Closed professions and closed minds

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Fortunately Greece has not been hit by a major natural disaster. It has not been struck by an earthquake on the scale of the one that rocked China, nor has it been swept by a cyclone like the one that has devastated Burma.

Nevertheless, it is in a state of constant crisis. A series of political decisions, legislative provisions, social contracts and economic deals have spun a thick web that impedes any response to the changing international environment. The latest example is the strike by public service vehicle (PSV) drivers. A small group of people have the power to cause a major crisis, causing long queues at fuel stations. The country has no other option: It will either yield to the demands of a small group of vested interests or it will end up in deadlock.

Many commentators have lashed out against what they see as a strong group of vested interests. This may be the case, but it's only because we allowed it to become so. With a series of legislative provisions, the state created a monopoly that has a tight grip on society. Instead of deregulating commercial transport, instead of allowing anyone that fulfills the necessary qualifications to haul products and fuel, it introduced legislation that has rendered society hostage to the whims of a small minority. There are no alternative solutions. The smooth supply of the market depends either on ministers' largess (with taxpayers' money) or the generosity of truck owners. This explains why one must pay about a million euros for a PSV license. These documents do not only allow their holders to transport goods but also to blackmail society in order to increase their income.

There are more closed professions. There are notaries public, drug store owners, taxi drivers and many others that enjoy monopolies in their provision of services. Even university education has become a closed sector (thanks to the much-debated Article 16 of the Constitution).

Critics claim that market liberalization causes problems. That is true, sometimes. In a competitive market, there are good and there are bad products; there are expensive and there are cheap products. Clearly, not everything is a success in a free market, but one person's flop is somebody else's success. A bad or an expensive product that doesn't sell well will inevitably be replaced by another. No one can prevent another entrepreneur from offering a better alternative.

State intervention breeds failure, both on a social level (see communism) but also on a sectoral level. Bad and expensive transport cannot be substituted because competition is prohibited by law. Holders of the costly licenses exploit their monopoly to strangle the market.

What we are experiencing now is not the work of some evil truck owners. It's just that a class of people is used to living under the state umbrella. The law protects their profession as well as income. Why should they become more productive when they can just raise the pressure? Why should they make any effort when they can simply earn money by virtue of a minister's signature? They will just go on strike and prevent others from working.

KATHIMERINI English Edition, 15/05/2008