Economic equality

Here, for example, is a typical view from one commentator. "The young Blacks of today are manifestations of a business economy which stresses individual achievement, the acquisition of wealth, as the paramount virtue in society." This, in his opinion, explains the "criminal mind in the Black ghettoes and drug dens."

Such a purely Marxist interpretation of social problems is bound to be wrong, because Karl Marx’s sociological and economic theories have been comprehensively disproved.

Yet it isn’t even necessary to discuss the unworkability of a classless society or the falseness of the labour theory of value. We just have to ask a simple question: if capitalism creates criminality, how is it that capitalist countries like Japan or Norway or Costa Rica have such low crime rates? Since the commentator’s solution to stopping criminality is to read the Bible, Bhagavad Gita and Qu’ran to students in schools, he would be unable to answer this query, let alone provide any practical solutions for the country’s crime problem.

This demonisation of capitalism is standard rhetoric amongst the leftist lunkheads, even though history amply demonstrates that socialist policies have always created far more misery and oppression for the ‘masses’. It is societies with market economies which have been the least unequal, and in which inequality has done the least harm to the fewest people.

Socialism, in its goal to eliminate economic inequities, requires power to be concentrated in the hands of the state. But what inevitably happens in such a system is that non-market-driven inequalities are created by the state for the benefit of those who control it. Judging from the way they laud Fidel Castro, though, many of our local intellectuals have learned nothing from history. Nor, given the retention of URP and the setting up of CEPEP, have our politicians.

These welfare programmes are an offshoot of socialism, and help undermine the country’s economy. In his classic work, Economics in One Lesson, the great economics journalist Henry Hazlitt observed that "government make-work is necessarily inefficient and of questionable utility.

The government has to invent projects that will employ the least skilled. It cannot start teaching people carpentry, masonry, and the like, for fear of competing with established skills and arousing the antagonism of existing unions." He added, "...the more inefficient the work — that is, the greater the volume of employment it requires in relation to the value of the product — the more highly thought of the investment is likely to be." The overall effects of such policies are to waste capital and reduce production. In our economy, this is partly masked by the energy dollars, but the consequences will be even more dire when the boom busts.

And even in the short-term, as the 21 percent figure tells us, poverty levels are not reduced. Such reduction only happens through economic growth.

This is another fundamental rule of economics which the leftist lunkheads try to deny. One senior journalist, whose socialist and afrocentrist biases guarantee intellectual ignorance, describes the international economic system as "iniquitous and unjust." He cites the UN 2005 World Social Situation report, emphasising rising global inequality, and dismisses the drastic drop in absolute poverty over the past 20 years, because most of that drop is accounted for by China’s and India’s economic growth. As syndicated British columnist Gwynne Dyer once noted about another UN Report on poverty, it’s "as though poor Indians and Chinese were somehow less deserving than the poor Africans".

The statistical fact, however, is that globalisation has decreased both inequality and poverty. It is true that the absolute and proportional gaps in living standards between the world’s richest and poorest countries have risen. But, as economist Martin Wolf points out in his book Why Globalisation Works, "Rapid economic growth in poor countries with half the world’s population has powerful effects on the only sort of inequality that matters, that among individuals." A 2002 World Bank Report examined 73 countries, 24 of which had globalised (ie increased their ratios of trade to GDP) and 49 which had not.

Between 1980 and 1997, the 24 globalising countries increased their average incomes per head by 67 percent, compared with a mere ten percent in the other 49 countries.

The same senior journalist also uncritically quotes the UN Report as saying that foreign direct investment (FDI) "frequently leads to a race to the bottom with labour protection and environmental standards usually ignored or compromised ostensibly to make the countries more competitive in the international market. External competitive pressures therefore restrict the ability of developing countries to pursue key aspects of social policy."

This last point is easily refuted. In 1999, 74 percent of all FDI went to high-income countries and just 24 percent to developing ones. "The problem with the world’s poorest countries, it appears, is not that they are exploited by multi-nationals, but rather that they are ignored by them," writes Wolf. Moreover, foreign affiliates generate considerable exports, accounting for 90 percent of Ireland’s exports, 44 percent of the Netherlands’ and Canada’s, 38 percent of Singapore’s and 50 percent of Costa Rica’s. So it seems that FDI actually helps provide the wherewithal countries need to deal with their social problems. Also, when transnational companies do invest in developing nations, they generally pay higher salaries and treat their workers better than local companies.

One survey found that US manufacturing companies in low-income developing countries, for instance, paid twice the average wage earned in the local economy. Of course, the leftist lunkheads can easily rebut these arguments by claiming that established research shows otherwise — just don’t ask them to cite one fact or figure to support their case. As for senior journalists, they merely dismiss calls to provide accurate information, since seniority is better than thinking.

But the besetting sin lies with our local economists who, except for Dhanayshar Mahabir and William Lucie-Smith, are usually more interested in sounding erudite than in clarifying our economic problems. Between them and the lunkheads, the country’s economic and social progress is continually stymied by wrong-headed ideas and ideologies.

E-mail: kbaldeosingh@hotmail.com

Website: www.caribscape.com/baldeosingh