reducing poverty by reducing government (1)
On 28 Oct the National Development Planning Agency (Bappenas) released a 1st draft of national poverty reduction strategy (PRSP). A quick look would tell one that the new format is slightly better than before, when the doc was under the Poverty Committee. Talk about a national blue print that the government is preparing to affect the lives of so many poor in this country! I am still reading it, and am not inclined to comment here.
But last week I read an interesting article written by a prominent economist. The title of this posting is after the very title of his article. Anyone interested in poverty reduction may benefit from reading it.
Now I can't go on without a mention how Indonesia has been undergoing a drastic but silent transformation, until decades from now. Through a largely unnoticed process of big-bang decentralization, Indonesia is fragmenting exacty to the opposite direction. Decentralizing Indonesia cannot stop itself from fragmentation, distributing central authorities first to provincial and then onto district governments. Nobody seems to care about all the consequences that entail.
reducing poverty by reducing government (2)
I am no exponent nor opposant to the idea of decentralization. I believe in both its goodness and badness, in theories at least. Nor do I intend to blog about it. To go back to the economist, Reisman wrote his article in refutation to an "economist" who had written of complains about the low wages of millon working families but offered, according to Reisman, misleading advise. In the refutation, Reisman interestingly echoed the voice of David Henry Thoreau, an early American thinker who believed that the best government is that which governs the least:
Workers, the poor, and the public at large do not yet see the benefits of economic freedom. They have been misled by generations of intellectuals ... to believe that the means of alleviating poverty is the seizure of wealth from the businessmen and capitalists, who use their wealth overwhelmingly precisely in the production of wealth, and who produce less to the extent that they are deprived of the means of producing it. And in much the same way, people have been misled into believing that the means of alleviating poverty is government policies that are nothing more than various forms of prohibiting the production of wealth, or at least prohibiting substantial numbers of people from producing this or that particular form of wealth. Reisman argues that it is economic freedom, not government interference, that is the means of overcoming poverty. However, he says that workers, the poor and the public at large do not yet see the benefits of economic freedom. If they did, they woud:
... rise up in outrage at the injustices foisted upon them [...] not against their usual targets, the businessmen and capitalists, who create the demand for the labor they sell and the supply of the products they buy, and who progressively raise real wages and the general standard of living by introducing ever newer and better products and more efficient methods of producing all products, but against the ignorant, incompetent politicians and intellectuals who have so misled them that moreoften than not they have been duped into positively yearning for the fetters that make them poor. Reisman further argues that it is time for everyone to open his eyes to the knowledge provided by the science of economics and to understand that it is economic freedom, not the government’s violations of economic freedom, that is the way out of poverty and is the foundation of prosperity for all.
On his last point, I suppose Reisman could have clarified what he means with economic freedom. But overall, his interesting observation deserves further critical thoughts.
