{"id":266118,"date":"2012-08-06T18:47:43","date_gmt":"2012-08-06T18:47:43","guid":{"rendered":"http:\/\/new.moldova.org\/2012\/08\/06\/the-party-economyopinion-232243-eng\/"},"modified":"2012-08-06T18:47:43","modified_gmt":"2012-08-06T18:47:43","slug":"the-party-economyopinion-232243-eng","status":"publish","type":"post","link":"https:\/\/www.moldova.org\/en\/the-party-economyopinion-232243-eng\/","title":{"rendered":"The party economy\/OPINION"},"content":{"rendered":"Reading Time: <\/span> 2<\/span> minutes<\/span><\/span>

This Sunday morning, at around 5 a.m. we awoke hearing shrill and piercing screams. A look outside the window disproved that those were part of a dream about a medieval witch hunt, nor a pagan ceremony involving animal or even human sacrifice. It was a wedding party of twenty or so adult human beings, one of them being the “conductor”, guiding the “choir” through a thirty-minute performance in the courtyard between the various residential buildings, until entering their final destination.<\/p>\n

Apart from the fact that the Kantian categorical imperative, “Act only according to that maxim whereby you can, at the same time, will that it should become a universal law”, is probably not taught at schools nowadays, this event revealed some underlying principles of the present Moldovan, but also the world economy.<\/p>\n

Recently, the Moldovan Court of Auditors released potentially scandalous information. The Municipality of Chisinau is accused of having lost during the last three years due to mismanagement more than one billion Moldovan Lei (around 65 million Euro), while leading staff at state enterprises, according to the newspaper Jurnal de Chisinau, receive, comparatively astronomically high salaries.<\/p>\n

What are the parallels between these apparently unrelated events? In both cases, there seems to be a complete lack of public outrage. Articles about the latter events on Romanian-speaking news sites were almost uncommented, while comparatively minor news provoked the usual verbal altercations among readers. Why is this so? The typical explanation, about people having become accustomed to unwise government decisions, does not solve the problem why citizens react differently to government mismanagement. The lack of reaction may stem from economic illiteracy. It is no coincidence that economic theory, how important one might think it would be for each individual, is typically not – or only episodically – taught at schools. This is valid also for other European countries.<\/p>\n

We may suspect that many consider public spending, however misdirected, as something intrinsically good. Since the 1930ies, apologists of public deficits, inspired by their idol, British economist John Maynard Keynes, have implanted in public discourse the idea that public spending somehow “stimulates” the economy and eliminates unemployment. Thus, even building apparently useful objects like new pyramids would be considered something desirable since it creates new jobs.<\/p>\n

This line of reasoning, however, ignores the fact that, at least material, goods are scarce. Using resources for one action makes them unavailable for alternative uses. In other words, you cannot eat the cake and at the same time preserve it. Let us return to our wedding party. “Stimulation” of the economy through public spending, like alcohol consumption, may produce euphoric results in the short but head-aches and other problems in the long-run. Unwise decisions are reinforced by collective frenzy. Behavior which individually performed would be considered at least unwise gains normative character if performed collectively. Contrary to the public sector, no one in his sane mind would consider that permanently incurring debt would be a good way to “stimulate” the “economy” of a family. Nonetheless, thanks to Keynesian propaganda, many young couples seem to consider that the best way to build a solid future is to incur as much debt possible in organizing their wedding ceremony.  <\/p>\n

By Gerhard Ohrband<\/em>
\n<\/i><\/b><\/p>\n","protected":false},"excerpt":{"rendered":"

Reading Time: <\/span> 2<\/span> minutes<\/span><\/span>This Sunday morning, at around 5 a.m. we awoke hearing shrill and piercing screams. A look outside the window disproved that those were part of a dream about a medieval witch hunt, nor a pagan ceremony involving animal or even human sacrifice. It was a wedding party of twenty or so adult human beings, one of them being the \u201cconductor\u201d, guiding the \u201cchoir\u201d through a thirty-minute performance in the courtyard between the various residential buildings, until entering their final destination.<\/p>\n","protected":false},"author":3,"featured_media":266117,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":["post-266118","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economy"],"content_social_share":"Reading Time: <\/span> 2<\/span> minutes<\/span><\/span>

This Sunday morning, at around 5 a.m. we awoke hearing shrill and piercing screams. A look outside the window disproved that those were part of a dream about a medieval witch hunt, nor a pagan ceremony involving animal or even human sacrifice. It was a wedding party of twenty or so adult human beings, one of them being the “conductor”, guiding the “choir” through a thirty-minute performance in the courtyard between the various residential buildings, until entering their final destination.<\/p>\n

Apart from the fact that the Kantian categorical imperative, “Act only according to that maxim whereby you can, at the same time, will that it should become a universal law”, is probably not taught at schools nowadays, this event revealed some underlying principles of the present Moldovan, but also the world economy.<\/p>\n

Recently, the Moldovan Court of Auditors released potentially scandalous information. The Municipality of Chisinau is accused of having lost during the last three years due to mismanagement more than one billion Moldovan Lei (around 65 million Euro), while leading staff at state enterprises, according to the newspaper Jurnal de Chisinau, receive, comparatively astronomically high salaries.<\/p>\n

What are the parallels between these apparently unrelated events? In both cases, there seems to be a complete lack of public outrage. Articles about the latter events on Romanian-speaking news sites were almost uncommented, while comparatively minor news provoked the usual verbal altercations among readers. Why is this so? The typical explanation, about people having become accustomed to unwise government decisions, does not solve the problem why citizens react differently to government mismanagement. The lack of reaction may stem from economic illiteracy. It is no coincidence that economic theory, how important one might think it would be for each individual, is typically not – or only episodically – taught at schools. This is valid also for other European countries.<\/p>\n

We may suspect that many consider public spending, however misdirected, as something intrinsically good. Since the 1930ies, apologists of public deficits, inspired by their idol, British economist John Maynard Keynes, have implanted in public discourse the idea that public spending somehow “stimulates” the economy and eliminates unemployment. Thus, even building apparently useful objects like new pyramids would be considered something desirable since it creates new jobs.<\/p>\n

This line of reasoning, however, ignores the fact that, at least material, goods are scarce. Using resources for one action makes them unavailable for alternative uses. In other words, you cannot eat the cake and at the same time preserve it. Let us return to our wedding party. “Stimulation” of the economy through public spending, like alcohol consumption, may produce euphoric results in the short but head-aches and other problems in the long-run. Unwise decisions are reinforced by collective frenzy. Behavior which individually performed would be considered at least unwise gains normative character if performed collectively. Contrary to the public sector, no one in his sane mind would consider that permanently incurring debt would be a good way to “stimulate” the “economy” of a family. Nonetheless, thanks to Keynesian propaganda, many young couples seem to consider that the best way to build a solid future is to incur as much debt possible in organizing their wedding ceremony.  <\/p>\n

By Gerhard Ohrband<\/em>
\n<\/i><\/b><\/p>\n

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