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