every where in the world there are interests of wealthy people spread all over the businesses, the same is the situation in Pakistan, (if we apply this concept to Pakistan) but the thing you rightly said is price regulation is not applicable here in Pakistan. Just one example, I purchase a shaving foam from a store in big city which costed me Rs 75 (USD 1.05 aprox.) the same foam i purchased from a relatively small city costed me Rs 100 (USD 1.39 aprox). the store selling it in Rs 75 is surely earning something from it, but the store selling it in Rs 100 is earning more than allowable limit, but government is actually unable to fix and ensure the allowable profiteering. So there is element of fake inflation of commodities, Once sugar was Rs 18 per KG in a week time last year it risen up to Rs 42 kg, no demand increased nor production decreased, how prices went up is hoarding by influencial politician in sugar manufacturing business. they made millions then the price of sugar came down to Rs 32 per kg (now a days) but never return to Rs 18 or Rs 20 per kg.

second thing government has no means of income, how they can subsidize items, previous government was earning by selling Cash Cows http://www.pakspectator.com/selling-the-cash-cows/
which was again a negative approach, government is earning from fuel and it has direct impact on freight charging.

coming to the point of article, there are families who are well to do financially, when they purachse commodities they dont bother for their quantities of purchase and quantities of consumption (not by their selves but also due to their links and meetings, they also dont bother to purchase (not required) items. This behavior put pressure on Production thus prices are increased. Government has no control over what should be imported as per requirement.

Thank you for your comments onmy version of what i thought Mr. Farid i said. I would not know about the economics of a nation as i am not the best suited to comment on this issue. Though i still stand by my point that the concept which Mr. Farid discussed over here not only pointed towards inflation but alos towards consumerism and consumer laws, becasue;

1) Quoting Mr Farid “He starts talking to all the people in his town and they decide to stop buying eggs” and that only happens if you have a forum where you can go and talk about the hiked prices and these forums are formulated by the government backed by the government laws on Consumer Rights and Consumerism.

2) The example of egg farmers which was given over here specifically pointed out towards the economic correlation of the “Demand and Price”, where the demand and the price are proportionate to each other, meaning if the demand goes up, so does the supply and vice versa. The scenario of bringing down the prices by decreasing the demand and creating a product back log can only be acheived if the consumers stand up for their rights, its going to be a collective effort not one which can be conducted on an individual one.

3) I personally think that every body in this country might not understand the economics of the inflationary situation in our country which i do agree is somewhat because of the inflationary trends world wide but i must empahsize and hope that you also agree to this fact that the inflation in our country is also largely contributed by high profit margins of business men and businesses and no one can stand up against them because there are no consumer right that protect the consumer, this in turn gives the businesses the leverage of pushing the high prices onto the consumer and adding his high profit margins to that already high price.

The importat point over here is that we all understand some aspect of the problem, i must agree that yes i do not understand the economics part of this problem too much but i understand the consumer aspect of it like wise you understand the economics of it and hopefuly together we can resolve this problem.

Thanks for your comments,

Mohsin Mahmood.

Basically stagnation and inflation are generally outcome of inappropriate macroeconomic policies.

Lesson is don’t try to fix something that’s not broken. We had a reasonably managed system in place and experienced respectable growth and then bang - we saw all these ‘democrats’ invading us like a curse. They neither have competence nor inclination to take care of the serious issues here.

Inflation is related to 2 things… Monetary Policy and Fiscal Policy. If both works properly, then we can curtail inflation otherwise…. STAGFLATION.

Thanks for sharing it online.

The above written article is an excellent example of how well capable our people are of couping with our problems. We just need to sit down and think about our problems instead of making a whole lot of useless racket about them.

The idea which you have floated over here is probably (pardon me if i am wrong) and idea based on the concept of “Consumerism”. The official definition of consumerism would be:

1) The movement seeking to protect and inform consumers by requiring such practices as honest packaging and advertising, product guarantees, and improved safety standards.(Reference:http://www.answers.com/topic/consumerism)

The idea of consumerism ha originally generated from the concepts of “consumer protection” , “consumer rights” and “consumer law”

The above mentioned definition of consumerism does not reflect the element of price hikes but the part where the definition states that “consumersim is a movement seeking to protect and inform consumers” is the key here. The consumers have a right to be protected from illegitimate price hikes or monopolistic price trends.

I would like to quote an example over here from countries of Euorpean Union where there are different consumer forums who protect consumer rights including the right to be protected against unecessary price hikes. If you find that you have been made to pay unfairly for a product/service you can go to one of these forums and lodge an official protest. The protest would then be processesd and would be publicized and people would avoid buying that product thus ending in a sort of a product bycott. This would eventually lead towards the lowering of prices of that particular product by the user (that is if he wants to stay in business)

In my point of view consumerism is all about collectiveness and staying together and fighting for your rights but in order to exercise these rights the government first needs to layout a platform for the people so that “THEY RELAIZE AND UNDERSTAND THAT THEY HAVE SOME RIGHTS”.

An excellent piece of writing Mr. Farid Massod,

Mohsin Mahmood