All Fallow Lands To Be Cultivated!

By Hema Senanayake –October 23, 2015

Hema Senanayake

I am an economic analyst and a macroeconomic researcher. If anybody wants to see further than others on any subject he or she has to do one thing. This was eloquently told by Sir Isaac Newton the great scientist. He said that, “If I have seen further it is by standing on the shoulders of giants.” This quote is from a letter written to fellow scientist, Robert Hooke in February 1675. The phrase is understood to mean that if Newton had been able to discover more about the universe than others, then it was because he was working in the light of discoveries made by fellow scientists, either in his own time or earlier.” This is what I always try to do in regard to economics.

Does the president or Prime Minister do this in regard to economics? I do not think so. And most importantly, there is no necessity for them to do it. They are politicians elected democratically to hold the most important public offices. They have to perform many duties. Among them what I consider most important are; “(1) activating and mobilizing citizens into participating in political decisions and transforming their opinions into viable policy options and (2) channeling public opinion from citizens to government.” (This quote is from The Electoral Knowledge Network).

Now, if the president or Prime Minister tells something wrong in regard to the pursuing of economic policy or part of it, what should I do? What their economic advisors should do? I am serious about this question. Why?

Around the world, many politicians elected to governments believe that they know better than economists. This happens even in many advanced countries. A few years ago, for an example, about seventy or so congressmen in the United States proposed to have a constitutional amendment which makes it mandatory to have a balance budget on the Federal Government. This was proposed to stop the ever increasing public debt on the federal government. If the budget is required to be balanced by law, there is no necessity to borrow for the government. In the event, public debt cannot go up.

Luckily, the congress and the senators consulted many leading economists who advised as to why the common sense proposal for balance budget was bad for the country. Finally, politicians gave it up. In fact, most of the common sense proposals of politicians do not work in the economic system. One of the most ridiculous proposals was submitted by Stalin to stop using money in Russia in early 1930s. There was inflation by that time in Russia. Stalin’s argument was simple. In order to combat inflation he argued that, “when there is no money there is no inflation.” His economic advisors defended Stalin’s policy. Are our advisors different? I do not know.

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