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In Romania, Unquestioned Rule by "Experts" is Alive and Well

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On the eve of new parliamentary elections, Romania seems to be locked into a permanent state of economic illiteracy, and many continue to support interventionism as a means to improving the standard of living in Romania. The public continues to show little affinity for a laissez-faire approach to markets.

Unfortunately, as Ludwig von Mises repeatedly pointed out, ideologies and political regimes in general, in order to take political shape, must necessarily receive the support of the public — the public is either well equipped or not to understand to whom it gives support and power. Otherwise, no ruler could actually rule.

In the current political environment in Romania, the public is supporting a new class of technocrats which took executive office last year in November. The political sea change occurred after a disastrous night-club fire, in which 64 people died in Bucharest. The fire was blamed on a corrupt government unwilling to enforce regulations on businesses.

Right after the fire, there were protests in the streets of Bucharest, in the spirit of Occupy Wall Street, with many young people urging nationalization of private firms, the regulation of business and trade, increases in government spending on wages and pensions, and an end to the “dictatorship” of big corporations. 

Claiming to hear the “voice of the people,” the technocrats were happy to oblige. What could not be achieved through partisan politics, it was believed, could be done by a non-political or ideologically "neutral" elite, whose only aim — it is said — is to “maintain economic stability” until the next parliamentary elections, scheduled for December 2016.

Now that this new technocratic elite is in power, let’s take a look at some of the actions toward “economic stability” that the technocratic government has pushed since November 2015:

  • minimum wage law, providing an increase of the minimum wage by 19 percent;
  • Social benefits: if you are unemployed and you find a job at more than 50 miles away of your home you get a subsidy (bonus) of almost 2,800 euros. Or if you are an employer and you hire a graduate student, you get 230 euros a month, for a year. So, you don’t add anything to the general welfare, but the technocratic government guarantees you a share of the pie;
  • Anti-poverty program: a “leap forward” for the mainstream media and analysts: social housing, grants for housing improvements, incentives for those who work on a daily basis, credits with very low interest rates for entrepreneurs in disadvantaged areas, development of professional and agriculture education, subsidies for agriculture and others;
  • National and European-funded programs for ecotourism.
  • A First-home program consisting of credits with artificially low interest rates for those who want to buy their first home, which coupled with the National Romanian Bank’s systematic reduction of the rate of interest, from 4 percent in 2013 to 1.75 percent in 2016 is anticipating an artificial boom;
  • State aid to “small and medium enterprises” amounting to 200 million euros (after all, a “just” measure in an époque of big corporations, right?) which supposedly will boost the “entrepreneurial spirit”;
  • Appointing private managers to state companies, ignoring that the real problem is who owns the company.

Of course, there are many other such examples of welfare redistribution which is basically the essence of the entire technocratic welfare state. It’s instructive to remember what Rothbard in Making Economic Sense had to say about it:

Here is the essence of the “welfare state” in action: The government cartelizing and restricting competition, cutting production, raising prices, and particularly injuring low-income consumers, all with the aid of mendacious disinformation provided by technocrats hired by the government to administer the welfare state, all meanwhile bleating hypocritically about how the policy is all done for the sake of the consumers.

The new technocratic cabinet was justified on the grounds that it was "non-ideological," how by would standard could this legislative agenda be considered to be non-ideological?  It appears to be no  different than any number of left-wing political programs across Europe and the Americas.

And yet, in Romania, the electorate is trapped in the idea that the educational and professional credentials of government workers matter much more than their views, and that things will improve if only the right, qualified, and professional people are elected.This is obvious listening to the people on the street, as well as respected intellectuals. Recently, for example, a well-known Romanian philosopher and social thinker expressed his disappointment that the word technocracy is receiving bad press, suggesting that Romanians, instead of appreciating “competence” and “educated people,” show more interest in “funny guys” and “good fellows.” Indeed, it might be that way. But highly respected professionals taking government positions isn’t a guarantee of justice or prosperity. On the contrary, it should scare us more when plunder publicized as “aid,” “protectionism,” and “competitiveness” takes the form of science-based studies, measurements, impact studies, feasibility studies and so on.

We’re living with a permanently naïve belief that bona fides or knowledge is all that matters, and the rest will come. But for bona fides to be preserved, laws should not be extended to anything other than protecting the individual and private property.


Andreas Stamate-Ștefan

Andreas Stamate-Ștefan is an associate researcher at the Ludwig von Mises Institute Romania and assistant professor at the Faculty of International Business and Economics, Bucharest University of Economic Studies..

Note: The views expressed on Mises.org are not necessarily those of the Mises Institute.
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