Irrational anti-merger government: Indra-Escribano and BBVA-Sabadell

Since Nobel laureate Coase and academic Williamson described two modes of action in economics, the market and rational reasoning, it is clear that under the given circumstances one of them must inspire economic decisions.

A market is more efficient when transactions are simple and with lower costs. There is transparency and negotiation is simple. There are many buyers and sellers and prices are characterized by the right confluence of supply and demand.

Judgment, a decision using rationality, is better otherwise. When negotiations are completed, their costs rise, there are few buyers and sellers, in oil markets or in internal structures.

What the Sánchez government does not believe in the market shows him an ambiguous obsession with the subject of life. There are many buyers and sellers in life, negotiations are simple. Just stop working on leyes so that the market will self-regulate in the big square.

The government also believes in economic rationality

Dejar that the functioning of the market in life is to liberalize the land, to eliminate restrictions of all kinds, for example, administration (not forgetting, for example, ecological religion). Desalojar okupas (which disrupt the market), …

But no, the Ministry of Housing is the only one who thinks that the prices are regular. We keep the result. Offer discount and price increase.

But government rarely believes in economic rationality when government must function. We saw this in the case of the failed BBVA/Sabadell merger.

In the end, whether you want to accept Banco de Sabadell or not, whether it is a quedado in a regional bank in the hands of the local burguesía. How long will it take? The merger has now enabled the BBVA/Sabadell merger to make leaps into the European dimension, which requires strong banks at an international level.

The same thing that important defense companies need. In Spain and in Europe. The writer’s integration into Indra was not just a financial operation. It is an operation of vertical integration of production. Indra is software while writing is hardware.

Please the Catalan members and keep their voice in Congress, prevent the BBVA/Sabadell merger. If that happens

Modern infantry is motorized. In vehicles with precision electronic systems. Escribano-Indra’s idea is rational. The government was apparently in favor. Why are you against it now?

In one, as in the other case, the reasons for the government’s decision are powerful. Pascal said that “there are reasons for the heart that reason does not understand”. The author of the “Resistance Manual”, President Sánchez, seems to have said this “There are reasons for power that reason cannot understand.”

This management does not depend on the rationality that requires larger companies to compete on a global level. You just need to have more opportunities to make a living in the world and place paid workers in the power bodies of companies. Companies they call strategic.

The possibility of using the money of Spanish speakers can be extended through SEPI, e.g. at Telefónica. If that happens.

Please the Catalan members and keep their voice in Congress, prevent the BBVA/Sabadell merger. If that happens.

To hold positions on the board of Indra, who will certainly manage the data in the electionsto avoid absorbing the writer. If that happens.

No market, no trade. Neither the liberal Adam Smith, nor the economists Coase and Williamson. Is President Sánchez a doctor of economics?

The terrible thing about these decisions is that the vulnerability of the laws of the market, when you have to respect them, and the attachment to economic rationality, when it should be primary, have consequences in the medium and large area that is paid for. We will pay the Spanish.

But the occupation of power keeps the effects short of government. The most immediate thing is remuneration in positions of power. For this reason, SEPI, Telefónica, Indra…

Cynicism is what it’s all about, with the line: strategic company. When he’s down, the reason is power and money.

** JR Pin Arboledas is an IESE professor.