Amin Kef Sesay: Sierra Leone Telegraph: 9 June 2021:
While what is called free-market economy has many advantages; such as fostering innovation, variety, and individual choice, it also has disadvantages, such as a tendency for an inequitable distribution of wealth, poorer work conditions, and environmental degradation.
We have heard people say that Sierra Leone is a free market economy. To the ordinary man, as the prices of basic essential goods and services keep rising with no end in sight, free trade has become synonymous with the freedom of businesspeople to arbitrarily impose whatever price they want on consumers.
For example, whilst the government has said that it has removed tax on rice for its price to go down, in the last two weeks it has actually gone up.
If the Ministry of Trade and Industry is mindful of how prices affect poor people’s purchasing power, and poor people are the majority in this country, they would understand that there is no free in freedom; and that freedom is full of accountability and responsibility.
Just because it is not forbidden doesn’t mean it is allowed. Reality is, there is the need for rules to keep everything working. That is why in the days before this free for all days the country had trade inspectors that enforced rules/laws.
What a free-market economy implies is the production and sale of goods and services, with little to no control or involvement from any central government agency.
Instead of government-enforced price controls, a free-market economy allows the relationships between product supply and consumer demand to dictate prices. The lack of government control allows free market economies a wide range of freedoms, but these also come with some distinct drawbacks.
Since businesses are free to pursue profit in whatever way they please, goods and services that are not profitable generally will not be produced. This can limit the range of goods on offer to consumers and may impact certain groups of consumers more than others.
Competition between firms should lead to firms wanting to produce as efficiently as possible because they want prices to be as low as possible so that consumers will want to buy from them; this drive towards efficiency should mean that resources are not wasted.
For example, few big trading companies have been importing rice and other essential food stuffs into the country for decades without ever thinking of investing to produce them here thereby creating jobs, incomes and reducing import.
As it is, the primary objective for any company in a free-market economy is profit maximization. In many cases, companies may sacrifice worker safety, environmental standards and ethical behaviour to achieve those profits.
When a free-market economy spins out of control, the consequences can be severe; as we see now in Sierra Leone where the prices of all basic essential commodities have nearly doubled in the past three years.
What the government should understand is that market failures have devastated the lives of millions in lost income, unemployment and homelessness. Many of these failures have stemmed from those seeking short-term profits over slow and steady gains, usually aided by minimal government intervention.