When talking with friends and acquaintances, among the many things I’m asked, two questions come up frequently.
The first is “What do you think of Romania?” and the other is “What are the most serious problems facing Romanians?”
I answer the first one easily: if I didn’t have confidence in this nation’s future and if I hadn’t seen positive signs, I wouldn’t be here; this answer satisfies most of my interlocutors. With the second question, I encounter some difficulties. When I answer that, in my opinion, the most serious problem is the lack of a mindset suited to the present and, in business terms, the lack of understanding of basic mechanisms, it sparks endless discussions.
Given that the way we handle everyday situations is very important, I have sought to understand the reasons behind this mindset-related problem, and by analyzing things without prejudice, I have reached some conclusions that I consider quite plausible. Please do not take them as “truths” or “judgments,” but simply as reflections.
At the same time, I would like to make a trivial observation, yet one that is almost always forgotten: six years have passed since the regime change, and this may seem like a long or short time, depending on your perspective.
But at least one thing is certain: those who are in the labor market today were born and raised under a different regime with different demands, and received an education and mindset suited to that regime.
Naturally, it is not my place to judge what is right or wrong; the fact remains that, as the Law of Evolution shows, those who manage to adapt to environmental changes survive; the others perish.
Psychology shows us that what we learn as adults has far less influence on our behavior compared to what was learned during childhood, and that contradictory teachings do not lead to a synthesis but often exist separately within us, causing those inner conflicts we are all familiar with.

The Brutal Shock: From Planned Economy to the Free Market

I have studied with some diligence the economic mechanisms of your not-too-distant past (I believe I am one of the few Westerners who has read the 980 pages of the 1981 “Economic-Financial Mechanism” and also the “Economic Cybernetics” texts) in order to understand the present.
Besides the fact that some ideas struck me as extremely interesting (at least from an academic standpoint), one thing seemed obvious to me: a whole set of beliefs and ways of acting, which probably worked in the past, are now completely worthless. First of all, those who lived, learned, and worked under a planned economy found themselves suddenly thrown into the “free market” arena, without the mental tools needed to cope, thus becoming easy prey for swindlers and dishonest people (Caritas, for example).
Those who managed to do business did so more out of instinct and luck than by conscious choice, applying the small-scale survival techniques of daily life to the commercial sphere.
Especially since everyone found themselves faced with completely new concepts that in the past bore the “infamous mark of capitalism”: competition, market economy, supply and demand, marketing, advertising…
Anyone who tried to educate themselves found themselves faced with voluminous, scholarly tomes on economics, filled with formulas and explanations that were hard to understand, with little or no applicability in the real world (forgive me, but my opinion is that most “experts” in economics around the world wouldn’t even be able to manage a newsstand… )
Of course, it is not my intention to teach economics, but, following the approach from previous articles, I would like us to reflect together on some basic concepts that govern the business world, focusing, as usual, on the principles; perhaps we will discover together that things are much simpler than they seem, if done correctly.

The Desert Island Reality Check: Resources vs. Results

The first concept I’d like to address is the very one that underlies any economy: that of work. Hundreds of pages could be written on this topic, but I prefer simple and obvious things, and for that reason I would like to set aside the complexities of the modern world for a moment to describe a basic situation.
Let’s imagine we are shipwrecked on a deserted island, far from trade routes. After an initial moment of discomfort, realizing that we will remain far from civilization for who knows how long, we resign ourselves to our fate and try to organize ourselves to meet our basic needs.
What are these? Daily food, obviously, and a place to sleep, sheltered from wild animals and rain. Then, once the immediate need is met, we’ll look for a way to meet our needs on a more regular basis.
We realize we have a number of options: we can try to hunt some small animals, catch some fish, or look for edible fruits. For rest, we can look for a cave to make more comfortable or, using the materials at our disposal, build a shelter sturdy enough, perhaps in the treetops.
From this simple situation, we can already draw a number of lessons:
Using available resources to transform them into something useful that meets our needs is certainly the first definition of work.
In our case, it is clear that:
– resources exist, but we are the ones who must find and use them; no one else will do it for us;
– it is useless to complain about the situation or the lack of resources;
– it is useless to look for excuses, no matter how real they may seem (an empty plate is an objective fact; the rest is just idle talk);
– above all, we cannot blame anyone else for the poor use of resources.
These are general principles that must be internalized in order to cope with the demands of the free market and which underpin the American myth of the “self-made man.”
It is evident that, when this philosophy is taken to the extreme, the result is an individualistic, competitive, and selective society—as, in fact, American society is. This type of philosophy can come as a real shock to those born and raised with a collective, centralized-control mentality, where the responsibility for decisions always falls on someone else.
It is equally evident that, everywhere, there is a state that ensures existence does not turn into a literal “blood-and-guts” struggle for survival.
In any case, and this is the first conclusion, in every situation there are resources and possibilities. It is our task to discover and use them. This means that WE are responsible for the results we achieve.

Now, assuming we are sufficiently organized and—by acting correctly—have resolved the problems of day-to-day survival, we begin to get bored and decide to explore our island a little. The island is not entirely deserted; by one of fate’s mysteries, it is also inhabited by other castaways who, like us, lead an autonomous existence.
After meeting a few of them and holding the customary celebration, we decide to organize our lives a bit better.
On this occasion, we discover that others have resources and products we lack—and vice versa—and that each person has a clear preference for a specific activity. One is very skilled at building shelters, another makes the best spears, and yet another knows where to find the tastiest fruits. We, who are excellent hunters but poor builders, ask the one with the best shelter to give us a little help. After some negotiations, we agree to have the shelter rebuilt in exchange for two wild boars.
We won’t address the social implications of creating an organized society (but we will); let’s focus on the work. First and foremost, we discover that the value of work lies in its RESULT (the restructured shelter) and that this result can be exchanged for other goods, being subject to the same laws of supply and demand that govern goods (remember the concept of “exchange” that we emphasized in previous articles).

The Great Illusion: Effort vs. Real Value

This represents a fundamental shift in thinking: very often we tend to equate the value of our labor with fatigue, with the time spent, or with the difficulty of the work (and we will see how certain categories of workers take advantage of this ambiguity).
It’s not like that: when I go hunting, it doesn’t matter how long I spent with my rifle to my eye, how ingenious the traps were, or how interesting the theory I’ve come up with about hunting is.
The only thing that matters is the amount of game I bring home and the possibility of trading it for something else, in case I have more than I need.
So our final definition of work in a market economy will be the following: Work is the achievement of something desirable for someone.

The New Definition of Work: “Desirable,” Not Just “Useful”

Let’s analyze this for a moment:
– “something” is the product or, as previously mentioned, the result;
– “production” represents the productive moment in which we invest our abilities and knowledge;
– “someone” is the recipient of the product (who will be identified—here comes marketing);
– “desirable” implies that the recipient knows our product and wants it (and here comes advertising).

Take note! This adjective “desirable” encapsulates all the differences between a market economy and a socialist economy; the latter uses the term “useful.”
If that seems like a small thing, consider the implications:
“useful” means that centralized control will be exercised over us by the same committee of experts who will decide what is useful or not, what is worthwhile, and how important it is.
In contrast, “desirable” means that we can want something that may seem completely useless, if not downright harmful (see alcohol or tobacco), while other “useful” things do not seem so important to us.
We will explore the significance of all these concepts in relation to organized labor, bureaucracy, earnings, and so on in the following articles.

For now, I suggest you ask yourselves some questions:
– What is the result of my work?
– To what extent can it be replaced?
– How desirable is it?
– For whom is it desirable?

If you manage to answer these honestly, you will discover something new and interesting. Happy reflecting!