Ever noticed a morbidly sick patient insisting that the hospital should take an alternate course of treatment ‘they heard worked elsewhere?’ A government prescribing the prices at which producers must sell their goods and services finds itself in a situation that is hardly any different. Except that in this case, the patient (government) has convinced itself that it is also the doctor.

What is a market? Economists believe that a market reflects the collective behaviour of all players and participants. That means for every efficient producer, there may be many who are inefficient and slopy; for every sinful trader prone to bribing the Customs officer, there may be several who are pious and conscientious.

Ask yourself – if a district commissioner officer notifies the “average” cost of goods for a given commodity, would all sellers – the efficient and inefficient, or the sinner and the pious – be able to make the same level of profit? A government’s responsibility is to provide a level playing field to all market participants. Yet, by fixing the market price of goods and determining the ‘acceptable’ profit margin, it will instead be picking winners and losers.

Then what exactly does the PTI government aim to achieve through its latest Price Control Order? While some believe that by adding SUVs and cement to the ‘essential commodities’ list, the administration has overstepped its boundary, that’s hardly the most material infarction. The MoIP has taken a law originally designed for “wartime, famine or natural calamities”, and invoked its jurisdiction in case “any commodity undergoes more than 33 percent price increase over the preceding year”. The SRO declares that such “uncontrolled price hike” amounts to national emergency, justifying invoking of war-time powers.

Consider that the government has invoked these powers at a time when prices of many raw materials have already risen by over 50 percent in international commodities market and are currently trading at decade-high levels. Consider also that the preceding comparison period would be year 2020, when prices of several commodities had touched multi-decade low due to Covid led bottom. If one-third increase in prices is the only metric to go by, be grateful that the administration has restricted itself to a Schedule of 50 commodities only!

Which brings this comment to the second most consequential infarction. While many may be quick to conclude that the officialdom is made up of officers whose naivety is only matched by their endless faith in their administrative powers, it may be foolish to afford them any benefit of doubt. While the list includes seed cotton and lint, it excludes cotton yarn whose prices have increased by over half already during the past six months. Thus, the officialdom not only seeks to determine which producer it shall punish for “profiteering” – never mind the increase in their cost of sales over last six months - it shall also decide which segment of the supply chain it seeks to protect: the yarn producers.

Clearly then, there may be more to this seemingly political gimmick than social media celebrity-bureaucrats would lead us to believe. Just like the rest of us, bureaucrats are also consumers, and have a tendency to smell foul whenever they notice “uncontrollable growth”. Afterall, what good is executive power if not used to exercise “control”?

Except, (in most markets) prices are not slave to the whims and fancy of any single producer, seller, consumer, or even political authorities. Prices are also rebellious, often defying past trends and moving chaotically. In fact, markets routinely “misprice” also, especially in the subjective judgement of those who believe a commodity to be under- or over-valued by majority of the market participants. But prices are never “wrong”, as they reflect the collective wisdom of a society and how it values any good or service at a given point in time.

Instead, in its supreme wisdom, the officialdom has in effect deemed the ongoing global commodity price spiral to be a “national emergency”. If the sole nationwide supplier of a life-saving drug during an epidemic were to increase drug price by a 100 percent overnight, the situation might call for administrative action. But even then, the real malevolence would lie with the legal framework that allowed a single player to achieve such market concentration and monopolistic power in the first place.

Unfortunately, enough has been written in this space regarding the predatory legal structure that has allowed such market concentration to become a common occurrence – to no avail. The delusional patient has not only fully convinced itself to be a medical specialist, it has also now started to take medications prescribed by itself. A “coalition of the reasonable” is needed to free PTI from its infantile fixation with price control.