|
Unions are unreasonable. They behave irrationally. The union’s demand for a referendum has nothing to do with labor law. The public is misinformed about the purpose of the signatures for the referendum. The entire union struggle takes on a political connotation… This is just part of the assessments that can be heard these days from the government, but also from some officials of the Croatian Employers’ Association. All these claims can be accepted, but at the same time, the unions can be understood and justified. In a country where many individuals and institutions behave economically irrationally, everyone irrationally joins this trend. Irrationality becomes a pattern of behavior and a condition for short-term survival. Amendments to the Labor Law aimed at alleviating the rigidity of collective agreements could today play a role similar to that of the introduction of VAT in 1988. The collective consciousness in Croatia is ready to endure all kinds of political and economic violence for a long time, which is unreasonable. But then, at one moment, all that frustration accumulates and projects onto what is actually not such a crucial government decision.
The Similarity of the Labor Law and VAT
At the end of the nineties, the government decided to replace the old turnover tax with the already widely accepted value-added tax. Since tax changes are always a fuse that easily ignites public discontent, all the anger of the public, which has accumulated over the years, erupted over the issue of introducing VAT. Although VAT was introduced by then Finance Minister Božo Prka, that ‘crime’ has forever remained with Deputy Prime Minister Borislav Škegra. No matter how irrational it may be, the memory of the introduction of VAT was one of the main incentives for the change of government in 2000. Today, the collective consciousness focuses on changes to the Labor Law, and the resistance to its changes actually aims to punish the government for everything it has done wrong in recent years. Rationally speaking, changes to the Labor Law do not deserve such a reaction from the unions and citizens, but the consequences of irrational government policies are irrational responses.
The contagion of irrationality is not limited only to the relations between unions and the government. The moves of employers are also puzzling. It is hard to understand that the Croatian Employers’ Association supports Prime Minister Jadranka Kosor and her Economic Recovery Program so unreservedly. It seems that only the employers’ association does not realize that this is a half-hearted program and that it lacks a developmental component. Even if it is implemented to the last line of the PowerPoint presentation, it will at best allow Croatia to stagnate. Irrational-rational have also become state officials and directors of companies in state (co)ownership. Directors of public companies, in more relaxed moments, are willing to admit to friends that they have no intention of making any developmental decisions because – they do not want to end up in Remetinec. At a gathering of representatives from the wood industry in Opatija, an entrepreneur proposed that legally permissible public tenders be applied in state procurement of furniture. One state official mumbled that he would not want to stand behind that because he does not want to end up in investigative custody either.
Consumers are not Rational Beings
When it comes to Croatian consumers, it is most difficult to diagnose their (ir)rationality. Until a year ago, they completely ignored their purchasing power and raided every store that came their way. Now they are avoiding them at all costs. Experts even diagnose that local consumers have gone to the other extreme – they are buying less than they could objectively. And in this way, through their micro-rational decisions, they are preventing everyone from getting out of the recession. Economic theory has been based for decades on the axiom that individuals behave rationally. Only about a decade ago was the theory more seriously accepted that it is wrong to incorporate rational behavior into economic models. The explanation is simple: the individual does not have all the relevant information from the market to make the expected correct decision about, for example, consumption or abstaining from it. Human psychology plays a much more important role in economic behavior than classical economic schools have assumed. This should also be the message to the current Croatian government and its Prime Minister Jadranka Kosor. After a long period in which they did not respond rationally to economic violence, citizens/voters/consumers are now beginning to respond seemingly irrationally, on a completely wrong topic – the Labor Law. The image does not have to be the truth, but it is a fact. If a referendum is called, the government will painfully realize this.
|
