Capitalism need not apologise

Bad news: capitalism is very much here to stay. Pakistanis need to start accepting it.

Farooq Tirmizi September 17, 2011


To those who have watched the financial crises of the United States and Europe unfolding with glee and pronounced with unabashed joy that capitalism is about to die, or at the very least, humbled, I have some very bad news: capitalism is very much here to stay and is not about to apologise to anyone for the mess the world is in.

Most Pakistanis do not think about how the economy should be organised, but it is surprising that amongst the few that do, a large number does not believe that the nation’s economic foundations should be built upon the principles of free market capitalism. It is nothing short of appalling to see even economics and business school professors at leading Pakistani universities support policies that are nothing short of populist drivel.

Take, for instance, the nonsensical idea that the government should own and operate companies for ‘strategic reasons’. To those that say that, I have one question: is it part of your ‘strategic’ plan to also ensure that these companies do not function adequately and constantly require bailouts? Is it worth spending more than Rs250 billion every year to keep propping up these ‘strategic’ companies?

The fact remains that, for all its flaws, the free market remains the best known system for organising an economy. Yes, the government needs to act as a regulator to ensure that everyone plays by the rules and ideally, the government should provide a basic set of services (education, infrastructure, etc) to ensure that there is a level playing field, but the government should not attempt to run companies on its own. It is absolutely laughable that the government thinks it can ‘create jobs’ by employing people in state-owned companies far beyond their capacity and need and then pay for them with bailouts. In essence, this is nothing short of stealing my tax money and giving to a politically connected constituent of some minister. I am surprised more people are not outraged.

So when I hear babbling about how the government should not sell off companies it owns for ‘strategic’ reasons, I would like to say this to the Zaid Hamid-style populists: you have no idea what you are talking about. Stick to your silly political conspiracy theories and leave the business of running the economy to those who have bothered to try and understand it.

WRITTEN BY:
Farooq Tirmizi The author is an investment analyst. He tweets as @FarooqTirmizi (https://twitter.com/FarooqTirmizi)
The views expressed by the writer and the reader comments do not necassarily reflect the views and policies of the Express Tribune.

COMMENTS (26)

Imran Kamyana | 9 years ago | Reply Evil cannot be regulated. When one talks about regulation in a society based upon private ownership & profit, the first ones to be bought off are regulators themselves. The only solution is to overthrow the obsolete system which has served its role in human history and to replace it with profit free planned economy where means of production are under the ownership of whole society collectively and democratically.
Raja Islam | 9 years ago | Reply Clearly government should not be running industry or other corporations. In Pakistan matters are made even worse because of a high degree of corruption and inefficiency within the government run corporations. Pure unregulated capitalism is not the answer either. It is a zero sum game. If someone becomes extremely wealthy then many others will remain extremely poor. The job of the government is to regulate capitalism so that monopolies are discouraged and exploitation is minimized. Additionally, the government needs to have a system in place for social services so that there is healthcare, shelter, education and food for all.
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