Saturday, February 18, 2006

ENSE PETIT LIBERTAM SUB PLACINDE QUIETEM: WHY IS THE SYSTEM OF COLLECTIVE BARGAINING DESTRUCTIVE TO GROWTH AND HARMFUL TO FREE SOCIETY?

It's widely believed that European "example-in-case" of Economic unsustainability will never reach so ever-wanted point, where Europe could become the most growthful Economy in the world. Such a wishful ambition is certainly welcoming. But sustaining current system of Economic destitution, where Europe is pretending itself to maintain such system in order to preserve its unique social system, which is and presumably remains unfit for command. So where's the problem that pushes Europe back. Following classical emphasis, the two main objectives are politically and economically underlayed. Let me first turn to the political issue. Europe has instituted one of the most beneficial systems of welfare through out the History of 20th century. Approximately until the mid-1970s Europe has been catching up with the United States quite instantly, according to economic results. But aftermath, European economic system began to decline rapidly and lagging behind the U.S. Economy. Several efforts lead Europe to such an unadmirable result. First far-reaching consequence is the lack of personal, social, economic and political irresponsibility. Such an intrinsic dimension of socioeconomic devolution was resulted according to European mind of uncritical social thinking that put income equality ahead of freedom, responsibility, growth, prosperity and happiness. But such devolution has been continuing to expand rapidly, after business managers that lead production began to become the hostage of lobbies and trade unions that insisted to impose 7-hour daily work time that reflected the very strong decline in entrepreneurial productivity. European trade unions forced largely expanding European businesses into appointing minimum wage, what made European labor market rigid and inflexible. Another crucially important aspect is that European trade unions insisted strongly to acclaim the promotion of an early retirement that replaced the burden of labor on the most productive individuals. Such a destructive effect of economic policy led to higher taxes. According to the Laffer curve, high taxes imposed on a smaller tax base, will not increase tax revenue, but sooner or later decrease. The most knowledgeable and productive individuals did therefore not accumulate a lot of their human capital, so the measured level of output capacity was lower than in the United States. That's how the most knowledgably recognized and prosperous individuals began to leave European misery and escape into the United States, where they much easily achieved what they seemed impossible to attain in Europe. The most obvious evidence of European economic destitution is seen in countries, such as France, Slovenia, Italy and Germany, also Sweden. Thus, according to Index of Economic Freedom (Heritage Foundation), France is the most bureaucratic monster in Europe. Very rigid labor market forced German investors to remove their production from Germany. Italian health and social security system is about to collapse sooner or later. Highly-regulated financial markets, unwelcoming approach to foreign investment, astronomic taxes, weak protection of private property, pro-rigid labor market and illiberal legislation made the richest of the post-communist economies, namely Slovenia, unattractive to invest. Slovenia's gradual approach to economic policy disabled strong and economic blueprint cooperation between the economy and science, based upon the innovative decision-making establishment. Ljubljana is a beautiful city, but unfortunately the tax system would leave you so little in your wallet, that could be very hardly to enjoy sightseeing, that is offered in Ljubljana.The very first approach to pull Europe out of its trapped misery is to reinstitute personal responsibility that will reward the application of knowledge in society. Speaking how Europe's economic performance is lagging behind, because its society is not based enough on knowledge, is actually funny. Therefore, European policy-makers need to cut government expenses by privatizing social security and health system. European type of public administration is "upside down". According to CATO's Economic freedom of the world 2003, Sweden and Slovenia, have the largest public administration in Europe. Market decisions must not be disturbed by trade unions. Therefore, European policy-makers must not allow trade unions to bargain about salaries and wages for thousands of individuals. It's morally unacceptable to let trade unions to impose decisions that are not resulted in accordance with market-based solution, but remain a political disrespectfulness. For avoiding the collapse, not politicians but entrepreneurial individuals must make decisions and trade unions should not be allowed to bargain and harm the Economic growth. In fact, the best social programs aren't not state subsidies, but only jobs. Political bargaining about salaries and collective contracts will always reduce an agenda for growing Europe, that was written by distinguished Andre Sapir and other distinguished economists. An agenda for growing Europe will hardly be possible, unless there will once be a construction of entrepreneurial philosophy and market decisions, that will put challenge and growth ahead of political misleading. The most suitable way of throwing off the lobbies is to cut the government and privatize pension system and reduce the size of the state into ultra minimal state, where individuals will be more responsible for what they do. At last but not least, there's another prosperously sustaining aspect that is required if Europe will want to rise for the challenge of the bright future. That aspect will be done when the Flat Tax will be imposed. Progressive taxes were elaborated and required in Marx's Communist Manifesto that subjected the worst case scenario of how European economy and society should function. Progressive taxes are harmful to the economy and ultimately enable political abuses, where lobbying is coded within differently imposed tax rates that hurt highly educated and productive individuals that represent the major source of economic growth and future sustainability. There's no accumulation without investment and vice versa. But to take seriously proposed step ahead, European leaders must (!) not allow lobbies and trade unions to be in the position of bargaining and taking destinies of millions of others in their hands. A free society, that I envision, consisting of knowledge, responsibilities, duties, rights, entrepreneurial initiative, rule of law and individual rights as the moral basis of society, I believe is a place of sovereign individuals where everyone, being free to choose, is enabled to move from the bottom to the top to make his or her dreams come true and therefore enjoy a fuller and happier joyfulness of life.

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