chat on their cellulars (inc faxes) and get warmly and unchallengeably away from their women, children and colleagues."
A cornerstone to identification of the Paradoxx, after years of research here at the Urubamba Discovery Centre, was that the Brazilian and Japanese economies were the same size in 1945.
The Washington and Whitehall chaps at the World Bank/IMF, USAID, Overseas Development Board say that the figures show that Brazilians are bone idle. They must "put their house in order" (I'm sure we were all delighted to see the other day that the Brazilians stuck them for a cool $41 billion anyway).
The Russians have seen the light and for the first time in a century are enjoying the stomach-churning roller-coaster that Latin Americans have claimed as of right along with Independence.
If you want to see world-beating institutionalized precision, go to Rio for the carnival and watch the tens of thousands of dancers moving through complex, lively, imaginative routines for days without missing a beat.
The only other places which have dancing and music as split-second precise and explosively complex are Haiti and Cuba.
The Urubamba Paradoxx therefore asks economists, "Would you rather go to a party in Zurich or Rio?"
I rest my case. Here at the Urubamba Centre, in any case, we welcome any new insight which might help, however modestly, to continue to fog the issues.