Business

Saturday February 18, 2012

A yardstick gone askew

Review by ABBY WONG


Title: What's the Economy For, Anyway?

Authors: John de Graaf and David K. Batker

Publisher: Bloomsbury Press

EXPERIENCE has taught me the many facets of economics. At last I concede its flaws and deem it a dismay science. What known as a field of study often is no more than just a lazy consensus among a handful of so-called experts explaining the ways things work in the face of inordinate uncertainties.

There are things economic processes cannot account for, and matters omitted in economic equations abound. And then there is absurdity of economic measures a major oil spill technically helps boost economic growth because efforts to clean up the spill contribute considerably to GDP (Gross Domestic Product, the principle yardstick to measure a nation's economic success).

What is economics for, anyway, if it allows those few at the top of the economic pyramid to gamble recklessly at the expense of ordinary people? How accurate is economics if the success of a country's economy is measured solely by its GDP growth, or the rise of its stock market indexes?

Why do we embrace economics when it approves great business deals that have devastating impact on the environment? How does economics help us if it cuts our jobs and allows technology to efficiently buy low-priced items from poor nations that spill toxic chemicals into water supplies or spew pollutants into the air? How can we trust economics if it does not make us happier?

Such are the passionate arguments underpinning this wonderful book. All of which raises a basic question: Who or what is the economy for, anyway?

The answer, when put simply and eloquently by John Graaf (an economist) and David Batker (a journalist), means economics should provide the greatest good for the greatest number, and over the greatest run. Plainly, it means is for economics to provide for health, quality of life, happiness, fairness, true prosperity, and sustainability.

“What's the economy for, anyway, if not life, liberty, and happiness?” write the authors. Drawing examples from Europe, particularly the Nordic countries such as Norway and Finland, the authors hope to enlighten readers on the perils of modern economic, and advocate for the reorganisation of existing economic system so as to allow a better economic model for the rest of the world to emulate.

Gaining laymen's support and understanding is not easy for who are we to challenge century-old economic model that indeed has brought about unprecedented wealth and technology prowess? Graaf and Batker pull it off marvellously by being genuine, compassionate, and real as they are in writing this book. And all they have to say is that economy should be for the people and confirm that the current economy is en route to spurious happiness in which humans are overstressed, wealth disparity is widening, and littered pollutants are conveniently ignored. If doubts remain and discourage you from supporting change, the book provides a quick trip back to economic history, and sheds humorous light on such economic buzzwords as “globalisation,”, “capitalism,” “productivity,” “marginal utility,” “equilibrium,” “Greek Tragedy,” “consumer sovereignty,” making you well equipped with economics knowledge sufficient enough to be awe-struck by the never-ending perilous scenarios enlisted in the book. In the end, you will concede, as I have, the dismay of economics, and demand, as the rebelling youth in Europe have, for our economies to be more committed to quality of life, social justice, care for mankind and planet Earth.

Behind every measure stands a goal. Yet, both the goals and measure of modern economics are flawed. What economics ought to do is to know when to stop. It has to, according to Graaf and Batker, stop wealth disparity from growing, understand that unlimited growth of anything is never good for someone out there will have to lose to enable another person to grow. Most importantly, it has to allow unquantifiable elements to come into its equations in order to correctly gauge progress and wellbeing. Volunteering, social connectedness, and housework, to just name a few, are considered a waste of time by economics for they make no contributions to any of the measures. To contribute positively to economic growth, commit some crimes, file a few more divorces, spend excessively and take unnecessary risks. For bailing out from these negative activities, flatten the economy, making it bustling and hustling.

Visionary, stimulating, empathetic and well-written, this book puts an ugly face to economics and makes suggestions for it to change. Together, the authors invite us to initiate change so as to allow our economies to secure the greatest good for the greater number over the longest run.

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