This is Jamaica, so if I say that I’ve been thinking about Adam for days that may get a few eyebrows rising and lips twitching. But, I’m just thinking about Adam Smith, and what he’s done to mess up our lives. What’s been bugging me is what economists call ‘comparative advantage’. As Smith wrote in The Wealth of Nations:
“If a foreign country can supply us with a commodity cheaper than we ourselves can make it, better buy it of them with some part of the produce of our own industry, employed in a way in which we have some advantage.” (Book IV, Section ii, 12)
Simply put, it means that countries shouldn’t go around trying to produce themselves all they need, but figure out what we produce at lower cost than others (in money terms or in terms of what we may have to give up to do it).
I’ve thought about it a lot because I see Jamaica’s stuck doing things that sound great, as embodied by ideas like “Buy Jamaican”. As I mentioned on Twitter a few weeks ago, that’s actually a policy to make the country poorer. We love certain goods, for instance, and think that because we can grow them or used to grow them hugs continuing to grow them is good for us. Well, we do a lot of growing at much higher costs per unit than other countries, in part because we need imported inputs that keep costing more as our exchange rate weakens. Also, we’ve some outdated ways of doing things that keep costs high.
We throw our hands up in horror as we see the amount of red peas we import, but others produce them more cheaply than we do. So, we have to drop the romantic notion that helping our farmers, for example, will do us good.
What’s really bothered me, though, is where we seem to have comparative advantage. Many people have heard that practice makes perfect, and perfect practice makes perfect.
Among the areas where we seem to excel are the ‘dark arts’. For instance, we are putting ourselves up there as the kings of scamming. Just read today’s papers.
- ‘Carmax placed into receivership‘, as two directors are sought to deal with alleged fraud of over $100 million. Jamaican cable television companies have to cease airing 19 channels next month because they never had the rights. The Broadcast Commission seemed to have been caught with its feet up eating popcorn. This was a great wheeze, facilitated by the government at many levels over several years. It allowed the cable firms to subsidize their services with this cool cost saving. Talk of refunds for cable customers is just pipe dream stuff. “Where’s my two ounces?”
Prof. Hopeton Dunn (all hope gone?), Commission chairman, talked about protecting image and guarding against international perception of Jamaica as a rogue country. “Whoa! Stop that horse! Bolt the stable!”
I asked if this illegal activity was going on with the full knowledge of the regulator. “Hello, is that my wake up call?”
- The country’s top public prosecutor can’t make a case to prosecute a local government councillor despite reams of evidence of nepotism after contracts were given to family and connected people. The best that can be done is slap a $1000 fine (US$10). “Pick yourself up off the floor and stop your laughing!”. In tennis, they penalise you for ‘not making an effort’.
As any dummy would see, if you can fleece millions in funds and pay pennies in fines, then pull up the gangway and let’s sail to Jamaica.
It makes you wonder about the smarts of criminals who rob and maim, when they could have raked in the dosh in exchange for a few handshakes, kissed babies, and the odd wearing of ceremonial robes. But, you can understand why even my puppy wants to get into politics.
Our new education system better gear up. Enough already of doctors and engineers. Let’s get courses up and running in ‘How to be a spiv’. The U.S. was proud to call you to come with other tired and hungry masses. What will be our clarion call? Let’s set up a conference call with Prof. Carlos Hill and Dr. David Smith of the OLINT School of Business.