Sometimes, it is difficult to understand why, with the abundance of proof, whether hard core statistical data or proven and tested economic theories or even anecdotal evidence, we as a people tend to ignore reality and allow other considerations to cloud our very best judgements when making pronouncements on the true state of our economies.
Furthermore, why, when presented with issues of a contentious nature, we sometimes defer to political correctness and ideological perspectives as the basis for our reactions, thus stifling potentially constructive debates on economic and financial matters of national importance?
Here is a simple example to illustrate the point. In the preface to their 2015 book Phishing For Phools: The Economics Of Manipulation And Deception, Akerlof and Shiller said: “It’s the economy, stupid!” said James Carville, campaign advisor to presidential candidate Bill Clinton in 1992.
He wanted to stick it to President George H. W. Bush for an array of economic problems that were tied to the economic recession that started during the Bush presidency.
Well, we have a different, broader interpretation of Carville’s statement: that many of our problems come from the nature of the economic system itself.
If business people behave in the purely selfish and self-serving way that economic theory assumes, our free-market system tends to spawn manipulation and deception.
The problem is not that there are a lot of evil people. Most people play by the rules and are just trying to make a good living.”
The preface continues: “But, inevitably, the competitive pressures for businessmen to practice deception and manipulation in free markets lead us to buy, and to pay too much for, products that we do not need; to work at jobs that give us little sense of purpose; and to wonder why our lives have gone amiss.
“We wrote this book as admirers of the free-market system, but hoping to help people better find their way in it. The economic system is filled with trickery, and everyone needs to know that.
“We all have to navigate this system in order to maintain our dignity and integrity, and we all have to find inspiration to go on despite craziness all around us.”
Indeed, the preceding are rather extensive quotes, but done deliberately because those sentiments alone should be sufficient to set you thinking about free markets and hence the issue of privatisation and its effects on economic choices and outcomes, whether in Barbados or other Caribbean countries.
How would you react the next time the International Monetary Fund or another highly influential global institution suggests that we should adopt more market-oriented policies and privatise unprofitable state enterprises? What would be your response to the idea that we in the Caribbean must reduce the size of our governments and consequently their involvement in the management of our economies?
What’s your take on private sector led growth and development of our small and highly open economies?
Given the nature of this week’s offering and taking into full consideration your personal knowledge and understanding of the Barbadian and Caribbean economies, I, now, therefore, ask you: Is privatisation and by extension free markets our economic redeemers?
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