When a head of state begs corporations to replace his government, what is left of democracy?

Author: Maria Luisa Guevara

What do you call a country where national businesses write its laws? Is it a corporatocracy, oligarchy, corporatism, or simply capitalism in its purest form? 

Political science doesn’t seem to agree on which term is the most appropriate — but one thing is sure, it is not a democracy, in the sense of policymaking being done, if not by the people themselves, at least by their elected representatives. Although there are many examples of businesses influencing policymaking through lobbying (or corruption, depending on where on the globe they are situated), the Romanian President’s speech at a recent business summit said the quiet part out loud. 

A speech of surrender

Romanian President Nicușor Dan was a keynote speaker at the employers’ association (read lobbying group) Concordia’s summit on competitiveness last week. His 10-minute speech was a capitulation in front of businesses, literally asking the private sector to “come with ready-written policies and ready-made points of view, ready to be implemented” supposedly because the state does not have the administrative capacity for policy-making. He repeated this plea at least 5-6 times, adopting a very submissive, almost begging tone: “We kindly ask you to replace the state where possible, so that the state can comply with the policies you define.”

His speech went further than his two co-panelists, Concordia’s president Dan Șucu and Fredrik Persson, president of Business Europe, a lobby group at the EU-level of which Concordia is a recent member. The two lobbying heads discussed the need for competitiveness at the EU level to face the US and China, and highlighted the important role that Concordia and Business Europe play in terms of influencing policy at the national and European levels, using mostly euphemistic terms such as “dialogue” (6 times) or “influence” (3 times) — never “lobbying”. 

But Nicușor Dan’s speech did not even pronounce the word “dialogue” once, which would have at least given the illusion that the public authorities and the business sector are on the same level. He kept begging for the business community to get involved where it shouldn’t be involved normally — in statecraft, policymaking and lawmaking — and insisted that the Romanian state does not have any capacity in implementing ideas. 

His admission of this supposed-incapacity is striking. Firstly, because at some point he even says that he, personally, does not have any idea of what public subsidies to businesses have worked in the past and which haven’t worked. For a head of state to admit his own incompetence or ignorance, this is not an act of courage — it’s an act of cowardice. Many Romanians have elected him on the idea that he is a brilliant person, based on his winning the international math olympics at high school and earning a math PhD. 

Secondly, this admission of a supposed-incapacity is striking because as a head of state, he is effectively calling the hundreds of thousands of civil servants incapable of doing their job. Public sector workers have been vilified in the 36 years since the fall of communism in Romania, and Dan’s speech was the last nail in the coffin. Doing so in a business forum only adds insult to the injury. 

The false theory of corporate statecraft

Moreover, in his speech, the president showed complete ignorance of what statecraft means. At some point, he says: “Theoretically, theoretically, you [the business community] should send some principles to the government, and there, some specialists should develop these principles and transform them into legislative acts, various regulations – this theory does not work.” Nowhere in any political science theory does it say that businesses should send ideas to the government and then the government’s “specialists” go on to implement these into policies and laws. Not even the theory of Corporatism — often associated with fascism and nazism — states this; nor does neoliberalism state any such thing. For one, Corporatism states that policies should be made by the government in accordance with the demands of both employers’ associations and workers’ trade unions (very similar to the EU’s concept of tripartite dialogue), while neoliberalism promotes the idea of a minimalist state but not one that directly takes its ideas from corporations. In fact, neoliberalism rather promotes – at least in theory – the idea that the state should legislate as little as possible in order to let businesses run the economy as they see fit. 

In fact, even the most libertarian members of USR, the political party backing Nicușor Dan (although he ran as an independent candidate), have criticised his position. Claudiu Năsui, one of the most libertarian USR politicians, posted on his Facebook page the following statement: “It would be a dangerous thing for businesses to directly write laws […] If you ask a company to write a public policy it will write whatever is in its interest, not what is good for society. […] The representatives of the private sector systematically ask from the state the same thing: money and privileges. […] If the investment doesn’t work, it’s everyone’s loss. If it’s working, the profit is 100% privatised”. What does it say about Nicușor Dan’s statements if even the most libertarian politicians in Romania have more common sense than him?

A betrayal of principles and people

The consequences of privatising policymaking are easy to understand, even for (or especially for) a libertarian: corporations’ only goal is to maximise profits, and their only accountability is to their shareholders. Maximising shareholder value is not the same thing as contributing to the public good – in fact, it’s often the opposite. Examples abound: from the tobacco’s industry’s push for deregulation in order to maximise profits which then impacts consumer’s health to mining corporations’ gold rush that destroyed landscapes and communities. 

The abandonment of policymaking and lawmaking at the hands of the business sector is not only dangerous to the common good, it is an act of betrayal — betrayal to the people who have been loyal to Nicușor Dan since his early days in civic activism, betrayal to the working poor (Romania has the second highest rate of workers at risk of poverty in the EU: 17,3% in 2024) whose interests have not been represented once in the summit. 

The striking thing about Nicușor Dan is that he started his political career back in the early 2010s, during the protests to protect Roșia Montana from gold-mining corporations. One of the main slogans back then was “Corporations shouldn’t make the law”, and this was the start of a decade-long anti-corruption trend in Romania, where the civil society became outspoken against corruption and the takeover of the state by private interests. 13 years later, it seems that Nicușor Dan is simply a turncoat, disappointing his supporters but also those who elected him to escape the far-right wave represented by George Simion and his political party AUR. 

But this should not come as a complete surprise: when taking over as President of Romania, Nicușor Dan first invited employers’ associations in May, and only invited trade unions a month later, showing his priorities lie elsewhere than for the workers’ interests. 

Businesses have always shaped policy in Romania

The striking thing about the speech to privatise policymaking is that it has been happening, de facto, for the past 36 years in Romania. Most laws and reforms have been done in the interest of the business sector, and sometimes at their express demand. For instance, in 2010–2011, when Romania was going through another wave of austerity, the business sector (especially foreign corporations) specifically asked the then-government led by Emil Boc, to deregulate the Labour Code in order to make it easier to fire employees and provide “flexibility” on the labour market. The government not only complied, but it went a step further and issued the Social Dialogue Law no. 62/2011 which dismantled the collective bargaining procedure at the national level and restricted the right to strike. 

The consequences of this privatisation for ordinary Romanians are dire and have been so since the beginning of the transition to capitalism period: wages below the minimum pay required for a decent living, increased healthcare costs, increased education costs, and rising poverty rates. Romania is often among the EU countries faring the worst in social indicators: lowest percentage of social housing, highest NEET rates, high at-risk-of-poverty rates, etc. 

Another way corporations directly influence policy in Romania is when lobbyists from the private sector are invited to participate in Parliamentary debates about various legislative amendments. An example is the case of tobacco company Philip Morris lobbyists being invited at the parliamentary debate about a tobacco-related law in 2024, where they expressed their opposition to any amendment following which the amendment was rejected. Another example is the immigration quota in Romania often being decided by the Government based on demands from employers, and the supplementary quota almost exclusively being decided following employer’s requests.

Therefore, since numerous policy areas in Romania are crafted based on demands by the private sector, why the need to ask for businesses to intervene directly in policymaking, as the President did during the speech?

A wider European trend

Nevertheless, this move to privatise policymaking is not unique to Romania. Indeed, it seems to be a general trend that takes two different forms depending on whether you’re in Western Europe or in Eastern Europe. In Western Europe, this has been happening for decades now through two pathways. The first one, classic, is lobbying – a legalised form of corruption. The second one is through consulting firms being hired to write public policies. Heterodox economist Marianna Mazzucato describes this perfectly in her book, The Big Con: with the advent of neoliberalism, states have been gutted of their policymaking capacity through years and years of defunding and removing experienced lawmakers and policymakers from public service. Their place is then taken by consulting companies such as The Big Four (EY, PwC, KPMG and Deloitte) or giants like McKinsey where inexperienced graduates are tasked with coming up with public policies on topics they are not specialised in. The results are often catastrophic for the working people – ranging from the catastrophic handling of welfare assessments to the flawed track-and-trace system during the Covid pandemic. And the mechanism is always the same: public money being siphoned into the bank accounts of these companies, who often craft policies for the interest of the private sector, often calling these policies “deregulation” or “cutting red tape” or “debureaucratisation”. Thus, further gutting the public sector from its capacity to make laws and policies for the interests of the greater good.

On the other hand, in Eastern Europe, there seems to be a different approach. While the Western approach is one of covert privatisation, of understatement and euphemism, in the East it seems that the strategy is to be more frank about it, to “say the quiet part out loud”. Nicușor Dan is not the only head of state to ask for businesses to make the law in the country. Poland’s Donald Tusk had the same approach earlier this year: holding a speech at the Warsaw Stock Exchange, Tusk directly addressed billionaire Rafal Brzoska and tasked him to come up with proposals for deregulation of the Polish economy. Soon after, the SprawdzaMY deregulation commission was set up. In contrast to Romanian president’s candid admission of (supposed) state incapacity to make laws, his Polish counterpart did not mention anything about state incapacity; but rather it was about “giving a chance” to the billionaire to come up with solutions to the many issues he complained about in the past (red tape, long delays, etc.). What is common, nevertheless, between both Western and Eastern Europe, is that the words “red tape”, “bureaucracy” or “debureaucratisation” often appear in these discourses – framing the topic around this perceived constraining state. 

Another difference with Romania is the idea of making this process to seem transparent by setting up this formal commission with a Steering Committee and publishing online all the proposals for reform. On the commission’s website, ordinary citizens can also make proposals, making this process seem more democratic (at least on paper) than what Nicușor Dan proposed – the complete takeover by the business sector of policymaking, without any involvement from regular citizens, or trade unions or NGOs. In the Polish case, some Trade Unions have gotten involved in the process as well – at the invitation launched by the commission itself – in order to make sure that the workers’ perspective is at least represented at the table, something that trade unions in Romania have effectively been prevented from doing by the current presidency’s omission to include them in the dialogue. 

Finally, some critical voices have raised in Poland against this deregulation process – not just on social media, but important economists and political scientists as well as trade unions have voiced their concerns. The lack of democratic control, the potential for the private sector to rule only in their favour are just a few of the arguments that have been brought up. In contrast, the media in Romania has not written extensively about the speech – merely reporting on it or calling it the “Sincerity Speech”, using words like “state failure” to qualify Romania – taking for granted Nicușor Dan’s assumptions that the state is incapable of making policies. The only heated debate happened on social media, by academics and NGO activists, and some of the USR libertarian members. Only one news article seems to have interviewed a critic of the president’s speech.

Democracy on its knees

Nicușor Dan’s speech is not an isolated gaffe, but the symbol of the decades-long hollowing of the state’s capacity to make policies. The democratic contract – the state legislating and making policies for the common good – is being broken. From the covert, consultant-driven gutting of public services in Western Europe, documented by economists like Mazzucato, to the overt pleas from leaders such as Dan or Tusk in Eastern Europe, the pattern is consistent. The Romanian case is just particularly stark, not in its practice, for it has a long history in the country, but for the subservient manner in which it was proposed by the head of state himself. 

Thus, the danger is no longer that corporations influence policy through lobbying, it’s that the state itself gives up its very raison d’être. When a head of state implores companies to replace the state, it signals the final stage in the erosion of democracy: not a coup, but a surrender. 

So, what do you call a country where businesses write its laws? We can debate the term, but we must not mistake its nature. It is the end of representative democracy, replaced by a system where the only vote that counts is that of a shareholder. 

Photo: Nicușor Dan shrugged at the meeting with the business (source: YouTube)

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