|A pleasant read
by MA Taslim
Publisher: Jagriti Prokashony, Shahbagh, Dhaka
Cover: Ridat Farhan
Price: Tk 350
Economics has been labelled as a dismal subject for long. Understanding the subject is quite troublesome as well as tedious. Most of the time, the issues of economics create confusion among us. Nevertheless, the subject has always taken place in the higher ranks. As no-one can go beyond economics, ordinary people try to understand it with their own perspective and limited capacity.
But policymakers and economists do not have such easy options. They have to go through and understand economics comprehensively and deeply. For the policymakers, it has utmost importance as misunderstanding any areas of economics or misinterpreting any economic behaviour will lead to flaws in policymaking. Such flaws will distort the path of development. In a similar vain, economists also need to be careful explaining different issues. Fallacious explanation may lead to wrong advice. And the consequence will be damaging.
So, policymakers and economists as well as relevant professionals should be very clear about the developments of economic issues. There are many occasions when a lack of such clarity of understanding prevails and dominates the thought and policy decisions in Bangladesh. In fact, policymakers and professionals many times are engulfed by economic fallacies. MA Taslim, an economist by profession, has pertinently pointed out the problem in his latest book, Unpleasant Economics, which hit bookstores in Bangladesh in August.
The book is basically a collection of selected 45 essays (one is co-authored with Ahsan H Mansur). The author has been writing for the last four years for different newspapers and websites. Most essays and articles are small in size and well-composed. Taslim, who has served national and international universities as a professor of economics (still with Dhaka University, but now serving as CEO of Bangladesh Foreign Trade Institute on secondment), shows his strong command over economics. He is brief but clear in his analysis and there is negligible confusion. Taslim has used the relevant economic theories, along with microeconomic tools, very efficiently to explain different issues.
In the preface, the author categorically said his articles in the book are in nature a series of attempts to explain the fallacies in some of these entrenched views about the economics discourse in Bangladesh. The task is not easy, though. That's why Taslim tries to link the theory with the real world.
For example, in several articles, Taslim argued that blaming the so-called syndicate or cartel in market for a price hike is not a valid one. In one article he says: "The most hackneyed allegation about the reasons for the price hikes is that a few powerful business houses form cartels (syndicate) to manipulate the market supplies in a manner that allows them to raise the prices. While this could indeed be a probable reason for the price hikes, the trouble is that no-one has shown, beyond reasonable doubt, the existence of such cartels, or for that matter how a cartel actually operates in Bangladesh."
Again, the author has pointed out that a rise in the prices of essentials is not inflation as many people sometimes think. There is a clear difference between the general price level and relative prices. Taslim says: "If all prices were to double, we would have an exceedingly high inflation rate of 100 percent. This would no doubt drive the IMF supervision team bananas, but it would hardly cause a stir among the people of the country. Since, all prices, including prices of the factors of production (i.e. capital, labour and land) doubled, all relative prices would remain unchanged, and nobody's purchasing power would be affected."
Or, if we go through his article on luxury taxation or unproductive sector, we will see that things are not so easy as presented by policymakers and backed by some economists. Taslim argued that it is the limited-income consumers who actually become marginalised by the imposition of higher tax on luxuries such as car and refrigerator, while no effect is felt among the affluent people who can actually spend much on luxuries.
Taslim is critical of the government's intervention in the name of stabilisation. He also showed how such wrong intervention was backed by policy advice of professional economists. In fact, it was in the army-backed caretaker regime when the finance adviser called to improve the marketing and distribution system of essential commodities. A local think-tank, in a study at that time, revealed that the principal middlemen in the rice marketing chain, the millers, received about 23 percent of the retail price and so these middlemen were causing the price to be too high. Taslim asked whether any of the middlemen was unnecessary or what are the opportunity costs or why others are not coming when high profits are there. As 'many of such questions were not asked, let alone answered,' wrong policy measures become unavoidable.
While Taslim believes in market economy, as reflected in his book, he has at the same time concern on disparity. That's why he questioned misguided eviction move by the government. In one place he writes: "A pottery vendor who occupied not more than 5-metre stretch at the edge of a footpath (next to an expensive hospital) was evicted. But little was done about the hospital which has turned about 100 metre stretch of both footpaths and roads into a private parking lot."
In the book, Taslim also goes on monetary policy, international trade, budget, black money and investment issues. There are some printing errors. But the language is lucid. The analysis is clear. The logics are well-presented. So, it becomes a pleasant reading indeed. Though the author says that the book is mainly for policymakers and non-economists, the economists should also have a look while students of economics can find it quite useful. Moreover, amateur economists or analysts should read the book before making their opinion on economic issues in public.
The writer is a journalist. Email: email@example.com