Tag Archives: private property rights

evo MUST NOT get away with this: Business confiscation law

A worrisome yet superbly-written Editorial by Pagina Siete:

Business confiscation law

President Evo Morales feels compelled, every 1st of May, to make a “gift” to the workers. In this order, he has made a long series of nationalizations (except the railroads, which are in the hands of the Venezuelan businessman Carlos Gil), and has announced the second Christmas bonus, among other things.

This Labor Day will not be the exception. The gift of this year to workers is probably one of the worst news received by the business sector and, in general, the rule of law: the possibility that workers may confiscate private companies.

The Law on the Creation of Social Enterprises, whose enactment is scheduled for today, provides exactly that. The companies in bankruptcy may pass into the hands of their workers, but also those who do not pay salaries, AFP [social security] and Caja Nacional [Health] for three months and those who “suspend” or “reduce” their production.

The first point of the law, the fact that the bankrupt companies pass into the hands of the workers, is acceptable. It would be necessary to ask itself why the workers wanted to take charge of a company that closed, that a businessman could not save. Could they do that as they have less managerial skills and less access to administrative methods? Or will they apply for credits that they will not cancel later?

But the other causes are even more risky: unfortunately in our environment there are dozens of companies, especially small and medium-sized, which face all kinds of difficulties and that often go through periods of three months or more without paying salaries or taking charge of the social charges of their workers. And they will be at risk of being confiscated by workers.

We could imagine, as business spokesmen have denounced, that the workers themselves will sabotage the company, for example to produce less, and so, by “diminishing” the production, trying to take over the company.

All this violates the Constitution, which does not foresee, in any case, this type of requisitions, and the rule of law in general, which should guarantee due process in all circumstances, including threats to private activity.

Many times it has been reflected on the importance that salary increases and the validity of labor improvements are not pure demagogy, but are accompanied by improvements in productivity. This benefits, as it should be, to all the actors: workers and employers.

To be seen as a champion of the workers at the cost of serious distortions in the economy is nothing more than a bad remedy to the usual evils.

http://www.paginasiete.bo/opinion/editorial/2018/5/1/ley-de-confiscacion-de-empresas-178472.html