Masters and Servants
June 6th, 2010
Mexican bureaucrats and politicians consider that the State owns the country and that they own the State. They view its citizens as a big stupid mass, easily controlled by the media. They only make a distinction between their favorite oligopolists and the leaders of the unions of state employees and government-controlled enterprises.
Using these criteria they justify imposing excessive taxes on the vast population, being careful not to affect their chosen ones, only to the extent necessary to satisfy their greedy spending needs. Based on archaic ideas, they assume that the State is the economy’s engine and the population is only deadweight. They also assume that greater government expenditure equals greater development. They think that an increase in taxes leads to an improvement in the conditions of the population. More State and less Society: that is their formula.
Currently they spend 30 percent of the country’s production, up from 19 percent in 1999. A much larger slice of a pie that becomes smaller and smaller as time goes by.
Only on rare occasions do these illustrious citizens manifest any true interest or affect for the condition of the workers, students, professionals and small entrepreneurs they claim to represent, or feel a real responsibility to improve their condition. It seems like their only real responsibility is to preserve the privileges of the political and bureaucratic class. Contrary to the principles expressed in their speeches, by their Parties or their economic education, they show a deep lack of trust in the ability of these vassals to make a contribution to the common good.
Strangers to the evident signs of extravagance, mismanagement, corruption, inefficiency, unsuitability, opacity, abuse, arbitrariness, voluntarism and partisanship in government expenditures which day after day are evident to the astonished eyes of the citizens, those same technocrats and politicians are now getting ready for a new "tax reform" to increase state revenue while they continue to spend like drunkards the money earned by others’ honest work. They feel that all the profits are owed to them and therefore, they can make use of them at will.
Even when faced with the continuous decline in private investment, consumption, employment and real wages – clear manifestations of the failure of their economic and fiscal policies – they accuse the citizens of a lack of unity with the enormous efforts they are supposedly making to help the country move forward, and are now requesting another increase in taxes. Some disoriented individuals, while criticizing their largesse, have given this idea credence, mistakenly confusing the need for fiscal equity with the need for more taxes.
Absent from this "reform” is the option of improving the fiscal policies as a tool for economic development. First, we must establish a ceiling for public expenses and ensure its relevance. It is impossible to spend without limits and not expect to paralyze the development as a consequence. Second, promote the efficient distribution of resources within the economy; and third, to promote a real redistribution of available income.
In their craven desire for more taxes, they forget the urgent need to accelerate economic growth, create jobs and develop a real increase in real wages as the only way to reduce poverty, increase the population’s hope and bring an end to the country’s crisis of security. The system of domestic prices is distorted, with fees, tariffs, prices and services increasing in an arbitrary manner, effectively obstructing investment and penalizing anyone who desires to work, save or invest. Real redistributive measures are omitted in order to perpetuate their privileges. Donations and handouts continue to grow, despite their evident ineffectiveness at rescuing from poverty the millions of citizens who now have become dependent on these practices.
Leaders and followers help with the harvest. Some offer open forums to help our illustrious masters fool us with unreal numbers and to reprehend their subjects. They falsely condition economic growth to higher tax burdens. Only a surrealist would think that investment levels that have been falling for the last three years will show an increase by reducing its rate of return with additional taxes.
Others naively lobby for more acceptable forms or levels of dispossession, without opposing the underlying problem: No more taxes! They decrease earned income and the return on investment, desincentivizing consumption and employment even more. No more spending! Not unless excess, waste, corruption and privileges are eliminated.
Let’s express ourselves as free citizens to prevent further plunder. Only then will it be possible for our country to grow and for us to overcome poverty.
The author is the president of the National Association of Independent Entrepreneurs, A.C.