The Romanian Parliament has often demanded the "return" of the state into economic life. The same calls were identified in meetings around the Victoria Palace. A large flock of those "lost in transition" see in the government their only hope to make things up. Not coincidentally, since '96, more than 500 ordinances were issued to correct the trajectory of economic-social life.
Although political and economic analysts discussed every single change in the society, opinion polls reveal that very few Romanians still believe in the virtues of transition. Many of them long for the virtues of an economic system based on a certain dose of egalitarianism. The idea is being put forward that in Romania we can identify three society types: communist (based on industrial mammoths and autonomous regies), capitalist (based on small and medium enterprises) and feudal (characterised by "dwarf households," exploited at a rudimentary level, meant to provide for mere survival).
Consequently, there is still a lot of confusion. No one knows what to leave to the market and which are the adequate tasks for the government.
Today, the biggest pressure on the government comes from trade unions in sectors that for years have been shielded by the protective wing of the "state god." In their ranks we meet assorted characters, from energy workers to oil men, resident doctors and public administration servants.
On closer inspection, most of the differences between the market system and the government don't hold. First, the market is usually characterised as private sector, and ministries, government agencies, governors' offices and officials make up the public sector. This is not to say company managers or consumers are pursuing private interests, and all those working for the government are pursuing public interests.
A senator or deputy who claims to be guided by "public interest" in all his decisions is, in fact, guided by a personal interpretation of public interest, filtered through all kinds of private interests: elections, influence in Parliament, media relations, popular image, and not a place in the history books.
The institution of the state can promote social cooperation and improve economic well-being in two main ways: (a) by securing protection for people's lives, freedom and property (as long as they are not procured by force, fraud or theft) and (b) by providing people with goods which are not supplied by the markets.
When the government performs its protective function well, individuals can be confident they will not be defrauded and the wealth they create will not be taken by looting intruders (see the FNI case) or by the state, via high taxes (which encourages tax evasion) and inflation rampage. In the latter case, savings decline significantly, and the rate of capital accumulation is low.
This is why the "FNI scandal" caused a lot of talk about trust in the state's institutions. In short, whether it gives citizens the certainty that "he who sows shall be allowed to reap." If that happens, the people will sow and reap in large numbers, thus adding to the nation's prosperity. Otherwise, the struggle for survival has caused a phenomenon called by president Constantinescu "generalised theft."
Therefore, when a government fails to perform its protective function, problems surface. If private property rights are not clearly defined and no one watches over their enforcement, thousands of citizens can be expected to engage in damaging actions against others.
They will come into possession of property which is not their own and use resources without paying for them. For instance, pharmacies support the cost of late settlements with hospitals, which in turn depend on the good will of the insurance department. When people are allowed to impose such costs to parties which do not assent, the "true" production and distribution costs will not be correctly recorded on the market.
"Taught" by the past regime, Romanians tend to believe that the state institution and especially the state institution led by a democratically elected government is a "corrective mechanism." It acts as if the state's interference will solve all problems. It is expected to uproot poverty or drive housing prices down. The state is also to blame for insufficient medical assistance or poor education.
This point of view is false. The state is not an entity that will always make decisions in the "public interest," however hazily this term is defined. Although the government, as a representative, decides for the pensioners, the socially assisted or the National Trade Union Bloc, it is a "corrective mechanism," ready to be used whenever the basic market organisation fails to achieve the desired goal.
But such expectations should not surprise us. Before World War II, the populace displayed the same behaviour. Professor G. Tasca, of the Academy of High Commercial and Industrial Studies, wrote: "In times of torment, of great social transformation, people lose their calm; most of them lose confidence in their own forces and appeal to the support of forces they deem superior to them and a universal cure for all their misfortunes: The State.
And when this almighty and 'superior being' falls short of their expectations, it is to blame for all that happens in the society. The State is at fault because the cost of living is high; the State is at fault for the plummeting currency; the State is at fault when merchants get rich; the State is at fault that others go bankrupt; the State is at fault that too much wine is being made; the State is at fault that not enough wheat is produced; the State is at fault that some live in unprecedented luxury; the State is at fault that regiments of scouts come in your way; the State is at fault when there are no clothes to put on; the State is at fault when there are too many clothes.
Therefore, the layman and scientist alike finds the explanation of all social evil in the poor organisation of the state." Therefore, it is quite explicable that, when everyone appeals to it, the government man himself begins to lose his grip and earnestly believe that he, who represents the state to the outside world, must take every step demanded by the public.
Therefore, "with a smile or without one, the state pretends to be an army leader, a guardsman, street sweeper, charity nun, trader, a merchant of boots, clothes, silk socks, lipstick or crosse de paradis, a banker, a farmer, a wheat exporter, gas producer, coal extractor, station chief and car driver. The state does everything."
Why does everyone appeal to this superior force? What is, indeed, this state with powers unthought of, which everyone expects to do something but to which no one wants to give anything? Let's think about how we see today the global income tax.
When the government sets taxes to finance its provision of medical assistance or education services, a silent constraint takes place. Disagreeing minorities must pay taxes to finance these services, regardless of whether they use these services or value them. The power to levy taxes allows the state to confiscate property (for instance, revenue), without the owner's permission. In the private sector, where market forces are strong, there is no similar capacity to constrain an individual.
Private firms can ask a high price, but they cannot force anyone to buy from them. High prices in the Poiana Brasov tourist resort have left the spa almost empty. Things could not be otherwise: private firms must give clients what they value, otherwise they will fail to attract the consumer's money. This is not always true when it comes to political leadership. When agencies or firms owned by the state are subsidised with taxes, there is no guarantee that people value the result of their activity more than the costs they incur.
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