Why is Romania poor, despite being rich in natural resources?

Here is the bad:

1) Very high taxes on fuel - which results in artificially high prices on almost every good (since most are transported by truck).

2) A very large segment of the population is employed by the government, being basically parasites of the economy instead of producers.

3) Economy-killing regulations imposed by the EU to protect Western producers (Romania was intended as a consumption market of the EU, not a competitor to politically-connected Western producers).

4) Poor infrastructure (roads, legal, etc.) causing delays and inefficiency.

5) Poor labor laws - which make it hard to fire people on the spot, lots of payroll taxes, and other burdens which make companies reluctant to hire people "legally"; as many people work "without papers", they do not have access to loans to buy cars or houses - and must pay for everything up front in cash.

6) Communist-era bureaucracy which makes it really tough to be an entrepreneur, and do it legally. Since most of the economy is forced to operate outside of the legal sphere, there is no legal stability for real investment.

7) Large regulatory bodies which basically act as corrupt power-brokers - shutting down outside companies which threaten those of people with ties to the politicians.

8) Demographics (aging population no longer fit for the workforce).

Notice I did not mention corruption - as that is a result (and not a cause) of the large number of regulations, and the large power the central government has.

Here is the good:

Romania was doing ok economically before the Communist invasion. Before WW2, its economy was much stronger than Spain's or Portugal's for example (although not quite in the league of industrial powerhouses such as Czechoslovakia). After Communism, it became one of the poorest countries in Europe. Now it is rising again, a middle class finally exists, and there are also positives:

1) Internet connectivity: with a very tech-savvy youth, and one of the fastest internet connections in the world, it might be a blessing that traditional employment is discouraged by the laws. Thus, many young people work online with foreign firms and develop skills for the future.

2) Education, despite all hysteria about how it has gone down the drain, is still ok - judging from how well Romanians emigrants fare in their new countries.

3) National debt: still very low for an EU country, the government lives (almost) within their means and don't spend much more than they take in.

4) Stable national currency - the government does not debase the national currency for short-term political gain. Thus inflation has been kept in check for a while, leading to monetary stability (not sure if to give Romanian politicians credit, or their IMF/World Bank/EU overlords, but who cares, given the result is positive).

5) Very low crime rate, even for a European country.

6) Romanians perceive Romania as a very poor backward country, because many have the opportunity to travel abroad, and compare it with Western European capitalist countries. Thus, the image is much grimmer. They would do better comparing Romania in 2014 with Romania in 1990, 2000, and 2010 to see it has gone a long way toward more stability and prosperity. There are lots of things to do, but the old generations raised in Communism have to die off, the Nanny State mentality has to disappear, and things can continue to improve - slowly but surely.

That is, until the next superpower decides to invade :)

Anarcho-capitalism

Economist, legal scholar, philosopher David D. Freidman, son of the late Milton Friedman, Nobel laureate in economics, argues (very logically and ably) for an anarcho-capitalist society. His main point is that society would not break apart (and anarchy is not a bad word), but – just like the free competitive market delivers light bulbs and hair cuts more efficiently than a centralized monopoly would, the free competitive market would deliver services such as legal protection and arbitration more efficiently than a centralized monopoly (i.e. the government) would.

A sample of his writing can be found here:

http://www.daviddfriedman.com/Libertarian/Machinery_of_Freedom/MofF_Chapter_29.html

The arguments are brilliant and logical (and more importantly, easy to follow).

However, I can think of a counterargument to his entire thesis: I would argue that we now DO live in an anarcho-capitalist society. Or rather, we are a result of an anarcho-capitalist society, we evolved from one. Our ancestors lived in that state, in caves and jungles. Eventually they developed more intricate mechanisms of protection and arbitration, whether through iron weapons, walled cities, empires, or national governments based on a common language, religion, and tribal identity.

Where Friedman calls for private protection agencies instead of a police force, we have national governments (which compete with other governments; sometimes they settle disagreements through a commonly-chosen arbitrator, sometimes by compromise, sometimes by force). Consumers have a choice of changing the protection agency (i.e. moving to a different country), but the costs are high (learning a new language, escaping illegally from the original country, waiting years for a visa, living illegally in the new country, etc). These private protection agencies (which we refer to as national governments) offer protection, but in return hold the monopoly on force in their own area.

If we put Friedman’s ideas into practice, and started anew, abolishing governments and following an anarcho-capitalist system, what guarantees do we have that in a few hundred/thousand years we would not evolve again into a system similar to the current one, of powerful “private protection agencies” with limitless power in their own realms?

I am wondering if it is a human trait to seek like ones, band together based on tribal identity, and collectively give up individual liberties in return for protection. I am beginning to think that this is the case indeed.

Human actions are not motivated by morality

There is no good or evil. There’s only matter.

/*Begin disclaimer*/ These thoughts only pertain to things from a material point of view – given that we live in a material era. This is not an atheist creed, and I am too much of a skeptic to consider myself a follower of the atheist religion. More so, I personally need the moral compass of good and evil in my own perspective on life, for purposes of stability and automatic decision-making. When discussing the absence of good and evil, I am referring only to human (and non-human) action, and how things work in the universe. /*End disclaimer*/

The closest biological relatives of our human race are the great apes – and looking at their behavior can offer an interesting perspective on ours. My idea expressed in this blog came from simultaneously reading (superficially) about power structures in a chimpanzee society, with its alpha male, lackeys, the matron, etc., and reading (also superficially) about a study theorizing that politics has nothing to do with issues or candidates or even logic (which I long suspected), but rather instinctual yearnings of humans to be part of a tribe, and a dominant tribe at that. Just like sports. A third influence was rereading Golding’s insightful “Lord of the Flies”.

Human society is not about good and evil, nor is it only about survival and reproduction. It is about power struggle (perhaps related to both survival and reproduction?). I am ashamed to find something logical in puerile madman Karl Marx, who claimed that the history of mankind is an evolving class struggle – but in a way it is. However, it is not about social classes. It is about classes of humans. Personality, inherited genetics, and the such.

The system is irrelevant. Yes, some systems are better at allocating Earth’s scarce resources where they are most wanted (I purposefully avoided the word “needed”) – capitalism, decentralization, and the rule of law, for example. However, these are merely details. The dominant monkeys will eat the choicest steaks in a capitalist system with the freest of markets, and they would do the same in a kibbutz.

In a way, slavery is a natural human institution. It has only been outlawed in the “civilized” world (read “Lord of the Flies” or modern European history to put the word “civilized” into perspective) for the past century and half, two centuries at most. And it was outlawed in the most advanced societies first – where other much more subtle and efficient means to enslave fellow man were devised, rendering the chain and whip of traditional slavery primitive and obsolete.

The reason I boldly and improperly state that slavery is an intrinsic human trait is because we all want to have more with less effort. Since the things we want (again, I am avoiding the word “need”, which David D. Friedman, son of Nobel laureate Milton Friedman, designated as a non-grata concept in economics) generally don’t produce themselves, we prefer others to do the work for us – starting with the inanimate, moving on to animals, and then to fellow humans. It is a human desire to have others produce for them (as long as the perceived cost of enslaving others is lower than the perceived benefit).

In a classroom, the bully will enjoy the fruits of another child’s labor (or that of the child’s parents) through sheer strength. “Give me your lunch money.” In most societies that is still the norm in adulthood. The pretty girls, lacking the physical strength to do the same, try to win the attention of the bully in order to have access to the material things he acquires. They will try to indirectly get to the goods through manipulation and winning the sympathy of the dominant male. The class clown – also lacking the physical strength necessary to partake in the plunder – will try to win the bully’s heart through antics and goofiness. The weak will receive a beating from the bully, as well as the contempt of the girls and other weaklings – for I have never seen them band together.

The appearance of another potential bully will cause power struggles, both physical and psychological. If the resources are relatively plentiful, the bullies can come to a peaceful and separate coexistence – much like a cartel in economic terms – but neither can sleep soundly or lower his guard.

This is continued in adulthood in many societies to this day. This is the way of the tribal warlords in various countries in Asia. This is the way neighborhood gangs operate in cities in the civilized and uncivilized world. This is how nations are run.

In more advanced societies, again, it becomes too costly to rely on physical might. Psychological dominance replaces it little by little (see centuries of development in the “civilized” world). Manipulation, rallying masses with illusory causes, and using them as weapons of mass destruction is less costly than using a military arsenal (it is easier to use willing servants than those forced into submission).

Dominant people in society will use their charm (politicians), religion and the promise to be on the side of “good” (i.e. to belong to the tribe that will dominate in the end), scare tactics (the world will overpopulate, overheat, succumb to disease, be overtaken by the “bad” guys – the competition, the tribe that is supposed to lose in the end), etc. Their goal, consciously or not, is to dominate the weak majority. A behavioral South Africa (under apartheid). Sometimes the dominant ones benefit materially (money, fame, women, luxuries, pride) and sometimes only through the knowledge that they possess power and, very importantly, reputation.

I sympathize with revolutionaries. I experienced one (a revolution, not a revolutionary, for the smartasses still reading this), live, with machine gun fire and terror, all eclipsed by the feeling of bursting freedom, of toppling the most insurmountable dam, a feeling that cannot be matched by a lifetime of orgasms. I feel for the Iranian youth today, fighting for change. I feel for the Cuban dissidents and for others like them. I respect them, and I envy them (they have something concrete to live for, they have a goal and no moral doubts about their actions). However, I am skeptical that they will change anything in the large scheme of things. It’s just that “their” guys will replace the “other” guys – don’t get me wrong, if I had a choice, I would associate myself with “their guys” on the spot, as I completely despise the “other guys”.

I did not lay out a clear idea in the above paragraphs. Just some rambling. If I read this aloud, I can start using some ideas from here to write many mini essays, or even try my hand at a novel, based on concepts found in these notes.