ABSTRACT

1953, where it is argued further that a high degree of concentration fur­nishes an imperfect index of monopoly power or profitability in these condi­tions.The following passages from a thesis submitted by Mr. B. G. Kavalsky for the M. Sc. degree at London University illustrate the ineffectiveness of price control in Northern Rhodesia in the 1940’s, besides other aspects of economic life there.‘The case of Mufulira in 1944 provides an interesting example of the operation of price control. The control price was set for grain and meal and immediately evaded through a change in the measure given to customers. The management then introduced special cups and dishes, which when filled with grain or meal gave the correct weight, and enforced their use. The marketeers next step was to cut round pieces of cardboard of the same colour as the meal and fit them as a shelf some inches up from the bottom of the mug. When the authorities cottoned on to this, the marketeers switched to beating up the bottoms of the mugs, and when this was stopped, they cut down the tops gradually over a long period, so as not to be immediately noticeable. The effect of all this was that in 1945 none of the measuring cups bore any relation to the original size, and the price had been restored to its earlier level.Other managements tried similarly to control the price by the introduction of scales. The figures on the scale were quickly scratched out and the old prices charged till eventually the matter was settled by the breaking of the scales. When the controlled price of fish was made 8d. a lb. as against the actual selling price of 2/- a lb. and the riverside price of 6d. a lb., the fish sellers simply left the market and refused to operate at that price. The customers were most unhappy about the situation and asked the manage­ment to stop the controls as they would rather have higher prices than no fish at all’.The passages are Mr. Kavalsky’s transcript of a longer discussion of this subject in W. V. Brelsford, Copper Belt Markets, Lusaka, 1947, pp. 22-3.5 Meaningful specific quantitative estimates of this point are difficult to secure because the occupational statistics of most poor countries are very wide of the mark, chiefly owing to the incomplete occupational specialisation in these countries where a significant proportion of the people not classified as traders nevertheless do *trade, at least part-time or intermittently. This subject is examined in P. T. Bauer and B. S. Yamey ‘Economic Progress and Occupational Distribution', Economic Journal, December 1951, and also in West African Trade, Ch. 2. However, it was found in 1950 that the number of traders operating in three markets of Eastern Nigeria was about 14,000, which was more than the total number of the regular customers of the eight merchant firms which at the time handled about five-eights of ail commercial imports into Nigeria.• The distinction between an increase in demand and a contraction in supply, though often important both for analysis and for policy, is not directly relevant to this article. For simplicity of exposition, the discussion is con­fined to a contraction of supply with an unchanged demand.7 It should be clear from the context whether the reference is to profit margins or to rates of return on capital.8 This type of situation is vividly described in certain official reports, especially locally published reports. Examples include the Report o f the Commission on Enquiry into the Distribution and Prices o f Essential Imported Goods, Accra, 1943; the Report o f the Commission o f Enquiry into Conditional Sales, Lagos, 1948; and also the Report o f the Commission o f Enquiry into Disturbances in the Gold Coast, London, 1948.8 These considerations apply much less to the transactions of local traders specially promoted to the status of merchants by the operation of import licensing, i.e. traders who would not normally import directly, and who are

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