MARCH 10 — The government launched the Price Reduction Campaign on the first day of March, hoping to reduce prices by 10-20 per cent.

On that day, I went to a restaurant in Petaling Jaya which sells local cuisines. It is frequently visited by diners of various races, and photos showing well-known people dining in the restaurant are hung on its walls.

When I reached the restaurant, it was already filled with customers and finally, I found a vacant table.

Food printed on the menu looked just as the same, but with higher prices. Prices have been increased by 10-20 per cent.

It was particularly irony when I thought of the Price Reduction Campaign. I could not help but made a bitter smile.

Could the prices be reduced?

The crowded restaurant has given me the answer.

If the restaurant owner again raises the prices by 20per cent, I believe that many people will still return and dine in the restaurant.

How can we blame the owner of the restaurant as everyone walks into the restaurant willingly instead of being forced? Moreover, its food is quite tasty and compared to those that does not taste good but charge high prices, the restaurant can be considered quite okay.

It is actually strange as everyone is criticising price hikes but many people are still willing to pay. Also, some people raise prices of their goods while criticising.

In fact, it is the real side of the market economy. There are also complications of principle and interests.

On the surface, many traders have violated morality and raised prices for their own interests and it is what consumers are criticising.

It reminds me of the famous utilitarianism by British philosopher and economist Jeremy Bentham when I was studying the concept of classical economics. The scholar who spent his whole life studying “happiness” established an important argument. He advocated utilitarianism that was opposed by the general public. He combined personal interests and interests of others to form collective social interests.

He stressed that people pursue their own interests and thus, create their own happiness. It is a rational and unchangeable choice. If everyone follows a particular order, without violating morality and law, they can then transform personal interests into public interest, and drive happiness in the society.

Price hikes by traders are based on greed and it is also a kind of greed when employees ask for increment. When everyone possesses that greed without violating law and morality, and instead enhance productivity, it could then drive market economy and create more wealth.

Although prices are hiked along the process, it is actually one of the driving forces of economic growth.

If economic growths and incomes are increased, price hikes are actually a good thing.

It would be bad if prices are not raised as it might mean deflation.

Imagine if a bowl of ramen in Japan cost you ¥700-800 ten years ago and the price is still around that rate today.

It is the suffering of the Japanese today. People are not willing to spend, traders dare not to raise prices and economy does not grow. The quality of life is not enhanced, but declined.

When prices are not able to increase, everyone suffers.

The economy of Malaysia is still growing and the employment rate is still high. These are the basic cause of price hikes. It is not necessarily a bad thing, provided that the economic growth’s benefits are greater than the level of price hikes, allowing the resulting happiness to ease the pain.

Of course, if prices rise too high, causing runaway prices and eventually triggers inflation, it would be a failure of the market economy. It will definitely be a bad thing if it brings greater pain than happiness.

Perhaps, instead of inflation, the widening wealth is currently a more crucial problem in Malaysia. When the rich spend and speculate excessively, it causes rapid goods and housing prices hikes; while the poor will have problems coping with the soaring prices even if they live very frugally.

The demand for set meals costing more than RM1,000 in Chinese restaurants during the Chinese New Year was extremely high while many families could not afford even the very basic festive goods. The gap is our sorrow, as well as a potential crisis. — AFP

* This is the personal opinion of the writer or publication and does not necessarily represent the views of Malay Mail Online.