On Entitlement

From: Dr. Zdeněk Drábek

To: MUDr. Martin Jan Stránský

Date: 19 May 2020

You introduce in your interesting YouTube presentation few days ago the concept of entitlement and link it to modern prosperity.  You explain how the feeling of entitlement has become a part of our life, its origins and speak about some of its effects. Even though the feeling of entitlement is a matter of psychology and perhaps sociology, entitlement has become a major issue for economists.

Entitlement enters our discussions about income distribution, about stabilization policies when countries get into various kinds of trouble (such as COVID-19), about understanding of consumer behavior or about incentives in labor market. Entitlement is a very powerful concept in economics because it can disrupt the very foundations of economic theory and, as you will understand very well as a top notch medical doctor and an academic, a fragile economic theory means a great deal of trouble for policy making. Take an example. A country is in a deep economic trouble because of COVID – 19 and responds by dramatically increasing government spending while it is experiencing a big cut in tax revenues. The result is a huge fiscal deficit.  Any reasonable person, and I should add – any responsible person, one who is not driven by the sense of “entitlement”, will think about the way how the deficit will be financed. He or she will also think about his or her children because it will be them who will pay the costs and be responsible for a part, and probably a large part of the deficit and for “our” irresponsibility. Yes, I am talking about Bohemia and about Malacova and Babis. The two of them, without blushing or any sense of shame, promise to make substantial increases in pension to retirees, giving 14 mld extra to MOD – Ministry of Defense for the purchases of new “jeeps” or whatever the minister was asking for in the budget for next year. Not even a sign of acknowledgement that, God forbid, these expenditures could be delayed by a year or so. Not even president Trump will be asking for such a sacrifice in 2020!All of these cases are examples of what these people perceive as entitlements.

Entitlement can be a brutal way of dealing with injustice, poverty or poor income distribution. Measures adopted under the heading of “entitlement” are used as a way of justifying the kind of ridiculous measures that I have used as examples above.  The only way that the measures can work is if sacrifices are voluntary with full knowledge and understanding of the reasons. That is obviously not the case with Malacova or Babis. As the true populists, they are chasing votes instead. But there is another problem with entitlement – and that is the other side of entitlement – our responsibility – our responsibility for our lives, something that has been disappearing from the lives of Czech people. The Czechs love to expect government to provide for their needs – whatever they may be. Surely, government should provide for a reasonable medical service or old peoples’ pensions. I agree. However, should it also be responsible for finding their employment? (IT was in 1948-1989).  Should it be responsible for finding them jobs of their desire? (I hate to say it but artists of different kind are an example. “We owe it to them because they are the spirit of the nation and carry the nation to survival and through history!” “Our doctors are the best, yet their salaries are only a half of what their German colleagues earn”. And so on). Should the state be responsible for my well being, or, rather, is it not my responsibility in the first place?  Should I be entitled to a subsidy or, rather, should not subsidy be only provided under special and agreed conditions (e.g. a market failure, medical handicap, or playing by the rules and by the European values as in the case of European subsidies etc.)?

Now back to psychology to which the concept of entitlement belongs. If we, Czechs have strong feelings of and for entitlement, then entitlement is a part of our life, of our culture, of our psyche. You are the expert in those fields and I would be on a very dangerous ground if I were to make any recommendations. However, I have worked and lived in the US, the UK, France, Switzerland,  South East Asia, in the whole Africa, and traveled in the rest of the world but I cannot imagine that culture can be easily changed. Cultural changes are for a long journey.  A big personal shock such as, death, crises or wars – could it make a difference? It may be that such interventions into our normal lives could produce a change in the way we think and act. I certainly do not know and would not even venture to suggest so. It would be a high price to pay.

published: 20. 5. 2020