Lessons from an economic story

The principles that can be extracted from the following economic story are as follows:-

1. Don't punish the real workers of the economy by closing the doors of opportunities
   
2. Allow then to trade/participate in a more opened up economy
   
3. Dismantle the institutional prison that preserves the monopoly by a small minority
   
4. A new regime that governs relations among economic agents must be installed replacing the old one that perpetrates a big lie that the real workers are in need of a policy administered by the minority.
   

 

One taxi driver told a friend who told me. He wakes before dawn, performs his subuh prayers and sets off to do his job as a cab driver until he comes back at around midnight. This cab driver works like a water buffalo.

The cab driver has no formal education but is spectacularly intelligent and resourceful. Beyond his work as a cab driver, he could butcher a goat or cow according to Islamic rights, perform the function of imam at the local surau, , fix a roof, plaster walls, fix a host of household appliances. Yet his total lifetime earnings were less than even a very lazy, untalented government officer might earn in a single year who lives in the more affluent part of his neighborhood. He is consigned to the kawasan rumah kos rendah.

 The cab driver asked my friend: tell me brother, can I be called lazy? These politicians and unquestioning buffoons say I am lazy. I work from dawn past midnight; my income is nowhere near those who say my kind is lazy. The income divide is widening and it's not because we don't work. Maybe, it's because, opportunities are closed for us. The powers that be don't allow us to trade.

And that prompted this question:

Why does a spectacularly hardworking, intelligent and resourceful person such as this cab driver earn spectacularly less than a lazy untalented officer?

The one sentence answer: Self-sufficiency is the road to poverty or lower earnings.

My son is a software engineer who works for a contractor company to BBC in Liverpool. He can draw all those game figures, writes programs into them, design websites and a host of other computer software, products. But he has learnt not to divulge everything. Reason? He may end up doing all the work in the office while the Caucasians go pub crawling. So it is economically prudent for him, to conceal all his talents.

The longer answer is that the lazy, not resourceful officer of average intelligence has no incentive to learn how to fix a broken alarm clock or butcher a goat or thatch a roof. For this kind of fellow, these elegant but time-intensive skills have a reward that is far below the cost in foregoing other activities.

The other guy is only lazy because he can afford to be. But put that guy on a desert island by himself and he will quickly resemble Robinson Crusoe, a man with no real skills suddenly forced to acquire some and with a very intense incentive to do so.

But that is only part of the story. Why can one guy afford so much leisure? The answer is that he has more people to trade with, people who bring more capital and skills to the table.

I know nothing about butchering goats the correct way, mend roofs, and repair vacuum cleaners. I know a reasonable amount about economics, a skill that is virtually worthless in practice. And yet I live a comparatively better life that the Alam Flora cleaner l. I live a better life than my great-grandfather who may have been smarter and may have been able to do many things I can never imagine doing.

The fundamental reason that is so is because I benefit from the division of labor. By specializing in economics, I am able to leverage the skills of other people who are specializing in their chosen fields. It is their specializing, and the opportunity to trade with them, that makes it rational and gloriously pleasant to specialize in economics which is a dry subject and called the dismal science.

There may be lessons here- I am telling through a principle of economics. Specialization allows trade (read opening up and competition).Close the avenues for opportunities (trade), the cab drivers of this world can work like a cow, but still receive lower relative income. Those people controlling the avenues of opportunity close the doors and window of access, the cab driver despite his diligence, talent and resourcefulness remains economically lower on the ladder.

Now a general poser: could it be that the majority of Malays have not been able to uplift themselves because they have been led to believe by a big lie, that a policy that was suppose to liberate them, actually enriches a few? That such a policy has actually resulted in doors of opportunities being closed for them? .