Government The Bargainer

The Lithuanian government has recently appeared in a whole new role…the role of a bargainer. Perhaps, on second thought, it is not all that new. In some cases it is even quite common. This role becomes governments when they pursue their diplomatic missions of negotiating peace, security or trade with other governments. Today’s governments, however, do not seem to be content with this honourable duty. They now tend to assume the responsibility of negotiators in inappropriate matters and with inappropriate partners.
Take, for example, the Lithuanian government. It has undertaken the mission of selecting and negotiating with buyers of state-owned assets. Many view this role as completely natural-if you want to sell something, you have either to call on a specialist-mediator or to do the job yourself. Knowing that a specialist would do a better job and bearing in mind governments’ notorious “buy-dear-sell-cheap” principle, few would approve of the state selling its property all by itself. It would be much more reasonable to delegate this task to private agents, or so to speak, to privatise privatisation. The society would then be confident that it is property rather than the products of governmental authority that is sold and called “privatisation.”
Lithuania’s experience with the telecom has illustrated the government’s cynical abuse of power and inability to restrain itself. The government is trying to sell, not a piece of property or a business, but an exclusive right to run the business. This right is going to be enshrined in the law. If this happens, it will be open, albeit not the first, abuse of the legislative power, abuse of the principles of LAW.
Prohibiting monopolisation of the market, the Constitution, it seems, may save the day. But it proved helpless many times in the past when the rights of the state as a shareholder were elevated above those of other shareholders. It was helpless when the authorities had recourse to law in trying to solve the problems triggered by the government’s inept participation in enterprises and banks. Finally, it proved impotent when the government, not the parliament, was establishing taxes. Eventually, the society became inured to the idea that the law may legitimise injustice and attenuate man’s inalienable rights.
If we fail to find ways to protect ourselves from the manipulation of the legislative authority, we are in for more ordeal. Inspired by the gratifying role of a negotiator, the state is paving the way for more bargains. Recently we saw the adoption of an investment promotion programme which provides that the government may negotiate with “important” investors. Negotiate over what?! – Over how to better the environment in which investors operate. The tax burden is too heavy? – No problem. The good guys will lift it. Any trouble with handling regulations? – Again, the boys will modify the rules. Need a side-road to facilitate the transportation? – They will build one. Need skilled labour? – They will pay for the training. No one knows how many favours the government is ready to afford.
Yet, every exemption or relief has visible and invisible costs. Every exemption betters the conditions for those selected and worsens for those without political connections, imposing on the latter a financial burden on top of it. Hopes that the economic climate in Lithuania will improve, regardless of the type of business or its magnitude or the source of capital, will keep fading with every exemption accorded to “important” investors. These will enjoy special favours and exemptions. To appease the rest, they will be given some share of the pie. Such chicanery will not only defile the desire to improve the business environment. It will leave neither time nor space to do it.
The danger of the philosophy behind the upcoming negotiations is twofold. For one thing, it indicates that the state regards itself as the only source of man’s rights and dispenser of liberties and privileges. Here, the pitfalls of the other side of the “negotiation philosophy” present itself. People and businesses and interest groups will seek power and fight for the opportunities to influence it. They will demand, by all possible means, a better treatment-at the expense of someone or, as many would rather believe, “no one.”
Only if the state’s right to negotiate things like those mentioned above is forfeit can its true mission-the mission of serving all of us-be restored. Negotiations will then occur between equals, and competition will take place in the market rather than in the corridors of power. Individuals will negotiate with individuals, all enjoying equal rights. Firms will negotiate and compete with firms operating under equal and fair conditions. Governments, in turn, will negotiate only with equal “partners”… the governments of other nations. These will be properly limited governments.