No such thing as textbook economics

12 Jun, 2016 - 00:06 0 Views

The Sunday Mail

The phrase “textbook economics” is often abused when there are disappointments with Government interventions and policy intentions. It is advisable to stay away from that phrase, especially in the context commonly used in Zimbabwe.

Caution should be taken in how such a simple reference can mislead our national perspectives from retaining a visionary imagination of the socio-economic manifestation we hope to realise one day in the not-too-distant future.

Instead, what we must proffer in cases of disappointment is the phrase “sound economic judgment”, based on a wide scope of economic theory options of which we have selective discretion.

We must always remind ourselves that there is no single economic design that should be considered standard, let alone the norm. Such a pre-condition derides the virtue of every nation having the choice to practise its own economic judgment based on subjective ideological conviction.

For instance, what the Chinese consider to be an appropriate economic design does not necessarily have to be similar to the imagination held by Zimbabwe.

Likewise, Zimbabwe’s ideal economic design does not have to be similar to that of our Tanzanian kin.

Of course, there are fundamental principles that every nation must abide by.

Zimbabwe cannot sustain a fiscal and trade deficit. We cannot sustain piling domestic and foreign debt.

We have to incite productivity in order to create employment.

However, by frequent reference to conventional “textbook economics”, I worry that we increasingly undermine the virtue of independent economic judgment.

Admittedly, certain recurring traits in our economic management should move in the direction of sound economic judgment.

It is understandable then that impatience brews within observers.

However, it is essential that we do not allow angst to cloud the importance of imagination, especially if we were to sacrifice our imagination for conformist mimicry under the intellectually inept guise of “textbook economics”.

Not so long ago, most of the world was living under a structurally enforced intellectual discipline to prescribed economic practice.

Immediate memory for most people would be the structural enforcement of the spread of neo-liberalism, to a significantly eased extent this still happens today.

A positive shift of economic thought based on credible evidence in paths taken in East Asia in particular has become increasingly difficult to restrain the realisation that economic prosperity is not subject to one viewpoint of economic perspective.

Just last month, the IMF, itself a traditional key enforcer of neo-liberal ideology, published a paper titled, “Neo-liberalism, oversold?”

The paper was a sincere reflection of the shortcomings and exaggerated virtues of neo-liberal prescriptions enforced in many parts of the world going back to the 1980s.

For example, convincing data pointed to how open capital markets (FDI) have led to financial crises and exacerbated inequality of wealth; especially short term flows of capital.

Limited government spending, austerity measures such as cutting a government’s wage bill and public spending, pushed by an emphasis to ease fiscal deficits accrued largely due to foreign debt, can be seen to affect welfare costs and worsen unemployment.

Some of these neo-liberal convictions remain predominantly referred to as “textbook economics” today.

Indeed, this could be an opportunity to imagine how different the fate of many well-intentioned ideologists of disparate convictions to neo-liberalism would have been had this emerging open mindedness prevailed sooner.

While we cannot go back in time, as we move forward, perhaps the world must place greater reverence in diversity of economic perspectives.

However, those economic perspectives must be grounded in pursuit of intentional outcomes.

Thus, when we critique chosen policy and Government interventions, it is imperative that we initially critique the intended outcomes and not simply abide to “textbook economics”.

Certain societies are hindered from such an astute evaluation of policy and Government interventions because of retained beliefs in those once-enforced economic perspectives of textbook economics.

Consider the dismissive and very low standard discourse around basic income and universal healthcare in advanced economies today.

Very little thought is given to the ideals and economic contribution that could be derived from having a healthy citizenry that can live at a minimum defined level of economic dignity.

Instead, predominant narratives of moochers living off state resources and the work of others remain instilled in social mindsets, this dismissiveness is justified by exclusion from “textbook economics”.

Open-minded and progressive societies would discuss the potential benefits of ensuring no citizen lives below the poverty line, a savings in economic and social cost.

Likewise, discourse can further be expanded into the credence of the effects that future technology will have in the potential redundancy of idle labour which cannot afford the cost of enhancing its occupational competency.

Perhaps such discussions seem to be of little relevance to many Zimbabweans, yet for a nation that retains an ideology of socio-economic transformation, how can imagination of unconventional economic design be festered by rigid expectations of “textbook economics”?

We must begin to emphasise the need for sound judgment in our policy and interventions.

This sound judgment must be weighed against intended outcomes, not textbook economics.

We have an economy of our own, let’s not be timid.

We must allow ourselves to create whatever outcomes we desire from it.

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