Economics in Crisis
by Paul J. Dejillas
Professor of Anthropology
1. The term “economics” is more popularly known as the science that deals with the allocation of scarce resources in order to meet the basic needs of the individual, family, or society. But there is more to this than meets the eye. Etymologically, the term comes from two Greek words meaning household and management. During the ancient period, household management encompasses several affairs, other than the “allocation” character, that directly affect the welfare of the family or nation.
2. Economic transactions or exchanges are made possible only because of the so-called “mediators.” The mediators keep the economy going and vibrant. They turn the wheels of the industry. They are the engines of growth and development. They influence individual decision making and behavior.
The Traditional View
3. The term “economics” deals on the allocation of scarce resources to meet the basic needs of the individual, family, or society. Resources may be in the form of income or wages received from employment or profit generated from operating a business. Needs, on the other hand, may refer to such minimum basic needs as food, shelter, clothing, education, medical and health care, etc.
4. Resources may be abundant or scarce relative to the needs of the individual. Usually, it is scarce relative to many individuals. One main concern of economics is how to increase these scarce resources, e.g., providing more job opportunities, augmenting the salary or income of individuals through some productivity or profitability schemes. Another concern could be keeping the prices of basic commodities and services at the minimum. When resource-based measures are not possible, one could simply limit his/her consumption by responding only to the most basic needs of food or clothing and perhaps abandoning education and savings for the future.
5. Economics can be viewed from the macro or micro perspective. The macro view considers the entire country or nation and is concerned of the national income, technically, gross national product or gross domestic product. It is also concerned with population, wages, prices, investments, employment, inflation, foreign trade, money supply, and many more. The micro view focuses on the enterprise or firm and is more concerned with such issues as profit, productivity, pricing, production, marketing, finance, labor relations, etc.
6. There are indicators that would tell us that a country’s economy is strong. Some of these are:
a) GNP growth rate is higher than population growth rate.
b) Unemployment rate is below 10% of the labor force.
c) Inflation rate is below 6%.
d) Export is greater than import.
e) Wages and salaries are above the minimum-basic needs requirements
There are also measures that could indicate that an economy is growing. Some of these are:
f) GNP growth rate is higher than population growth rate with GNP increasing and population decreasing over time
g) Increasing per capita income over time
h) Unemployment rate is decreasing over time
i) Inflation rate is decreasing over time or kept at the minimum
Thus, when one enters the world of economics, he/she is introduced to such economic jargons and concepts as income, profit, productivity, consumption, expenditures, demand, supply, prices, GNP, inflation, foreign trade, exchange rate, etc. Relationships are measured quantitatively and usually in terms of value, which is expressed in terms of money, goods, commodities, or services.
Today, when we say economy, what comes to mind is a money-based economy or an economy mediated by money.
A Broader View of the Economy
10. As stated earlier, economics originally means household management and that family affairs is much more than just financial or money management. The household is a political unit and structure founded on a hierarchy comprised of the father and the mother, each of whom have their corresponding power and authority defined and established by tradition, beliefs, or customs.
11. Other than money matters, family concerns include seeing to it that family rules are observed, discipline is established, daily household chores are done, and there is peace and harmony within the family. Family traditions, customs, and even religious beliefs are other equally important concerns too in the management of household affairs. Etymologically, all this comes into the realm of economics and that economy or household management becomes not only mediated by money but also by power, values (love and harmony), customs, and even religious beliefs.
12. Political power provides the structure and mechanism that influence the direction and content of the money economy. Power variables may include concentration of power and authority, maintenance of peace and order, availability of needed knowledge, skills or expertise as well as degree of people’s organization and participation.
13. Even during the olden days, such values as sharing, reciprocity, teamwork and cooperation, commitment, dedication have already been found to exert influence on the economic lives of the people.
14. The history of religion all over the globe demonstrates how religious beliefs influence the lives of peoples and nations. Today, history has given birth to such insightful discussions as Muslim economics, Christian economics, Hindu economics, Buddhist economics.
Economics of Abundance
Economics, as we learned in the first lecture, is based on the concept of scarcity. Because natural resources---land, water, minerals, trees, animals---are scarce, people need to allocate these limited resources in such a way that they can be optimally used to respond to the basic needs of man.
But there are those who take the contrary view, convinced that the world possesses abundant natural resources far more than enough for everyone’s needs. The world possesses built-in mechanism to reproduce and replenish itself. Scarcity, according to this view, comes in only because of greed, hidden under the “noble” concepts of industrialization, development, profit, etc. In view of this, injustice has become rampant. One multinational financial corporation having an asset of over $22 trillion as against millions of people all over the globe earning less than $1 a day is one case of glaring injustice. The same in the case of one individual earning more than one developing nation earns in a year.
Another reason behind the concept of scarcity is fear. People fear about the future, the reason why they amass savings unto themselves – a hedge for the future, which to them is uncertain. Yet, uncertainty of the future is another creation of the concept of scarcity to justify the individual’s unrestricted accumulation of unlimited wealth and assets, without any regard at all to the other’s needs.
Several theories support the concept of scarcity: Charles Darwin’s “survival of the fittest,” Adam Smith’s “laissez-faire,” the Western concept of “democracy,” etc.
That there is in fact abundance in the world and in life gives rise to the concept of “economics of abundance.”
Economics can be better appreciated if viewed from a broader perspective. Perhaps, the broader view advanced here could provide more meaningful approaches to address existing economic problems. But even before this can be so, more serious efforts still remain to be done to construct a more comprehensive theory and framework that integrate in one holistic model the many variables --- economic, power, values, religious --- advanced in our discussion above. At best, what the discussion is able to achieve is to open up the possibility that economics is after all more encompassing than is popularly viewed today.###