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The chamberless entrepreneur

May 07,2017 - Last updated at May 07,2017

Scottish economist Adam Smith, author of the monumental work “Wealth of Nations”, believed that little is needed to carry a state from the lowest barbarism to the highest degree of opulence, but peace, easy taxes and a tolerable administration of justice; all the rest would come about by the natural course of things.

Situated in an area rife with conflict, Jordan unfortunately cannot bank on peace. 

Easy taxation is equally elusive because most of the working population is employed directly or indirectly by the state, and a thin sliver of the population needs to have the living daylight taxed out of it in order for the bureaucracy to pay salaries and pensions and sustain itself. 

One can always argue also that this is vital for maintaining order. The problem is that it does not stop there; the state is not the only party that hauls in taxpayers and asks them to open their pockets and shut their mouths.

For instance, no one can practise a profession without joining a professional association. 

We are told that this is necessary because professions need to be regulated, which is best done from within the profession.

But the associations did not develop from within; they were formed by legislation, which could just as happily have regulated the profession instead of forming an association.

Instead, we pay, yet, another tax, this time to a civil society organisation.

Similarly, chambers of trade and industry are supposed to be business networks formed by businessmen to serve their interests.

But I ask every entrepreneur I meet what his chamber has done for his business, and the only answer I receive is that they take a lot of money every year.

So why is membership not voluntary, and let the membership fee be paid only by those who benefit from it?

You see, the chambers in Jordan were formed not by entrepreneurs organising to serve their interests, but by legislation which was promulgated only God knows why.

The trick is that no entrepreneur may practise a profession without a municipal licence, which is not issued unless the hapless entrepreneur produces a receipt from the chamber to which he is assigned attesting that he paid his dues for the year.

This makes it just another tax.

So, far from asking entrepreneurs what it can do for them, the chamber does not even bother telling them that payday has come. All it needs to do is sit back and count the money as it rolls in.

At a time when the investor confidence index shows that investors are disappearing from Jordan in a blur of colour and a cloud of dust, the country persists in making small and medium enterprises subsidise the already rich and powerful.

This is probably the exact opposite of what we should be doing.

 

Jordan would do better to follow the Australian wisdom that in levying taxes and in shearing sheep it is well to stop when you get down to the skin.

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