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Jakarta Post

Insight: Cultural inertia in the economic doldrums

Every time history repeats itself, the specter of economic crisis returns

B. Herry-Priyono (The Jakarta Post)
Jakarta
Fri, August 28, 2015

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Insight: Cultural inertia in the economic doldrums

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very time history repeats itself, the specter of economic crisis returns. So does a gush of soul-searching as to why this country has again been caught vulnerable. But nothing is puzzling about the jitters.

In the age of borderless financialization, sovereignty seems like a quaint memory from a remote past. Now, though not alone, this country is again trapped, this time squeezed between the looming interest rate hikes in the US and the sharp economic slowdown in China. It is only safe to predict more unpredictability.

But it is best to start with a smile. What is amusing is that with the return of the angst also comes an oft-repeated admission that purely economic policies will not do the trick. Indeed, bracing the crisis requires more than technocratic wizardry. Here comes the current outburst of seminars on the quality of this country'€™s human resources.

Just last week I was placed to learn from some of these seminars. In spite of their differences in content, it turned out that, instead of delving into what is necessary for lifting the country out of the doldrums, most ended up talking about the mentality of Indonesians. No doubt this was because any talk about policy measures is haunted by the question of execution, while the problem of execution is always troubled by the question of the quality of human resources.

It is in this jittery economic climate that an appeal to culture seems convenient. But this is a desperate act of finger pointing, i.e., putting explanatory burdens elsewhere after failing to explain the problem with reference to purely economic or financial factors. This won'€™t do. Not because culture does not matter, but because policymakers keep on repeating the same mistake in conceiving the economy as an autonomous reality.

Of course, if you are an economist or a finance minister, you can only advise or devise policy that falls within your remit. But how the hydraulics of prices and interest rates work, or how investment decisions are made, are not purely economic or financial matters.

The separation between the economic, the political, or the cultural is a creation of the academic world. But nothing is inherently economic or financial about price fluctuation, just as there is nothing inherently political about voting. Such designations come from analytical partitions, in which a certain mode of analysis focuses on one specifically carved-out dimension of human interactions.

The plight of earning a living and engaging in exchanges is called the economic sphere; that of statecraft and power management, the political; and that of value formation and its dynamics, the cultural. But in the order of reality there is no area designated as the economic that is not cultural, no cultural problem that is not economic. This has far-reaching implications for policy-making.

First, it is a virtue to exhaust the best academic wizardry in policy methods, but this should not be confused with problem-solving. Since the order of reality is always a mix of everything, we cannot solve problems simply by employing policy wizardry devised from a particular academic discipline. If the economic is also the locus of the cultural, then no economic problem can be adequately addressed without a parallel measure in its cultural dimension.

Second, our lamentation about the poor quality of human resources is not misplaced. However, both policymakers and the business community still view this problem as a cultural black box '€” a conceptual trash bin into which they throw all inexplicable factors. They are then seen as mysterious rather than merely problematic.

There is nothing mysterious about them. If it is called a cultural problem, it contains a mismatch between the material conditions of life that proceed in a runaway manner and behavior or attitudes that are more resistant to change. This is what is called cultural lag.

Third, it is addressing this cultural lag that has been lacking in policy circles. The appeal of revolusi mental (mental revolution) is symptomatic of the pressing nature of this problem. But, to the chagrin of all thoughtful citizens, while the buzzword points to a compelling imperative, its initiators and their policy mandarins remain silent as to how to translate the shibboleth into a pedagogical process on the national scale.

This shows that the government sorely lacks imagination in the area of cultural strategy, which is another way of saying that no improvement in the quality of human resources is to be expected.

Fourth, we always take this conundrum into account in moments of economic or political crisis, only to lapse into forgetfulness as soon as some glee appears on the scene. When the business community and policymakers talk about the poor quality of human resources, what they mean is actually a low level of productivity, which in turn is taken to explain poor economic growth.

Yes, growth is spurred by productivity, but which aspects of human resources drive productivity is more contentious. Often the resort is another policy fallacy: Productivity is pursued by making the education system directly serve economic growth, say, by injecting an entrepreneurship-driven curriculum.

But this leads us to double disasters. Not only is growth dented, but the quality of education also degenerates. The reason is plain: Growth needs more than just entrepreneurship and the raison d'۪̻tre of education is not economic growth.

It is true that education is the main pedagogical vehicle for cultural transformation and all countries with healthy economies also have quality education systems. But this is so only because their education systems train their future human resources in the art of imagination, intellectual innovation and other values necessary for the formation of wholesome personality, not because their schools produce homo economicus.

This is also where policy imagination needs to be cultivated. Otherwise, economic technocracy will always be a Sisyphean task.
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The writer is a lecturer in the postgraduate program at the Driyarkara School of Philosophy in Jakarta.

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