The need for economic policy overhaul

By Meuthia Ganie Rochman

NIJMEGEN, Netherlands (JP): In a few years, man will pass the second millennium of civilization.

Printed media, including respected newspapers in developed countries have published articles on the social and economic tendencies for the near future.

Included in those topics discussed are the economic role of state, economic blocks, capital globalization, the changing position between western countries and the new capitalist states in Asia, and the balance between liberalization and protection.

These economic changes are caused not just by the development of information, capital, technology and management in economic fields.

Other factors, like the dissolution of former East European countries and the economic downturn in western countries are influencing the way western countries deal with developing countries.

Previously, these countries had to evaluate the geopolitical factors in economic cooperations. Recently, all countries' economic machines seem targeted in one direction: how to get a better economic position.

Major emphasis on economic spheres is considered as stimulating different problems among social scientists. Three basic problems get their attention: social boundaries and solidarity, balance between collectivism and individual, as well as (the form of) democratization.

In every society these elements always exist, albeit in different forms and degrees. In the past, ethnic, religion and place of birth played important roles in encouraging solidarity among community members.

The problem of solidarity is significant only if one puts it in a challenging situation. Ethnic solidarity, for instance, can only be seen outside the locality of an ethnic group, as in big cities.

Such big cities are constituted by various elements different from any ethnicity. In Indonesia, until the last 15 years, the relationship between the family living in a big city and relatives in village areas was still strong.

A family member just arrived in the city easily received financial and accommodation support from the relatives. Since about 10 years ago, data shows a decreasing number of migrants coming to cities this way.

Solidarity can certainly change. Urban society has developed new forms of relations through professional, neighborhood, or self-interest means. However, these new forms are much more limited and do not continue the involvement of affection or privacy.

The forms of solidarity which exist in such communities also have a distinct position between "the giver" and "the taker". For example, charities for natural disasters or for helping poor people.

On the other hand, social boundaries can become stronger. It particularly happens if the present system can not provide an equal rule for different groups.

One stark characteristic of developing countries is a sharpening of economic inequality, which has its roots from either past or recent growth, that tends to be treated as "natural".

If, in the past, inequality was justified by traditional values, it is presented by economic and political systems in the present.

At the economic downturn, as Brazil and Argentina have experienced, violence becomes ubiquitous, sometimes triggered by emotional outbursts. The violence in certain Central Java cities some months ago against Chinese ethnics did not show a strengthening solidarity among the ethnic Javanese.

Instead, it showed the hardening boundaries among ethnic groups encouraged by economic frustration. In these cases, the economic system has failed in creating justice or even a sense of justice among the lower class indigenous.

Even in western countries, there is moral distortion which affects solidarity. The ethnic violence in non-Western countries, like in Bosnia and Rwanda, received no less attention from western countries. In addition, trade relations are considered more important than questioning the violation of human rights in certain developing countries. Now, the expression of "double moral standard" is often targeted to the European politicians.

A few months ago, there was a discussion the Kompas daily about the principles of individualism and collectivism. Even though the discussion wanted to emphasize Indonesians as collective individuals, the approach was very individual in nature.

The problems of individualism or collectivism do not lie as to whether an individual is a collective creature or not but whether there are identities, values, norms, and goals shared collectively.

This problem has two dimensions: cultural and structural. If defined this way, excessive individualism is also a problem for western societies. An article in The Times magazine last year showed a widespread feeling of alienation among Americans.

Amitai Etzioni, a prominent sociologist, revealed that excessive demands of individualism have created individual and family problems. Certainly we should be careful in seeing problems of individualism in western societies.

Individualism in those societies is supported by economic and judicial systems, which basically keep the social values of collectivism. For example, welfare programs and the rule of law are much better than in Indonesia.

Collectivism is closely related to the function of structure of distribution in a society. Individuals as social creatures are meaningless, for instance, without shared understanding on justice that is endorsed through the economic system.

Cultural contents, such as identity and values, influence the performance of the economic system in certain directions. An article in New York Times Magazine this year brings us to the problem of consistency between economic and social values.

According to the article, there is an increasing gap between economic groups in the United States.

The income of employees in 20 years is decreasing, with male employees hit the worst (11 percent). Meanwhile, the income of the upper 20 percent increased up to 29 percent.

One cause of economic disparity is the change in an "implicit contract" between employers and employees. Now the blue collar laborer can not expect automatic recruitment along with an increased benefit of the company.

This is because companies, despite increasing incomes, tend to cut labor costs through recruitment and wage mechanisms.

In the past, the implicit contract was a pillar of American democracy. The article evaluates, at the level of social organization (in this case, economic relations) that the disintegration process is developing.

International oriented economic structures and activities, albeit aimed at improving a country's advantage, have inevitably influenced the formation and function of democratic systems.

The consolidation process of the European Community is always shadowed by the problem on how far the European superstructure is within the control of European citizens.

Although there is already a regional committee responsible for the interests of local communities, the anxiety persists.

This is because the function of the democratic structure depends on the factors of time and complexities in articulating interests.

Even the problem of conventional democracy is not yet resolved in western countries. Despite this, industrial countries are often considered as the yardstick of democracy; for some groups the present structures are not sufficient to defend democracy.

A more democratic structure is endorsed by "new social movements". These movements consider that the present system of representation is ineffective to channel people's interests.

Also, in their view, the decision making is often impotent to accommodating people's problems. To overcome these shortages they form loose, participatory, and multiaspected pressure groups.

The problem of democracy is even bigger in many developing countries. A considerable number of social scientists is of the opinion that democratization is happening in many of these countries.

Among the most popular is, of course, Fukuyama, who wrote that this process comes from the pressure of global economy. In reality, this process is full of tensions, so much so that it raises doubts whether a stabile democracy will ever be achieved.

The problem lies in the economic transition. After industrial development, many developing country governments could not direct the domestic corporations to be competitive and linked with smaller industries.

Almost typically, an economic downturn was followed by political restrictions. In turn, the economic gap and political restriction affected the civic culture. Experiences from Argentina and Brazil show that economic disparities created the culture of violence. This culture does not only imply the lower classes but also on the system of conflict resolution between economic groups.

The contemporary problem faced by many nations is the lack of structure and culture that mediate between groups in society. Individual relationships transform into anemic atoms. The individuals move by the calculation of cost and benefit.

It does not imply to reject the structural approach: the structure is constitutive in group relations. What is meant here is that economic orientation creates new social boundaries that are harder to pass by political arguments.

It is only in the western democratic countries that the problem of disparity is better controlled. However, the present economic problems, apparently everywhere, need new forms of policy making.

Solidarity and morality are being contested, driven by economic global competition. Or, do we need new forms of solidarity and morality? Articles in journals, magazines, newspapers and others reflect the anxiety among western societies.

The new problem of solidarity and morality needs to be solved.

The writer is currently pursuing a doctoral degree in sociopolitics at the University of Nijmegen, the Netherlands.

Window A: Forms of solidarity which exist in such communities also have a distinct position between "the giver" and "the taker".

Window B: On the contrary, the social boundaries can become stronger. It particularly happens if the present system can not provide an equal rule for different groups.