While we often hold legitimate grievances against aggressive western liberal intervention in our political, social and business affairs, we need to admit to ourselves (quietly) that there is still plenty to learn from the United States and other western (or in some cases eastern) societies to improve Hungary’s competitiveness.
Businessdictionary.com defines competitiveness as the ability of a firm or a nation to offer products and services that meet the quality standards of the local and world markets at prices that are competitive and provide adequate returns on the resources employed or consumed in producing them. However, it needs to be said that it is not only competitiveness that makes a country a desirable place to live, but a plethora of other factors.
George Soros, Ferenc Gyurcsány and the western liberal intellectual elite may be Darth Vader, Ivan the Terrible, Vito Corleone and Gordon Gekko combined, but if we take a step back, reconfigure and change our direction, we can make up a lot of ground that still separates us in living standards from affluent western societies. This little thesis will examine how we can improve our lives here at home without putting the blame on external factors for our economic ills. Of course, these twelve recommendations reflect the perspectives of the blog author and do not represent the views of Hungary Today.
1. TAXATION AND FAIRNESS. The 27 percent VAT inhibits consumption and growth, reduces our standard of living and enduces citizens to purchase goods and services elsewhere in Europe and the world. The dozens of other taxes, duties and fees that are imposed on the citizens of Hungary also reduce living standards and inhibit growth in the economy. Reducing and/or eliminating taxes therefore makes great sense – it will also increase tax compliance and spur growth. Granted, state revenues will be set back initially but that can be remedied by reducing the size of government (and/or municipalities), cutting bureaucracy and perhaps spending less on superfluous services and questionable development projects. THERE SHOULD ALSO BE FAIRNESS IN SOCIETY! Those who are able to, should proportionately contribute more to the economy than the wage-dependent middle class and the needy and those living on minimum wages should be entirely tax exempt!
2. ANTI-TRUST LAWS! In order for an economy to prosper, we need to have STRICT ENFORCEMENT OF ANTI-TRUST LAWS. No monopoly or multi-national company should be able to set prices artifically, collude with other giant firms, get away with paying less taxes and abuse its power and size.
3. COMPANY LAW LIBERALIZATION TO ENABLE SMALL AND MEDIUM-SIZE BUSINESSES TO STRIVE! An important measure of a successful and well-functioning free enterprise system is how easy (or difficult) it is to establish a small firm, a private enterprise and/or a family-owned business. In the United States, you can establish a firm within 10 minutes at a cost of usually 10 dollars, register it with the municipality, name it whatever you want and start making money instantly by offering a product or a service. You can also cease or suspend a firm or a proprietorship within minutes. Unfortunately, cumbersome laws, fees and excessive bureaucracy inhibit commercial activity and kill the entrepreneurial spirit in Hungary. There is a rule of thumb in America that we should adopt: KISS! Keep it simple, stupid!
4. LESS GOVERNMENT, MORE PRUDENT DECENTRALIZATION! Government, the state and municipalities should provide as much leeway to the people to pursue their life life and business as possible. Our course there should be oversight, but we should elimininate bureaucracy in all walks of life. An economy prospers if there is less intervention and less regulation. We need to eliminate restrictions, redundant administrative procedures, excessive penalties and fees. This concerns traffic laws as well. Too many cameras pry into our lives that do not serve our security and safety, but may serve one purpose only: to squeeze more money out of the people and enrich the central or municipal budget. The answer is not more, but less regulation!
5. MINIMUM WAGE! The minimum wage should be raised to western levels in graduated, but rapid steps. It will initially not make the economy more competitive, but it is a matter of fairness that Hungarians receive decent wages that approach western standards. This is why we joined the western alliance and not because we want to be their low-wage butlers and caterers in this part of the world.
6. WIN-WIN ATTITUDE! We need to reduce envy and jealousy in Hungarian society! The „sárga irigység” factor as a Hungarian World Bank economist (not Bokros) once said impedes our ability to cooperate, to enrich our lives, to increase value added. Unfortunately, there is an old attitude in Hungary: it’d be best if the neighbor’s cow dropped dead (dögöljön meg a szomszéd tehene). Jealousy and envy are also present at the workplace. Certainly it will be a long and difficult process to convert people’s thinking, but the adoption of the win-win mentality may help establish trust and confidence between one other. We need to learn that if we backstab someone in the work environment, it will NOT advance our own career in the long run. Of course, we can accrue some short-term gain by stepping on someone else’s foot, but we will certainly not advance our career in the long run by torpedoing someone else’s.
7. We also need to increase long-term ACCOUNTABILITY AND PREDICTABILITY in society! Changing direction frequently and repeated company reorganization kills the entrepreneurial spirit. People need to be able to plan ahead! LONG-TERM PLANNING AND JOB SECURITY increases confidence in the economy and will ensure a positive feedback from the work force. It also gives the impression of a more professionally run society that induces long-term accountability and predictability.
8. The state-regulated NOTARY PUBLIC SYSTEM. It is a redundant, expensive and dated European institution, popular in feudalist and communist times. It has no legitimacy in a modern 21st century economy. It should be deregulated. Being a notary public does not require high-level legal training. It is not rocket science or brain surgery. Anyone can do it, it should require a simple course and a 5,000 HUF annual fee for a license perhaps, but any citizen in good standing should be able to act as a notary.
9. The same with language services. Of course, it is key to competitiveness that we as a people learn FOREIGN LANGUAGES! Bu beyond that translations as a profession should be completely deregulated. OFFI AS A GIANT MONOPOLY SHOULD BE ELIMINATED! There is no reason for centralization and the artificial maintenance of a monopoly in this profession. Anyone who is capable of translating from one language to another should be allowed to do so. It is a private contract between a person placing an order and the translator. The state has no business over-regulating it. What may be desirable is some kind of an administrative bureau overseeing this activity and keeping track of translators. But that is all. Anyone should be able to obtain a license to complete translations without a major test or taking a course. The market will filter out any improprieties and take care of any impostors.
10. PRIVACY RIGHTS. This is a concept that has not become entrenched in Hungarian public thinking as of yet. Privacy should be protected! Vehemently! Citizens should have a right to peace and quiet. Noise, pollution, aggression, intrusion, unwanted disturbance should be stringently regulated both in big cities and the countryside!
11. FAMILY LAW – MARRIAGE AND DIVORCE!!! It is great that we still perceive of marriage as a contract between a man and a woman, but it is not enough. We need to eliminate the institution of the so-called „no-fault” easy divorce. Custody should automatically be given to the parent who does not wish to break up the family. Also, one should not be allowed to initiate a divorce where there are minor children in the family, just because he or she develops a physical attraction to a secretary at work, the neighbor, or the delivery man. Divorce should ultimately be restricted as it drives families to bankruptcy, destroys children’s psyche in the long run and it always brings harm to all parties involved – physically, financially, emotionally and socially.
12. Finally, there are two areas of social services that are key to the economic health of any nation: EDUCATION AND HEALTH CARE! Both should be held to the highest quality standards and this requires more investment, more attention and yes, competitive wages paid to teachers, doctors and nurses. But the profit motive should be eliminated in both areas. These are national services that should not be sold in a supermarket style.