Patrimony parrots

On the south-bound lane of the Solomon Hochoy Highway, after the Chaguanas turn off but before the Chase Village flyover, there is a low gray concrete building in a layby. Originally set up by a government department for doubles vendors and others to sell their products, it is now unoccupied. The idea was that drivers would stop there to buy the doubles and aloo pies and pholourie and so. It was, I suspect, an attempt to replicate the popular Indian delicacies stretch in the village of Debe. A few vendors did start selling in the building, but soon closed up shop. Customers simply didn’t come.

Why did this venture fail when Debe has been so successful for the past 20 years? After all, on the face of it, the Carlsen Field location is much more favourable, and the concrete stalls certainly compare favourably to the rickety shacks that line the Debe stretch. I have no exact explanation for the failure, but a key difference is this: the Debe strip grew as a result of individual vendors seeing an opportunity to exploit. The Carlsen Field layby was a topdown initiative, which assumed — wrongly — that the presence of the stalls would create customers. And this is why the State should never control the commanding heights of the economy.

Twentieth century history teaches us, beyond any shadow of reasonable doubt, that governments are very bad at commercial activities. Not only that but, when a State controls the economy, it results in greater oppression to citizens than in even the most rabid capitalist nations. Yet, if you attend to the rhetoric of the trade unionists and other leftists in our midst, you would think that the main events of the 20th century never happened: that Stalin didn’t murder 10 million people, that Mao’s Great Leap Forward didn’t lead to the deaths of 30 million people, that the Berlin Wall didn’t fall.

In his superb book Why Globalisation Works, economist Martin Wolf writes, “The irony is that such tyranny was justified by the alleged horrors of capitalist inequality. To eliminate market-driven inequality, all power was concentrated in the hands of the State, which then promptly and inevitably generated non-market-driven inequalities for the benefit of those who controlled it.” This is why Burnham’s protectionist policies made resource-rich Guyana the poorest Anglophone Caribbean nation, why the Jamaican economy nearly collapsed when Seaga flirted with socialism, why Bishop’s Grenada Revolution was a disaster, why Castro’s Cuba is the least free country of the region, and why corruption was institutionalised under the PNM in Trinidad.

State control of the economy has always been and will always be economically disastrous. Such control requires central planning, and central planning is anathema to the market economy and, concomitantly, democratic politics. In a centralised system, planners can never find out what needs to be done to co-ordinate the production of a modern economy. They cannot get accurate information from workers, since the latter will not tell their superiors what quantity can be produced: workers will only tell what quantity it is convenient for them to produce since they are more likely to be penalised for under-production than rewarded for surplus. Additionally, planners can never know what thousands of potential customers want. And, because in a centrally planned economy prices bear no relation to cost, there is no way to calculate what production needs to increase and what needs to be reduced. There is also no way to control for quality, since central planners cannot inspect all aspects of production: only users of the product in a market economy do this. And, even if a central plan could solve all these problems, such a system can never be innovative since any innovation, by definition, disrupts the plan.

It is, of course, easy to understand why leftist ideologues, especially trade unionists, do not want to acknowledge such facts. They have built their entire careers on rabid rhetoric, and need to continue spouting it in order to keep their jobs. But let nobody be fooled into thinking that they cleave to outmoded ideologies like socialism out of concern for workers. After all, the highest-paid workers in the world are from countries driven by capitalism. These are also the countries where citizens enjoy the most freedom. But you would never think so to read the diatribe of our leftist ‘intellectuals’. David Abdulah, in a typical passage, writes in his Newsday column of November 21, “The policy of privatisation together with other neo-liberal policies implemented over the past 20 years has resulted in a profoundly inequitable and unjust society.”

I would certainly not disagree that our society is unjust and inequitable, nor do I think the denizens of the Chamber of Commerce should be allowed to influence social policy on matters unconnected to commerce. But, if there is an ideological cause for our society’s economic deficiencies, it is that successive governments have committed too weakly, rather than too strongly, to market policies. It is not at all clear that the government has abandoned the disastrous ‘‘mixed economy” policy implemented by Dr Eric Williams. Thirty years ago, the State had shares in 35 companies worth $82 million; in 1983 the State had shares in 66 companies with a value of $2 billion. Where the State has pursued market economy policies has been in removing tariffs, abandoning protectionism, and attracting more foreign direct investment (which between 1991 and 1997 rose three- and four-fold in all areas — food, drink, chemicals, minerals — except manufacturing, and nine-fold in the energy sector).

Comparison with other economies suggests that FDI has probably helped our Gross Domestic Product to grow between 1996 and 2000 from 2.9 percent to 4.7 percent, whereas the government’s continued involvement in business, if anything, probably retards economic growth. Certainly, there are commercial areas the Government must be involved in: health, education, infrastructure, maybe even broadcasting. But when the Government, through mouthpieces like Senator Christine Sahadeo, makes it clear that it believes in micro-management in State enterprises, it is the same as saying that they’re going to take our tax dollars and flush them down the toilet.