A Letter to the Minister of Finance

First Published: 2000-04-07

A constituent in a letter to the Minister of Finance outlines historical differences in approaches to the organization of an economy and indicates that the country is in danger of taking the Road to Serfdom, the modern example of which is The Jamaican Road.

The Hon. Sir William Allen
Minister of Finance
The Government of The Bahamas
Nassau, Bahamas

Dear Sir William

In 1944, the single most influential political book of the 20th century was published, Hayek-s Road to Serfdom. It had as profound an influence on subsequent generations of intellectuals and politicians as The Communist Manifesto did in its time – one hundred years earlier. Marx and Engels succeeded in orientating European politics along class lines, Hayek succeeded in establishing a new fault line in political discourse between the freedom of the individual and the power of the state.

Some of the worst crimes of the century have been caused by the failure of politicians to make the distinctions between the two arrangements: state management or trusting "the market" to do its best. In mid century the Keynesian "middle way" held sway, Hayek retreating to write his seminal work dedicated to "The Socialists of All Parties". Today we have the benefit of historical evidence of the failed Keynesian "middle way" and Hayek-s "spontaneous order" of a market flourishing as never before. In his usual eloquent manner Milton Friedman expresses the problem as follows:

"For many of us, freedom – economic, political, civil – is an end in itself not a means to other ends – it is what makes life worthwhile. We would prefer to live in a free country even if it did not provide us and our fellow citizens with a higher standard of life than an alternative regime. But I am firmly persuaded that a free society could never survive under such circumstances. A free society is a delicate balance, constantly under attack, even by many who profess to be its partisans. I believe that free societies have arisen and persisted only because economic freedom is so much more productive economically than other methods of controlling economic activity". (Italics mine)

Because your government has been unable to make the important distinction between what the state can and cannot do, it has fostered political division – on two fronts: foreigner versus Bahamian and now employer versus employee. Nationalism, bolstered by the foolish bahamianization policies of the past and present government along with the accumulation of legislation purported to correct the inequities of the human condition, the latest being the offensive labour legislation, the country is firmly established on The Jamaican Road to Prosperity a chilling reminder of Hayek-s Road to Serfdom.

Sir William, I write as one of your constituents, deeply concerned by the fact that your government is about to launch the latest round of legislation covering so many aspects of economic life. It simply takes my breath away. The "pretence of knowledge" inherent in the drafts I have seen of the Minimum Standards Bill is the kind of arrogance that guarantees your government-s policies will be harmful. The tragedy is compounded by the fact that wise decisions like selling off bankrupt hotels are now replaced with restrictive and complicated legislation bound to slow down the economy. The market – if left to function will perform the miracle as it has in those countries like New Zealand that removed similar legislation now under discussion in this country. To introduce new, complicated and even destructive laws that are violations of property rights, that give far-reaching powers to a Minister, setting wage rates, promoting divisiveness, expanding the bureaucracy etc. etc. are grave and irresponsible decisions as the consequences are already known. It is simply mind-boggling that your government is so blind to the fact that a free people conducting their daily lives in an unencumbered market is what really works.

I was privileged to have a brief conversation with you in 1992. You indicated the need to reduce the size of the bureaucracy in your department – you even gave me an amount – 20%, a clear indication of your intention to run an efficient department with consideration for taxpayers. Perhaps you had some success, however the FNM government as a whole has expanded, creating new bureaucracies for its "social engineering" projects. The Industrial Court, and the labour legislation – regulation here and regulation there is more government and less economic freedom.

As my chosen representative to parliament, I would like to think that you are not a party to the labour legislation and the demonizing of the business community coming from government and the unions. I would also hope that you would have some influence to stop or side-track your Prime Minister from unleashing the monster that will send us careening down the Jamaican Road committing the Bahamian people to the serfdom Hayek warned against that is the sad story of Jamaica today.

With all respect
Sincerely

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