Kevin Baldeosingh

If you don't know ba­sic eco­nom­ics, you are not a tru­ly ed­u­cat­ed per­son. This is so whether you have a Bach­e­lor's de­gree or even a PhD, since un­der­stand­ing eco­nom­ic fun­da­men­tals is so es­sen­tial to un­der­stand­ing the mod­ern world–which in­cludes T&T.

Luck­i­ly, this un­der­stand­ing isn't hard to ob­tain. There is a pletho­ra of good books deal­ing with the ba­sic prin­ci­ples of the so-called "dis­mal sci­ence", rang­ing in length from a few hun­dred pages to less than 50, and these prin­ci­ples are read­i­ly com­pre­hen­si­ble for any­one with a sec­ondary school ed­u­ca­tion. But I am re­view­ing a book that was first pub­lished 70 years ago be­cause, save in mat­ters of de­tail, Hen­ry Ha­zlitt's ex­po­si­tion has nev­er been bet­tered. And, even if all his ar­gu­ments were wrong, his clear prose is sheer plea­sure in it­self.

Yet Ha­zlitt (who died in 1993 at the age of 98) was not an econ­o­mist–at least, not in terms of for­mal qual­i­fi­ca­tions. He was a jour­nal­ist who wrote on eco­nom­ics and busi­ness for the New York Times and Newsweek, but he had no PhD–in­deed, no ter­tiary qual­i­fi­ca­tions of any kind. Yet he was praised by lu­mi­nar­ies in the field such as FA Hayek and Mil­ton Fried­man. And, even af­ter 70 years, there are lessons in this book which pol­i­cy-mak­ers in T&T would do well to at­tend, and or­di­nary cit­i­zens more so in this re­ces­sion­ary time.

Ha­zlitt starts by not­ing that "Eco­nom­ics is haunt­ed by more fal­lac­i­es than any oth­er study known to man." He at­trib­ut­es this main­ly to two fac­tors: "the spe­cial plead­ing of self­ish in­ter­ests" and "the fal­la­cy of over­look­ing sec­ondary con­se­quences."

So the fal­lac­i­es are root­ed in (1) see­ing on­ly the im­me­di­ate ef­fects of a giv­en pol­i­cy; (2) see­ing its ef­fects on­ly on a spe­cial group; (3) not con­sid­er­ing the long run-ef­fects of that pol­i­cy on all groups. "In this lies the whole dif­fer­ence be­tween good eco­nom­ics and bad," Ha­zlitt as­serts.

From this premise, there is a whole range of is­sues in this book which can read­i­ly be ap­plied to T&T is­sues and en­ti­ties. For ex­am­ple, Ha­zlitt writes: "If a par­tic­u­lar union by co­er­cion is able to en­force for its own mem­bers a wage sub­stan­tial­ly above the re­al mar­ket worth of their ser­vices, it will hurt all oth­er work­ers as it hurts oth­er mem­bers of the com­mu­ni­ty."

From this per­spec­tive, the Oil­field Work­ers Trade Union has been the great­est foe of the work­ing class in T&T.

Or con­sid­er his take on the gov­ern­ment cre­at­ing em­ploy­ment: "The more in­ef­fi­cient the work–that is, the greater the vol­ume of em­ploy­ment is re­quires in re­la­tion to the val­ue of the prod­uct–the more high­ly thought of the in­vest­ment is like­ly to be." What bet­ter sum­ma­ry of the URP or Cepep could there be?

And, in re­spect to the lat­est scan­dal at the Hous­ing De­vel­op­ment Cor­po­ra­tion, Ha­zlitt's point is fun­da­men­tal to all pre­vi­ous scan­dals: "All that hap­pens is that mon­ey is tak­en away through tax­es from fam­i­lies of high­er in­come (and per­haps a lit­tle from fam­i­lies of even low­er in­come) to force them to sub­sidise these se­lect­ed fam­i­lies with low in­come and en­able them to live in bet­ter hous­ing for the same rent or low­er rent than pre­vi­ous­ly."

Read­ing this book will help you know when politi­cians, pol­i­cy-mak­ers, and even pro­fes­sion­al econ­o­mists are talk­ing tata.