The fashion world is having a bout of nostalgia for the 1970s, and so is the Malta Chamber for Small and Medium Enterprises – GRTU it would seem.

Of course, it’s not a hankering for cat suits, bell-bottoms and kaftans that Vince Farrugia and Paul Abela have developed.

Rather, it’s a desire to go back to the way business was carried out in Malta in the 1970s, with the state protecting local industries and intervening when it had no business doing so.

Even though we’ve come a long way since then I can’t shake off the feeling that the GRTU hasn’t fully grasped the notion of free enterprise.

The dictionary definition of that is a situation where businesses are free to organise and operate for profit in a competitive system without interference by government beyond regulation which is necessary to protect public interest.

It means that businesses can go about making money whichever way their owners chose to, as long as business is legal and not harmful to third parties.

If profits are made, they accrue to the business making them, not to the government or anyone else. In the same way, if any losses are suffered, then it is the business which has to bear them. You’d think it was a simple enough concept to understand.

Apparently it’s not so easy for the top people at the GRTU. During a current affairs programme about the situation in Libya and the effect that the chaos is having on Maltese businesses which have operations in Libya, Abela suggested that the government could help these businesses out by guaranteeing their credit and intervening with local banks on their behalf, perhaps to extend credit terms.

Now I understand that the GRTU has to make all reasonable efforts to try and protect the interests of its members, but is whining to the government to step in when things go wrong the way to go about it?

Was the GRTU clamouring for its members to share their profits with the public, when profits were being made? You bet it wasn’t. So why call in the government now? As pointed out by Malta Enterprise CEO Alan Camilleri, the government cannot guarantee business risks.

It can, and should encourage and facilitate investments in new sectors, but it cannot be asked to bail out certain businesses when things get tough or when there is a change in circumstances.

Everybody has to practise a bit of risk management, or to paraphrase US General George Patton, to take calculated risks, which is something entirely different from being rash.

Otherwise, government would be forever bailing out ailing businesses that cannot respond to changing market demands.

Greeting card makers and importers could expect to get government bail-outs simply because e-mail wiped out their business overnight.

Similarly, dressmakers could demand that the government intercede on their behalf and get the banks to extend their line of credit, because the flood of imported high street clothes had practically made them redundant.

And those people who dreamt of getting rich quickly by snapping up bonds and shares in Argentine investments could have turned to the Maltese government to tide them over when Argentina’s economy went belly-up in 2001.

There would be no end to it. Businesses would be forever relying on the government when there was a dip in profits.

Now the GRTU could counter that businesses which branch out in foreign markets are breaking new ground and making profits which will eventually be channelled into the Maltese economy, and that they are employing people.

However this is true for all types of businesses, even those that venture out to more stable jurisdictions. It would be unfair and discriminatory for the state to intervene only in cases where investment was made in riskier places.

More often than not, when I read a news report replete with the whinging and moaning of the top people of the GRTU, I get the impression that they simply can’t come to terms with the basic notion that it is impossible to go into business without incurring any risk.

An association which should be fostering a lively spirit of entrepreneurship, initiative and creativity is far more taken up trying to obtain preferential treatment for its members.

With this kind of attitude, it’s no wonder that many Maltese businesses find it hard to compete in the wider marketplace beyond our shores.

They have become accustomed to being mollycoddled by the Maltese authorities and can’t quite cut it when the babying stops.

With this kind of mind-set, you wonder how well they can fare in a fiercely competitive environment when they are not shorn up by government.

cl.bon@nextgen.net.mt