Rethinking the economy



In universities, more in colleges, economics students gaze at their professors in wonder; outside the classroom, they find little relevance of their theoretical learning to the reality on the ground. This kind of allegation has loomed large on the economy’s horizon since my scholarship in the sixties. Relevance aside, they find model mathematics and subject economics, a laMaynard Keynes, “a difficult subject, but no one will believe it; it seems an easy subject compared to the higher branches of philosophy or pure science, yet very few excel at it.

Wahiduddin Mahmud, a distinguished professor of economics and former adviser to the interim government, reflects on the issue with a critical eye and paves the way for a solution that will serve the economy in developing countries. In his most recent book Markets, Morals and Development – Rethinking Economics from a Developing Country Perspective (2021, Routledge, India), the eminent economist provides (a) a critique on the subject of economics itself, and ( b) suggests how the economy could become more human by contextualizing the theories according to the situation. The 100-page book is a collection of public lectures delivered in Dhaka using illustrations from Bangladesh, India and other countries that offer a compelling understanding of various economic realities by taking a fresh look at what is familiar.

The book highlights the shortcomings of Western economic models, with illustrations adapted to the realities of developing countries like Bangladesh. The economy, as it is, fails to respond to the discontent of the contemporary world economic order with its market supremacy which contributes to unprecedented instability and inequality in the midst of plenty. “While the market economy has become the dominant model of our societies, it is viewed with widespread distrust, mixed with indignation or fatalism.” Ipso facto, argues the professor, the least developed countries feel all the more aggrieved in a regime of perceived injustice of the world market system where the powerful North and the relatively powerless South are on what Imanuel called a ” unequal exchange ”. The economy is derided, rightly or wrongly, for having legitimized this market system devoid of compassion and prey to the private interests of companies, says the author.

Wahiduddin Mahmud discerns that the disconnect between what is said in economics textbooks and what is observed around, unfortunately, results in a growing apathy towards the economy among students in Bangladesh, India and others. developing countries. They are in fact forced to feel that the textbook economy is out of step with real economic phenomena; feeling frustrated that “there is no equivalent in developing countries of the book Economics: An Introductory Analysis by Paul Samuelson (1948), which is arguably the introductory manual to ‘most famous economics ever written’. Policymakers are also disturbed by policy advice that emancipates itself from academic economists from institutions in rich countries, playing the role of agenda setting and oversight. This often tends to create a mismatch between the disease and the diagnosis; what is academically rewarding within these institutional cultures and what policymakers in the Global South may actually need for practical purposes.

The beauty of the book is that it is written in lucid language, interspersed with witticisms and timely examples, underpinning six chapters with tempting titles: Thinking Like an Economist; The ethical basis of economic theory and practice; Institutions, moral standards and development; Amartya Sen’s Ideas and the History of Bangladesh, and Is There a Social Business Economy?

The entry is made with an interesting introduction to the book. Thomas Carlyle in the 18th century called economics a “gloomy science” disgusted with the dire predictions made by economists of his day, especially Thomas Malthus, about humanity trapped in a world of widespread misery and impoverishment. Professor Mahmud argues that the aforementioned contemporary global mess, the inadequacies of textbook summaries to deal with country-specific anomalies, has apparently turned economics into a “gloomy science.”

Few of the relevant remarks about developing country markets faced by Western models in the analysis properly capture the attention of readers. “… The variety of market institutions in less developed countries also makes it difficult to predict the results of market intervention policies, such as the application of anti-monopoly regulations or the introduction of a tax on the market. added value. Shabana Azmi, noted Indian film actress and social activist, once remarked that India has lived simultaneously for three centuries; this is certainly true of the variable nature of markets in less developed countries, such as in terms of formal-informal divide, variability in supply and price fluctuations of agricultural products, markets, product quality standards, integration into the economy. world economy, etc. Students of economics can thus have a rewarding experience trying to apply market analysis tools to a variety of markets. “

So it is not all over yet, “Despite the alleged lack of compassion and empathy in economics as a discipline, there is ample room to rethink the ways in which the market economy can approach problems. morals of human and social well-being. justice… with concrete examples, how the study of economics and public discourse on economic issues can be made more accessible and engaging as well as more relevant from the perspective of the least developed countries. Students from developing countries like Bangladesh and India can ingeniously attempt to apply theories to practical applications, such as market models, of their societies facing different types of markets – from local hats and baazaars to cosmopolitan shopping centers. The imperative also stems from the fact that two of the Nobel laureates pocketed their prizes from practical problems in developing countries – Stiglitz from rural credit markets in South Asia and Akerlof explaining why adulterated food products are invading less country markets. developed, such as the fresh milk market in Delhi and Dhaka bazaars.

In a famous statement, Adam Smith warned that businessmen rarely meet without plotting against consumers. However, the author’s observation on the peculiarities of developing country markets merits reflection: Other examples show why it may be wrong to blame businessmen on ethical grounds for price increases in certain products. food on religious festivals, while the moral responsibility must also fall in part on the relatively wealthy buyers who may choose to exercise some moderation in the consumption of items in limited quantities compared to demand, or how, in markets seasonal fresh fruit, consumers end up buying fruit artificially ripened by harmful chemicals while the “invisible hand” of the market acts through the selfish behavior of thieves, fruit growers, handlers and traders, although in a lax law enforcement environment. “

Whatever the historical origins of social institutions and norms of behavior, these must be taken into account through the involvement of the community in the design of local development programs; otherwise, such programs may not produce the desired results and may even be counterproductive. This observation perhaps indicates the absence of “bottom-up” – a demand that dates back decades.

Applying Sen’s ideas to understanding the socio-economic progress of Bangladesh, the author also examines the relevance of these ideas in the different socio-political contexts of developing countries.

Economists can do better, the author believes, by improving their understanding of the complexity of human behavior, for example, by drawing inspiration from new ideas developed in neuroscience and experimental psychology; they must also leave more room for ethical judgments in the choice of survey subjects, in their methodological approaches and in the drawing up of political conclusions.

All in all, Wahiduddin Mahmud’s book is a “must see” not only for students but also for policy makers, teachers, even for men of the media. As Kaushik Basu notes, “With allusions to literature, psychology and anthropology, and dotted with illustrations from Bangladesh, India and other economies, Mahmud’s book is a pleasure to read.”

However, at some point the reader would finish reading the book and might wish to make the following comments: (a) Why prominent Bangladeshi economists are apparently apathetic when they regularly write articles for newspapers on complex economic issues ? ; (b) The author would do a favor by publishing an economics textbook taking into account his awareness of the gap between theory and practice in developing countries; and finally, a Bengali version of the book would be welcome.

Dr Abdul Bayes is a former professor of economics and vice-chancellor of Jahangirnagar University; currently adjunct professor at East West University.

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