Every time I listen to the radio and hear the announcement “gas prices at the pump are expected to go up by 5 cents a litre tonight,” I wonder if the oil companies are signalling each other to raise prices. How is it that when crude prices drop, prices at the pump often go in the reverse direction? How come all the refineries decide to do their maintenance at the same time and take dollops of capacity off the market to drive up prices? Higher pay for no work works here! How come the price controls that once existed for oil and gas and gave us some stability, have now been removed, and this era of “perfect competition,” has only resulted in escalating prices? Something is indeed “rotten in the state of Denmark.”
In the US, some still rear their fangs every time there is talk of public medical care. “Let the market prevail,” they say and yet the “market” in this case has led to the highest medical costs in the world. Even the advent of Obamacare has raised more bitterness than acceptance; while it may have widened access, it has not addressed costs. Other developed countries with socialized medicare have lower costs and longer life expectancy rates compared to the US with its advanced medical capabilities that are available only for the privileged few.
How about education? The branded top tier schools charge astronomical fees in relation to their state-owned or publicly funded competition, for knowledge that is universally available today thanks to the Internet. Students get into debt for a commodity called a degree that perishes rapidly as knowledge advances. And many can’t find jobs, degree notwithstanding.
These three sectors are but examples of our intention to have pure competition through a market economy but ending up with something less than optimal. The value chain has been converted into a toll-way with gatekeepers siphoning off cash into their coffers as you pass each toll gate. It’s as if the 1% decided to keep things that way, to preach the message that “competition reduces prices,” and then introduce middlemen (insurance companies, academics, distributors and refiners, aided by some slick politicians and media powerbrokers) to artificially spike prices, enrich their own wallets and hold to the Orwellian maxim that “some animals are more equal than others.”
So what do we do about it? Communism and Socialism failed in the nineties, so we cannot go down that road again. And Capitalism, that raises its head the moment any alternative system fails to deliver, is also full of holes like the ones I have described above, providing fabulous wealth to a few at the cost of impoverishing everyone else. And perfect competition is only a utopian dream of a Mr. Adam Smith.
I wonder what would happen if we are able to fuse these systems into a composite; let the government (legislature) lay down the rules of engagement, and interfere only when those rules are broken, with punishments severe enough to be taken heed of; let private enterprise provide the goods and services needed to fuel the economy; and allow a third body of concerned private citizens, elected by their peers, to act as watchdog when either the government or private sectors cross lines or act out of role. The elected citizens of this third body will have no political leaning, and will hold the welfare of the nation as their paramount interest.
How do we fund this third body without creating another level of bureaucracy? To date we’ve had a second house of government (call it a Senate) playing this role of sober second thought. But that house has fallen into partisan disarray and abuse of power in many countries, and its focus has been only on the legislature, often to support it and not to question it, especially if both houses have a majority of the same political stripe. Perhaps this third body could be funded by scrapping the Senate in countries where the latter has outlived its purpose. Perhaps I am dreaming of a utopia. Perhaps these utopias were created in another age when Senates were first envisaged, before they slumped into dysfunction. Perhaps...