Lithuania has celebrated the ninth anniversary of the restoration of independence. Today we can have everything we dreamed of during the dismal Soviet era. The welfare of each and every one of us, and the welfare of the society as a whole, should now depend only on our own abilities and initiative.
However, that’s not always the case. Although the flywheel of the market is turning faster and faster, there is another machine working at increasing capacity. That machine is called bureucracy. The fact remains that these two mechanisms – market and bureaucracy – cannot co-exist, as their nature and purposes are totally incompatible.
Assuredly, all we have achieved over the past nine years is the result of people’s efforts and initiatives. But at the same time it is the result of their unrelenting struggle against the bureaucratic monster. Bureaucratic impediments have proliferated to such a degree that many people would not dare to start a business. LFMI’s survey of the business climate in Lithuania shows that less than ten percent of people in Lithuania would be willing to launch some sort of business in the current conditions. The fact that as many as one in every four polled would start a business if conditions were more favourable suggests that people are ready to rely on themselves instead of the government. These people would not only generate wealth but also create jobs and opportunities for others.
A total of two thirds of Lithuanians think that business conditions in the country have worsened over the past two years. A heavy tax burden, constantly changing laws, rampant bureaucracy and pointless regulations are considered to be the main stumbling blocks to business growth. Interestingly, entrepreneurs and people who have never done any business expressed similar opinions.
Bureaucracy and regulations are costs producers and consumers incur to do the government’s bidding. As LFMI’s survey indicates, eight percent of people in business spend more than half of their time satisfying the whims of bureaucrats. For more than half of those polled, it takes 25 to 55 percent of working hours. If the private sector creates about 29 million dollars of worth every day, how much wealth fails to be produced because of energy and resources being wasted on senseless bureaucracies. Every drop of ink that is used to fill in absurd bureaucratic reports and every minute that is wasted, and every nerve cell destroyed, in the corridors of power mean tons of unbaked bread, stacks of unwoven cloth, hundreds of pages of unwritten books… Is there, praytell, a way to measure thus unfulfiled hopes and lost faith?
The regulatory state has no doubt arguments of its own. In most cases it claims to protect our, consumers’ interests. But the truth lies elsewhere: the state, which used to be the only employer and entrepreneur for half a century, has so far failed to scrap the old habits and regulatory levers. Not accidentally, one in every three entrepreneurs contend that business regulations serve the officialdom only. Participants in LFMI’s conference on business deregulation gave many examples of the regulatory nightmare. Some of them follow in this issue of The Free Market.
Today the authorities seem to be overly concerned with the acceleration of economic growth. They keep devising plans towards that goal but at the same time fail, or don’t want, to recognise the straightest road to it, which consists in minimising business regulations and creating simple, transparent and human business conditions. This should be their main task and, sadly, no one will do it for them.
Meanwhile, our life resembles a violently turning windmill which fails to be filled with grain because everyone is busy with loads of bureaucratic paper work. And no matter how strong the wind of change nor how powerful the windmill – you don’t make bread out of wind flour.