Two months ago, a friend and fellow UPSE alumni asked me
to respond to his ideas, below.
Indeed, the
economic buzzwords these days is how to
achieve "inclusive growth". I'm just wondering why
we always get fixated with the decades-old mantra
towards “FREER MARKET" or
the need to break down further "Institutions" to
achieve freer markets.
While it
is true that there are still
institutional bottlenecks and bureaucratic
inefficiencies (i.e., red tapes, corruption, etc.) that
need to be scrapped, I think we are
losing sight of what true economics should mainly be
all about----Production and not fixation with
freer markets and consumption.
If I am not mistaken, almost 80 percent of the total economy is consumption driven. In short, we are producing much less through the years as a percentage of total GDP.
If less and
less people are creating physical wealth, there is
indeed some basis to the analysis that the economy is
mainly being bailed out by the OFW money that is
circulating around and helping boost consumer and service industries
like the malls and food chains.
-----------
Many people indeed have that "uncontrolled itch to
control others".
Consider here: A taxi driver or jeepney driver would wish
to have the freedom, the choice, where he can eat lunch cheaply and with
parking at the same time. But those with "uncontrolled itch to
control" would wish that such freedom should be curtailed. If some of
those carinderias that give cheap lunch do not pay taxes and city hall business
permit, sanitation permit, etc., then they better be closed down. Control
people's freedom of choice. Attack free market, onwards with the command and
control thinking.
His fixation with "Economics = Production" is
lousy. Remember Econ 11 again, Economics is about WHAT to produce, WHEN and
WHERE to produce, HOW to produce it and for WHOM. Economics is about production
and consumption and non-consumption (savings, investments). What's so hard to
understand here?
It is impossible for micro units (individuals,
households, micro and big firms) to answer all the "what, when, where, how
and for whom" if there is no free market. Can central planners, whether
products of UPSE or Ateneo or Harvard or Timbuktu University, foresee how
many rubber shoes, what color, design and sizes, would be needed in village or
municipality A, and in other areas and cities? What if there was an
over-production of color blue, size small rubber shoes but under production of
color pink, size medium and large rubber shoes? How fast can central planners respond
to such consumer demand who will be in shoe stores today or tomorrow?
Only the free market -- producers who are free to produce
what/when/where/how/for whom, consumers who are free to buy
what/when/where/how/from whom -- can have the flexibility and foresight to see
those things.
About "inclusive growth", new terminologies,
and perhaps new rackets. Notice that it has already evolved into
"inclusive development", "inclusive democracy",
"inclusive business", "inclusive politics", what else.
The framers and inventors of such "inclusive
_____" are careful that the people will not see them as ultimately gunning
for "inclusive pockets" and "inclusive savings". That is,
your money in your pocket or savings account is not yours and yours alone. It
belongs to the collective, other people have a "claim" and
"entitlement" to it already. These "other people" include
the poor (regardless of the causes of their poverty), the politicians, the
bureaucrats and the various poverty fighters.
-------------See also::
Inequality 12: Billionaires and the UN Politics of Envy, July 11, 2012
Inequality 14: 99 Percent to Support the 1 Percent, October 20, 2012
Inequality 15: SM, Henry Sy and Class Envy, October 20, 2013
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