In his book on Man and the State, Jacques Maritain was of the firm opinion that “the end, for democracy, is both justice and freedom”.
And in another book on Capitalism and Freedom, Milton Friedman held that economic arrangements play a dual role in the promotion of a free society.
On the one hand, freedom in economic arrangements is itself a component of freedom broadly understood, so that economic freedom is an end in itself. Secondly, economic freedom is also an indispensable means towards the achievement of political freedom.
In and of itself, economic freedom is an extremely important part of total freedom.
Separation from political power
Economic freedom insists on the separation of economic power from political power. It seeks the dispersal of power in all its forms. It resists coercion, whether this comes from political quarters (the state) or from economic quarters (monopolists).
Absolute freedom is impossible, hence the need for government as a forum for determining the “rules of the game”, and as a regulator or arbitrator. In other words, the government is needed to do those things that the market cannot do, namely to devise and operate systems of checks and balances and to maintain a social equilibrium.
All the above has relevance in the contemporary Maltese context.
Our young democratic republic succeeded in making significant strides forward, particularly since the attainment of independence. An industrialisation drive took off. A social services network was constructed. The poorest of the poor were provided with a safety net. And the quality of life of the average citizen started to show improvements.
By all accounts, this was a positive performance, considering the fragility and exposure of the Maltese economy.
Positive it was – but it has stalled in recent years and a good number of countries that, like us, took the EU route – though not all – are doing better than us.
During the last half century, a titanic struggle has been waged between the market system and the forces of economic manipulation. The market forces have prevailed, driven as they were by free competition and the advance of technology.
Topmost source of value
In essence, the contest proved that the 19th century theory, which held labour as the principal source of value, did not prevail. The topmost source of value and the primary cause of economic development is the mind – it is free enterprise.
Enterprise works best from the bottom upwards, and it must have the widest possible popular base. It relies on the combined efforts of the social partners, and it feeds on its success when it lifts the poor out of poverty.
Enlightened enterprise makes solid advances when the poor start to emerge from the shadow of poverty, and gradually become masters of their own economic destiny.
The wealth of nations
The secret of the wealth of nations is economic growth. Wealth cannot be distributed unless it is created. And, in a world of unforgiving competition, it can only be created if productivity is stepped up, costs are reduced to a minimum, and the social partners adapt to flexible systems.
Competition imposes its imperatives in terms of efficiency and the abolition of outdated practices. The social partners have to work in tandem in order to sell more, earn more and improve their lot if they realise enough profits.
Conversely, the social partners and the national economy lose ground, as well as the battle for survival, if they fail to pull the same rope.
In the contemporary globalised economy, where the winds of competition blow with hurricane force, the battle for survival becomes tougher. And it becomes tougher still as Malta must, willy-nilly, organise itself in order to gain entry and hold its place in the world of free trade. The rough and tumble of competition imposes stern imperatives, involving, among other things, an ongoing restructuring process and even a change of culture.
Threat of obliteration
It is a challenge driven by irresistible and overpowering forces of competition. To stand in the way is to invite obliteration.
Yet, there will be vested interests that will demand privileged shelter, and others who hanker after monopolistic advantages, as well as unearned wealth through political manipulation – even corruption.
There will also be politicians on both sides of the political divide who will be beholden to the electoral vote and their personal political survival. They will shirk their duty to address the imperatives of economic efficiency.
It is up to the social partners to forge a partnership that serves their common interests. It is up to the government to create the right environment for a meaningful partnership with a human face and animated by a social conscience.
The Malta Council for Economic and Social Development (MCESD) could have been the right forum. Instead, its potential value has never been properly appreciated.
The council is no more than a talking shop, while the government resorts to the process of public consultation exercise on policy matters that could properly and seriously be thrashed out in the MCESD.
Malta has been the loser. It is never too late to make amends.
It is enterprise that has the expertise as well as the means to exploit opportunities, given the right support and freedom from bureaucratic restraints and punitive taxation.
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