Economics should be about improving the well-being of all citizens: Your Turn
Ours is a sovereign nation where leverage is everything — an ultimate bargaining chip. Such leverage or bargaining chip is immutable in our great country, known worldwide as the bastion of capitalism. It is the practice of getting the most with what you have.
Ours is a market economy where activities based on abstract theories are the rule and common sense is anathema and viewed as an inconvenient interloper. It is called a free market, even though it is composed of selfish buyers and sellers acting in self-interests. It is based on the assumption of ceteris paribus, French for “with other conditions remaining the same.” Where does that ever happen?
Our market economy thrives on privatization or private ownership of material and capital resources by stockholders who are unapologetically, prodigiously and most disproportionately compensated at the expense and marginalization of other stakeholders. Government interference is frowned at, viewed as an impediment that must be curtailed if not avoided in toto. The rationale here is that government intervention is unnecessary because in such a free market effective self-regulation works to ensure equilibrium from self-adjustment as if with “invisible hand” through the interplay of the theories of supply and demand. Self-interest and competition also act against each other to keep things in check, obviating the need for government meddling. The “invisible hand” influences and channels private interests and passion, presumably, in a trajectory “most agreeable to the interest of the whole society.” This all sounds so academic that one could lose sight of human well-being, which is the most important element.
Forcing this notion suitable to the Lilliputian economy of the 18th century on the giantism of the 21st century economy would certainly be anachronistic. Nonetheless, it is what neoclassical economics has been doing, with the support of the IMF and the World Bank.
A market, operating without concern for fairness, is also devoid of a modicum of ethical and moral compass. It is, therefore, wishful thinking to expect that decency and discipline will characterize such a market where people are unleashed with unbridled, unregulated self-interests. In such a market hoarding, price gouging, market circumvention, collusion, mergers, squeezing out competition, monopoly power, environmental degradation and worker exploitation are common features of this laissez-faire economics, as in no government interference.
Adam Smith, the Scottish political economist, and his contemporaries are credited with the inception of classical economics. History has it that he gleaned the idea of the “invisible hand” concept from the feedback mechanism of the fly-ball governor of the Industrial Revolution steam engine, which regulated its pressure and speed to minimize chances of explosion.
Also a philosopher and moralist, Smith believed in economics with a human face, empathy, sympathy, compassion, and distribution. “No society,” he wrote, “can surely be flourishing and happy, of which by far the greater part of the members are poor and miserable.” In other words, growth is at the very least a necessary chemotherapy for the cancer of poverty without redistribution.
Today’s neoclassical economics focuses on growth at all cost, relying on the trickledown theory to indirectly lift the impoverished masses in the long run. This does not inspire much hope! Economics is not about a tryst with statistics but the improvement of the well-being of all citizens. Unfettered, the practice of neoclassical economics creates and maintains a social structure in which wealth is concentrated in the hands of a network of a few people at the top. The masses below in the structure have their nose to the grindstone trying to make ends meet with incommensurate wages to enable the top people to maintain domination and power. This network of people at the top somewhat reminds me of John Perkins’ “corporatocracy” and Dwight Eisenhower’s “military industrial complex,” in terms of people wielding inordinate power. Some politicians, I am sure, belong in this network. However, I hesitate to agree with Mr. Harry Truman that “You can’t get rich in politics unless you’re a crook.” You are certainly entitled to your opinion.
Anyway, we have a current President who does not seem to be in support of this inconsiderate social structure and wants to extend the proceeds of progress indiscriminately to all, but all I hear from the news media accentuates the negative. On which side is the news industry?
Anthony Akubue is a St. Cloud resident. Submit a Your Turn of your own for consideration by sending it to columns@stcloudtimes.com.
This article originally appeared on St. Cloud Times: Economics should be about improving the well-being of all citizens: Your Turn
