Showing posts with label Mala Gunasekera. Show all posts
Showing posts with label Mala Gunasekera. Show all posts

Friday, November 16, 2007

Spontaneous Market 5: Limits to Free Market?

A friend, Geronimo "Indian" Sy, wrote in his column in Manila Times last week, a paper entitled “Face control”. He noted that
In the land of equality, liberty and fraternity, I find the strangest thing—face control. In certain places in Paris, notably in bars and party places, there are gatekeepers—bouncers in our parlance—who allow people in or exclude them not based on anything except how they look…. The face control is not based on science. Neither is it based on logic. My friends tell me the ones who are turned away are usually Middle Eastern-looking…. To top it all, the queues are long, snake­long. The crowds continue to jostle in and be counted. In a democracy, can one really do that?
I wrote him and argued that in a free society, or where there is a "rule of law" (unfree society only have "rule of dictators and bureaucrats"), people are free to set their own limited rules, so long as such rules do not result in harming other people's lives and property.

For instance, if I put up a pizza house, the food are soooo great at a good price, then I attract hundreds of customers everyday, I can make my own rules whom I can allow entry or whom I can refuse. This attitude might turn off other people, so they also put up a rival pizza house nearby, they also attract plenty of customers, and they make their own rules that are different from mine. Fine, that is free market and competition. Nothing wrong, right?

Problem would arise if my pizza house is a government corporation, funded by tax money, and I am just an appointed bureaucrat, a crony in short, and I make rules that exclude other taxpayers while allow entry to other taxpayers. This is wrong. But if my pizza house owes nothing from tax money, then I have the freedom to set my own rules.

Indian replied that while I got some good points, he believes that there is “inherent limit to free markets”.

Yes, there is a limit to free markets -- competition. Competition makes sure that players behave well in dealing with their customers, with the public in general. Because if they don't take care of their customers, others will, and that can be the end of their business, the end of their job creation capacity.That is why policies that limit competition, like government-created monopolies and oligopolies (through franchise, whether by congress or by certain national government agencies or local government units), in the name of "protecting the public", actually works against the public.

Another friend, Rica, wrote that “there is an inherent limit to private enterprise being free, that point is where you infringe upon human dignity or human rights. This face control is similar to someone’s policy of physically banning a caddy from the private compound which is indirectly managed by him, and he does not even own the property. Although they are "free" to do this because it is private property, there is a point of human dignity.”

Yes, there will be some abuses or disrespect of human dignity elsewhere, somewhere, but such incidents don't invalidate the freedom that humanity enjoy under a free market system.

A father spanks his son for saying words the father does not like, the mother fights her husband. One can call this abuse of human dignity of the son by the father, or a mother consenting with the bad attitude of her son who abuse the dignity of his father.

Micro cases, household level cases, firm or company level cases, school or church level cases, you will find millions of different cases like these. But they do not invalidate the freedom that individuals enjoy under a free market system. That is why there are rules and laws that apply to individuals, even rules that apply to members of a household or family (like no wife or husband battering), to preserve order in society.

In the case of that guy who bans a caddy, if that golf course is owned by the state, and that guy is a cabinet minister or big-gun Party official of a dictatorial government, not only that he can ban the presence of that ordinary caddy, he can even kick and punch the caddy for no reason at all, and that caddy nor civil rights groups will have no power to punish any bureaucrat for his abusive behavior. And the caddy may not be able to find other golf courses to work for because all golf courses are owned by the state and all are managed by cronies and state bureaucrats.
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My two related papers in recent weeks:

(1) Beelzebub and Government DNA

October 30, 2007


Last October 24, 2007, the International Policy Network (http://www.policynetwork.net/) announced the winners of the 6th Annual Bastiat Prize for Journalism. There were 5 finalists -- Mr. Clive Crook of Atlantic Monthlymagazine, Mr. Jonah Goldberg of National Review, Mr. A. Barton Hinkle ofRichmond Times Dispatch, Mr. Dominic Lawson of The Independent, Mr. Patrick Mcllheran of Milwaukee Journal Sentinel, and Mr. Amit Varma of Mintnewspaper in India.

First prize winner got $10,000, wow! Second prize got $4,000 and third prize winner got $1,000. The winner, Mr. Varma, has a witty writing style. The 3 papers he submitted were, "Where's the Freedom Party?", "A beast called government", and "The devil's compassion". The latter is about a speech given by the devil Beelzebub at the convention of demonic beings.

Remember The Queen's song, "Bohemian rhapsody"? There's a part there where Freddie Mercury sang,

"Mama mia, mama mia
(mama mia, let me go)
Beelzebub has the devil put aside for me,
for me, for me..."

In "A beast called government", Mr. Varma argued that wastes in government is not an aberration, but it is written in its DNA, because government bureaucrats (a) want to multiply subordinates, not rivals, and (b) officials make work for each other.

Second prize winner, Mr. Crook, has a more formal writing style. His 3 articles were: "The fruitful lie"(about lies that trade protectionism benefits the poor), "MiltonFriedman's unfinished work" and the "The Ten Cent solution" (aboutprivate schools that educate the poor).

For 6 straight years, IPN has attracted more journalists and columnists from around the world who write about the principles of a free society -- including free market, rule of law and property rights -- to join the competition.


(2) Advancing Property Rights and Liberty

November 07, 2007


A friend from Singapore, Pin-quan Ng, wrote an essay on market solutions to developing world health care access issues. His paper has been published in the 'Young Voices in Research forHealth 2007' compilation for the 11th Global Forum for Health Research in Beijing.
Compilation pdf can be found here: http://www.globalforumhealth.org/Site/002__What%20we%20do/005__Publications/012__Young%20Voices%20in%20Research%20for%20Health.php

Yes, we need to assert more market solutions, not more government solutions, to health care -- and pension, housing, education, infrastructure, food production, etc. -- issues. Markets are driven by real service; you don't serve well your clients and consumers, others will, and you lose your business and your shirt. No forced revenues (aka taxes) that will subsidize or bail you out.

Another friend from Sri Lanka, Atty. Mala Gunasekera, got a new website --
http://www.wcicsl.org/index.php
It's the site of Women's Chamber of Industry and Commerce, empowering women in business (not in bureaucracies) . The site is cool and easy to navigate.

Mala is also busy doing research and legal work on forgery of title deeds in Sri Lanka, other Asian countries. In short, she is busy making private property rights work in her country.

Meanwhile, Asia is really a place of irony. Our continent has the fastest growing economies in the world. Three of the 4 largest economies in the world (size of GDP expressed in PPP values) are Asians -- China, Japan, India. The tallest buildings in the world, the longest buildings, etc. are in Asia. Yet in our midst are also some of the notorious dictators in the world. People like Gen. Tan Swe of Myanmar, Gen. Musharaff of Pakistan, and Kim Jong il of North Korea. Less notorious but also prince and princess of treachery and public deception are also with us, including the Philippine President.

Advocating collective freedom is already hard. Advocating individual freedom and liberty is much harder. But we're in the midst of this fight already, we need to persist.

* See also Spontaneous Market 4: Entrepreneurship, Community and Property Rights, October 23, 2007

Tuesday, October 23, 2007

Spontaneous Market 4: Entrepreneurship, Community and Property Rights

Entrepreneurship and free market, in the words of Adam Smith, Friedrich Hayek, and countless other intellectuals, lead to human welfare. People who want to be useful to society and at the same time become rich, invent things and services -- or facilitate the introduction and marketing of those inventions and innovations -- that improve human lives. From new rice varieties that can improve nutrition to new cellphones with cameras that improve communication among people, to new cars that are more fuel efficient, to new medicines that are more effective in fighting diseases.

We can add therefore, that only useful things get the attention of the people, and they buy those things and services, making the inventors and sellers of those things rich. Useless things like nuke bombs and more powerful killing machines are bought mostly by governments and military generals. If you have doubt about this, you can ask the Myanmar generals or Robert Mugabe or Fidel Castro, etc. why they bought hundreds of thousands of assault rifles for their troops.

One example of the fruits of entrepreneurship, is a first ever Oceanarium in the Philippines, that will open up less than 2 months from now. This means that Filipinos who want to see different marine animals and fishes need not go to Singapore or Hong Kong -- and pay thousands of pesos in travel tax, petroleum tax, terminal fee, security fee, to the state -- to see these marine creatures in style.

There is also an ocean park in Subic, about 130 kms. north-east ofManila, but there is corresponding or additional travel costs in going there. This oceanarium will be right in Metro Manila.

When people, children especially, can see live fishes and other marine creatures in front of them, and not just on Discovery or Animal Planet or National Geographic channels, or other documentaries, their appreciation of the marine environment will increase. Because who would want the destruction of marine environment if they will know that those colorful and beautiful, not to mention gentle, marinec reatures, will also be destroyed and killed?

(See the news report here,
http://businessmirror.com.ph/10232007/headlines013.html
First Philippine Oceanarium to open in December
By Louise M. Francisco

MANILA Ocean Park (MOP), the P1.1-billion joint oceanarium project ofChina Oceanis Philippines Inc. (Copi), and Singaporean and Malaysian investors, has set the opening of the first phase of its live aquarium facility on December 15, unveiling plans to exhibit more than 20,000 marine inhabitants of approximately 300 marine species. The oceanarium is divided into six sections named to evoke national pride....
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My two related papers in recent months:

(1) Markets, Government and Community


August 22, 2007

A friend defined these 3 concepts as follows:

Market - by competition
Government - by coercion
Community - by cooperation.

In my book though, I define them as:

Market = voluntary exchange
Government = forced exchange
Community = voluntary co-habitation.

Examples:
1) Market: I can only have your money if you like my hair-cut services, then you come back, you tell other people that i'm a good barber. The moment I become a lousy barber, or my barbershop stinks like a dumpsite, there's no way I can have you and your money.

2) Government: I will have your money even if you think policeman X is the most extortionist law enforcer, even if Congressman Y is the most corrupt politician, even if Mayor Z is the most arrogant mayor around. They are your public servants, so give me your taxes.

3) Community: I will live in this community (or village or condo building or barangay) only if it gives me peace of mind for me and my family, at a price that I can afford. The moment the peace and order deteriorates, or the cost of staying in this community becomes unaffordable for me, I and my family will be out of here, and we'll look for another community.

Market competition is only a means, not an end. The end-goal is choice. With choice, comes freedom. More choices, more freedom. In the process of voluntary exchange, some guys will lose out to fellow sellers as the buyers and consumers become choosy. So sellers are forced, even coerced, by circumstances, to be competitive, to produce goods and/or services that will be wanted and bought by the public. So in the process of giving consumers more choices, competition was born.

Government coercion is also a means to pursue a purported goal of public welfare. Oftentimes, the result, in the perspective of consumers, is lesser choice. Lesser choice means lesser freedom. When you have less take-home pay because of high income taxes, then you have less freedom to buy or consume certain goods and/or services that you deem important for you and your family.

Community cooperation is part of voluntary exchange. That is why builders and leaders of private villages and communities incorporate lots of amenities like good peace and order, garbage collection, street lighting, etc. to entice more residents and locators in their communities. More residents, more profit for them. Less residents and less buyers of their residential units, less profit, even losses for them.

Choice through voluntary exchange is a sacred goal to be pursued if one is to ensure individual and community freedom.


(2) Property Rights = Freedom


JUNE 12, 2007

A friend from Sri Lanka, Ms. Mala Gunasekera, wrote a short essay, "The conversion of bad title into good title by acquisition and vesting. This process has empowered governments and impoverished the poor."

In her paper, she observed:
"In Sri Lanka we had legislation called Waste Lands Ordinance to take over their lands. Successive governments fluctuated in their opinions whether the lands should be government owned or privately owned. From time to time cultivated lands were taken over and controlled by government, land laws were randomly altered thus creating many doubts in the minds of people. This created a political cultural ethos where entrepreneurs looked to their respective governments to obtain land for their industrial establishments. They never looked to willing sellers to purchase land for their projects."

What Mala wrote is so true. Property rights means Freedom. And zero property rights means zero freedom. If you can't say that you own your tv or refrigerator 100%, that is, somebody can always come in and he says that he also owns your tv or refrigerator and takes it away from you, then your life is a mess.

If you extend that analogy to lack of property rights to your agricultural land, or the lot that your house is sitting on, then you have 24 hours of absence of peace of mind. You come home from work and somebody else has already fenced your agri land, or your house has already been demolished and someone else is putting up a new house or shop in your lot.

I think that the absence of secure, well defined property rights among citizens is the single biggest GOVERNMENT FAILURE ever created. But if you look at the literature of those who always cry "market failure" to anything and everything around society, the concept of "government failure" never comes to their minds.

Governments around the world have many tools in their disposal to discourage private property rights. Among them are multiple and high taxes, multiple titles and requirements (and signatures and regulations) to secure, unstable and unpredictable legal and judicial system, and so on. A combination of all these and life can be chaotic. I think people in Zimbabwe, Congo, and many other African countries fully understand this.

The big challenge for free marketers, is how to remind governments to focus on that very important function - to ensure property rights, whether intellectual property or goods/lands property, of the people. By extension, governments should be discouraged from dipping their dirty fingers on endless regulations of business and entrepreneurship, on providing endless subsidies to things that are better relegated and administered as personal and parental responsibilities.
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See also:
Spontaneous Market 1: Profit, Trade and Personal Responsibility, May 22, 2006
Spontaneous Market 2: Market Failure vs. Government Failure, June 07, 2006
Spontaneous Market 3: No Nurses' Brain Drain, June 21, 2006