Can capitalism survive in a world where profit and utility maximization are not the goals? In Thailand, the King has advocated a sufficiency economy. (see link here) The main tenants of the philosophy of sufficiency are three moderation, reasonableness, and self-immunity. The blogger states:
Thailand values this new economics philosophy as a practical tool to effectively manage capitalism in a way that aligns and engages it with social sustainable development. In doing so, Thailand hopes that this approach will foster accountability and empower people and their communities. More importantly, the main goal of The Sufficiency Economy is to measure economic development not just using GDP, but also by taking the reduction of social inequality and poverty into account. This philosophy is also expected to help prevent another economic collapse such as the one that occurred during the mid-90s, and to be a powerful tool for moving the nation overall economy upward.
Maximizing GDP in a global economy may not make sense. Does this?
This brings us back to the conclusive discussion about Tanzi and his text we had last night. When alalyzing the economic policies of Sweden, we saw that there potential growth and efficiency was much less than that of other western countries. However their stability made them more immunized to the recent recession on the brighter side of numbers. By taking less capital risks and banking less on future productivity expectations, they weathered the storm far better than their less risk-averse neighbors.
ReplyDeleteThailand appears to be taking a similar approach with this idea of "Sufficiency" over rapidly expansive ideological polices. This is an interesting concept to say the least. Sustainability over the unfettered idea of maximizing growth. In our American society we've come to connotate growth with economic success. If (heaven forbid) things only continue to get worst, I wouldn't be surprised at all to see more countries taking this type of approach.
This is very interesting and, having studied abroad in Thailand, I think I can offer a little insight. This idea put forth over the past 30 years, has largely been an effective way to help put rural communities at ease with the vastly different urban communities that have developed in a couple portions of the country. Bangkok itself has around 1/6 of the population and for years has taxed rural communities to help channel money into the metropolis which has been used for massive infrastructure and manufacturing projects. This self sufficiency, although created by the king under the best of premises, has been slightly altered to better serve the bulging bureaucracy.
ReplyDeleteIn theory, the sufficiency economy could be a great philosophy; by establishing a measured and cautious approach, Thailand could possibly avoid some of the most onerous risks of development, while still creating marginal improvements in people's lives. Comparing the sufficiency economy to a normal capitalist economy, it is almost as if the government has said, "there is too much risk in rapid industrialization, and rather than attempt to insure this bad risk,and spread its dangers throughout the economy, we will simply prohibit it." Of course, government is only as good as those who govern, and this policy seems rife with opportunities for exploitation, especially of rural poor, who are basically being told to bear their burdens quietly for the sake of the urban bourgeois, as Evan said above. Perhaps part of this goal could be accomplished by raising the liability of investors in businesses, forcing them to adequately measure the risks of their business ventures, not only financially, but in holistic terms, including its costs and benefits to society.
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