* Originally published in the Tuscaloosa News on October 19, 2003.
In a small victory for capitalism last week, the French government announced plans to reassess the 35-hour workweek’s impact on its shrinking economy, high unemployment rate and growing deficit.
The defenders of the petite schedule can blame their own laziness for the political momentum behind those willing to work a bit longer. For whilea the American economy recovers, France is teetering on a 10-percent unemployment rate and has now slipped into a recession. But at least it’s slipping leisurely.
A recent survey published in L’Expansion magazine found that 67-percent of French citizens want higher numbers — both in jobs available and hours worked.
The World Bank disagrees. The international lending organization released a study last week that calls increased regulation during an economic decline utter stupidité. In what should be common knowledge, “Doing Business in 2004: Understanding Regulation,” rambles through 230-pages to articulate the simplest of concepts: the least amount of business regulation fosters the strongest economies.
Laissez-faire capitalism — the doctrine of state noninterference — pounded the theory of a controlled-economy into the dirt well before we ever heard of the Internet. But if the socioeconomic crime scene that was the Soviet Union is too distant an example, then study the contemporary evidence on the Korean peninsula. The relatively free South Korean economy is building a billion-dollar car plant in Alabama, while the artificially engineered North Korean market is starving its people.
If more comprehensive evidence is needed, the World Bank’s report provides it by measuring the costs of five basic business-development obstacles in 130 nations. It evaluated how government regulation affects an entrepreneur’s ability to start a business, hire and fire workers, enforce contracts, extend credit, and finally to close a business.
Basically, the bank found that regulatory red tape binds the hands of producers, workers and consumers.
The more a government “helps,” the worse its economy suffers. Further regulation is equivalent to tossing a bowling ball to a drowning man, and upon seeing no positive result, following it with a cinderblock.
“Heavier regulation is generally associated with more inefficiency in public institutions … and more unemployed people, corruption, less productivity and investment, but not with better quality of private or public goods,” the report reads.
The World Bank found that the most efficient economies are the least regulated. The U.S., Hong Kong and Singapore were the best examples. The differences from the others were stark.
In the U.S., you can register a business in four days; in France it will take nearly two months. Credit reporting agencies cover nearly every adult in America, but only about one percent in China. If your business fails in India, it will take about ten years to negotiate yourself through the bankruptcy process. It will take a businessman four years to collect a delinquent bill in the Guatemalan courts, and because of this nonsense, more than 80-percent of Bolivian trade is done on the black market.
I suppose it goes against human/snature to trust one’s livelihood/sand consumer safety to the ebb and flow of an unseen yet theoretically/sbenevolent economy. Maybe that’s why so many individuals surrender their commercial freedoms to government regulation. By doing so, however, they throw a wrench into the gears of the laissez-faire, consumer-driven machine that powers their standard of living.
But there’s one commercial freedom that must never be surrendered, or even moderately regulated: land. More specifically, your land. Among the principles of laissez-faire capitalism, private property is the most essential. Thankfully, the bank’s report also focuses on the correlation between the quality of a nation’s standard of living and its property rights.
“Instead of spending resources on more regulation, governments are better off defining the property rights of their citizens and protecting them against injury from other citizens and from the state,” the report reads. Nearly 70-percent of Americans are homeowners, by the way. France is hanging below half.
Not surprisingly, the authors write that excess regulation stifles homeownership in much of Africa, Latin America and the former Soviet Union. This section of the report will unfortunately fall under blind eyes, for the brutes running these third-rate economies rule cultures with little or no history of property rights. But as globalization expands, their little thiefdoms shrink.
When a meddling advisor to King Louis XIV asked a group of struggling businessmen how the government could help them increase profits, a frustrated factory owner named Legendre bravely shouted, “Laissez-nous faire!”
Translation: “Leave us alone!”