It takes all sorts to make a world, including those who have just woken up from a decades-long sleep to imagine that we still live in the era of Dom Mintoff, protectionism and price freezes. Even in the 1980s, when the rest of Europe was going through an economic boom and the market economy was taking over, price freezes were seriously outdated – and we can all remember the damage they did to Malta by hampering the development of the market, and hence, jobs and earnings.

Now here we have the president of the Consumer Association, who last Monday called on the government to freeze the prices of products and services. He and his association apparently believe that this will be in the best interest of that mythical figure called The Consumer, by protecting him from the inflation that will otherwise occur when we switch to the euro on New Year’s Day. What I find most entertaining about people who think like this – aside from the fact that they are so ill-informed that they imagine a price freeze is legally possible – is that they look at life in a series of little boxes, while knowing absolutely nothing about how markets and businesses work to create jobs and wealth.

The essential problems with Dom Mintoff and Karmenu Mifsud Bonnici as premiers, aside from the fact that one had a very difficult personality and the other was not elected by the people and so was resented by them, was that neither knew the slightest bit about how market economies work. They came from the mindset that businesses make money whatever the conditions in the country, perhaps because the owner has a tap in a backroom that he can turn on to spout gold.

Businesses were therefore expected to create wealth for the taxman’s coffers and to keep people in jobs whether they were selling their goods and services or not. Mr Mintoff the architect and Dr Mifsud Bonnici the lawyer did not just impose and maintain cast-iron price freezes. They also imposed rock solid wage freezes and froze – in Arctic ice – the right of an employer to make employees redundant even when he or she could not pay them – not that there were many “she” employers in those days. Looking back, life and business in Malta were like something out of a black comedy sketch, except that nobody was laughing – unless it was those who made truckloads of lolly out of yet another freeze, the freeze on imports, which gave them a licence to print money with their import substitution factories, operating in a monopoly with a captive and desperate market.

But enough about that – most people my age have by now got over the excitement of having some kind of a real life, the life our friends overseas lived and took for granted in those days. We no longer get a thrill out of seeing stuff on shop-shelves instead of having to hunt for it. The one thing we won’t forget is the greyness and the hard times that were the result of price freezes, import freezes, wage freezes and freezes on God knows what else as well. Even our hearts froze in those days as we watched without word while human rights were transgressed on a daily basis.

You can’t consider your options in a series of little boxes, compartmentalised and divorced from one another. To every action there is an equal and opposite reaction, as I remember dimly from my grim days on a frozen bench in a frozen classroom in the days of price freezes, listening to a physics mistress try to explain Newton’s Law of Motion while I showed more interest in the sandwich I was eating beneath my desk. Applied to life, the principle dictates that you can do almost nothing without producing a reaction of sorts, even if it is not equal and opposite. But in the case of price freezes, Newton’s law certainly applies in full. Prize freezes across the board are imposed by those who think that they will somehow improve the lot of The Consumer (when did we last hear the simple word, “people”?). But in reality, they provoke the equal and opposite reaction of massive dissatisfaction and economic downturn, followed by stagnation. Price freezes, along with all those other freezes, were not the cure for the recession and stagnation of the late 1970s and the early to mid-1980s, as our inept prime ministers of the time believed (they didn’t teach much economics in the law and architecture faculties in the 1940s). They were the cause of it. Price freezes, wage freezes, redundancy freezes and import freezes all helped to propel us into the mess we had reached by 1986 – and of course, economic stagnation caused by a command economy allows those in control to do as they please, because people are frightened and cowed besides being overly preoccupied with the need to find a job and stay in it at all costs.

The days of the command economy are long gone, and I thank heaven for this every day. Just as the older generation who lived through war get nightmares about going without and always eat up all the food on their plates, I get nightmares about living in a command economy again, and even my worst of moods can be soothed by a nice, calming trip around the shops in the spirit of visiting a museum. Just looking and touching is reassuring. I don’t have to buy anything. Lots of people reading this will know exactly what I mean.

The point is this: prices are not frozen in a vacuum. Indeed, nothing at all happens in a vacuum, despite the tendency of some men to compartmentalise everything, with their wife in one box, their work in another; then there’s the box for their mother, the other box for their children, and God help them if they have a mistress, because they’re going to need a lockable box for that one.

So if you freeze prices, other things happen – bad things, not good ones. Businesses first try to survive the imposition of frozen selling-prices and escalating buying-prices (because prices are not frozen in the markets where raw materials and goods are bought) by eating into their usual profit margin. When that becomes impossible, they begin to shed workers. As more and more workers lose their jobs in all sectors, the market for all goods and services shrinks because there are less people with money to spend, and so even more workers are made redundant as sales drop off.

It becomes the vicious cycle we know as recession. Producers operating in an environment of frozen prices try to keep their heads above water by cutting costs of raw materials and lowering quality. The Consumer ends up paying the same frozen price for something of poorer quality than he bought before the price freeze – because the government can put a price order on something, but it sure as hell can’t freeze the quality.

This is precisely what is happening with the traditional Maltese loaf. Because its price is regulated, and every one-cent increase demands a battle royal with the government and front-page headlines in our newspapers, bakers have had no choice but to cut quality to survive. It’s either that or they have to stop making the loaf altogether. What isn’t an option for them, as it wouldn’t be anywhere but under Mintoff’s government, when I actually remember these things happening in other sectors, is having the government oblige them to carry on producing the loaf without any profit or even while losing money on it.

I am sure that any sensible person would rather pay what the loaf actually costs and let the baker have some profit, rather than pay the paltry few cents we are paying now for a sub-standard loaf that is nothing like the real Maltese loaves we remember. In effect, regulation of the price of Maltese bread has brought into existence another loaf altogether. It’s called a Maltese loaf but it isn’t one, and yet – curiously – its price continues to be regulated under the ordnance that controls the price of its near-extinct relative.

One blessing of joining the European Union, for me at least, is that the ghastliness of life in a command economy is in the past for good. EU law does not permit this kind of authoritarian control of the market. It allows only a temporary price freeze in extreme situations, on a particular product – for example, on an essential commodity in times of great shortage as a result of war or disaster.

And the greatest irony of all? It’s that the Consumer Association, so quick to rush forward with its demands for a return to the methods of Dom Mintoff, has not even bothered to take part in a price-monitoring exercise in the run-up to the euro, even though the government has offered to foot the bill. It’s a whole lot easier to call for a price freeze, I suppose, than to actually get up and do something.