Does democracy mean welfare?

Does democracy mean welfare?

This is the second of two articles on the relationship between democracy and economic growth.

By Ignas Kleden

JAKARTA (JP): The debate on the relationship between economics and politics seems to depend very much on which level the debate is conducted. If we talk about economic growth, for example, the basic assumption and vocabulary used tend to be more technical- economic rather than political.

This is all the more so if the discussion goes along the line of the stages of economic growth ala Rostow, where political interests and the need for a political participation claim on power and policy, or pressure on a constitutional system, are assumed to originate from an improved economic condition, which is brought about by the take-off stage.

There is a point in the above argumentation. It is a sociological truism that the changes occurring at the material base of a culture (of which economics and technology become the main underpinning) will, in turn, have repercussions which, again, impinge upon the social structure and cultural system of a group of people. This is discernible in the changing social and cultural behavior of Indonesia's emerging middle class.

It is equally true that Indonesia's ongoing economic development has now been built on effective social engineering. It takes the form of political restructuring, by which the existing political institutions are expected not to hinder but, if possible, to support the project of economic development aimed at economic growth.

The reduction of the number of political parties, for example, has been done on the assumption that too much political participation through uncontrolled party politics will only shake the political stability. This, in turn, will render the economic development insecure and unsustainable.

The central position of economic development and the basically economic approach to the development problem is also reflected in the discourse on it. People are gradually made used to the differentiation between economic affairs and noneconomic affairs, as if social, cultural and political and ecological matters are only a residue of economic problems.

The present discussion starts to show a new awareness in which the clear-cut differentiation is perceived as counterproductive.

In a recent lecture commemorating the 15th anniversary of the Muhammadiyah University in Yogyakarta, the State Minister of National Development Planning, Ginandjar Kartasasmita, pointed out that many concepts in development have been doomed to failure because people tend to separate economic development from social development.

This separation results in various sorts of development bias, which render many conceptions misleading and their implementation ineffective.

Those misconceptions are discernible in the tendency to believe that people at the lower social layer, who are to be assisted, are first in need of material help rather than technical and managerial assistance.

Or that the sort of technology which is introduced from above must be better than that which the people themselves are tinkering with, though with many trials and errors. Or that the people are either stupid or lazy and that the only way to help them is through instruction instead of motivation.

Also, that social institutions which have developed in society must be ineffective, so that they are usually neglected or even ignored, instead of our feeling obliged to strengthen and enhance their workings.

All these misconceptions, to quote the minister, originate in the basic misconception that a rational dimension of development is more important than its moral dimension, or that the material aspect is more important than its institutional aspect, or that economic affairs are more important than social matters.

Though the above statement contains nothing new in a sociological respect, it nevertheless becomes a strategic opportunity to shift focus from economic growth to a more socioeconomic perspective, which treats economic growth as merely a part, albeit an important part, of development. In that connection, the issue of prosperity is a good case in point.

It is clear enough that prosperity is not simply an economic category but also a social or, if you will, an ethical one, since it has to do with the wellbeing of the citizens. By way of illustration, we can take up the issue of the minimum wage of workers. As far as economic argumentation is concerned, the consideration usually focuses on the labor as a factor of production.

The question is whether the low wage is still necessary to retain the present price of goods in order to be competitive, or whether it is more profitable to replace the labor with machines or other technological equipment.

However, workers are human beings, who deserve a treatment as such. Keeping in mind that there are various technical argumentations which stand for or against the minimum wage, we can make a long story short by contending that there are two opposing positions in this regard.

First, if we look at them only economically, the question is how low their wage should go in order to keep Indonesian goods competitive on the international market, and let other considerations, be they ethical or political, just follow suit.

Second, if we treat them as human beings who deserve a life compatible with their human dignity, the question should be reversed: What minimum wage should be provided to the workers in order for them to lead a good life, which they deserve both as human beings and as the citizens of an independent state? This point should be established first and then let economic calculus follow suit.

The two questions mentioned above have very concrete implications. In the United States, for example, one can find the richest managers in the world, but in Western Europe, one can find the most prosperous workers in the world.

In this connection, another statement of Prof. Nazaruddin Sjamsudin is also to be reconsidered, in which the huge proportion of economically weak people and the millions living below the poverty line are said to be the main obstacle to the development of democracy in Indonesia.

From this statement it can easily follow that we must give priority to economic development and, after that, there is a real hope for the advent of democracy.

The question is then: 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. We have learned in the course of the last years in Indonesia and in other developing countries that economic growth is one thing and the prosperity of the majority of people is another.

For one thing, economic growth can be accompanied by the process of wealth concentration. For another, income redistribution is a matter which has a political rather than economic nature. It depends not on economic mechanism but rather on political will and political decision-making.

If we are aspiring after economic democracy as a precondition for political democracy, this is already a political choice par excellence because economic democracy, which presupposes more equal income redistribution, can only work if the people concerned are more involved in pushing for such a political choice.

This means that even economic democracy is only thinkable if there is more political participation from the people who are still afflicted by poverty to strive for a political decision which is beneficial to them. In that case it is clear that not only prosperity is the way to democracy, but democratic participation is the way which enables and, if possible, accelerates the advent of prosperity.

The writer is a sociologist now working at Jakarta-based SPES Foundation Research Center.

Window A: Prosperity is not simply an economic category but also a social or, if you will, an ethical one, since it has to do with the wellbeing of the citizens.

Window B: We must give priority to economic development and, after that, there is a real hope for the advent of democracy.