I’ve always believed that the main goal of economic development policies and programs is to raise the real standard of living and incomes of the vast majority of people not only with respect to particular nations but more so with respect to the global family of nations. It’s time to rethink economics towards this perspective and Econ4 is a start.
http://www.econ4.is/
www.econ4.is
I am happiest when I could have some quiet time alone at home, in the garden surrounded by fruit trees, reflecting about life and my experience of it, my faith, my family, my work, and all else I love – seeking, studying, understanding and resolving to live and love more and better through it all.
Yesterday I learned of Steve Job’s death. I just want to acknowledge that personal computing, and all that it has made possible because of his creative genius, has given me more of these quiet times saved from mundane work and other tasks.
Thanks for the happiness Steve!
In times when I ask myself if I have made a difference for good in the world, I reread a letter sent me by my daughter in her junior year of college. She wrote:
Dear Mom,
I know this is not a mother’s-day card but it’s about your relationship with the Lord. Because He will be with you forever. We have not always agreed on every point, but God is our great bond. I pray that you will trust God in all you do. Believe that His eyes are always upon you and that His love will see you through.
I pray you develop your full potential in the Lord, and that you would not hesitate to obey and sacrifice for Him. We know that all that we do has an eternal reward, and is not in vain. I pray that in each moment, you will always opt for the right way. Be not afraid to die to yourself, God will be faithful to you.
The Lord deserves all our love, sacrifice and pain. To die for God is to have life eternal. We must indeed love God above all, even above our lives. Your faith is not in vain. Do not over worry about your body for the important thing is the soul.
Thank you for our talks. I am happy that you always ask me about the Bible. I hope and pray, I’ve also been a good daughter because I try my best. Still, much is to be improved. I pray we learn to love God more and more each day despite all our trials and tribulations. God knows us. He knows our future for He said, “For I know My plans for you, plans for good and not for calamity. To give you a hope and a future.” (Jeremiah 29:11).
Let us therefore forget what lies behind and set our hearts on the prize of the upward calling of God. We know God will be faithful to finish the work He began in us. (Phil. 1:6). We will live only once, we must give our all for God’s work, knowing that we are but stewards of His great blessings.
Thank you for everything! God bless you! May the Lord grant you peace and quietness of spirit. That you may trust in Him completely, for God’s eyes are always on the righteous. May He grant you great joy despite all your doubts. May we indeed know how to say, in our hearts, “Whatever may happen, the Lord has taught me to say, it is well with my soul.” And so for you also.
“Therefore, I say to you, do not worry about your life, what you will eat or what you will drink; nor about your body, what you will put on. Is not life more than food and the body more than clothing?” (Matt.6:25). But seek first the kingdom of God and His righteousness and all these things shall be added to you. Therefore do not worry about tomorrow, for tomorrow will worry about its own things. Sufficient for the day is its own trouble.” (Matt 6:33-31).
Smile! Miam 
I deeply sympathize with the Japanese people for what they are going through after the earthquake and tsunami that befell their land. I have read much about their discipline, technological skill and economic wealth, but I most admire them for their generosity of spirit about which my late husband shared with me. Years ago as a young UNIDO scholar sent for training in Rome,Italy he found himself arriving late on a Sunday afternoon when banks were closed and with hardly enough cash to be able to book himself a hotel room for the night. As he frantically explained his situation to the hotel personnel at the desk, a Japanese couple overheard his story, found out he was a Filipino and unhesitatingly put in his hand a wad of local currency to tide him over the weekend. He never saw them again even as he tried to locate them to thank them and return their money as soon as he got back from the bank the following day. I pray to God that He may look upon this spirit of generosity and multiply it a million fold to especially bless and spare the Japanese people from further suffering.
I think the thought – that as a Christian I am in the world but not of this world, per bible scripture – this thought must have given me some comfort in looking to this “other world of God” when the pain and troubles in the world seem too much to bear at times. Perhaps providential circumstances come to goad me to reflect and acquire insights on the meaning of scriptures, an understanding which is based on a searing experience in the heart, a personal imprint of understanding that may not be possible otherwise.
Originally, I thought I would make this blog one on economics, at least on my thoughts about the subject. After all, I’ve worked as an economist – teaching and consulting – for more than 25 years now.
But economics is no longer very important to me, or not as important as it was. Its theories and models that are used to describe and explain the events of the world and men’s activities do not seem as convincing and real to me now as before. Somehow, I don’t see an unambiguous focus in the discipline which leaves my soul unsatisfied to think that these are mostly all that I know of life, and of my life. And even these I’m not sure are the constructs that really describe our world, that really matter in our world. So what to write on. If not economics which has been all of my career life, it should be something really important to me.
Economic development does not necessarily have to be defined within the constraints of national borders or countries. To save our world from crisis to crisis, from famine, war, and political conflicts, development has to be redefined in the wider context of world development inclusive of world resources – material, people, land, technology and entrepreneurship. Unless this view is accepted as the basis for action, the world will continue on its downtrend because its basis or root is inappropriate or incompatible with sustainable development from a global human perspective.
Too many factors involved in economic development as it is presently defined are externally determined – external to the country whose development is being studied. Domestic policy efforts could at best be useful to the extent internal market distortions are corrected to allow benefits to expand within the system, which of course limits the growth of national output up to the size of the internal market. Beyond this, a global perspective and strategy is essential. That’s why import-substitution can power growth for a while, and growth henceforth, becomes dependent on externally determined factors. And in the global arena, certainly purely economic issues often are subservient to those linked to socio-political factors. Often, this explains why a country after doing all it can to put its domestic house in order, experiences a burst of economic growth, then plateaus or stagnates for reasons linked more to historical, political and social issues than to the apparent economic issues advanced as explanatory variables. This is true even with the advent of regional trading arrangements such as AFTA, APEC, and WTO.
The resolution of issues on economic development and/or human development (with emphasis on the quality of life) for individual countries or nations may be better sought from a wider perspective using an economic paradigm that challenges our oldest set of beliefs regarding the ultimate human motivator for economic enterprise and human well-being. This is not to say that the efforts of helping institutions like the World Bank, IFC, and USAID, among others, are not important. Up to a point, countries are helped to correct self-inflicted problems like price and market distortions and other social and political problems that may or may not be historical in origin or deliberate. Beyond this are problems that are globally and externally determined that are just too much and too well entrenched in the internal system for any one nation to resolve on its own.
I think of a new economic paradigm which sets out to maximize production given the world’s supply of land, labor, capital, technology, and entrepreneurship, and allowing unhindered production specialization to take place wherever it is most efficient to do so. For example, rice, corn, wheat and agricultural products are allowed to grow where the production function is allowed to shift to the outermost technology frontier without tariffs, quantitative restrictions, foreign exchange controls, and other administrative regulations serving price-fixing objectives of vested interests whether corporate or government. The same is true for production of clothing, electronics, and other goods. Specialization in production according to global comparative costs inclusive of transport and market distribution costs is the key. The resulting global trade and exchange payment system, while enormous because of the greatly expanded levels of production to be made available, will parallel the flow of goods and commodities, i.e. countries that produce and sell more will receive more payments and have more income.
The other blade to this paradigm is the notion of distribution of output consistent with a more equitable consumption levels worldwide. Conceivably, with the resulting monetary income and payments favoring countries which produce and sell more, world income hence purchasing power or consumption levels, may be distributed more unevenly among nations. Redistribution of income to effect a redistribution of purchasing power among nations is a challenge that must be accepted as leading to the solution to many if not most of the world’s problems today. The mechanism of this system needs to be fleshed out carefully on the level of world groupings. A truly representative and impartial United Nations would be a logical first choice to start the ball towards this end. The mechanism may be based on a monetary system of compensation that evens out the greatly skewed income distribution from world trade specialization, or it may be a more direct commodities and goods distribution program undertaken on a global scale. But whether the UN, as it is today, with some help possibly from the IMF would be equal to the task is another matter. Only time will tell when the world will be ready to depart from an economic system so deeply conditioned and entrenched in Adam Smith’s principle that equates the pursuit of self-interest as the beginning of economic wisdom.
Short of the dream of a Utopian economic development paradigm briefly outlined above, there are problems to be faced in moving from the domestic to the global resolution of economic development problems for any country. In the neoclassical system which describes our present, most developing countries have a lot of work ahead just putting their economic houses in order to really optimize the benefits to be gained in a market-system economy, internally as well as globally. The economics literature does not lack volumes on the definition, measurement, and correction of market distortions, intended or not, apparent or disguised, etc. in terms of prices, tariffs, quantitative restrictions, exchange controls and other politically introduced measures of policy. The bulk of the effort consists of the political will to find out the extent of the problems attendant to these market distortions, the decision to resolve these problems, and the determination to implement corrective actions.
This is the first entry for this month of September. This will develop the conceptual framework on developing the international competitiveness of a hypothetical country. Such will lead to a broader analysis of development policies and strategies that may be applicable to all developing countries with regard specifically to their balance of payments and financial country position.
