Thank God for small mercies. Christmas has come and gone, but this year, the commercialized cacophony of Christmas was hardly heard. The noisy parties might have been held, but not many people seem to have gone on a shopping spree.
I, for one ,was glad that people have at last realized that Christmas could be a happy one without anybody going on a crazy shopping spree and then complaining that the cost of living is so high.
The cause of the high prices during the Christmas season is because there is a high demand for the goods
When I was teaching Economics in Batticaloa, I taught my students that one basic law of Supply and Demand is that a rise price diminishes demand. I had to tell the children that while it may be so, it does not apply to Sri Lanka, because here the people would buy only if the price is high. Those children were somewhat amused by it, because Batticaloa is generally a poverty-stricken area. So they were not used to the idea of going on a shopping spree. I had to tell them that in Colombo, this is, in fact the case. People attach more value to a good only if the price is high. So invariably they end up buying goods when they are expensive, and this pushes the demand for them still further. This is termed Demand –pull inflation and the whole country is gripped in it well and truly.
If people refrain from buying too much,the sellers would be compelled to reduce the prices and something that no Government could do, would have been accomplished by the people
The cause of the high prices during the Christmas season is because there is a high demand for the goods. It may not be so in poorer villages, but it certainly is in Colombo.
When I was reading for my degree, I came across an article by a professor of Economics, whose name escapes me. What he said was that during the time when prices rise, the problem would solve itself because due to the continuously rising prices, people would stop buying those goods. It did not seem to be so in Colombo, but this year, the buying spree was conspicuous by its absence. I was pleased to note that this year, the people of Colombo have learned their lesson the hard way. I must congratulate the people of Colombo for realising it because,the problem of rising prices would solve itself soon . If people refrain from buying too much,the sellers would be compelled to reduce the prices and something that no Government could do, would have been accomplished by the people. It would be another kind of people’s revolt to solve the problem of rising prices. So congratulations to the people of Colombo for the successful revolt! May they revolt more and more, without giving a opportunity to the unscrupulous traders to raise their prices!It is slightly better than going on strike first and negotiating later!