By Dr Morgan Job
ERIC Williams was ignorant both of the rigor and the importance of positive economics. The intellectual cretins who defend his hypotheses concerning the profits of slavery as explanation for the industrial revolution in England do not explain why the gold from Mexico and Peru caused no industrial revolution in Spain. They do not explain why Portugal, the inventor of the Atlantic Slave Trade, remained backward and industrially primitive into the end of the 20th century, despite owning colonies in Asia and Africa into the third quarter of the 20th Century. They boast of Point Lisas as economic as economic success and they cannot structure the question: "Why with billions of unearned profits from oil, Eric Williams failed to develop the people of Tobago, Tamana, Rampanalgas, Grand Riviere, or Laventille, too many of whose grandchildren must now have URP or Cepep as their 2020 Vision?"
Viewed as a body of substantive hypotheses, economic theory is to be judged by its predictive power for the class of phenomena, which it is intended to "explain." Only factual evidence can show whether it is "right" or "wrong" or, better, tentatively "accepted" as valid or "rejected." Mr Ewart Williams understands the difference between the facts PNM manipulates to construct propaganda and the reality of what the facts must predict:
"Government spending has resulted in an increase in the non-energy fiscal deficit. This deficit rose from 6.5 per cent of GDP in 2001/2002 to 10.1 percent of GDP in 2005/2006. The deficit is financed by drawdowns of Government deposits at the Central Bank" (Central Bank, Monetary policy report October 2006), which explain inflation. Point Lisas and the energy sector employs three per cent of the labour and produces 45 per cent of TT GDP, 55 per cent government revenue and 90 per cent of TT foreign exchange. Some 97 per cent of the labour employed with Cepep, URP, public service, and the non-energy sector produces 10 per cent TT foreign exchange and 50 per cent GDP. The economy is more dependent now than when Dr Williams died in 1981. Point Lisas is about diversification, not economic transformation.
Neither Williams nor Best cared much for Nobel laureate Sir WA Lewis' neo-classical ideas. Lewis' Economic Development with Unlimited Supplies of Labour is a model neophytes or pseudo-intellectual Marxists cannot grasp. Models based on economic theory derive from a body of systematized knowledge concerning how the world works (concerning production, consumption, trade, exchange, money, interest, and diffusion of ideas or technological change), distinct from normative political issues usually based on particular theology.
Normative prescriptions can never be independent of positive theory, even if politicians or racist polemicists believe so. Preferences for Blacks called affirmative action have costs, whether implemented as Cepep, medical scholarships, or recruitment to the police. The theory's prediction is valid in Nigeria, India, or the USA. Price control must incite corruption and black markets, everywhere. Implemented differences in values or racist ideology cannot be ordered by logic, but by violence, as in pre Civil rights USA, Guyana, Nazi Germany or all over Africa. PNM cannot banish poverty dumping the Treasury on Laventille with no costs to Caroni, efficiency, meritocracy, or the economy.
Politicians do not study Lewis or positive economics. Government spending to win elections does not explain economic Development, or every Caribbean island would be developed. Journalistic language used to discuss economics abandons systematised or organized methods of reasoning. The media encourages ignorance: Public confusion of normative statements with the imperatives of positive economics. Lewis' theory is "simpler" than Williams' "profits from slavery" or descriptive Best-Levitt Plantation models. The picture of nine young men charged for the murder of Vindra Naipaul-Coolman is dramatic in its focus on the failure of economic transformation, despite the diversification success of Point Lisas. Lewis' ideas explain without reference to the bogus European idea of race why taking jobs to kill people is an option for some young men brainwashed by the noxious ideas of victimhood or race. Lewis' economics abjures reliance on racist polemics, populist pretensions, or non-scientific categories of race or class. It is fruitful and precise because of the resulting predictions, the wider area (all under developed regions) within which the theory yields predictions, and the more additional lines for further research it suggests.
Dr Morgan Job was a university economics lecturer and a former Minister in the Ministry of Finance.
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