ever stopped and looked around you wearing the glasses of an economist? i have tried it, after taking the third economics course in these last terms. i didn't have a background in economics, but i absolutely devoured the classes that my grandfatherly professors conducted. (even though i was never really sincere with my readings.) but anyhow, here are some key terminologies to start with:
growth matters - its all about positive sum game. living conditions around the world are improving. there has been tremendous growth and innovation based expansion and its fascinating to see such changes even in our own short lives so far. thinking of an example, the first thing that comes to my mind is internet and mobile is a close second. what seemed efficient then, can be done so much more efficiently now! the impact has been top-down, the learning has been transmitted through exclusive exposures percolating down generations, and from experiences of growing up to adults surrounded by these advances. we can debate endlessly about the cons also, but i have come to believe that its not all a trade-off, the impact has been far more positive than negative and that is why these advancements continue. those that are more negative, in fact become obsolete and very quickly too. the current hot debate is about measuring progress through happiness rather than gdp growth. that happiness of others makes us happy too and it has to be a collaborative environment rather competitive one - and this to me is evolution too. once we can stop worrying about meeting basic needs we need to meet higher needs and the first step is to be able to measure that.
comparative advantage - as i said above the evolving trend is about collaboration. but then there is the undeniable truth that everyone is not equal. capitalism does work on the principle of survival of the fittest, but the uncompetitive segment has yet not been eliminated. and the competitive segment has a certain air about it, almost like chauvinism. who is more productive vs who is expected to be more productive by society. if you look at the north and south of spain, you see the difference in productivity. catalunia, madrid and basque country are the industrial hubs while andalucians drink sangria and dance flamenco. same principle can be extended to other european countries and even the north and the south countries in europe and in the general the northern and the southern hemisphere. the logic is simple, when you have a snow-covered half of the year, you work double in the sunny half to provide for the harsh times. wage becomes a defining element here and the results of the hard work and high wages show. this gradually leads to a classification of labour, where the technologically more sophisticated work gets concentrated in the north, while the more labour intensive work gets relegated to the south. whereas those who have sun the whole time, work and make merry and to make it sound nicer have an active social life too and know how to have fun. so the north is more productive - maybe the ego is justified then. even the paternalisitic behaviour of developed world telling the developing what they should do.
incentivising behaviour - just as an example continuing from the above point, the stark difference in living conditions incentivises people of "higher productivity" to move to the north. and with the same logic, cheap labour from south also moves to the north, thus still keeping some labour intensive activity in the north. now lets look at another example - traffic in India. people are incentivised to break lane rules, jay-walk and jump lights, because it helps them beat the system, even if at the cost of some others. the concept of competition is so strong in the absence of sufficient resources, that the rabbit who is fast will win - because he is conscious that he cannot take a nap anywhere. in some ways i can still say that sheer size of the population is a hindrance, but more than that the attitude is the problem. the attitude of crab mentality - you can leave crabs in an open basket and they will not let each other escape - they will spend their time pulling down any crab who might try to climb out of the basket. and this can then be extended to everything - looking for shortcuts is the norm and this is incentivsed first because the rewards of following rules are not lucrative enough and also because the punishment of not following the rule is not harsh enough. again going back to the size of the population - how many resources does a country need to devote to punish the wrong-doer?
it all comes down to discipline then - to focus resources on innovation, to work hard for progress and to follow rules for the bigger good of the world. think of a sector and this will apply - movies, streets, schools, businesses, sports, politics. and on a personal note, that is what my religion teaches me too. religion translates to dharma in hindi which then translates to discipline also.
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