General T&T, Oil and Gas, PNM

The Tricky Ways of Democracy

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By Dr Selwyn R. Cudjoe
September 11, 2018

“Democracy will never be supplanted by a republic of experts.”
—Thomas Piketty, Capitalism in the Twenty-First Century

Dr. Selwyn R. CudjoeI want to compliment Dr. Keith Rowley for the informative and well-argued address he made to the nation on Sunday about his government’s intention to get rid of the refinery operations of PetroTrin. One may not agree with everything he said or the conclusions he arrived at, but it was courageous of him to share his thinking with the nation.

Dr. Rowley’s decision reminded me of Domingo de Vera’s lamentation when he heard that Anthony de Berrio, a Spanish governor of Trinidad (1580-1597), had committed the unpardonable act of slaughtering many horses in the middle of the unknown. “There is this about the great actions of living men: they are calumnied by many, praised by few and rewarded by no one” (V. S. Naipaul, The Loss of El Dorado). I hope the latter outcome is not Dr. Rowley’s fate.

Listening to Dr. Rowley, few could come to any other conclusion but that something has to be done to solve the deteriorating situation at PetroTrin. What he didn’t tell us is that much of the “Petrotrin mess” occurred “between 2005 and 2009 under the Patrick Manning government.” (Varnus James, Express, September 6). Although Dr. Rowley’s action seemed logical, I couldn’t help but think of Dr. Eric Williams’ decision to scrap the railway in 1968 because, in his estimation, it was not economically feasible to retain. I am not sure that many people today accept “the wisdom” of his decision.

The most glaring omission in Dr. Rowley’s address was the absence of any humanist, historian, or sociologist in the many committees upon which the government relied to make its decision. It was as though economists and accountants are the only ones who are capable of evaluating these important aspects of national life.

The oil industry started in La Brea in 1857. However, in treating the production of oil as only an economic activity, Dr. Rowley failed to acknowledge the importance of this industry to our national development. It did not only provide dollars and cents for our citizens. It fashioned our people’s lives enormously.

While the advice of Dodderidge Alleyne and Euric Bobb, “two of our most distinguished sons of this nation” (“Reinventing Petrotrin”), was important and that of the members of Selwyn Lashley’s Committee (Helen Drayton, Chandrabhand Sharma, Robert Riley, Wilfred Espinet, Gregory Marchan, David Abdulah—primarily accountants and economists), was just as important, none of these committees consisted of “distinguished sons and daughters” who excelled in other fields of human endeavor.

This is not to suggest that we should not rely on expert analysis when we make these decisions, but we tend to forget that economics does not deal only with “the allocation of scarce resources.” It also involves the social relations among people and how we distribute the fruits of our labor. After all, a gallon of gas does not, in and of itself, determine its price. It is people, taking into account all the economic and social factors, who decide its price.

The abandonment of an important social good such as Petrotrin cannot be left to the narrow expertise of economists and accountants alone. Today, the government has to convince a weary public about the perspicacity of a decision that was made primarily by those experts.

Thomas Piketty analyzed global inequality in his book Capitalism in the Twenty-First Century. He argued, “It would be a mistake to underestimate the importance of the intuitive knowledge that everyone acquires about contemporary wealth and income levels even in the absence of any theoretical framework or statistical analysis…Indeed, the novels of Jane Austen and Honore de Balzac paint striking portraits of the distribution of wealth in Britain and France between 1790 and 1830.”

When committees are established to make decisions about our national patrimony, it cannot be left exclusively to economists and accountants to decide even though they consider the human implications of their decision-making. Although the government argues that it works in our best interests, it always finds ways to withhold information that is necessary for citizens to make rational decisions about what our government is getting us into.

It is always government knows it all (possesses superior wisdom), knows what’s best for us (assumes a paternal attitude), and demands we leave it to the experts (a form of autocracy). The government has concluded certain arrangements with Venezuela and is working to establish a Sandals resort, yet certain details of those arrangements are too secret for the public to know. Piketty warned: “Democracy will never be supplanted by a republic of experts—and that is a very good thing.”

The public is asked to accept the decision of these experts as the cumulative wisdom of those in charge. When we remember that many of our leaders didn’t know what the Mahabharata is or its importance in the lives of 30 percent of our population, it should give us pause to think and ask, How readily should we accede to the wisdom of those who are placed in charge of making decisions that affect our nation?

There will always be trade-offs when we make momentous decisions about our future. Allowing people/scholars from varied disciplines and experiences to participate in such decision-making always guarantee better outcomes.

12 thoughts on “The Tricky Ways of Democracy”

  1. Mr Rowley may be on a leadership pathway, not seen since the early days of Dr Williams tenure. He may also be the first leader to break down the ills of what Petrotrin have been going through all these years. The workers will pay a political price, so great, it will reverberate throughout San fernando and the entire South. There is nothing Tricky about Democracy, it was never intended for the majority to have or to know the inner happenings of decision making, the ability to vote + partisanism, is what masquerades as Democracy, where in the world is Democracy found Dr Cujoe?. Power is concentrated, both in the Streets and Suites, the problem is that, there will be hardly any sympathetic voices coming from the Party that is in control of National decision making, where is the trade off? in any political and economical crisis, who feels the full brunt? the Workers . The Gov’ts decision to close some aspects of Petrtrin, was the advice of the IMF/World bank and lending agencies, all direct accompli of Globalization, the dynamics are very troubling as developments continue to unfold, both for us in Trinidad and the World. Sometimes, Dr Rowley seems to have to walk back on some statements of the past, at first, he took a strong personal stance on decriminalizing Marijuana, only to be confronted by a conscious group of Nationals, where he accepted a letter, while softening his stance. Today, the Prime Ministers observation of what the deadliest of all Drug can do to homes, on the job, on the roads and in every day life, must be applauded. Men of integrity are not Saints, they are the ones who have learnt from their mis-takes.

  2. Points made by Selwyn Cudjoe in his very interesting article

    • The team that made the decisions did not include any “humanist, historian or sociologist” and that economics “also involves the social relations among people and how we distribute the fruits of our labor”.
    • Thomas Piketty points out that “Democracy will never be supplanted by a republic of experts—and that is a very good thing.”
    • “Allowing people/scholars from varied disciplines and experiences to participate in such decision-making always guarantee better outcomes”

    There are some contradictions in Cudjoe’s article which should be pointed out. Firstly Piketty’s book was primarily an analysis of inequality in which he claimed that when the return on capital (r) was greater than that of economic growth (g) inequality would result. His thesis was essentially an economic one relating return on capital to economic growth. His use of Balzac and Jane Austen was to point out the social structure that existed at that time. Piketty’s analysis was therefore an economic theory not a humanist, historical or sociological one. Piketty’s solution was government intervention through progressive taxation. We in T&T don’t even have property tax.
    Secondly, Cudjoe advises that people/scholars form varied disciplines and experiences should participate in decision-making. Not a bad piece of advice, but those people/scholars – are they the man in the street or also experts in their field. In other words is Cudjoe asking that economic “experts” be augmented by experts in the field of history, sociology, etc? Wouldn’t they just be another kind of expert?
    Finally, in terms of the connection between democracy and inequality, Piketty wonders why democracy doesn’t dismantle inequality and he conjectures in his lecture “Brahmin Left and Merchant Right” that traditional parties of the left “no longer represent the working and lower middle classes”. In other words they have become elitist. Our situation in T&T is perhaps more complicated than that.

  3. “Although the government argues that it works in our best interests, it always finds ways to withhold information that is necessary for citizens to make rational decisions about what our government is getting us into.“

    Post colonial governments tend to develop a life of its own. The most serious challenge is accountability and openness in their decisions. Long after they have passed on the public is left with the bill sometimes billions wasted as was the case of the Malcolm Jones led Petrotrin board.

    Secrecy and lack of accountability is the two fang monster destroying post colonial nation’s economy. Sandals comes to mind.
    Extra from CNN financial news “Burgis, a former correspondent in Lagos and Johannesburg, finds a wide variety of kleptocrats and rackets over his travels through dozens of resource-rich countries. But a common thread is that the wholesale expropriation of resources during colonial times has barely slowed through the post-independence era, albeit with new beneficiaries.
    “Western governments are not supposed to wield commercial and political power at the same time, and certainly not to use one to benefit the other,” says Burgis. “In colonial states…The British or Portugese would cultivate a small group of local people who would fuse political and commercial power to control the economy.”
    “When the foreign power leaves, you are left with an elite that has no division between political and commercial power. The only source of wealth is mines or oilfields, and that is a recipe for ultra-corrupt states. Somewhere like Nigeria, an ‘extractor elite’…wanted to draw to itself the rent that oil and mining resources generate”

    We see tha bourgeois class controlling the wealth as Burgis states in his correspondence. The danger as he states is the marriage of politics and commercial power. The interest of the national good can easily be overlooked in this marriage, where huge contracts and controlling interest is place in the hands of the political party controllers.

    Burgis further states “ The ability of governments to rely on resource revenue leads to corruption and oppression, Burgis argues, as they are not accountable to their people through a social contract based on taxation and representation.
    He cites Angola, which earns almost half of its GDP from oil, as an example of government as “a service for the elite.” A 2011 IMF audit revealed that $32 billion disappeared from official accounts between 2007 and 2010, a quarter of the state’s income.
    The Angolan elite rejects accountability and does not tolerate any challenge from the public, Burgis adds, recalling the recent case of activists being jailed for a public reading of a pro-democracy book.
    “Government can behave that way if it doesn’t need the consent of its people,” the author says.“

    American democracy was based on the idea as Lincoln stated “for the people by the people”. Today that is lost in the separation of powers from the public good to the elitist, who carries economy power and is accountable to no one. Yes the 1% behind the scenes are the chief puppet masters pulling the political strings.

  4. Quoting principles from books can be easily done but learning from practical experiences as to how these are applied in the local context and having the necessary qualifications makes one effective as to their good or bad intent. Petrotrin refinery from an economic standpoint is untenable to sustain further and needs to go, to the layman why now? Many public sector companies love to look at the bottom line only but always tend to negate preventative maintenance in their budget allocations, compare that to a private sector company that want to prolong the life of its machinery on the understanding of the 10% annual depreciation in value anyway.

    In this case the bottom line is dollars and cents, the economists and accountants being experts. I remember one instance when Frank Rampersad in a Board meeting at Caroni taking a swipe at these experts and said, ‘do not bring any plans (distillery) to me if there is not a minimum of 10% – 15% internal rate of return for the proposal’. What did the so-called experts do, they literally inflated projected sales to meet that goal. You should guess what happened in the next meeting- mankind faces (Maingot, Donawa, Wotherspoon etc.) changed colour when he (Frank) literally blazed their ‘behinds’ as to what’s your marketing strategy, justify those projected figures, give me a time frame for those achievements etc. etc. The long and short is do not mess with the man who prepared so much budget speeches for PM Williams in the past, he (Frank) knew his onions.

    Rampersad, Farrell, Alleyne, Bobb, etc. are all brilliant in their own way and in transition from colonial to independent T&T it was not easy. In the fray Williams was also not an easy person to work for because people like O’Halloran etc. was kept close to him for reasons know to him only (keep in mind the cement plant in Panama). Saith, Julien, Imbert and other technocrats at UWI were also given the opportunity to spearhead diversification basically petrochemicals for the island. The public for the most times was kept at bay and that for me is the basis for the elitists seeding the acts of corruption. In my limited view based on personal experience these technocrats would present their proposals identifying the acquiring of the technology, capital, costs outlay, etc. which were put forward but had inflated costs very well disguised. With petrodollars flowing at the time like oil from a pipeline fueled such as well.

    Secrecy was always in the game plan practiced by all colonials and post independent T&T. The locals always had their debates in their respective enclaves e.g., the barber shop and amazingly was very good in forecasting results and consequences. I believe the black power uprising in 1970 and the Muslimeen insurrection in 1990 were similar in their fomenting and gelling.

    Democracy at work inviting for e.g., sociologists, historians, etc. may seem the way to go as you would do for establishing an impact statement in environmental management systems. However, in the Trinidad context you would literally be inviting unjust distribution of land resource, racism and inequality, indentureship and slavery, etc.to the table which would delay that important and realistic collective decision that the refinery must go. At the end of the day the politicians and the economists are the ones that will control our destiny in finding alternatives to the refinery closure. Did the same happened for Caroni (1975) Ltd?

  5. To elucidate and make clearer what I said. Selwyn Cudjoe is arguing in his article that the Petrotrin restructuring was left to economic experts to decide what to do and that as a society we should not leave this decision up to experts since (and he quotes Thomas Piketty) “democracy will never be supplanted by a republic of experts” and moreover (quoting Piketty again) “It would be a mistake to underestimate the importance of intuitive knowledge that everyone acquires about contemporary wealth and income levels even in the absence of any theoretical framework or statistical analysis”. I am saying that Cudjoe misrepresents what Piketty is saying by de-contextualizing his quotations and attempts to lend the authority of Piketty’s status as one of the foremost contemporary economic theorist to his (Cudjoe’s) claims about experts and economic decisions.
    So what is Piketty saying? Piketty’s thesis about inequality must be put in the context of the struggle to dominate economic decision making by political parties on the right and political parties on the left. The economics of the right has been that of tax cuts, supply side and trickle-down economics. Piketty ideas are a countering of that type of economics which is what has made him such an icon to the left, some claiming that he is the greatest economist since Karl Marx. The trickle-down economics had claimed that tax cuts would generate government revenue and that tax cuts to the wealthy would result in investment in the productive capacity hence growth would occur and the benefits would trickle down. Piketty’s work was based on the idea that if return on capital was greater than growth, then the wealthy would have no incentive to invest in the productive sector. They would simply hoard their wealth and the result would be growing inequality. Government revenue would not increase either so there would be the call for cutting social spending to balance the deficit caused by the tax cuts. To solve this problem, Piketty calls for increasing taxes in a progressive way so that very rich, the 1% or 10% if you like, pay very high taxes sometimes as much as 75% of income.
    When Piketty asks why democracy hasn’t dealt with inequality, (the 99% hasn’t dealt with the 1%), he comes up with the idea that money has so infiltrated the political system that even political parties on the left who were supposed to represent the working class and middle class have been taken over by big financial supporters. The parties on the right have always represented the wealthy. So Piketty is speaking about two separate areas, the economic and the political. He has produced an economic theory that justifies the economics of the left, but the political sphere has become corrupted and operates not like a democracy but more as an oligarchy. His comments about democracy are designed to address the political shortcomings; his economic theory is designed to address the economic problems. So let us not mix them up. If you are physically sick you would want to see a medical doctor, the very best one, if you have an economic problem you would want to consult an expert in economics. It is common sense.

  7. This plan by the Opposition should not be taken lightly.

    In­sist­ing that the Petrotrin re­fin­ery can be saved, Op­po­si­tion Leader Kam­la Per­sad-Bisses­sar has out­lined a 24-month plan which she be­lieves can save thou­sands of jobs at state-owned Petrotrin.
    Speak­ing at the UNC’s Mon­day Night Fo­rum in Clax­ton Bay on Mon­day, Per­sad-Bisses­sar said she plans to share her plans with the Oil­field Work­ers’ Trade Union.
    “I want to tell the union up front, the work­ers, that you have to make sac­ri­fices to save your jobs. Don’t ex­pect the rest of the coun­try, who al­so see­ing trou­ble be­cause of this in­com­pe­tent Row­ley, to bail you out. Stand up, man up and ac­cept some re­spon­si­bil­i­ty to save your own jobs,” she said.
    Blam­ing the board of late Petrotrin chair­man Mal­colm Jones and a for­mer PNM Cab­i­net for the com­pa­ny’s mis­for­tune, Per­sad-Bisses­sar pro­posed a 24-month plan, which in­cludes the sourc­ing of cheap­er sup­plies of crude.
    “Per­sons in Petrotrin were not look­ing for best prices on crude. What they were do­ing is that they had their pre­ferred sup­pli­ers and were not price shop­ping. We must al­so source high­er prices for re­fined prod­ucts. Petrotrin needs to have di­rect mar­ket­ing for our prod­ucts in or­der to max­imise prof­its. We should al­so ne­go­ti­ate with Sam­sung to get the ULSD plant work­ing,” she said.
    She added that her vi­sion was to train, ed­u­cate and pre­pare our cit­i­zens for high pay­ing jobs in in­dus­try and for the dig­i­tal econ­o­my.
    As part of the im­me­di­ate plan, she said all over­time should be cur­tailed for this 24-month pe­ri­od.
    “The work­ers must un­der­stand this over­time can­not con­tin­ue. We must re­duce and rene­go­ti­ate ben­e­fits for this 24-month pe­ri­od. We must al­so re­duce or sus­pend va­ca­tion leave dur­ing this pe­ri­od, set prop­er as­sess­ment and per­for­mance tar­gets for each em­ploy­ee and up­dat­ed terms of em­ploy­ment where­by em­ploy­ees have to and must be ac­count­able for poor per­for­mance,” she added.
    She al­so told Petrotrin work­ers that poor per­for­mance will not be ac­cept­able.
    “Let’s be re­al, some of these guys get away with very poor per­for­mance and keep their jobs. So don’t ex­pect me to try to help you keep your job and ex­pect to con­tin­ue with that be­hav­iour,” Per­sad-Biss­esasar said.
    She al­so not­ed that there was se­vere price goug­ing by safe­ty sup­pli­ers, ser­vice sup­pli­ers and goods sup­pli­ers for prod­ucts and ser­vices in the re­fin­ery.
    “It cost $300 to in­spect a T ve­hi­cle in the gov­ern­ment li­cens­ing of­fice but up to $4,000 by some in­spec­tors in Petrotrin. Sec­ond­ly, it takes half a day some­times be­fore any­one can start work­ing. Third­ly, mas­sive over­charg­ing for goods and ser­vices. These con­trac­tors, sup­pli­ers, safe­ty firms must come to the ta­ble and the rot­ten ones purged from the com­pa­ny,” she said.
    She al­so called for a new open mar­ket ten­der­ing that was trans­par­ent.
    “The pre-qual­i­fi­ca­tion sys­tem is rigged to ex­clude com­pe­ti­tion and favour pre­ferred sup­pli­ers. The union must ac­cept that some of its own mem­bers are in­volved in this and must as­sist to root them out. You can’t have prop­er ten­der­ing if the pre-qual­i­fi­ca­tion is rigged. We have many oth­er more de­tailed pro­pos­als but we are pos­i­tive we can low­er over­heads and op­er­a­tion, main­te­nance cost, em­ploy­ee cost and turn a healthy prof­it,” she told sup­port­ers.
    Per­sad-Bisses­sar al­so said she planned to share the UNC’s plan with the union on how the US$750 mil­lion debt can be fi­nanced be­fore shar­ing it with the pub­lic.

  8. “Persad-Bissessar also said she planned to share the UNC’s plan with the union on how the US$750 million debt can be financed before sharing it with the public.” The new populism is one of the dangers to democracy. Promise the population anything, make it so appealing that it is hard to resist, free food cards for everybody, free houses for everybody, free phone cards for everybody, jobs for everybody, drinks for everybody. We wouldn’t tell you how it’s going to be paid for, but trust me, we have a plan, believe me. How can you not fall for it? We are all going to rise, believe me. In the end, however, it turns out to be a false dream, a nightmare really, based on unsound economics, on rachife economics, on irresponsible management of the economy. In the end a few get very rich, they end up on Forbes list of richest people in T&T after only a few years in government. We the people have to pay for it. We have to tighten our belts, band our bellies, and make the hard decisions and do the hard work to put things financially right. A few years later, when things are just getting better, the same bunch show up, promising everything under the sun, of course this time they will change things around a bit, now you have to accept a pay cut, you have to work hard, think smart, so that all their great promises will come true. We will rise again, only this time we have to put more yeast in the mix. My advice, take the straight and narrow path, it will be difficult but you will be building on rock not sand.

    1. It’s great news to hear from Birdie McLean that the PNM is now the party of fiscal responsibility, accountability, profitability and free enterprise. They were the ones who ruled our nation for decades and ushered in the periods of “free food cards for everybody, free houses for everybody, free phone cards for everybody, jobs for everybody, drinks for everybody.”

      All post colonial PNM governments and prime ministers prided themselves on unbridled socialism while their unqualified political appointees of state enterprises immersed themselves in “unsound and rachife economics” of corruption. Petrotrin is a perfect example.
      The PM is presently involved with the Chinese to build a port in LaBrea to the tune of billions…. another project doomed to failure but billed as a vehicle for creating employment for displaced Petrotrin workers.

      I am so pleased that this present government is adopting the entrepreneurial, free enterprise philosophy of the one percenters and is prepared to “tighten our belts, band our bellies, and make the hard decisions and do the hard work to put things financially right.”
      Good luck with that.

      .

  10. There’s always one thing to keep in mind when international consultants are recruited to do an analysis and submit a report, they tend to interview some locals on a one to one basis. After a few months when you start to read the report you realize that your suggestions are bound between two covers under the consultants name. In this instance it is a surety that the Union members would not recommend closure of the refinery and the Corporate sole may offer salaries and wages bill as the major component in the liabilities accrued and the diminished net worth of capital assets. So now the relevance, importance and quality of contents of the report comes into question as unnecessary and a forex bleeder.

  11. I am amazed how static we remain of the view of that “the guvament is our sole arbiter”. That view pervades most of the commentaries the media present. Most of our thinking, whether rich or poor, happy or sad, young or old, dependent or independent, educated or ignorant, helped or helpless are fixated that we need an ideal government to cure the ills that befall our society. Sure, government holds the key to many, many aspects of how we fare in our ability to survive, but that responsibility should not be left solely at their hands.

    Government, through various avenues, create opportunities whereby citizens may prosper economically. One such means, is the issuance of contracts, which usually involves hundreds of millions of dollars passing through the pockets of contractors. It is usually expected that these distributed revenues are used to employ the best and brightest among those in the trades, retail, supply, professional, manufacturing and agricultural fields. It is expected that those benefitting from such governmental largesse be pillar builders of an upwardly progressive society. For example Amazon, Facebook and Apple are at the forefront of receiving government contracts. In return, they recruit, train and employ the best analytical and skilled minds that make up the American society, thereby making and sustaining a skilled middle-class society. Locally, SIS was reported one of the biggest contractors of the 2010 – 2015 government. The question to ask is, what contributions have they made to our society? It would be hard pressed to visualize anything the billions of dollars awarded to them, that went back to build the economy. Don’t these people have a responsibility (after receiving so much tax payers money), to invest in the development of our economy from which they became so rich?

    Political hacks on this board are non-hesitant in calling Dr. Rowley “incompetent”, because it is what their political leaders hope will catch on due to his steadfastness in making the decision to close Petrotrin. Sure, that was a gusty move on his part, when one takes into account the number of people who are being replaced. But, faced with the competitive nature of world trade and the products we are hoping will endure, there must be a change in how we do things to survive in it. I, for one am glad he had the wisdom to do it. That is NOT “incompetence”, it is leadership. We cannot expect to over-staff our institutions to 120 percent of work force, have an executive staff pretty much over lapping in responsibilities, a lowly productive work force and still expect our products to propel us to world-class competition. Our source of revenue must be efficiently productive.

    It is a common practice in business to re-brand. When BWIA was used by executives of the airline to fly their families and friends free to far away destinations and over populate its working staff, it became bankrupt and less efficient. The government in power had to disband it and re-brank to CAL, so that it can return some degree of revenues.

    Most of the comments regarding the closing of Petrotrin are political and valueless. A business operate for the good of the business, not only for the good of those who want it to stay. The problems with Petrotrin is not a new one. Roget insisted that Dr. Rowley give the five percent offered by Kamla otherwise he would “close the damn thing down”. Dr. Rowley gave in and now he really has to “close the damn thing down” (for economic reasons).

    For my political friends who use the word “incompetence” to deride Dr. Rowley for his leadership in making hard decisions, I say, I’d rather have the trumpet blow at reveille than mourn the loss of a cherished departure with the flags flying at half-mast.

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