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Thursday, October 16, 2014

Textbook economics vs life in the real world

If only our policymakers were truly our representatives instead of being mere VIPs at public ceremonies.
COMMENT
 By Ahmad Ibrahim Zakariagst_1_300
Some economists do what we may call a timeline analysis. They collect the economic data of the past and those of the present—capital, incomes, population growth and so on. Whatever the research purpose, they can usually tell whether the quality of life has risen or fallen.
My grandfather was a poor man with eight children. He pedalled a trishaw for a living. His sons used to scavenge dump sites for scraps with which they would construct bicycles to go to school with. His grandchildren currently study overseas using loads of taxpayer money and wasting every penny. I don’t have to do a timeline analysis to come to the conclusion that living standards, as far as my family is concerned, have risen to levels that my grandfather never dreamed of.
But it is not enough and not fair to compare living standards by such narrow and simplified examples. There are many other questions to be asked. For example, is the increase in living standards the same across the region? What about Sabah and Sarawak? Are the people in those states enjoying the same prosperity that their compatriots across the sea are enjoying? While we amuse ourselves looking at skyscrapers in our major towns, and we scatter railway lines all over the west coast, there are still villages without electricity and water, not to mention Internet connection or the obligatory bridges built during by-election campaigns.
Is the living standard the same among the races and between the states? Have the children of other families received the same opportunities that mine has received, and have they been subjected to the same judgement of their merits vis-a-vis their achievements?
According to the textbooks, of course it is irrational for a government to provide an oil subsidy. It is not something homo economicus would choose for an economy. Rather than waste taxpayer money with the subsidy, which benefits even the rich, it is better to give the poor direct cash handouts. The textbooks clearly show in their graphs and pie charts and what not that subsidies cost much more than cash handouts, although both ultimately bring the same effect.
Or so they say.
I would suggest that the economists and policy makers chuck their textbooks, get off their plush seats in the Prime Minister’s Office and Bank Negara and go out into the real world. Or, if they prefer, they can stay in their air conditioned offices, close their eyes and reflect. Surely, these economists would know that fuel prices affect the price of pretty much everything else. Or are they living in a different world?
Equality and all the rest
According to the textbooks, the Goods and Services Tax is better the Sales and Services Tax because nobody will ever be able to avoid paying tax. Without GST, only the rich pay tax. And now because the government believes in equality, democracy, egalitarianism, civil liberties and so on, it has to tax everybody, including the poor in the slums, the homeless, etc. We supporters of equality must submit to the system.
Furthermore, GST is a better taxation system simply because hundreds of other countries use it. And the system makes it easier for the government to collect tax. And we, as decent citizens, must make it easier for the government to make the poor suffer.
It is inconceivable that these policies would have seen the light of day if the people making them were to truly live among the masses to see how people struggle to make ends meet. Had they been true representatives of the people rather than mere VIPs in public ceremonies and random faces on Hari Raya banners, I wonder what kind of country we would have now.
If only they could see how the economy treats people as commodities, how labourers are kicked out of their jobs when they no longer help with the bottom line. These rejected people then get kicked out of their houses because they can’t afford the rent, which keeps getting higher. They seek the streets and spaces underneath bridges to make their beds. Then they are caught and put in jail—all because they are poor and homeless and an eyesore to the rich.
No wonder some people think it is appropriate to slap the PM’s picture with a slipper.
Fortunately, we have a minister who is aware enough of the suffering of the people. He must have thought long and hard before showing up in the news with the brilliant idea of telling people to bring packed lunch to work.
Thanks very much for the tip, Mr Minister. And, by the way, you look very nice in your expensive suit, shiny glasses and immaculately trimmed hair.
What a mockery and what a humiliation to the burdened masses, especially when this minister and his colleagues are getting a raise. Remember Mary Antoinette? When told that the starving masses were complaining because they had no bread to eat, she said, “Let them eat cake.” They promptly chopped off her head.
Of course, we are not keen to behead anyone. Not yet anyway, because Malaysians forgive and forget all the time, and we tolerate almost everything.
Ahmad Ibrahim Zakaria sits in the PAS Representative Council of the United Kingdom

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