Price Controls are an Invasion of Privacy!

Published on 6th November 2007

At a recent chamber of commerce forum for urban and rural businesspersons, a veteran of Zimbabwe's armed struggle whose business is one in thousands that are reeling from the Government's vindictive price control laws paused an interesting question: where does the Government derive the right to come to my shop, tell me what to charge and even, where I refuse to comply, confiscate my goods?

Leon Louw of the Free Market Foundation has advanced many theories that can be interpreted as citizens have a right to resist bad laws that are unjust, or are seen to violate civic liberties. This should come as a tonic for Zimbabwe National Chamber of Commerce (ZNCC) whose mandate is to promote the interests of business, rather than being popular as a bastion of submissive compliance to laws that destroy their members' corporate well being.

While Zimbabwean policy makers argue that price controls are international practice, pollution, depletion of ozone layer and domestic violence are also global phenomenon, but that does not make them right.  In Zimbabwe, price regulation has been 'legitimised' via a series of contestable pieces of legislation that hitherto no one in the ZNCC has bothered to challenge in the courts. Just because a commission has been 'appointed' through some presidential decree does not insulate it from rebuke. The implementing arm of price controls emerged out of a protocol signed under the Tripartite Negotiating Forum (TNF) early in this decade. Originally, this regulation was meant to cushion 'poor people from market forces that tend to drive prices up' of what the Government terms 'basic staple goods'. This is not surprising, given that the dominant players in the TNF are labour and government. I mention the term 'implementing arm' in a context of the 'price and incomes stabilization protocol', rather than the institution that we now know as the National Incomes and Pricing Commission (NIPC). Yet the prices are now nowhere near where even a reasonably wealthy person can afford.

Laws cannot be made to protect one section of the society only, because they will invariably violate rights of another. Zimbabwe is generally a haven of repugnant laws. Businesspersons in Harare's Chamber of Commerce have questioned why fiscal and monetary policies always come with a menu of punitive compliance clauses and threats of retribution. But most laws, including our National Constitution that has been amended a record eighteen times, are subject of vibrant contestations. Why is it so?

When the Government, perhaps through the Presidential Powers Act, or as a result of some politically motivated populist public pronouncement, incites a law that controls the way citizens relate to each other in a shop,  it becomes unconstitutional. What actually vindicates my point is that the Government imposed on itself an obligation to supply electricity, water and fuel. They then, to reinforce the partisan patronage of typical populist African governments, subsidize or control the prices of these goods and services. In no time, the country experiences widespread shortages because what the Government charge pays little regard to replacement value, since it is below cost. At one time, the 'official' petrol price was cheaper than a soft drink. Having failed to supply these 'public goods', Government then requests private companies, in the case of fuel, to supply but at 'government rates'. Those who do not comply are arrested, charged, jailed and their licences revoked.

This heavy-handedness has no place in a country where rulers claim to abide by and respect human rights and rule of law. Besides, who 'arrests, charges, jails and revokes licences' of Zimbabwe Government when they, as they have, fail to provide services which they actually are constitutionally and legally mandated to supply?  Do you not think that when electricity and water fails in homes, hospitals, universities and industry this actually amounts to criminal negligence?  Meanwhile, grown men actually sit and get paid in the NIPC for deliberating over the selling price of a loaf of bread while the Kariba Hydro-electric Power Station collapses!

The question therefore lingers: am I under any obligation to respect a bad law? At its last national conference, the ZNCC had an answer: comply first, and then argue later. Bad option. The negative impact of price controls has been so swift that very few of ZNCC members actually lived long enough to have their day in court. But then when a government has a record of blatant disregard of court judgments, what hope is there that the Chamber can succeed in defending its members' rights? The answer lies in its mandate.   If the Chamber [claims to] has a constituency, they can only use their critical mass to leverage their anti-price control position. In local Shona language, we say 'kusi kufa ndekupi' (either way we die).

In a contest between political survival and business survival, business should prevail. The rational behind this adventurous argument is simple - not everyone is a voter, but everyone is a consumer. As it is, the forces of demand and supply have prevailed over senseless policies, why, because there is no amount of propaganda that can mend a broken supply chain. The conclusion to this piece is three fold: price controls are an invasion of my privacy that I have with my shopkeeper and violate my constitutional right to choose. NIPC is therefore an illegitimate way of managing the market, because it not only results in large-scale deprivation of goods and services, but those (poor souls) meant to benefit from it are the biggest casualties. It must therefore be dissolved immediately.


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