Tell us what it's going to take for you to return to Guyana.

Monday, May 26, 2008

Guyana's Prosperity Barrier

In a free market, the price of a good or service is a phenomenon that emerges from the countless interractions of countless people. It's a valuable and yet simple signal that lets people know whether or not to buy now or wait. It also lets producers know whether it's a good time to produce more of that particular good or service or to produce something else.

Guyana's government has intervened in the economy in such a way as to frustrate any hopes to one day see a prosperous Guyana.

When the President Jagdeo announced all the subsidies for various foodstuffs about a month ago now, he was also announcing the death of the price mechanism in Guyana's economy.

When the government uses money taxed from the populace to bring down the price of food, it does two things: Firstly, it disables the signal that would let others know that it's time to grow more food on the widely available land here in Guyana. Also, it creates a shortage. A high price is a rationing machanism that ensures that a good will never run out. As it becomes more scarce, the price goes up and this tells people to economize.

The US and UK learned in the 1970's that a government can't manage the economy and country to prosperity. It's too large a task that simply never has good results.

The foundations of prosperity and even civilizationitself are private property and the abiltiy to buy and sell without government intervention and meddling.

When a government taxes away most of a nation's wealth and uses it to further muddle things by creating monumental market distortions, that nation is well on its way to serfdom.


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