INSTITUTE OF ECONOMIC AND SOCIAL STUDIES

When you ask a good economist to name the most precious capital, their answer will be “human capital”. Large oil field, steel production capacity, or a number of tractors produced do not make the company rich. The company grows rich thanks to skilled people in the right place, their excellent skills and ability to adapt to change. As Julian Simon used to say, the ultimate source of wealth is man.

Governments around the world reacted to the pandemic situation in similar fashion. Costly economic stimulus packages popped out, undermining the role of decentralized reaction from the bottom and strengthening state’s role in economy. European Union introduced the EUR 750 billion worth Next Generation EU package. Next Generation EU and its crucial part, Recovery and Resilience Facility, promise to bring an era of growth and stability to the European Union and its 27 member states. Can this promise be fulfilled, and if so, at what cost?

One of the basic economic lessons is that the first slice of bread will bring you the highest utility. Definitely, you will be better off than with the second slice, or the third which is rather more likely to bring costs. The law of diminishing marginal utility applies generally to all human action, including the public administration.

The Slovak society has recently experienced number of front-page stories about patients who were refused payment for innovative, highly expensive drugs by health insurance companies. The stories which attracted a lot of emotions and stirred the public are vanguard of much bigger future troubles in public healthcare.

The low productivity of agriculture and the coronavirus crisis have sparked a discussion about promoting self-sufficiency in agri-food products in Slovakia. Many hope that it is self-sufficiency that will guarantee twice as many cattle grazing on the pastures, tons of Slovak organic meat or eggs from happy free-range hens on the supermarket shelves.

When we talk about wages in Slovakia, we refer to gross wage. From an economic point of view, however, it is a fictitious value created by accountants. It represents an arbitrarily set point between the two key values: net wage and labor costs.

The Slovak education system has a number of problems but the generally low teacher salary is not one of them. Those who claim the opposite refer to an international comparison: the share of teachers’ wages in wages of university-educated people. Even the government reform plan says that this share reaches 88% on average in the EU, while Slovakia scores a little above 70%. This difference is identified as one of the main reasons why there is a necessity for a blanket pay rise for teachers in Slovakia.

Who is the Oracle of Omaha? Warren Buffet, of course. Without any doubt, the name of this investor can easily be included among world celebrities such as Lionel Messi or Arnold Schwarzenegger. The former has a nose for football, the latter for breath-taking action movies – and Buffet has a good nose for investing.

In 2016, Slovakia’s Institute of Economic and Social Studies (INESS) introduced the Bureaucracy Index, which draws attention to the amount of red tape a small entrepreneur has to navigate on a daily basis. The Index is based on a straightforward methodology, using the analysis of a model micro company and all of its bureaucratic obligations—such as taxes, worktime planning, health safety measures, and even waste management, among others—which are assigned a specific time cost.