Price hike: Ethics as a controlling mechanism

Writer : Monir Ibn Hafiz

Price hike is a common phenomenon in Bangladesh. In Ramadan it becomes worse than the rest of the times of the year. Nowadays, life is becoming much worse day by day because of the high prices of essentials where most of the people earn a fixed income. People face a serious problem in balancing all spheres of their life as they are to spend more amount of money on essentials. The sufferings of the low wage-earners are beyond description.

When we think about the causes of price hike, some terms come to our mind — profiteering, hoarding, lack of proper market monitoring, high demand, lack of proper market monitoring, little applications of laws etc. Among these, profiteering and hoarding are the main culprits of price hike.

Profiteering is the activity of deliberately making too big a profit, especially by exploiting people at different times like during a war or famine — in our country, during the Ramadan, natural disaster and other crisis moments. Businesspersons form syndicates and charge exorbitantly high price instead of fair price.

Hoarding is another cause of price hike. It is a deliberate effort to create crisis of goods in the market to push up their demand. Thus, the product is marketed at a higher price and people are bound to buy the product at that higher price to satisfy their demand. An the time of natural disaster, shortage of supply creates price hike as the people want to procure things at any cost.

Other causes of price hike are mentioned in the following diagram which represents the cause-effect analysis:

It is generally suggested that to control price hike the government should take several steps like monitoring the market frequently and hanging price lists in the bazaars. Such steps have been proved to be of not much effect in controlling price hike. It seems that there is a problem with the ethics of the businessman.

Moral values and the sense of social belongingness should be developed among the businessmen. It is shocking that during the Ramadan, prices increase manifold in our country. In the Middle East, businessmen reduce the prices of essentials during the Ramadan in the hope of getting reward from Allah (SWT). In Europe, people buy more products and services during the Christmas, and prices of products and services remain low. Can we imagine such a situation in our country during the Eid, pooja, Christmas or in other religious festivals?

We should promote moral values and business ethics. The mass media, government, politicians and religious leaders can play a vital role in this regard by undertaking mass awareness campaigns among all classes of people, particularly the businessmen.

We need moral filter as well as some effective measures to control price hike. We can say like Barack Obama “change we need”. Yes, change we need in our social structure.

The writer is a student in management studies at Dhaka University. He can be reached at: monir_du25@yahoo.com

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  • atiq005
    Let consider some options for the solution:
    1. If ethics comes to play a vital role, then be sure it'll take a long period to do so, as most of us especially the business-people of today's consumerist society lost all those ethics, values etc. a long time ago to the satanic force. It's gone to a deep sleep like those microscopic living organisms that lives under the warm of the fur of an animal. It's like hypnotism.
    2. So, let bring the law & order to handle this out. But what a matter of joke/fun or what a matter of sorrow (what should I call this), we are following the law & order of those people who actually developed & are nurturing & promoting the consumerism & profit-making sense.
    On the other way, if the change does not come from the inside, from their own realization, how long we can forcefully drive, control & monitor them through the law & order? So, the present law & order can't be the optimum permanent solution for us.
    3. Some economists tell about incentives ........ Yes, certainly there are incentives as said in the Holy Quran & Hadith. But do those have any impact? Those incentives are intangible, non-material, doubtful & meaningless (for the disbelievers & weak-believers) to most of the today's businessmen who are looking for the present & instant outcome. If we succeed with the tangible & instant incentives, we may able to control the problem, but our job will be half done. The ideas of these types of materialistic incentive have also come from economists like Adam Smith. Although Adam Smith amply confirmed this more than two hundred years ago in his analysis of sharecropping contracts, only in recent decades has a theory begun to emerge to place the topic at the heart of economic thinking!?! So, why isn't it working properly & permanently? Because, when people get incentives (materialistic), they look for more ...............

    The debate continues .................

    # I believe: If we can able to establish/institute Islamic law, make people to be used with it & let them adjust, we'll be succeeded InsaAllah. Because incentive will be an obvious consequence of it.

    ** These are from my little knowledge & personal opinions only. There must be some more practical & better solutions. If I've said anything wrong, please forgive me & let me know about your thinking.
    You can share your thinking at:
    muhammadatiqulislam@gmail.com
  • I will try to reply point by point.

    1. the problem with ethics was not created in a day. it was a gradual process of thousands of years. so, no one, except the god sent messenger, can move the head of the beheaded ship in a day.surely it might take a long time. i believe there is no point of being disappointed.

    2. I guess the gist of your second point is the way how to enforce or establish ethics. and you are claiming that only law can't be the solution to establish ethics. I got no way but to agree with you here.

    3. you are saying traditional incentive will not be that much effective to control price using ethics as an appeal. To some extent, this might be correct but, we must not forget that material incentives have a value. Think of a situation where the law and order is using material incentives along with non-material/spiritual one? I can cite the example within our society. here being a thief is an unaccepteable profession, and also punishable by governing law. so, law is working as a negative material incentive and social disapprovale is a non-material incentive. The problem with this system is, such social disapproval is loosing its value and weight everyday. again, only social disapproval is not enough. so what do we need more?

    yes, you said it in your last point. I want to say it in a different way, not only instituting Islamic law, by instituting faith-the faith that tells that there is a judgement day, we can solve problems.

    In fact, my view of ethics is, this is some kind of personal law where breach of it will be solely judged by Almighty in the day of judgement.
  • shahadath
    Generally, policy makers consider at time of policy making that human will do unethical mean to maximize their gain. As a result they try to capitalize the greed of human for social welfare. Almost all the initiatives are command and control approach (like- hanging price lists & forcing to reduce hoard) rather than market based incentives. We have to find out the incentive or incentives which motivate marketers to respond accordingly for the well being of masses.
  • only ethics can't play the role enough. the system must provide other controlling mechanisms such as, government regulation, public voluntary overseeing (whistle blower) etc.

    Ethics is certainly important, but optimum output can result from a comprehensive approach.
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