Governments that succeeded each other in the ten years of transition have tried occasionally to reveal to the public the doctrine that underlied their economic policies. After 1990, they introduced the principle of comparative imitation with the famous Western models.
One by one, Romanians were presented with the virtues of the British, Swedish or even Japanese model. Foundations sprung up to explain the theoretical grounds of these models.
To make transition less painful, Romanians were induced into thinking that governments in power efficiently promote social protection policies, which in fact promote social justice.
Regardless of the stated political colour, post-revolutionary governments embraced the “middle way” model, asserting their inclination toward market economy.
In reality, social justice is an illusion
Why do we dislike this goal of the social-democratic forces? A plausible answer is that in its most respectable version, it is targeted at suppressing the role of chance in the situation of each Romanian, so that merit alone decides.
This ambition is unachievable in its nature and would abolish any notion of “right.” No one can gauge another’s merit, nor can anyone sufficiently control one’s life to rule out the unpredictable.
Since “social justice” cannot even be defined, it cannot be possibly applied in Romania. But it does involve the legal robbing, to which it serves as a pretext: politically powerful people steal for their benefits the wealth produced by others.
This “legal robbing” promoted by post-December governments can no longer continue. Already, the Romanian society is divided into antagonistic casts: beneficiaries of stolen wealth and their victims, who must support them.
I understood President Constantinescu when he declared war on corruption and lost. The mafia-type political-economic system replaces the inequality that results from productive capacities through inequalities resulted from turning public force to one’s own advantage.
Therefore, I also understand Theodor Stolojan when he says economic policy in Romania can only be one based on liberal values, which include the rule-of-law state. “A weak state is as dangerous as a totalitarian state,” Austrian professor Friedrich von Hayek used to say.
This is why “the kiosk war” waged by mayor Basescu or the “villas war” declared by the Brasov governor reveals that a rule-of-law state is not wanted in Romania. It is one of those shapes without essence one finds in any political programme brandished by parties in power.
We are still to see a true regime of freedom in Romania. The socialist ideology in the minds of advisors, experts and state officials has not yet vanished. It survives under the mask of “social-democracy.” Both the PDSR and the present algorithm-driven government would like wealth to emerge due to the market economy, used merely as “a tool.”
Who will think today that Romania’s enlightened politicians are seeking to broaden the country’s riches when they have the power to seize those riches, which they need to pay off their electoral clientele?
Why is a liberal economy desired? Because it provides performance and brings prosperity. To the liberals, this prosperity is not a goal but a consequence. The goal is to create the environment in which everyone can develop the projects they have nurtured, to seek in the economic sector the means to carry them through, to create, to enact, to become more human.
Many of Romania’s politicians have their minds tuned in to the principles of “social justice.” They listen to the voice of the masses: pensioners, workers, students and intellectuals. If pensions, doctors’ salaries and students’ scholarships are to grow, the revenue needs to be distributed (if there is anything to redistribute). This is why everything is swamped in a shameless hypocrisy.
And when “social justice” does not camouflage the claim for privileges, it justifies the domination of a clique over the entire nation.Between real freedom and the deceptive aspirations to social justice, a choice must be made.
Only illusionists can claim to be offering both, asserting that responsibilities can be exercised without any sanctions, that the economy can be both controlled and decentralised.
This is why people living off a 600,000 lei/month pension are asking for justice, people with no market orders are asking for justice, those who feel “humiliated” by regie leaders’ high pay are asking for justice, etc.
And the algorithm-driven government must listen to the voice of those who have their votes for this autumn “in their pockets.”
If we declare an authentic democracy in Romania, then it must allow the citizens to control the power of the state. Thus, it is an illusion, encouraging the masses to re-discover the “virtues of socialist democracy.”
The rulers cannot use it to justify the exploitation of the politically weak by the politically powerful, be they a majority or a well-placed minority.
Defending the social
The offensive of the left is based on the idea that the state should become more involved in social life, and arguably strives to correct the inequality and injustice generated by the market. This is why all government programmes necessarily have a “hard core”: social policy.
It is an idea one finds, under diverse shapes, in various circles of the Romanian political life, with a Social-Democratic, socialist or even Christian-Democratic nuance.
The market, they say, is an irreplaceable mechanism in ensuring a free confrontation between supply and demand. For now, we do not have a supply economy. But the market, they continue, is a generator of inequality and injustice (see pensions, scholarships and intellectuals’ pay compared to salaries paid in regies).
Steps have been taken to “level” some of the discrepancies. Therefore, the market aggravates conflicts and puts social cohesion in peril. Socialists’ accusations are flowing: where authorities have attempted to introduce reform models by force, social explosions followed and blood was spilled (see the miners’ uprisings).
It is therefore normal that the state should become involved in correcting the glaring contradictions that result from the free game of competition mechanisms. These arguments should seem perfectly logical. But in reality, they conceal two grave flaws:
a) they retain the hypothesis – implied, but contested – that the political market is, by definition, an instrument of allocation that is much more fair and egalitarian than the economic market. At the interference between the two markets there is corruption.
The candidate “Stolo” was therefore right in identifying the true causes of poverty in Romania: inefficient political structures, inefficient economy, corruption. Romania is this close to becoming a mafia-driven society. Its roots have been exposed quite clearly in the “kiosk war.”
The fact that “the political dictates the economic” is a presumptive statement that has not been demonstrated. On the contrary, one of the open sectors of economic analysis after the ’80s period is based on works that apply economic reasoning in the operation of political institutions and in public output.
These works, especially those produced by the American school in Virginia, conclusively indicate that present-day analysis of public action is based on a deification of the state.
Starting from the idea that the political market is the place where political people exchange electoral pledges for votes (see the negotiations between BNS and PDSR) they suggest that there are many chances for this to be true.
This finds a confirmation in all studies on the real re-distributive effects of social legislation, which clearly shows that most of the times, the state’s interventions result in social effects that are the exact opposite of the original goals.
For instance, a study by the World Bank in Romania found that “the poor are subsidising the rich”! All these studies suggest that there is no reason to believe the state’s intervention could necessarily produce results more fair and more egalitarian than the market would.
b) much better substantiated, this argument relies on the fact that the market can be forced to separate its resource allocation function from the distribution function. This is heresy, Milton Friedman says in his famous book “Freedom to choose.”
It is simply impossible to enjoy the benefits of the pricing system, as a mechanism of polling the market. It draws its efficiency from the fact that it leaves to the individuals the freedom to act in response to the information they receive, while allowing the freedom of prices, determined, if not entirely, at least to a large extent, by the distribution of revenues.
To forget this fundamental feature of market mechanisms is only to reduce their spontaneous efficiency and this leads (imperceptibly) to state interventions which, in turn, will further destroy the natural efficacy of the market and further their own legitimacy.
Numerous Romanians have travelled West, and upon return told that people there enjoyed a few liberties because the democracy grants them. What they cannot understand is that not democracy is the guarantee of liberties, but a frail tradition of liberalism that limits and controls democracy. Hence the conclusion that there is no other “freedom” than the one brought by the market.