The Uruguay of Sterile Comfort

Socializing Losses, Privatizing the Applause

THE URUGUAY OF STERILE COMFORT
Socializing Losses, Privatizing the Applause
By Dr. Nelson Jorge Mosco Castellano

“An economic system in which protected failure is backed by the public treasury and productive success is punished with confiscatory taxes is not a market economy; it is crony capitalism sustained at the expense of the poorest.”
The middle-income trap is an economic phenomenon in which a developing country manages to grow steadily and reaches a middle-income level, but later stagnates and becomes unable to make the leap toward high-income economies.
This concept, coined by economists Indermit Gill and Homi Kharas in 2007 for the World Bank, describes a failed transition in which the initial competitive advantages are exhausted and the economic model enters a gray zone of low productivity.
There are countries that spend their lives trying to build the future, and others that prefer to devote themselves to the exquisite art of managing lethargy.
They build well-paid idleness.
Uruguay, with its perennial vocation for being a neatly arranged closet, has become the living example of an international diagnosis as elegant as it is merciless: the middle-income trap.
With economic growth crawling along with the dignity of an asthmatic tortoise—painfully hovering around 1.5% a year—the country struggles in a perfect limbo.
We do not fall over the cliff into the dramatic crises with which we are compared, but neither do we move a muscle to take off.
We are the national equivalent of sitting in a dentist’s waiting room: nobody screams, nobody bleeds profusely, but the discomfort is unbearable and chronic, and the air grows thick.
The Paradise of “Half-Mast Institutions,” or the Art of Vetoing the Future
If one reads economists such as Daron Acemoglu and James Robinson, one quickly understands that underdevelopment is not a matter of fate, but rather a masterpiece of political engineering.
Nations do not fall behind for lack of talent, but because there is a coalition of beneficiaries of the status quo guarding the entrance so that no one dares come in and change anything.
In our blessed homeland, this takes on the trappings of civic operetta.
We have a democracy that is impeccable on paper, perhaps even excessively so when it includes totalitarian parties, but an economy constrained by a corporatism that would make any medieval guild blush.
Everything is protected here except those who produce.
The result?
A domestic market where competition is a dirty word and where prices reflect the ingenuity of those clever enough to charge tolls.
We live in an ecosystem where private success is punished with a fiscal voracity worthy of a better cause, while the business failures of the politically favored—provided they have the right political contact or sectoral chamber—are cushioned by a safety net funded by the long-suffering pockets of the usual people.
CASMU is the best example.
The Generous Social Program for Businesspeople Down on Their Luck
That is where the great national irony lies: the free market is applied with ruthless cruelty to the corner shopkeeper, the independent professional, or the worker whose taxes are paid before the salary even reaches the account.
For them, if the business goes under, the market is a ruthless and heartless judge.
But, oh, when the protagonist is a “systemic actor,” a protected monopoly, or a corporate structure that has run out of fuel through sheer managerial incompetence, the music changes.
The beloved culture of patriotic bailout enters the stage.
The inner circle is convened, “social peace” or “jobs” are invoked, and a tailor-made rescue is designed.
Who pays for the feast of someone else’s inefficiency?
Simple: the ordinary taxpayer, including the poorest worker who, every time he goes to the store to buy a kilo of bread or pays the rate charged by a monopolistic public utility, religiously pays his share to keep the blunders of “crony capitalism” afloat.
We privatize profits when the wind blows in our favor, and socialize losses when lethargy turns into bankruptcy.
The underlying problem of an economy trapped at the middle-income level is not necessarily sudden collapse, but a chronic lack of horizons.
Families sense that opportunities for social mobility are shrinking and that the system rewards inertia over productive daring.
Bewildered Polls and the Art of Resignation with a Bill Attached
It is hardly surprising that public opinion polls reveal a muted, heavy discontent.
Citizens go through life feeling that it is consumed by paying for a country that is extremely expensive for what it offers; what they earn disappears into taxes and public prices that include them, while the political class competes for the laurels of having prevented collapse, as though surviving day to day were an Olympic medal.
The distance between the official narrative of “first-rate stability” and the anguish of making it to the end of the month is a ditch no one can jump across anymore.
We have been convinced that settling for mediocrity is an act of institutional prudence.
While the world advances at dizzying agentic and technological speed, here we are still debating whether to leave everything as it is so as not to upset

Middle-income trap
Corporatism and privilege
Socialization of losses

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