Wednesday, 20 September 2017
Englishman in Dubrovnik Englishman in Dubrovnik

Don't flush free enterprise down the toilet

By  Mark Thomas Jun 18, 2017

Thank God all of the political events are over. I don’t know about you but I have had more than enough of watching the fight for seats and positions (and salaries) around the country. They have all spent the past months trying to woe us to vote for them and now they will spend the next four years ignoring us, we are now surplus to requirements, we have served our purpose.

And I have had a double dose of the politics with the UK going into an early general election, that clearly didn’t go to plan for the Conservative party. We ended up with a coalition government which whilst in Croatia might be normal in the UK it is far from normal. As one political analyst commented “it can only bring instability and insecurity.” He had pretty much summed up Croatian politics!

But whilst the UK is still embroiled in Brexit, Croatia has a different set of problems. However one excellent argument I read in an economic magazine could be useful advice to both countries. The article was basically pulling holes in the socialist vision for the UK that the Labour Party was proposing. But with some word play I will transform it onto Croatia and the problem the country has with developing into a free market economy, one that promotes free enterprise rather than trying to flush it down the toilet. So here is the new/old text.

- An economics professor made a statement that he had never failed a single student before, but had recently failed an entire class. That class had insisted that socialism worked and that no one would be poor and no one would be rich, it would be a great equalizer. The professor then said, “OK, we will have an experiment in this class on the ideological socialist plan”. All grades will be averaged and everyone will receive the same grade so no one will fail and no one will receive an A. After the first test, the grades were averaged and everyone got a B. The students who studied hard were upset and the students who studied less were happy. As the second test rolled around, the students who hardly studied for the first test studied even less and the ones who studied hard decided they wanted a free ride too - so they studied less. The second test average was a D! No one was happy. As the tests proceeded, the scores never increased as bickering, blame and name-calling all resulted in hard feelings and no one would study. When the reward is great, the effort to succeed is great, but when government takes all the reward away, who will try or want to succeed? It could not be any simpler than that. -

This is one of the keys to the problems of Croatian governance at all levels. There is a fear, an unfounded fear of private enterprise, rather than a culture to nurture and support private business.

There are basically five morals that we can take from this article – 1 - You cannot legislate the poor into prosperity by legislating the wealthy out of prosperity. 2 - What one person receives without working for, another person must work for without receiving. 3 - The government cannot give to anybody anything that the government does not first take from somebody else. 4 - You cannot multiply wealth by dividing it. 5 - When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get the benefit of their hard work - that is the beginning of the end of any nation.

Pay particular attention to the third point. Yes, the money that all governments are using is NOT their own money. Yes, firstly they must take that money from somebody else (YOU) before they can spend it. The huge, and I mean mind-blowingly massive, public institutions in the country have to be paid for by you, they make no profits on their own. And yet the very people who fill the countries coffers, the private businesses, are the very ones being grossly overtaxed and terribly under supported. “It is easier to do nothing rather than actually work and try something,” is a phrase that I’ve heard thousands of times. It may well be right but what a sad state of affairs.

I repeat - When the reward is great, the effort to succeed is great, but when government takes all the reward away, who will try or want to succeed?  

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