Economic empowerment and grassroots democracy.

Posted from Kuala Terengganu.

The germ of an idea to write this article comes from my initial reading of a book written by Ludwig von Mises. He was a leading exponent of the Austrian School of economics. He has had tremendous influence over economists who can generally be regarded as proponents of free market. The particular book I am referring to is titled Economic Freedom and Intervention. I find the ideas resonate well with the PM's declaration that the age of big government is over. I am hoping that declaration also signals the coming of an age of greater economic freedom and decreasing intervention.

Suppose the masses of people still lived in hovels. Let us further suppose in the many economic and social indicators, the masses of people are found wanting. The average per capita income is low; the share of the national income going to the majority of people is smaller than one that goes to the minority. We discover for example, that 20% of the population gets 60% of the national income while 80% must share the remaining 40%. This means on average, the income of the 80% is perhaps 1/8 of the income of the minority. We see levels of education; housing they lived in, access to facilities and access to means of producing wealth are limited.

How is it possible the 20% gets to own what they do, while the sea of masses, Chinese, Indians and most noticeably Malays have to eke out a living from the measly 40% of the nations income?

The next question we need to ask is who is to blame for this sad state of affairs? The almost universal response would be, is to blame the sea of masses. We can blame the inherent inferiority of the masses for their inability to overcome their inferiority. It is also almost universally accepted nowadays, that this inferiority that we speak about, is a product of the social system. Only a small portion of the inferiority is ascribable to natural inferiority.

As matters are, we then proceed to look at the structure of the social system. We quickly come to the conclusion that, the present state of affairs in which we find ourselves pitying, arose because of uneven distribution of power.

Now, when we speak of power we are of course referring to political/governmental power and economic power. It is the uneven distribution of these two types of powers which has created the sad state of affairs. The two powers are concentrated in the minority. The minority is known by many names, but thus far, in my articles, I know and speak of them as the elite.

So we come back again and again to the declaration by the PM that the age of government knows best is over. Like so many others, I want this to work. It is a revolutionary idea. It can lead to the redistribution  of  power from the minority to the people/majority.

But is also an idea fraught with dangers and many hurdles. The masses of people must 'qualify' themselves to achieve what has been declared. First they must not compromise on quality leadership. We need good leadership at all levels. Second, the level of consciousness through education, through socialised action must be achieved.

When the PM made that statement, that the age of an omniscient government is over, we must provide flesh to the skeleton of the idea. We must take it to mean, the divestiture of concentrated power must be made, from the minority to the majority.

The statement by the PM brings with it far reaching implications. Perhaps, the PM acknowledges the bigger portion of blame for the state of affairs rest with the elite/leadership.

The leadership has governmental power. The essential nature of political and government power is this. The government alone and with it those who hold the levers of power, have the coercive powers of the state. They alone have the instruments to oppress and pummel the people into submission. They have the powers to ram policies onto our social setting.

Take for example, the NEP and successive policies that follow it. The NEP is essentially a set of policies that seek out to correct economic imbalances through non-economic measures. They are in the form of legislative powers. They are substitute policies that seek to correct things which could not be achieved through purely market forces. Since they are also governmental powers, they bring with them, the essential nature of the powers. The essential nature is that they are coercive powers.

Perhaps, that is why Tun Razak when formulating the NEP imposed on it a finite timetable. He knew and understood the involuntariness and forceful nature of governmental power. Those who do not understand the nature of such power become intoxicated and addicted to power. They wish to prolong it because it confers a sense of superiority on them.

There is a more serious objection to the continuance of NEP that transcends racial settings. It is just an extension of potentially coercive purely governmental powers into the realm of economics. It is on this principle, we can object to the continuance of NEP.

Coming back to the PM's declaration about devolution of governmental powers, it makes sense only if it's spoken to free people. And by free I mean the economically independent people. The more advanced sections of our society, the economically stronger will find the declaration attractive. They are relatively freer than those who depend on the government for economic succour.

If it is spoken to Malays in general who look up to government for protection and help in a host of ways; it is useless unless they are economically empowered. Hence, the PM's wish to have the powers of big government reduced must be followed through by concrete actions. It has to begin with the economic empowerment of the majority Malays.