We should care about economics because it is the language of power spoken by people of power who change the world.
Previously, multiple economic schools of thought coexisted. These include Classical, Neoclassical, Marxist, Keynesian, Schumpeterian, Austrian, Institutionalist, Behavourist, Developmentalist schools of thought.
However, over the past few years, economics are converging into one main way of thinking: neoclassical economics. This is where individual self-interests are prioritized, and the value of economy is limited to within the market only.
A large section of economic activities happen outside of the market and the world will face new challenges. Therefore, we need agile, varied economic approaches, and new ideas for a healthy economy and democratic polity
“Natural” strengths are never natural.
Malaysia has upgraded its industries from the starting colonial points of tin and rubber. Today, Malaysia produces palm oil products, electronics, electrical goods, and Petronas is a world leader in deep sea drilling. Yet, Malaysia’s economic growth has been stagnant in the last two decades.
There is nothing natural about Korea’s edge in manufacturing automobiles, or Taiwan’s strength in semiconductors. Other countries have similar, if not more, access to critical raw materials.
Economic strength is a product of long-term industrial policies. It is important to develop productive capabilities and think about long term growth on a 20-30-year horizon. For example, Korea and Japan ventured into the automotive sector despite American and German dominance as global automakers at the time.
Taking lessons from humanity’s approach to food, we should keep an open mind, try different things, and redefine community conventions.
This approach diverges from current economics, which relies on a popular way of thinking across traditionally defined schools of thought and is generally focused on self-interest.
Answers to today’s issues will not come from old ways of thinking. To understand the underpinnings of current complexities, past learnings and ideas that build conventional paradigms will not suffice.
To advance up the value chain, countries must sometimes eat bitter gourds. There is a need for sacrifice for economic development (financial suppressions, reallocations of loans from consumer finance to machineries, higher consumer prices during infant industry protection phase.
Malaysia’s future depends on systemic improvement. In addition to individual excellence, we must create space for collective injection of fresh ideas/ingredients into the system and drastically transform systemwide framework and processes. Malaysia has proven that it has done a lot, and therefore can do a lot more, if given the right ingredients and systems.