Democracy vs welfare

Democracy vs welfare

"Economic development is a pre-condition for democracy and
political development. The main obstacle to the development of
democracy in Indonesia is the huge proportion of economically
weak people and the millions living below the poverty line," said
Nazaruddin Sjamsuddin at the University of Indonesia (The Jakarta
Post, March 4, 1996). To this Ignas Kleden commented: "Can we
assume that the huge proportion of economically weak people and
the millions still living below the poverty line will surely have
their living standards improved if we keep pushing for economic
growth? This is very debatable." (The Jakarta Post, March 14 and
15, 1996).

Although it is hard to digest, it is true that the millions of
poor could be an obstacle to the development of democracy in
Indonesia. The economically anxious poor can be easily attracted
and misled by people of doubtful integrity and principle.

When I take a look at the slavery and its abolition in the
U.S., it appears as if the abolition of slavery was the result of
capitalism winning over feudalism. Of course, missionaries did
their job. Industrial growth needed the manpower from the
agriculture sector and the abolition of slavery was the only
answer. Capitalism and industrialization -- or economic
development -- never had the welfare of people as its main
objective.

Investors are not missionaries. They invest where the returns
are the best. Regardless of the amount of investment, the lives
of the poor will not be substantially improved because they lack
the skills necessary to take advantage of industrialization. If
the rich become richer the poor will not become less poor.

Ignas Kleden stated: "We can take India as another example,
where democracy works fairly well, though economic development is
still left behind." He further says, "Democratic participation is
the way which enables and, if possible, accelerates the advent of
prosperity."

In India, economic development took a back seat to the
socialist economy. Business development, R&D, productivity
improvements were stopped by legislation like the Monopolies and
Restrictive Trade Practices Act, Industries Development and
Regulation Act, Capital Issues Control Act, etc. If my memory
serves me right, the country that used to export automobiles to
Korea in 1960s had the same models of automobiles until very
recently. Complicated tax and labor legislations created talented
non-productive accounting and legal professionals, black money,
capital flight and a brain drain. If this is the case in a poor,
developing country, what is happening in a developed country like
the U.S.? It is troubled by the question: Why has the purchasing
power of blue-collar workers stagnated in the past 15 years when
pay increases are stratospheric for top brass? In Japan, with one
of the highest per capita incomes, the number of homeless is
increasing. To me, this shows that democratic development may not
necessarily result in improved welfare.

Another point discussed by Ignas Kleden is minimum wages. Most
everyone agrees that workers are human beings, and deserve to be
treated as such. Nevertheless, determining what minimum wage is
needed for workers to lead a good life is subjective.

Paradoxically, democracy, although not taking care of the
welfare of the people, allows freedom of expression. When a
sizable section of the population can be easily tempted to seek
immediate economic benefit does the fundamental right to freedom
of expression do the nation any good?

After reading the views of the two gentlemen, I started
doubting if democracy is the best answer to help society. Can
someone enlighten me?

D. PRABHAKAR

Jakarta