Recently, fuel, electricity and general price rises have been a source of much public discontent. In the face of this public anger, several senior government officials have gone out of their way to defend the government’s economic policy, coming out with a whole range of interpretations of market mechanisms that stretch credulity. At the same time, President Ma Ying-jeou (馬英九) has been complaining that the public do not understand economics. I have strong feelings about what he says, not least because it reminds me of two episodes that occurred during the years I was studying in the US.
The first was my discussion with an economist who holds a doctorate from the University of Chicago on healthcare policy. During our discussion, this well-educated academic took me quite by surprise by claiming that it was wrong for physicians to obtain licenses in order to practice medicine, because it completely violates the free-market mechanism.
He believed that, through a process of elimination and equilibrium, as patients made the wrong choices, that the market itself would regulate the situation, retaining the good doctors and eliminating the bad ones. He backed up his argument with graphs and illustrations.
A little taken aback, I asked him: “How about human lives? What if someone dies?”
His answer was that a few lives do not matter and that the promotion of market efficiency is far more important.
The second episode took place in a macroeconomics policy class. The professor asked one of the students in the class to imagine for a minute that he were the government finance minister. He handed him some unemployment figures and asked him to interpret them.
The student proceeded to talk at length about the figures, comparing them with those of the previous year. He then went on to discuss changes in structural and non-structural unemployment in terms of the figures. When he was finished, the student was fully expecting the professor to offer praise for his brilliant analysis. His classmates were certainly suitably impressed.
To my surprise, the professor said that, when discussing the unemployment rate, a finance minister should first offer sympathy to the tens of thousands of people who have lost their jobs and dignity, and are struggling to make ends meet, then explain what he was going to do to get the rate down.
Economics is a social science and as such it has to start from the welfare of the general public. If it does not, it is little more than dry theories and formulae and those who implement policy are mere bureaucrats and bean counters.
Ma and senior government officials are supposed to be highly educated and should know what they are talking about. If they ignore what people are going through and even go as far as to complain that they do not understand economics, it is time they go back to school and learn what economics is really about.
Lin Hsuan-chu is an associate professor at National Cheng Kung University’s department of accountancy.
Translated by Eddy Chang
Minister of Labor Hung Sun-han (洪申翰) on April 9 said that the first group of Indian workers could arrive as early as this year as part of a memorandum of understanding (MOU) between the Taipei Economic and Cultural Center in India and the India Taipei Association. Signed in February 2024, the MOU stipulates that Taipei would decide the number of migrant workers and which industries would employ them, while New Delhi would manage recruitment and training. Employment would be governed by the laws of both countries. Months after its signing, the two sides agreed that 1,000 migrant workers from India would
On March 31, the South Korean Ministry of Foreign Affairs released declassified diplomatic records from 1995 that drew wide domestic media attention. One revelation stood out: North Korea had once raised the possibility of diplomatic relations with Taiwan. In a meeting with visiting Chinese officials in May 1995, as then-Chinese president Jiang Zemin (江澤民) prepared for a visit to South Korea, North Korean officials objected to Beijing’s growing ties with Seoul and raised Taiwan directly. According to the newly released records, North Korean officials asked why Pyongyang should refrain from developing relations with Taiwan while China and South Korea were expanding high-level
Japan’s imminent easing of arms export rules has sparked strong interest from Warsaw to Manila, Reuters reporting found, as US President Donald Trump wavers on security commitments to allies, and the wars in Iran and Ukraine strain US weapons supplies. Japanese Prime Minister Sanae Takaichi’s ruling party approved the changes this week as she tries to invigorate the pacifist country’s military industrial base. Her government would formally adopt the new rules as soon as this month, three Japanese government officials told Reuters. Despite largely isolating itself from global arms markets since World War II, Japan spends enough on its own
When 17,000 troops from the US, the Philippines, Australia, Japan, Canada, France and New Zealand spread across the Philippine archipelago for the Balikatan military exercise, running from tomorrow through May 8, the official language would be about interoperability, readiness and regional peace. However, the strategic subtext is becoming harder to ignore: The exercises are increasingly about the military geography around Taiwan. Balikatan has always carried political weight. This year, however, the exercise looks different in ways that matter not only to Manila and Washington, but also to Taipei. What began in 2023 as a shift toward a more serious deterrence posture
RSS