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Today, more than half of Guatemala's population of 13 million lives in poverty. Namibia and Botswana rank higher than Guatemala on the Heritage Foundation's Index of Economic Freedom. Guatemala is one of the most corrupt nations in the hemisphere, according to Transparency International, a nongovernmental organization. Land ownership is concentrated in few hands. Key industries such as sugar are controlled by powerful oligopolies that saddle poor consumers with high prices.
"They are insatiable," Ayau said.
Still, Ayau points to a few small victories. Francisco Marroquin graduates were among the key architects of the 1996 deregulation of Guatemala's telecommunications industry. The country now boasts a competitive sector with some of the lowest rates in Latin America. About three-quarters of the population have mobile phones.
Francisco Marroquin "is like this little gem in the middle of this region," said Donald Boudreaux, a George Mason University economist who has lectured at the university. "It has a sterling reputation."
How a small Guatemalan college became the darling of free-market circles has everything to do with Ayau, a charmingly abrasive dynamo who looks nowhere near his 82 years of age.
Born into a middle-class family in Guatemala, Ayau spent much of his youth in the United States, where his mother moved for a time after his father's death. He attended Catholic high school in Belmont, Calif., then headed to the University of Toronto, where he studied chemical engineering.
He dropped out after reading Rand's "Fountainhead." The novel's protagonist, Howard Roark, is expelled from architecture school after refusing to conform to its tired standards.
"I realized when I read Rand . . . that I was starting out my life all wrong," Ayau said. He said he concluded that "I have to study something that I like, otherwise I'll never be any good."
Ayau eventually earned a mechanical engineering degree at Louisiana State University and returned to Guatemala to work in the family's industrial gas firm. He joined a business council that lobbied the government on various issues. But favors granted to specific people and industries didn't make Guatemala grow any faster. Ayau wondered what role the state should play to ensure that everyone had a crack at prosperity.
So he set out to teach himself economics. One of the first books on his list was "The Affluent Society," a 1958 bestseller by Harvard economist John Kenneth Galbraith. A longtime Democratic Party advisor, Galbraith believed that government spending on healthcare, education, infrastructure and anti-poverty programs was essential to society's well-being. Galbraith wrote that "wealth is the relentless enemy of understanding."
Ayau wasn't persuaded. "I read the first two pages and I said, 'This guy is nuts!' " he recalled.
He later picked up a pamphlet by Ludwig von Mises, a member of the so-called Austrian School of economics. Considered one of the fathers of modern libertarianism, Mises abhorred state intervention in the economy. He believed that open markets, individual choice, private property and the rule of law were the means to a prosperous society.
Something clicked. Ayau read everything he could find by Mises, Friedrich Hayek and other Austrian School economists. He started a small discussion group among some Guatemalan friends and eventually traveled to New York to attend lectures at the Foundation for Economic Education, a free-market think tank. Through contacts there he met Mises and others whose works he'd been reading. At Ayau's urging, several traveled to Guatemala to speak to his tiny band of free marketeers, who by now were calling themselves the Center for Economic and Social Studies.
The center published pamphlets, wrote newspaper op-ed pieces and held seminars. But the group concluded that young people were the key to change. They would start a private university teaching natural law and free-market economics.
They founded Francisco Marroquin in 1971 and began classes a year later with 40 students in a rented house.
Enrollment is now at 2,700, and the university offers 18 degree programs, including journalism, architecture and medicine, on a beautiful, modern campus.
All students speak English. Entrance requirements are stiff. So is tuition. At $8,000 a year for some programs (more than three times the annual gross national per capita income), it's the priciest university in Guatemala. University President Giancarlo Ibarguen said the sum was justified by the good job offers graduates receive.
There are no sports teams and no affirmative action in hiring or admissions. Instructors can forget about tenure; there is none. Ditto for the protests and sit-ins that are common in public universities in Latin America. If Francisco Marroquin students are unhappy with the product they're getting, they're free to take their business elsewhere.
"If you don't like Macy's, you go to Gimbels," Ayau said.
Critics scoff at the so-called House of Freedom, as Francisco Marroquin likes to refer to itself.
"What they sell is discipline . . . a uniformity of thought that easily translates into dogma so that students graduate from campus believing that they are unique possessors of truth," said Mario Roberto Morales, a respected Guatemalan writer and intellectual.
"The truth is that the university exists to indoctrinate the children of the oligarchs."
Andrea Gandara, a 24-year-old political science major, begs to differ. The daughter of middle-class parents, she said her instructors had been consistent in their criticism of both mercantilism and socialism.
Gandara said she wanted to take what she has learned at Francisco Marroquin and communicate it to a wider audience, particularly the millions of low-income Guatemalans that she said elites had written off as ignorant and easily manipulated by socialist rhetoric. Her career goal: president of Guatemala.
"People aren't dumb. They want to make more money. They want to have more opportunities," she said. "Here we criticize capitalism, but we don't even know what it is. . . . I want to be part of a movement to change their minds."
marla.dickerson@latimes.com
Times staff writer Alex Renderos contributed to this report.
"They are insatiable," Ayau said.
Francisco Marroquin "is like this little gem in the middle of this region," said Donald Boudreaux, a George Mason University economist who has lectured at the university. "It has a sterling reputation."
How a small Guatemalan college became the darling of free-market circles has everything to do with Ayau, a charmingly abrasive dynamo who looks nowhere near his 82 years of age.
Born into a middle-class family in Guatemala, Ayau spent much of his youth in the United States, where his mother moved for a time after his father's death. He attended Catholic high school in Belmont, Calif., then headed to the University of Toronto, where he studied chemical engineering.
He dropped out after reading Rand's "Fountainhead." The novel's protagonist, Howard Roark, is expelled from architecture school after refusing to conform to its tired standards.
"I realized when I read Rand . . . that I was starting out my life all wrong," Ayau said. He said he concluded that "I have to study something that I like, otherwise I'll never be any good."
Ayau eventually earned a mechanical engineering degree at Louisiana State University and returned to Guatemala to work in the family's industrial gas firm. He joined a business council that lobbied the government on various issues. But favors granted to specific people and industries didn't make Guatemala grow any faster. Ayau wondered what role the state should play to ensure that everyone had a crack at prosperity.
So he set out to teach himself economics. One of the first books on his list was "The Affluent Society," a 1958 bestseller by Harvard economist John Kenneth Galbraith. A longtime Democratic Party advisor, Galbraith believed that government spending on healthcare, education, infrastructure and anti-poverty programs was essential to society's well-being. Galbraith wrote that "wealth is the relentless enemy of understanding."
Ayau wasn't persuaded. "I read the first two pages and I said, 'This guy is nuts!' " he recalled.
He later picked up a pamphlet by Ludwig von Mises, a member of the so-called Austrian School of economics. Considered one of the fathers of modern libertarianism, Mises abhorred state intervention in the economy. He believed that open markets, individual choice, private property and the rule of law were the means to a prosperous society.
Something clicked. Ayau read everything he could find by Mises, Friedrich Hayek and other Austrian School economists. He started a small discussion group among some Guatemalan friends and eventually traveled to New York to attend lectures at the Foundation for Economic Education, a free-market think tank. Through contacts there he met Mises and others whose works he'd been reading. At Ayau's urging, several traveled to Guatemala to speak to his tiny band of free marketeers, who by now were calling themselves the Center for Economic and Social Studies.
The center published pamphlets, wrote newspaper op-ed pieces and held seminars. But the group concluded that young people were the key to change. They would start a private university teaching natural law and free-market economics.
They founded Francisco Marroquin in 1971 and began classes a year later with 40 students in a rented house.
Enrollment is now at 2,700, and the university offers 18 degree programs, including journalism, architecture and medicine, on a beautiful, modern campus.
All students speak English. Entrance requirements are stiff. So is tuition. At $8,000 a year for some programs (more than three times the annual gross national per capita income), it's the priciest university in Guatemala. University President Giancarlo Ibarguen said the sum was justified by the good job offers graduates receive.
There are no sports teams and no affirmative action in hiring or admissions. Instructors can forget about tenure; there is none. Ditto for the protests and sit-ins that are common in public universities in Latin America. If Francisco Marroquin students are unhappy with the product they're getting, they're free to take their business elsewhere.
"If you don't like Macy's, you go to Gimbels," Ayau said.
Critics scoff at the so-called House of Freedom, as Francisco Marroquin likes to refer to itself.
"What they sell is discipline . . . a uniformity of thought that easily translates into dogma so that students graduate from campus believing that they are unique possessors of truth," said Mario Roberto Morales, a respected Guatemalan writer and intellectual.
"The truth is that the university exists to indoctrinate the children of the oligarchs."
Andrea Gandara, a 24-year-old political science major, begs to differ. The daughter of middle-class parents, she said her instructors had been consistent in their criticism of both mercantilism and socialism.
Gandara said she wanted to take what she has learned at Francisco Marroquin and communicate it to a wider audience, particularly the millions of low-income Guatemalans that she said elites had written off as ignorant and easily manipulated by socialist rhetoric. Her career goal: president of Guatemala.
"People aren't dumb. They want to make more money. They want to have more opportunities," she said. "Here we criticize capitalism, but we don't even know what it is. . . . I want to be part of a movement to change their minds."
marla.dickerson@latimes.com
Times staff writer Alex Renderos contributed to this report.
