The Republic of the Privileged

And the Bureaucratic Mirage

THE REPUBLIC OF THE PRIVILEGED
And the Bureaucratic Mirage
By Dr. Nelson Jorge Mosco Castellano

There is a contrast that irritates because of its obscenity and saddens because of its predictability.
In a country where the real economy rows against the current of suffocating tax pressure, unacceptable production costs, and a meager domestic market, there is an island of unchanging happiness, a bunker shielded from the turbulence of the world: the political public sector.
While the neighborhood shopkeeper, the rural producer, or the technology entrepreneur racks his brain —and empties his pockets— to pay wages, contributions, and bills while exposed to the elements of private risk, the Uruguayan state rewards its senior officials with a generosity worthy of the most prosperous monarchies.
A Uruguayan legislator receives a gross salary comfortably exceeding 7,000 dollars a month, while those at the top of the Executive branch earn around 14,000. These are figures that would make economies with a GDP ten times larger than ours blush.
But the real scandal is not only how much is paid, but who is paid and according to what logic.
Historically, national politics knew how to shelter an intellectual elite, accomplished professionals who took a break from their successful private careers to serve the republic temporarily.
Today the picture is different. In many cases lacking previous experience in the market for goods and services, entrepreneurial risk, or the management of real scarcity, those occupying parliamentary seats and ministerial offices come, to an alarming degree, from trade-union inertia, perpetual party militancy, or the public administration itself.
The membership card and organizational obedience are rewarded above merit, technical competence, or the ability to create value.
Resentment toward effort, technical training, and the genuine generation of resources for society as a whole is rewarded.
The result of this equation is a vicious circle with highly toxic effects on the institutional health of the republic:
First, there is a savage distortion of incentives.
When the state pays first-world salaries to people trained in union rhetoric or state bureaucracy, the appeal of innovation is destroyed.
Why risk capital, compete in international markets, or endure the calamities of homegrown labor legislation if the most lucrative and secure goal is to latch onto the teat of the national budget?
Young talent, instead of founding companies, aspires to protected public employment, for which “balde” or “foca” militancy is the first rung on the career ladder.
Second, the disconnect from the taxpayer is absolute. Whoever has never signed a private-sector paycheck, whoever has never known what it means to face a wage award or deal with an unforgiving bank, legislates and regulates the lives of those who do produce with astonishing pallor.
They live in a bubble where the money is always there because, if it runs short, taxes are simply raised or debt is issued.
We thus have a political class with Scandinavian-level salaries, a level of training skewed toward statism and anti-business thinking, and complete insensitivity to the cost of living faced by ordinary citizens.
As long as we fail to understand that the state must serve those who produce, because that benefits ALL of us, and not the other way around, we will continue financing a “golden caste” that lives in the first world at the expense of a country rowing through underdevelopment.
A world running counterclockwise, in which alternation is a Gatopardian political sport.

Political-sector privileges
Incentives and productivity
State and taxpayers

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