Imagine you have a project for a product or service that could be useful and interesting, something worth bringing to market. That is not a good idea at all. Avoid it at all costs, because you are about to get yourself into serious trouble.
The reason is the existence of a vast army of people who share three fundamental characteristics. First, they do not produce and have never produced anything. Second, they understand nothing about invention, development, management, negotiation, or efficiency. Third, they earn more than most of those who actually produce and improve social well-being. What they do instead is impose on companies and businesses an enormous and incomprehensible mountain of laws, decrees, codes, regulations, ordinances, certifications, licenses, authorizations, inspections, and rules, all tied to countless taxes, fines, penalties, fees, tariffs, contributions, charges, commissions, and other legal forms of extraction.
Even before producing anything or earning a single dollar, a new business must spend significant time and money registering, certifying, being inspected, and setting itself up. And as soon as it achieves any result, no matter how small, it should assume it is violating multiple requirements and rules it may not even know exist. Lawyers, consultants, accountants, and staff must be hired, not to produce, but simply to deal with all of this.
The purpose of this entire apparatus, comparable in scale to genuinely productive activity, is to protect society from the vast number of violations, abuses, and offenses that businesses allegedly generate. It is true that serious crimes do occur in companies and markets, and these must be firmly addressed. But those are handled at another level and by other people, as they are difficult and risky. The army described here is dedicated exclusively to pursuing honest, law-abiding citizens who find themselves lost in a regulatory swamp.
These rules are said not to prevent dishonesty, but to protect workers, consumers, women, children, the elderly, the environment, and social equity, as well as food, health, wage, financial, and road safety, physical, psychological, and cultural integrity, language and heritage, privacy, freedom of information and association, equality of opportunity, race, gender, religion, sexual orientation, and countless other objectives. One could say they protect everything except the businesses that generate wealth, serve society, and pay for all of it.
If your business is small or medium-sized, you may receive some support. But if, by bad luck, it succeeds and begins to grow, then the full force of legal, tax, and regulatory systems will descend upon it. Once it is no longer small or medium, it becomes fair game. This is not about “big capital,” which we are often told is the monstrous cause of all problems and must be eliminated at any cost. No, this refers to ventures that would be considered small in other countries, but here are seen as too large to be left alone.
Where does this economic nightmare come from? The reason is curious and worth noting. Contemporary society is deeply distrustful, far more so than in earlier, more violent times. People today are highly suspicious of one another, especially of those who take initiative and create wealth. Modern society places its trust in a single entity that has, paradoxically, shown its limitations over centuries: the law. As a result, our era is the first to attempt to legislate and regulate every aspect of human life, even the most intimate and delicate, leaving us buried under an indescribable thicket of rules and directives.
Of course, the state has useful and indispensable functions in well-defined areas. But it also suffers from serious limitations. The legal apparatus does not truly solve problems. People do. The only thing the law really does is punish. That can be useful in certain situations, but it is far too blunt an instrument for most. Police and courts, inspectors and regulators, do not drive or develop society and the economy.
The result is a volume of legal texts greater than anything seen in human history. In this supposedly scientific and efficient age, we generate colossal waste trying to protect ourselves from ourselves. What is surprising is that, despite all this, there are still people bold and creative enough to conceive a useful and interesting product or service and consider bringing it to market.
João César das Neves, Professor at CATÓLICA-LISBON