Survival of the fittest
Jun 10, 2017 , http://www.kaieteurnewsonline....ival-of-the-fittest/
Capitalism is the law of the jungle. Some have to go under so that others may live.
The free market system in its purest form is about survival of the fittest.
Only those who can compete successfully will survive. The rest will have to fall by the wayside.
The falling by the wayside is all part of the self-regulating side of capitalism. Those who cannot compete simply have to go out of business.
Guyana is not a perfect free market system. This is why you have had so many businesses which have for years been suffering losses are yet able to keep their doors open. Even those that cannot cover their fixed costs stay open. The business in Guyana is losing money, but the storeowner does not shed staff to cut costs. He stays open and hopes for the best.
You walk down Regent Street and go into some markets and you will find some businesses which do not get a single sale on some days. The staff and the owners are sitting there watching the world go by. But they are not shutting shop.
This is bad for the free market. It amounts to a misallocation of resources. Resources are being left to go idle and unproductive. A country cannot develop this way when businesses refuse to shut shop, even when they are not doing any business.
You will not find that in other countries. Sales drop and immediately workers are laid off. Businesses do not cut corners in other countries. When things begin to dip, the owners fold up and walk away. They move on to other things.
We have some dreamers in Guyana. They are always dreaming of a pot of gold. They believe that one day they will hit the jackpot. There are a great many vendors, for example, who spent hundreds of thousands of dollars to build their stalls. They are not making any money but they are opening all year long, year after year, hoping that their fortunes will change. All the while, they are losing money.
There are many such businesses in Guyana. They are not covering their expenses. They are running low on cash flow, but they are borrowing just to stay open so that their owners can pretend that they are business people.
They have to wake up and smell the coffee. The reality is that if you cannot compete you have to go. The free market is about business rising and business dying. If that is happening, then something is wrong.
The government is trying to make the business community in Guyana understand that governments are not there to bail anybody out. The role of government is to regulate the market and to promote development of the country.
All of those people who were looking for government to help them do what they cannot do on their own, will have to look elsewhere. They have to wake up and smell the VAT.
The VAT is the vampire at their throats. If they cannot survive in the free market, they will be sucked dry. They will have to fall by the wayside.
Guyanese businesses have to become competitive. If you cannot compete on a level playing field, then you have to fall by the wayside.
We have far too many businesses in Guyana. Some will have to go because they cannot compete.
The free market has to operate like a free market â free from government support.
Of course some businesses that are dying are highly profitable. A great many members of the business class in Guyana export their profits. They do not work for the development of Guyana. They work to sustain a lifestyle for themselves and families overseas. They borrow from the bank, ship some of the capital to buy properties overseas and use the rest to make a dollar in Guyana. The profits are not reinvested. They are sent overseas.
After a while, the debts pile up. The banks refuse saving. It has to go under if the market system is to be made less imperfect.
