Capitalism cannot exist where there is socialist thinking

Aug 29, 2017 Features / Columnists, Peeping Tom

Guyanese had a taste of socialism. It was a bitter taste, but some people still pretend that it was sweet.
The Declaration of Sophia marked the beginning of the worst political experiment in the entire Western Hemisphere. It reduced an already poor nation to a nation of paupers. Persons who were never accustomed to drinking sugar water for tea were forced to do so.
Those who initiated that crazy experiment of cooperative socialism did not appreciate the impact of European hegemony on our society. The values which emerged during the long period of Dutch and English rule had conditioned Guyanese into accepting a different kind of outlook on life.
Guyanese do not want everyone to be equal. Guyanese have been nurtured to believe that inequality motivates people to do better. European hegemony had conditioned Guyanese to reject State control and to accept private enterprise. Any attempt at socialism was therefore bound to fail, because it was not part of the people’s value systems. The leaders of Guyana were socialist, not the people. People wanted to be rich, not equal.
Socialism has had a negative impact. It has created confusion in the minds of Guyanese. They want money, but yet they view those with money with envy. Socialism has caused persons to be envious of those who do well, so much so that today when some see others doing well, they accuse them of doing underhand business.
Socialism has also poisoned economic thinking, by encouraging greater pressures on the propertied class. Yet, it is this very class which is expected to create wealth. How can the private sector create wealth when there is this bias against them, both in the minds of the underperformers in society and within official policy?
If you have money or people believe that you have money, there are many people in this country who want to speculate on how you got your money. Some of them also want to tell you how to spend your own money. But what is even more sickening is official policy towards the rich. Instead of encouraging the creation of wealth, official policy is to try to place greater pressures on the rich.
Take, for example, capital gains tax. This tax should be struck off the books. Why should persons be taxed because they are making a profit on a transaction? If Guyana wants to develop a capitalist country, then you cannot be having taxes which effectively penalize persons for making profits. Such a tax can cause under-the-table transactions which take place to avoid paying those heavy taxes.
We are placing taxes on profit-making when we should be giving a discount on those taxes for reinvestment purposes. Unless tax rebates are given for reinvestment, people will continue to ship their money out of the country. The lack of reinvestment concessions encourages capital flight.
Then there is municipal policy. The most overtaxed is the business community. Businesses pay an average of ten times more rates and taxes per year than what is paid by residential properties. This adds to the pressures on the business community.
The situation would not have been as bad if in return for these progressive taxes, greater efforts were made to curb unfair competition. For every store on Regent Street and on Water Street south of Robb Street, there are three vendors. You have more persons selling outside of the stores than you have stores. Do these persons pay their fair share of taxes? Do they have to pay overheads, staff and for licenses, No, they do not. Yet, they are crippling the retail market.
The vendors also generate a tremendous amount of garbage. It took one mayor an eternity to recognize how much garbage was generated by vendors, but this did not stop that Mayor from still seeing the problem of vending as a ‘complex’ one.
The latest blow to the business community is that they are being burdened with a special tax for garbage collection. No one has questioned whether the Minister of Communities has approved of this heavy fee for garbage collection. It reflects socialist thinking – pressure the business class because they generate more garbage. Do they?
Guyana has to decide whether it wants socialism or capitalism. It cannot have both. If it wants an open market system where you can buy what you want and not have to wait on Knowledge Sharing Institutes to sell you a pound of sugar, then there is need to rethink the whole approach to private sector development.
The private sector must pay their fair share of taxes, but they must not be crucified with excessive taxes. Unfair competition provided by vendors must be discontinued. And the tax system must encourage the making of money and its reinvestment. Otherwise, the profits will continue to be exported overseas, legally, and it will end up building America, Canada and England, rather than Guyana.

1 thoughts on “Capitalism cannot exist where there is socialist thinking”

Kassem_B August 29, 2017 at 5:36 am

‘Capitalism cannot exist where there is socialist thinking’
The reverse is true.
We live in a capitalist world
There are different level from extreme rabid capitalism to capitalism with a human face
We are yet to find a State with socialist thinking and practice that the leaders of capitalism do not want to wipe out and continue to do so.