The old and the new
Warriors and despots are generally bad economists - Richard Cobden, the19th century 'apostle of free trade'.
More and more, we see the rise of two opposing political camps in Bangladesh. One is the old that wants to revive politics through immediate parliamentary polls. The other is the new that emerged after January 2007 and who never wishes to return to old political dominance by dynasties, lawlessness, and the inability or reluctance of elected governments to bring reforms.
The 'price of liberty is eternal vigilance' so said one of the great English philosophers and we should never lower our guard even in the present situation when much is expected but little can transpire.
While government's political reform agenda is commendable, its weakness lies in its economic belligerency. It continues to mismanage the economy and no political reform is sustainable without a satisfactory economy.
The government assigns economic experts, task forces, and holds discussions with the stakeholders but no results have been achieved. They tried the blame game. Blaming the 'syndicate' was once everyone's favourite. Neither the experts nor the government have found any wilful manipulators of prices. They blame the international oil price hike and global shortages of food due to bio fuels, cyclones, hoarding, profiteering, and the like.
The government cannot clearly explain our economic problems. However, as a solution to our economic ills, the government can leave the economy to the large informal market to respond to the crisis. The official word for this would be liberalisation. The simplest way to liberalise is to legalise the informal economy and all related activities.
Liberalisation specifies that no armed agencies would hinder informal economic activity or 'monitor' markets. It implies that market prices are not controlled. It means eliminating the policy of seizing goods in the border regions or within the country. The liberalisation of the economy would let loose mass entrepreneurship which in turn would fulfil the demands of the economy.
“Entrepreneurs are blessed with a special courage to risk their own resources,” said Rockwell of Mises Institute in USA. Entrepreneurial freedom, the sovereignty of the producer and the consumer, if backed by sound money, can generate astonishing levels of productivity to meet the demands of a country.
Individuals possess better economic judgements and skills than governments. Individuals know where and when to take risk. When they sustain loss, they redo their management methods or quit to stop further losses. Unfortunately, Bangladesh's academics or even the media have not found much to highlight the positive sides of the economic individual. In economic matters, Bangladesh's intelligentsia focus on the power of the government. They project private enterprise as weak, unscrupulous, and without access to global resources or markets. This belief and the practice have created a vested business community that constantly seek government favours and protection. To this class, having access to the government is more important and necessary than customer satisfaction in the market.
Protection, as they get, results in economic distortions and in the exploitation of labour. Protected exporters earn billions on workers living in city slums. Each year they forecast higher export figures, receive awards and attention, but labour standards remain unchanged. The government's poor wage structure robs the lowly paid employees in SOEs of proper incentives to work. The wages they receive are too little to meet their requirements. The government's irrational policies are responsible for nationwide corruption, but we blame only the poorly paid who are compelled to be corrupt.
Western nations have prospered as their intelligentsia campaigned for economic freedom of the individual, not for economically powerful governments. While our media, academics, and some politicians seem to understand the need for political freedom of the citizen, they remain adamant to restrict his/her personal economic liberty. They favour governments and scorn markets. They misinterpret liberalisation.
Bangladesh's new political camp, the reformers, should realise that due to continued economic disappointments the politics of the old may stage a comeback. The old are politically experienced and can outwit the new, unless the government takes a non-intervening economic role to revive the economy.
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