It’s all informal.

I see there are many Jamaicans who are now waking up to the fact that we don’t need government to run our businesses (we’ll call those who work without need for government part of the informal sector).

Beast of No Nation

There is much talk about the informal sector of the Jamaica economy. This ‘informal’ sector is usually spoken of in a derisive manner as it exists in a grey area that is free from taxes and government regulations. Thus, it seen as parasitic, disorganized, inefficient, and even dangerous by both privately employed and government technocrats. You know, the type that likes to say “stakeholders”, “ICT”, “paradigm shift”, and other such vacuous buzzwords.

Most of the solutions to the “problem” of the informal sector consists of having them register with government to become legitimate. The problem with this solution is that, if it made sense to register a business in Jamaica, there would be no informal sector. The sad fact is, only the most masochistic of our citizens actively choose to interact in anyway with Jamaican government, and when a citizen (inevitably) does deal with the government, he inevitable finds the…

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About RightFromYaad

A view from "the Right", as a source of ideas to create a new vision of freedom and what it promises for Jamaicans, to counter the tyranny of the status quo of Jamaica's reality since 1962. Website: RightFromYaad.wordpress.com Email: rightfromyaad@gmail.com Twitter : @rightfromyaad Facebook: https://www.facebook.com/pages/Right-From-Yaad/244886608978438?ref=ts&fref=ts
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3 Responses to It’s all informal.

  1. satanforce says:

    The results of letting the private sector play government? Dangerously overcrowded buses, an underperforming private school system, a security guard industry that treats its dogs better than its employees, among other failures.

    Wouldn’t this go against the expectations of libertarian economics? Or is there some room for small government, perhaps an efficient Prussian style bureaucracy?

  2. Not at all. There is a need for government. A government is necessary for Justice, through establishing courts of law; protection of individual rights, protect property…etc. If govt can’t do it, let the individual be allowed to protect his life, family and property. The right to bear arms should be a fundamental human right (sorry for the digression).

    Interesting examples you have put out there. The private sector is playing govt right now, because the govt is in bed with the private sector….it’s called crony capitalism/corporatism. Thru this perverse relationship, the govt limits competition and protects companies…we the consumer suffer….Look at Digicel’s competition with the LIME/C&W/BMobile as a classic example of competition benefiting the consumer.

    You bring up overcrowded buses….Overcrowded buses have arisen through government’s limitation of who is granted a transport license. During the 1990s the NTSC was given an almost exclusive monopoly license to operate in Kingston. So with govt privileges there existed a monopoly and a shortage of buses was the result, because of lack of competition…The govt then created the JUTC to take over the bus operations and removed the license from the NTSC…again no one else is allowed to compete with government on the bus routes (apart from robot taxis).

    The govt thru the issue of a license limits who can operate buses on the road. We could put a huge dent in traffic congestion and overcrowding in short order by removing restrictions on who is allowed a license to run a taxi or a bus. Why not simply have a easy registration process if you want to operate a taxi or bus?…..Why does one need an operator’s license (i am not referring to a driver’s license now) and a red plate granted by govt?

    An underperforming private school system? Do you live in Jamaica? Have you been in Jamaica at anytime over the past 40 years? Private schools at the primary level far outperform govt primary schools with a handful of exeptions (Dunrobin, Windward Road, St. Richard’s). The vast majority are poor. Govt administered high school are abysmal when compared to traditional highschools. Govt institutions (Holy Trinity, Tivoli, Tacky, Aabuthnott Gallimore) are far worse that high schools run by the church (Holy Childhood, KC, George’s, Campion) or private trusts (Munro, Cornwall, St. Jago, Mannings’). This was a poor example to choose as a possible outcome of the private sector running schools.

    What ill treatment is meted out to security guards? Please be specific. Are persons employed to security firms forced to work for them? They applied for a job knowing salaries and working conditions….Most security are watchmen/women who sit and do nothing for most of the day. What is the ill treatment? Please be specific.

    As for the private sector running the govt…I think they are in bed with govt. The govt should allow more competition, through free trade and free markets. Interestingly govt has made it extremely difficult for new indigenous businesses to start up to give competition to established institutions, through govt fees, regulations and red tape. Our govt has done a piss poor job of running the economy over the past 4 decades…maybe it’s time to give the market a chance to do it.
    -Kavon

  3. satanforce says:

    My post was mainly concerned with rent-seekers that have come into the Jamaican economy during the last 20 or so years. They operate in areas of the economy which require high fixed costs in order to effectively deliver a proper service. Fixed costs like these can be afforded through trusts, government subsidies or bank loans, but these are generally not made available to them , thus they deliver an inferior service compared to their more established peers.

    This was a poor example to choose as a possible outcome of the private sector running schools.

    The last 15 or so years has seen an explosion of secondary and post-secondary schools that cater mainly to students that performed poorly on their terminal exams (the Quality Academics, the Huttons), as well as sixth formers that cannot find spaces due to the government’s (and private school’s) failure to keep up with expanding population. The students that attend these schools require small class sizes, special teachers, guidance counselors, and other facilities for students that have special needs whether they be psychological, emotional, or behavioral. Not only these schools not provide these services, they actually provide a poorer service. To lower their average costs, they pack students into classrooms, 40 to 60 at a time, have little to no counseling services, never mind that students pay at cost, no subsidies from trusts or the Ministry of Education, no textbook rentals (private, or as they are called here, traditional schools , get these too.)

    The govt then created the JUTC to take over the bus operations and removed the license from the NTSC…again no one else is allowed to compete with government on the bus routes (apart from robot taxis).

    There are various minibuses (Coaster buses) that are licensed by government that ply the 32, 21, 31, and 42 routes – all very profitable routes. They tend to piss of passengers during the late morning/afternoon (Never mind that during the mornings, they frequently violate the 29 seat limit by having passengers stand in the aisles instead of sit on the fold out seats) by trying their best to fill the bus to capacity, even if it means staying at a bus stop for upwards of 20 to 30 minutes. The larger JUTC buses do not do this, and as a result they have been eating into their profits. This has created a sort of positive feedback loop, where the more the JUTC buses eat into their profits, the longer and more often the buses wait at the stops. . In fact the same type of feedback can be said to apply to high schools, where the traditional schools receive the best primary level students, and thus produce the best secondary students, thus reducing the need much teacher input.

    What ill treatment is meted out to security guards? Please be specific. Are persons employed to security firms forced to work for them? They applied for a job knowing salaries and working conditions….Most security are watchmen/women who sit and do nothing for most of the day. What is the ill treatment? Please be specific.

    See below.

    http://www.jamaicaobserver.com/news/Trade-unionists-say-security-dogs-better-treated-than-guards_7957465
    http://jamaica-gleaner.com/gleaner/20110204/news/news3.html
    http://www.jamaicaobserver.com/news/Unions-move-to-represent-security-guards

    Don’t forget, asymmetric information does exist in labour markets.

    The fact is, most of these businesses are going into areas that have high fixed/capital costs and require some level of sophistication in order to perform properly. So instead of these diploma mills, lets have a private sector body that sets an actual educational framework, a police force or private intelligence service that can actually perform long term , deep undercover investigations, and a transport service that can actually schedule and supply buses properly.

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