Romanians Emigrate for Stability and Infrastructure

Have you ever been surprised, while driving through not-so-bad villages, by signs indicating a town? Well, among Romania’s 320 towns, more than 50 are villages promoted to the urban rank after year 2000, in a bold effort given the population decrease, adverse to congregation.

To pursue a town status, a village needs a population of at least 5000 and has to meet several criteria for infrastructure, schools and other built areas, and at least three quarters of its inhabitants must not work in agriculture. Unfortunately, many of the villages promoted to towns do not qualify. Thus, a significant proportion of the food consumption in urban areas does not come from trade, but from own production.

To put it simple, Romania is actually more rural than shown by the latest census, which recorded an urban-to-rural ratio of 53 to 47 per cent.

For instance, miners returning from the towns in the Petrosani basin were astonished to find their Moldavian village transformed into a town shortly after their homecoming, while the small communes they left were not downgraded to villages. Such artifices, however, cannot stop statistics from showing whole regions where the most population is rural. We’re talking about Moldova, Muntenia and Oltenia, also well-established leaders in terms of farms - mostly subsistence ones.

Nevertheless, the goal was not necessarily to keep an urban majority, but rather to expand the municipal staff with cronies of the local barons, thus increasing the power of the latter and the politicians’ dependence on them, especially during elections. And ultimately this wouldn’t be an insurmountable problem if agriculture generated a steady surplus of products, like in Slovenia, where only 51% of the population lives in towns and cities.

Two-and-a half decades ago, the post-Communist national leadership inherited a undercapitalized economy, which needed massive inward investment to keep the whole extant workforce. But instead of helping businesses to attract more investors, which would have offered jobs, the politicians preferred to disguise de unemployed as retirees, until one third of the population enjoyed this status. Subsequently, people migrated back to their home rural towns an villages. The forced industrialization of the Communist era, which moved millions from villages to towns, was followed by a decade of reverse migration.

Investors don’t like ruralization. In Estonia, the first ten cities concentrate 55% of the population, which atttracted more money from abroad than in Latvia, where the urban population is 53%, or Lithuania, with 43.5%. In Hungary, the top ten urban communes account for 39% of the population - more interesting for foreign investors than the Czech Republic with 26% or Slovakia with 24%.

In Romania, the largest ten cities - from Bucharest to Braila - only have 20% of the total population. We’re closer to Russia (16.5%) than most of the Eastern European countries that joined the EU. Perhaps this is why even Bulgarians saw more inward investments per capita; one third of our neighbours south of the Danube live in the top ten cities.

But examples can be found beyond Eastern Europe. The famous cities on the U.S. coasts, around the Great Lakes or the Gulf of Mexico could be one of the reasons of the American GDP (in purchasing power standards), nearly equal to the whole EU, which has 50% more people. And within the Union, the Nordic countries - especially Finland - lead the competitiveness, as they have small populations concentrated in few cities.

The conclusion is clear: investors are attracted by large markets, where they can sell easily or pick the workforce. Bucharest is the largest market in Romania. That’s why the bankers rushed to extend loans, the retail networks to invests, and the developers to build. Unfortunately, Bucharest is singular, and even so, far from the two million population of early 1990s.

And when markets shrink, “eroded” by ruralization, investments dwindle and developments slows down.

Moreover, as Bucharest is no longer the two-million metropole, Romania is no longer the country with nearly 23 million people, like in 1992, but one below 20 million. The population decreased by 15%. Meanwhile, many cities lost larger percentages.

Consequently, there are now just 20 cities with populations over 100,000, instead of 25. Among those 25, some - like Piatra Neamt, Bacau, Galati, Braila, Buzau, Satu Mare, Brasov or Focsani - lost between one quarter and one third of their people.

The more than 70,000 people who no longer live in Brasov or Galati are the equivalent of the whole population of county capitals like Tulcea or Slatina. The 50,000 to 60,000 losses of Constanta, Iasi or Bacau exceed the current number of residents of Calarasi or Zalau. We could say that whole cities vanished from within Romanian cities.

The more than 50,000 inhabitants no longer found in Braila’s census are the equivalent of the whole Onesti of 1992. That’s because the town on Trotus Valley, once highly industrialized, now has only a population of 39.000.

It’s also worth mentioning the nuisance: while Romania never had very concentrated municipalities, to allow an efficient development as seen in the United States or in Japan, the towns grew even smaller.

During the 1980s, the Romanian economy, employing many forced village-to-town migrants, began losing capitals. Ceausescu paid off the foreign debt and discontinued all investments in industry. That’s why the first thing to do in 1990 was to capitalize the economy using inward investments, the only available source.

So 30 years ago, a centralized economy needed to shift to de-centralized management, and it could only be done with capital from abroad. Instead, the opposite sequence was followed: “Our Country Is Not For Sale”. And the backasswards administration, especially during the terms of President Iliescu, produced the local barrons, which grew connections to politics and together with it generated corruption.

This explains the depopulation of cities. People sought stability, like the Transylvanians who emigrated to the United States in the early 20th century.

Some left the country or moved to Bucharest and around it (Voluntari’s population, for instance, grew by 43% in 10 years!) to gain stability and to benefit from the better infrastructure.

Others left the industrial towns, where undercapitalized factories were ailing, and returned to their home rural towns or villages.

The bottom line was a reverse migration, from cities to villages, which moved people from a field with higher productivity - the industry - to one with lower efficiency: agriculture. The couple of acres of land worked by the elderly ended up feeding six or seven people instead of two, without yielding more, just sharing the poverty between more.

But let’s get back to the matter of stability and infrastructure, because not everything in Romania evolved towards disaster. Cluj-Napoca and Timisoara were cities who lost little population since 1992, and even gained some between 2002 and 2011. While Cluj is sought for its preserved stability, Timisoara is connected to the good Western infrastructure. Conversely, Brasov and Constanta, dominated by corruption, suffered massive losses of population. Five decades ago, Brasov was the second industrial city of Romania, with 324.000 inhabitants; especially due to the Moldovan workers leaving the industrial platform, it lost nearly one quarter of the population.

In Moldova, the extinction of industry mattered the most. Not even the light industry survived. Staff leasing preserved some jobs, somehow stopped the decline, but how long could it do that?

Finally, a literary critic once noted that Romanian literature is mainly one about poverty. Continuing his line of thought, we note that poverty writers, from Ioan Slavici to Liviu Rebreanu and Marin Preda, have found their characters in villages. So the more sparse the population, in many communes and villages instead of few cities, the less productive and competitive it is.

I repeat the reason: investors are attracted by large markets, where they can sell easily or pick the workforce. It’s very important, because - like Johan Norberg said - free market is the poors’ only chance; only there, they can sell their work force.

But to completely clarify the matter, it’s worth also looking into the works of Lüdwig von Mises.

The liberal concept of social life created the economic system based on the division of labor. The most evident expression of the exchange economy is the urban settlement, only possible in such an economy. In cities, the liberal doctrine was developed into a consistent system, and found most of its supporters.

But as wealth grew, bringing to cities more immigrants from villages, so did the attacks against liberalism, from the principle of violence. The rural population finds quickly its place in the urban life, and promptly adopts an appearance of urban manners and behavior, but it remains for long time estranged from civic thinking.

A social philosophy is harder to wear than a new coat. It must be earned by mental effort. Thus, we keep finding throughout history periods of strong progressive growth of the liberal thinking world, when wealth grows as labor division advances, alternating with periods when the principle of violence struggles for supremacy - when wealth declines, because so does the labor division.

The growth of cities and of urban life has been too fast; it has been more extensive than intensive. The new inhabitants of cities became citizens only superficially, not in their way of thinking. So, as they multiplied, the civic sentiment saw a decline. More threatening than the barbarians that besieged the walls from outside were the unassimilated citizens inside - urban only in appearance, not in mind.

In 1922, when the first edition of Mises, quoted here, was published (Socialism: An Economic and Sociological Analysis), 80% of Romanians lived in villages, and only 20% in towns and cities.

The forced migration that followed under Communism brought this ratio to 55% urban vs 45% rural. Unfortunately, Romania is now as poor as depicted in literature.

The Communists took over many enterprises of Malaxa and Auschnitt, and later claimed the merits of “building” them; they kept them working, even though they organized them worse, and provided jobs for the workers brought from villages.

On the contrary, after 1990, when the elite with “healthy” origins (term used by Communists for the descendants of workers or poor peasants), consisting of barons and corrupt politicians, was unable to at least carry forward this heritage, and ruined it instead.

What have to say now the bearers of signs reading “IMGB restores the order”, those who used to yell at the top of their lungs: “Our Country Is Not For Sale”? (translator’s note: workers of IMGB, a heavy industry factory, fought the early post-Communist protesters against the new regime). They feed another corncob into the fire, in the village where they returned, and - holding their heads with the same hands once used as a horn - they vent: We should have known better!

But I wouldn’t end on that; I’d rather repeat myself and note that Romanians now migrate not only to Madrid or Torino, but also to Bucharest or Cluj. We see that in the license plates of cars crowded in parking lots, showing registration in counties like Dolj, Gorj, Vrancea, Buzau, Constanta, Arges or Prahova.

It was somehow logical to expect that. The metropolis has robbed the province for years, through barons, and we know that no job is created without resources. Now the outsiders come to the capital city, in a crowded space built on the annuities exacted from the province. That’s much of the same reason that pushes the Romanians to emigrate, as the politicians provided no incentives for the multinationals to reinvest here.

The same is happening to the French, who under the colonial empire took the resources of Moroccans and Algerian, which now they see in Paris, coming - like our provincials in Bucharest - for jobs from those who extracted the investment essence out of their countries.

From this standpoint, the British have democratized education, created the Commonwealth and thus anchored the former subjects of their empire.

But speaking of education, I’m more interested on what happens here on the Dambovita than on the Thames. Watch the traffic: Bucharesters try to take advantage of every gap, but their aggressiveness and chutzpah are reasonable and understandable for their peers, who see they don’t just cut off stupidly. On the contrary, the outsiders - visible by their license plates - develop extra-aggressiveness above the native level, and this is not because one has to fight harder when less connected, but rather because of the direct link between aggressiveness and lack of education.

Traffic aggressiveness and education gap - seen not just in Bucharest, but also in Paris, and less in London - bring us back to Ludwig von Mises, reminding us of the urban “only in appearance not in mind”, marching under slogans like “Our Country Is Not For Sale!” and “IMGB restores the order”.

These people do not value a free market where they can sell their work force or start their own business; they just need leaders to follow. It’s not by chance that Romania has the most Leftists in the region, among the countries who koined the European Union. The explanation resides in the large rural population, but mostly in the many who look urban, but do not think the same.