General News - Tuesday December 18, 2007

OPINION / THAILAND'S ECONOMY

Making the system work for everyone

Capitalism doesn't have to make the rich richer and the poor poorer

By BANYONG PONGPANICH

What does Thailand need to do to develop its economic system so that it reflects an ideal form of capitalism?

There are key issues that can guide our development toward true capitalism.

First, all sectors of society need a correct understanding of the core concepts and ideals of capitalism. This has to be recognised as a national agenda.

Civic groups should actually condemn distorted forms of capitalism, instead of expressing wholesale disapproval of all forms of capitalism as is the case today. Society must take part in the common goal of defining a sensible course of economic development.

Second, we should develop mechanisms and components vital to facilitating effective and fair market mechanisms. As well, relevant regulations and systems of implementation, necessary checks-and-balances systems, good governance both in public and private sectors, access to information, transparency and public participation must also be in place.

Actually some of these components have already been initiated, especially after the economic crisis 10 years ago, although developments have been haphazard and somewhat distorted.

Third, the role of the government should be restricted to providing public services and welfare, as well as performing its responsibility as a market regulator, ensuring free and fair competition through effective infrastructure, and financial and market instruments.

At the moment, I think the government is playing too active a role in the economy. When you add government enterprises to this scenario, it is clear that the government is still exerting considerable control over the economy, managing the market and intervening in every issue.

The private sector also expects too much from the government, seeing it as the knight on a white horse that will come to the rescue in every matter.

For instance, when the export sector is affected by the baht appreciation, they call for government intervention in the foreign currency exchange, instead of trying to increase their own competitiveness.

If we can reform and reposition government involvement, the economy can be more effectively developed.

These three issues are essential for the transition toward true capitalism.

Can capitalism and the sufficiency economy go hand in hand?

The sufficiency economy philosophy, as we know it, means humility, moderation, realising one's capacity, maintaining ethical practices and creating safety nets for one's enterprises. These concepts are all incorporated in the goals of capitalism.

However, during a period in the past, we neglected these principles and hence the economic crisis occurred.

His Majesty the King's advice has lent tremendous support to this philosophy which is of immeasurable value to our country.

Within a sufficiency economy, our economic system would be less exposed to risks of hardships such as those experienced during the last economic bubble.

Ethics are very important and must guide the economy's common goal of maximum utility. In capitalism, maximum utility is not just about maximum income and profits.

Is it true that capitalism encourages materialism which is against eastern and Buddhist philosophies?

People like to say that extreme materialism is a product of capitalism, but I see it differently. Capitalism has been created from the human tendency toward material attachment, a basic part of the human instinct.

All living things are concerned with themselves, their survival, satisfaction of their needs and wants, according to their own preferences and capabilities. If humans were not at all materialistic, we would still be living in caves.

Capitalism creates opportunities for material satisfaction for the majority of people, instead of reserving those opportunities to the privileged few.

In other words, where quality of life is concerned, material matters are always part of the picture, except for those who strictly follow the teachings of Buddha and abandon the worldly life in search of enlightenment. But most people cannot follow this path even though it is the truest.

It may be true that those who only seek the highest profits in a capitalistic system want people to worship material as much as possible. But in a good system there would be regulatory bodies to protect consumers such as the Food and Drug Administration, the National Censorship Board, and other legal frameworks. There should also be efforts to promote appropriate values by responsible organisations.

In capitalism, the strongest and the smartest always win. The strong have an advantage over the weak. But the majority of the people in this country are not strong, but rather weak and underprivileged. What can we do?

In any system, the strongest always win. It is part of the survival instinct of all living things, just as materialism is part of the human life.

The point is how to give opportunities to the underprivileged, to make the weak stronger. How do we reward the winners without stamping out the weak?

A good capitalistic system seeks to address these issues; it must encourage people to want to compete within the system and regulations without taking advantage of others. The fact that one person is better off does not mean making another fall. We can look at it as a kind of sport. Both the winner and the loser can learn to run faster, and no one gets killed.

Regulations must be respected. If you want to win, you have to run faster, but you are not allowed to trip the runner in the next lane deliberately. You cannot use illegal substances. If you break the rules, you can no longer compete.

Giving opportunities to the weak does not mean everyone has to run slowly.

In a good capitalist system, equal opportunities must be available for all when it comes to certain issues, such as education, so that everyone can develop his or her potential and can have access to resources. The underprivileged must be taken care of. State welfare must provide them with basic necessities including health care. The state must ensure that even the unemployed will survive even though they are not rich.

This article is the last in a two-part series on Thai people and their experience with democracy, provided by the Sanya Dharmasakti Institute for Democracy, Thammasat University.

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