Mediocrity, a vicious circle

Ten years ago, Greece was in the midst of a huge row over the proposed abolition of price ceilings for bread. The new law said bakeries could produce all types of bread, while supermarkets would also be able to sell bread. Nothing peculiar about that. Back then, however, the bakers’ association waged a huge struggle to protect the exclusive privilege of selling bread at a price set by the state. Bakers finally gave in, and the world kept turning. Bakers did not become slaves to either supermarket chains or the multinationals. They are still around, making money, producing bread and a wide selection of products that fulfill consumer needs, despite the fact that big stores sell various types of bread, often at cheaper prices than the local bakeries. And no one sees that as a threat. Today, the abolition of the price ceiling for bread sounds normal, but when it was first announced it created mayhem. Reforms that look radical today could well seem quite normal tomorrow. This also applies to the deregulation of closed professions. The sea of laws and regulations that currently bar the entry of European professionals into the domestic market purportedly protect local sectors and businesspeople. In truth, it only perpetuates their low competitiveness and productivity. This is the vicious circle of mediocrity. Local entrepreneurs are happy to see restrictions against competition; politicians claim to defend domestic producers and consumers get used to the fact that they won’t find better or cheaper goods. The vicious circle will break only when politicians stop trying to please voters and expecting rewards from those who benefit in the long run. After all, no baker ever expressed satisfaction with producing a variety of products that bring him higher profits than the old-fashioned loaf. That, you see, would be stating the obvious.