Tuesday, May 30, 2006

Friedman vs Galbraith

This month, HBS Working Knowledge's "What do YOU think?" compares & contrasts two great economists: John Kenneth Galbraith and Milton Friedman. One a Keynesian and institutionalist, the other a proponent of laissez-faire capitalism.

As I expected, the column & sum-up of discussion tilted towards Friedman (this was acknowleded by Prof. Heskin, the host). Well, I shouldn't be surprised. This is Harvard Business School, and good chunk of participants were managers, directors, owners, etc. of big businesses.

However, I'm also relieved to read this bit from Heskin:

I was struck by the number of respondents who suggested that the ideas of both Friedman and Galbraith had relevance, perhaps at different times and in different places. Henry Kwok wrote, "They brought to us two perspectives—the need for freedom to choose and the need for the government to provide an order to the economy. We cannot live with one without the other." Kamal Gupta noted that, "in the case of an economy that is coming out of poverty, like India . . . [the ideas of Galbraith] would provide for a faster redistribution of wealth. But once the economy reaches a certain threshold . . . the state should move to minimize its involvement."

And quite amused to read this one from a participant:

The real strength of the free world is not in its freedoms but in its ability to reach compromise. From that angle, Galbraith (like Keynes before him) would appear to me to be more relevant in the future. Rosy socialism was a mistake and Friedman's great role was to help stop the world from going there. Galbraith's views are more inclusive and require us to look at the social responsibilities of the successful.

As a foreigner, an HBS graduate, and an admirer of America, I find that we may now be drifting too far to the right. Viva Galbraith.

People's Media and Public Services

The BRIDGE (Building and Reinventing Decentralized Governance) project is finally interested in the voice of the people to improve public services in Sulawesi. After more than a year, now they want to build a multi-stakeholder knowledge management strategy. And community radios will be at part of this. About time! The problem with our precarious public services, though, was never in the voice of the people (or a seeming lack of it). But rather the inability of government - and their private sector partner - to listen to them.

Communication is really at the center of governance. Whether a government agency is transparent or closed, accountable or corrupt, can be seen by how they communicate. Do they gather inputs, or just disseminate? Do they listen, or just talk? A pro-poor communication system is one that makes, or forces, the government to listen to the people.

"Cities, Magnets of Hope"

Titled above is World Habitat Day theme for this year. It's clear that the role of cities and of urbanization remains and will probably stay at the center of international concern for human settlement. See the list of WHD themes for the past 20 years. For the last 11 years we've moved on from "shelter" and really focused on "cities".

BTS at the discussion in URDI this morning underscores not just the growth of large cities and the losing out of villages, but also the shrinking of (small) towns. There's no more hierarchy of cities. There's only (big) cities and everything else. SW said villagers nowadays don't move to a small town before they move to a big city; they come straight to Jakarta ("tembak langsung"). DJ said that urbanization is unstoppable. Governments need to prepare for this condition and provide adequate services for the poor coming in to the cities.

I see cities NOT as "magnets", but rather they are the ONLY "hope" left. Cities (or urban interests) have engineered it this way. Lefebvre said the rural is now part of the urban. And this, Storper & Walker said, is the "capitalist imperative".