An old friend whose acquaintance goes back to school days, recently returned to Barbados after living abroad for many years. He called to ask in a rather annoyed tone as to why the cost of living was so high here in Barbados. The issue has come into public attention following the statement by Mr Kerrie Symmonds which appears to place much of the blame on the retail sector in Barbados.
Rising inflation continues to be a major problem in much of the capitalist world. Thankfully, the inflation rate in the US now stand at 2.9Â per cent, the lowest it has been since 2021. In addition, the Federal Reserve is widely expected to lower interest rates in a few months, which should serve to further slow inflation. The Federal Reserve considers an inflation rate of 2 per cent to be acceptable.
Whatever the current rate of inflation, rising prices remain a source of popular discontent and incumbent governments take much of the blame, particularly when they relate to basic foods. Most families shop twice or three times per week, so supermarket prices are a great concern to nearly all Barbadians. Not surprising, some governments in turn find some other entity on which to place the fault.
Symmonds who is also Minister of Foreign Affairs and Foreign Trade is quoted as stating: ‘There is clear evidence to us that prices are being contained by some parts of the Barbados distributive sector, that they are keeping prices at realistic and very low levels. And then there are other people who are being very ‘cavalier’ with the public.’
One is not sure who specifically is being singled out here. But if as the minister suggests there is ’clear evidence’ that some retailers ‘are acting in a dishonourable way,’ then it may be up to the government to let the exploited people know who those persons are. Predatory behaviour in any form is not to be encouraged, even in an age of ‘swashbuckling capitalism.’
President of the Barbados Chamber of Commerce and Industry (BCCI) James Clarke was quick to make the point that much of Barbados’ inflation is in fact imported, because as a high importer of foodstuff Barbados feels the inflation that obtains in the overseas markets from which we source many of our goods. This is a reality we have to face. Again, as Clarke points out, shipping costs are rising as there are factors involved in getting food supplies into Barbados. Interruption in the supply chain can slow shipping causing delays and attendant increase in prices. Again, as Clarke points out, added to the high shipping costs over which we have little or no control, are a number of other local charges or duties including Value Added Tax (VAT) and local transportation cost. Over the latter government may have some measure of control in terms of lowering the impost on the general population.
This effect of such a lowering excise and other taxes would be a diminution of the general revenues much of which derive from taxation. But Barbadians want to maintain and even increase the welfare provisioning that we have been afforded over the decades. You can’t have free health care, free university schooling, affordable social housing and other welfare grants to alleviate the effects of poverty without paying taxes. It is one of the pervasive misapprehensions of Barbadian society that there is a something Santa Claus-like entity called ‘Government’ that can somehow take care of us all from the cradle to the grave. People seem not to realise it is the ordinary Barbadian who pays for these services through his taxes, direct and indirect.
Of course, politicians everywhere and of different stripes tend to encourage and reinforce the misapprehension. My government they say, will give you this and my government will give you that. Our own government even promised ‘a rent-free democracy’ ostensibly one in which we will all own our own homes. Total nonsense of course.
Listeners to talk radio will be acquainted with the charge of ‘price gouging’ overcharging or in Barbadian parlance ‘jucking out one’s eye.’ This is an indictment too often levelled against commercial retailers even though it can be applied justifiably or not against high professionals or lowly artisans. In a competitive world in which we are all either seeking to ‘get by’ or to maintain one’s class position, this may be becoming increasingly common. One hears complaints of how the same product of the same size and brand name can be costed differently. One is surprised at the differential which in some cases can be as much as eight or ten dollars. The differential may be explained by the fact that different supermarkets have different levels of overheads. A large store with wide aisles and ample attendant staff may have to charge more. The obligation on the shopper is to always where possible to choose mindfully even though it might be true that as they say ‘yuh can’t eat de money.’
I am a believer in capitalism because it is the economic equivalent of liberal democracy. This does not blind me to a historically predatory element in the post-industrial capitalist order. These range from child labour in the first industrial revolution to the American robber barons of the early twentieth century to the tech barons in our post-industrial times. Capitalism is legitimately about profit, investors do not establish companies primarily to give people jobs even though that should be a legitimate consideration. This must not suggest that they should be allowed to make supernormal profits while ‘cavalierly’ undercutting wages. The idea of trickle down economics is a blasphemous myth creating a situation where in the words of the poet ‘wealth accumulates and men decay.’
The Governor of The Barbados Central Bank recently offered glowing prospects of the Barbadian economy which has apparently grown over the past two years. He however admitted that many were not yet seeing the benefits of that growth and that it would take some time to see those benefits. One factor is that most persons do not see substantive changes in their conditions of life over the short to medium term. It takes a much longer period. The greater truth is that development is too often uneven. There are the working poor who often lack the soft and hard skills to participate effectively even in a growing economy. Prolonged inflation tends to erode their real income rather quickly and may even serve to create an under or sunken working class. The Barbadian economy can hardly be considered robust.
Much is said about price controls which of course have a tremendous appeal to the working poor, but across the board price controls are not known to work. During the oil crisis of the early 1970s, then trade minister Brandford Taitt experimented with controls. The net effect of price control is often to diminish supply and exacerbate poverty as businesses withdraw from the shelves on which they cannot make a substantive profit.
The reality of the liberal capitalist democratic state is that it allows for the contest of the countervailing forces of labour, capital and government. It works best when the three can find a social compact that permits some degree of equilibrium, but that is not always easy. Those who talk glibly about socio-economic equality are invariably talking about a different mode of production that does not allow for these countervailing forces.
As Gladstone used to say, they are talking about the kind of equality that can only be enforced by a tyranny complete with secret police and attendant gulags. The struggle continues.
Ralph Jemmott is a respected retired educator and commentator on social issues.
