Sunday, March 18, 2007

Deconsructing Matichon Writer Nongnuch Singhadecha in Bangkok Post

Don't let capitalism run amok

Sufficiency economy is a way to apply a framework of justice to today's version of capitalism, in which it seems that 'anything goes'

Bangkok Post


Since the interim government declared sufficiency economy the guiding economic policy of this country, there has been fierce criticism from some quarters that foreigners may misunderstand and think the government is closing up the country, turning its back on international trade and reverting back to a stone-age economy, noted Nongnuch Singhadecha, a Matichon writer.

Nongnuch reminded those Thai critics that they should read His Majesty the King's speeches about sufficiency economy before making fools of themselves by claiming that foreigners would be frightened by such a philosophy. His Majesty first explained the concept in 1974, then again in December 1997, but there were still some people who could not grasp it. Thus His Majesty explained it once more in December the following year. Over the years, there had never been any negative reactions from foreigners, only from some Thais who were unduly worried that foreigners would be scared.

Nongnuch expressed wonder that sufficiency economy could be so hard to understand, or that it warranted controversy and debate. She doesn't doubt that sufficiency economy can be applied in practice, because this is the philosophy that has been taught by our ancestors and our religion.

The main idea of sufficiency economy is to "do everything in moderation according to one's means and capability, not too extreme, not too greedy. Do not take advantage over other people. Be reasonable. One may have some luxuries, but not at the expense of others" (from His Majesty's speech given on December 4, 1998).

Thais who are fearful that sufficiency economy will replace free market capitalism as the dominant economic philosophy in this country tirelessly espouse the good points of capitalism. They cite Adam Smith, who said that free markets would create wealth because everyone would have incentives to work and to produce. The more one works and produces, the wealthier one can be become.

Yet there are billions of people in this world who still lack basic amenities such as potable water. Many find it hard to get enough food to survive each day. If the global community can help these billions of people rise above this abject poverty, it will do the world a lot of good. There is no need to talk about wealth in the capitalistic sense at all.

Whoever craves capitalism to the extreme should consider that it is capitalism itself that creates insufficiency, because it creates economic injustice. Wealth is concentrated in certain groups while the majority don't have enough to eat. Even in the United States itself, some pundits suggest that in the near future there will be only the very rich and the working class, while the middle class will disappear. The gap between the haves and the havenots is ever widening.

Capitalists often argue that countries must create investor-friendly environments with clear-cut investment rules, so that investors can plan future moves. Yet it is often these same people who create chaos and instability throughout the world by speculating on and attacking weak currencies to reap enormous profits, without caring for the suffering of those who lose out.

Nongnuch concluded by saying that she would not dispute the notion that free market capitalism is the least evil of economic models, but it still has many flaws. It needs wisdom to manage capitalism so that its adverse effects cannot hurt society too much. Such wisdom is sufficiency economy, said the Matichon writer.

What's up with this broad? She rails against capitalism and embraces Royalist neo-feudalist jargon like most anti-liberal Thai academics and writers.

And like most Thai thinkers, her analysis is wrong and her solution is simple-minded and moronic.

There is no such thing as extreme capitalism. Every country in the world has a mixed economy. Some swing towards freer markets, some swing towards state socialism.

A country like Hong Kong, which is as extremely capitalistic as you can get is widely successful.

The problem in Thailand is not capitalism, of an extreme or mild variety. The problem is Thai capitalism, of which its negative aspects are manifested through inefficiency, lack of integrity, greed, exploitation, social stratification and incompetence.

I am totally convinced that Thailand could have a wildly successful economy if certain people tempered their greed, the legal system was sound, the education system was decent, and if the government wasn't corrupt and inefficient.

Also, there is nothing stopping Thailand from adopting a Scandinavian model or a Swiss model or a Singaporean model.

There are many models to chose from, and the king's advice can be used as a guide, but it does nothing as a theory in determining rational public policy. And why use the king's so-called theory as a basis for public policy when that policy can never be debated by the government? And who will judge the efficacy of sufficiency theory? Going down the sufficiency theory road is a slippery slope that no government would be able to extricate itself from in case it needs to change direction.

But one thing we know for sure, the Thai capitalist model sucks and needs to be seriously reformed. The "blame the farang" model may work for some writers who don't want to take responsibility for what happens in Thailand, but as matter of public policy it is totally useless.

1 comment:

Bryan said...

Agree. Nongnuch Singhadecha is misguided on what capitalism really is. Capitalism works. It's up to the government to mangage the incentives.