The myth “Bulgaria will get better when politicians start listening to the People.” Part One: Who is “the People”?

Georgi Zayakov

One of the most frequently repeated myths during the transition is that Bulgaria will recover only when politicians start listening to what “the People” tell them. Nostalgic people, for example, are dying to sculpt the image of Todor Zhivkov as a great politician, because he was the only one who listened to the people’s wishes. And now there was a need for someone like him, who would go to cities and towns, talk to the electorate and, hearing their pain and desires, bang his hand on the table and say “The state will do it.” “Dance!” and everything starts to flow like butter and honey, and Bulgaria becomes the Switzerland of the Balkans.

However, everything listed so far is a big mistake. The reason for this is very simple – the “wise people” raised on a pedestal is not a homogeneous structure, but consists of many individuals who, firstly, differ in a number of characteristics (education, intelligence, preferences, age, experience, etc.) from each other and, secondly, pursue completely different interests. Given that most political decisions directly affect economic activity in the country and its results, it is important to clarify that if the “people” are the ones who should say what should happen, then they should understand economics. Unfortunately, this is not the case – according to a Gfk study, three quarters of Bulgarians are financially illiterate. The number of economically illiterate people is probably similar, or even higher. One of the big problems is also that even well-educated people with higher education, who, however, have not delved into reading serious books on economic topics, make the mistake of thinking that specialization in their own field (for example, medicine, law or engineering) can be transferred to economics and give wide publicity to the economic fallacies they believe in. Accordingly, two main questions can be raised:

1) Which "people" exactly will politicians listen to - the majority who do not understand economics, or the marginal minority who do? (It is worth clarifying here that there are many economists who believe in economic fallacies, but on the other hand, they are the favorite advisors of politicians because they find a scientific explanation and justification for even the most harmful and populist policies.)

2) What will be the results when politicians listen to "Narod"? We will address this question in the second part of the article.

To answer the first question, it is necessary to analyze the leading incentives that determine the public behavior of politicians. There are basically 4 of them:

• To be elected and come to power.

• To be re-elected.

• To be able to increase their power as much as possible, at the expense of the rights and freedoms of citizens.

• So that they are not convicted of abuses when they fall from power (a very pronounced motive, especially in Bulgaria).

From the above, it can be concluded that politicians will choose to listen to the majority of the "People" who do not understand economics, as this guarantees them more votes and higher chances of winning elections. It is worth noting that, depending on the position they take on a particular economic issue, an individual may belong to this "People" in one particular situation and not be part of it in another.

The “people” for their part have an incentive to always choose the path of least resistance, to avoid painful reforms, to get more than they give, and most of all to get what they want right now (higher wages, better healthcare, good education, etc.), instead of being patient and waiting a certain period of time until they can work out what they want themselves. Accordingly, they do not care what will happen in the future after the adoption of some counterproductive populist measure, as long as politicians listen to them today and do what they want. Why deprive themselves of the “free lunch” that they can be served today, when the bill will be paid by, for example, someone else’s children and grandchildren?

Grandma Pena has worked in the fields all her life, raised and educated 3 children, 8 grandchildren and 6 great-grandchildren. Grandma Pena has seen a lot and a little, knows several volumes of proverbs and sayings, is full of good intentions and is a collective image of the “wise people”. A politician from the leading parties comes to her village on an election tour and asks her “Grandma Pena, what can we do to make Bulgaria better”. And she answers him “let the State provide 5-10 sheep for every resident in the villages, like it was when I was young, so that we can ask each other. Let there even be more jobs so that young people don’t run away to Sofia or abroad, reopen the factory from the time of Uncle Tosho, which was liquidated when democracy came.” Sounds wise and logical, right?

But there is one big problem – Grandma Pena does not know that the resources of our planet are scarce and that the most efficient way to distribute them is through voluntary cooperation between free people through market relations and the price mechanism that signals what should go where. Grandma Pena does not realize why the factory in her village was closed – it was initially an unprofitable project and should not have been built in her village, but on the other side of Bulgaria in another village, which, however, was not lucky enough to be the birthplace of a once leading nomenklatura figure. Accordingly, a lot of money, time and resources were wasted to make it exist, against all economic logic, until finally the bubble burst and it had to be liquidated so that the scarce resources could be reallocated elsewhere in the Bulgarian economy.

Even if the experiment with him were repeated, it would fail again, and in the end the young people of her village would still have to leave it and rush “abroad,” but they would have wasted too much time and chances to do so. Moreover, in order for this experiment to be repeated or for the state to buy 5-10 sheep for each of Grandma Pena’s fellow villagers, she would have to redirect funds that could have gone to something else, such as opening a school in the neighboring village, repairing the road between the two villages, etc. – there are many missed opportunities. Even worse, the state has no money of its own, and must take from citizens’ funds through taxes and rein in the momentum of well-developed sectors of the economy, in the name of a doomed idea, the opportunity cost of which is enormous and reverberates throughout the economy.

If you ask the wise grandparents from the other villages, their wise sons and daughters, and their wise grandsons and granddaughters (in short, ask the "People"), their proposals will not be ideologically different from what Grandma Pena synthesized in two sentences in her conversation with the politician who wanted to hear her. And for a number of reasons, these proposals appeal to the politicians themselves, because putting them into action increases the power of those in power, facilitates their access to corrupt practices, and at the same time inflates their egos, making them feel all-powerful and heroic.

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