Excellent lecture by Dr Moore!

GUESTXCOLUMNPermit me use of your Op-Ed page to commend Winston Moore on his excellent inaugural Professorial lecture: “In Plenty and in Time of Need: Barbados’ Economic Development since Independence”.

Economics is neither Physics nor, to use the cliché ‘Rocket Science’. The physical sciences admit little room for argument, controversy or credible debate, once a contested theorem is shown to be counter-factual.

Note: good, useful theory fits the observable facts, embodies predictive power, is refutable but never can be proven correct. Seems weird doesn’t it? Einstein’s E = mc2 – energy equals (m) mass, multiplied by (c2) the speed of light squared, reigns since 1905! Nobody expects refutation.

So why does science embrace this view? To avoid complex discourse, let’s leave ramification to the philosophers, except to say ‘we know not what rising out-swinger our universe may throw at us’. Take a simpler example: everyone knows water, at sea level freezes at 0 and boils at 100 degrees Celsius. No sane person disputes this.

In economics, however, controversy prevails over validity of Keynesian macro-economic theory. Does it accurately represent reality? Do policies derived from its predictions work? Problem: strong ideological tendencies attach to contending views. Thus the Laffer curve – a graph purporting to show lower tax rates on high incomes lead to higher tax revenue generation – permeates conservative ideology.

Despite evidence of US economic rebound following the Obama stimulus package, and sluggish performance of European economies, the International Monetary Fund (IMF) and European Union policies of austerity hold tremendous sway. Despite evidence from Kansas and Louisiana to the contrary [ignore the lead-filled pipes disaster of Flint, Michigan], conservative ideology maintains tax cuts as the core of stimulating economic growth.

Kansas Governor Sam Brownback claimed tax cuts would be a “shot of adrenaline into the heart of the Kansas economy.” His economic advisers predicted they would be a “near immediate and permanent boost” to the state’s economy. They were wrong.  Subsequent budget deficits and low employment growth required big expenditure cuts on higher education and unsustainable ‘one-off remedies’ – sale of state assets and depletion of reserves, accumulated surpluses.

So, it is refreshing that Moore insists we have no need for more consultants. Even more refreshing, he confronts the myth, strongly held by many Barbadians, that the Barbados Labour Party (BLP) is the ‘party of business’ whereas the Democratic Labour Party (DLP) is not. It is inferences like these that truly separate a scientific approach to economic investigation from ideological posturing.

Moore contemplates the evidence which persuades him neither party is anti-business. Honestly, they couldn’t be different. Bear in mind, all major Commonwealth Caribbean political parties began with the Labour Movement. They resulted from mass protest and mobilization. Widespread disturbances of the 1937-38 period and subsequent publication of the Moyne Commission Report laid bare the wretched, condition of working people.

Eric Williams’ The Negro in the Caribbean [1942] provided irrefutable evidence of unacceptably debilitating impacts colonial exploitation visited upon West Indian populations. But for Marcus Garvey’s People’s Political Party of 1929, there was sparse attempt at mass mobilization.

Who today funds political parties? Norman Manley spearheaded Jamaica’s first push for self-governance – the Colonial Office insisted federation was perquisite to independence – but that’s another story. Here’s a little known fact. Upon entering politics, contemporarily the region’s foremost advocate at the Bar, Manley used a significant proportion of wealth accumulated from his extraordinarily successful practice to assist development of the People’s National Party. Subsequently, political parties depended financially, on contributions from those able to afford it and organizationally, from those committed to their espoused platform. The former, mainly businesses, the latter largely – surprise, surprise – women!

Moore concludes it is ‘simplistic’ to associate the BLP with enhanced economic growth and the DLP with economic decay to mean BLP pro-business, DLP anti-business. He suggests ‘voting out’ incumbents often follows economic downturn, thus historically, it is no unreasonable expectation for economic growth to be associated with periods of BLP governance. Fact is, both parties depend on financial support from business.

Moore’s identification of fiscal performance as Barbados’ immediate economic disorder is undeniably accurate. His focus on capacity enhancing policies for public transport, education, waste disposal, water management, eco-tourism and the like are spot on. One comment in conclusion: devaluation as curative for fiscal deficits in Caribbean countries is a veiled mechanism of austerity with tenuous prognosis of success. Approach the IMF, there’s a trodden, predictable path. Our goal: never succumb to the ailment requiring such intervention! Difficult, not impossible!

Wilberne Persaud

Consultant Economist.


Leave a Reply

Your email address will not be published. Required fields are marked *