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.