I was reading an article from the Singapore Financial newspaper “The Business Times” and was amused (but frightened) when I read about the Malaysian government’s recent reduction in the price of petrol (gasoline) this month of 5.6%. Why was I amused/frightened?
A Little Background
Apparently, due to rapidly rising oil prices, the government increased petrol prices 41% in June (wow huh). And just so you know, the government regulates this market as the major producer in Malaysia is Petronas (maybe you’ve seen the two spiraling towers in Kuala Lampur – the Petronas Towers, among the tallest buildings on earth? Yes they were built with nationalized oil wealth.
Anyway, back to the story. After the 41% increase, they decreased prices in August and now again in September. The problem is, and what made me laugh was that the people rioted after the price increase in June. It also made me frightened because we have many horribly ill-informed people here in the USA who would love the government to control our oil market. But Malaysia shows us a major problem with this and the problem with ALL of socialism:
When the government and not the market sets the prices, you always have more opportunity for corruption and more temptation for the government to curry popular favor but doing something inefficient and irrational. It also can lead to people rioting I suppose!
The other side effect, which I have written about before, is how socialism turns the population into a bunch of dependent leaches who cry when they don’t get a handout. Look at our credit/mortgage mess now. With the proposed ‘rescue” plan, many average people feel that Wall Street companies are getting bailed out while they suffer. I am not going to get into whether that plan would work, but because the government is in charge of reallocating capital here, people will whine and complain because they are not getting “theirs.” And this is simply a horrible attitude. We have developed this over the years as the government, in one way or another, bailed out or handed out to anyone and everyone that might suffer.
And this is why I was most frightened – I see a bit of US in the Malaysian problem and I hope we don’t go there. I suppose lack of education of free markets, economic self-determination and being thrifty to boot hurts us all. Most of us get our financial education from newspapers (english majors writing about finance) and TV and of course TV and newspapers only show the end result – the end result of greed, of mismanagement and even of success. They rarely show the hard work (or real causes) – which of course makes for a boring story. The answer to many of our problems is hard work and thrift – two concepts that don’t get much attention or respect recently.
I’d like to see fewer crybabies, more hard work, and more people from top to bottom of this economy take some personal responsiblity for the problems they have caused.I can dream can’t I?
Chris Grande
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