Aria PN

Idealistic view of the world has bothered me a lot recently. But you’ll see why you can’t be without ideals. So let’s try another approach, or what I’d call “the” approach. Rather than looking at specific issues, we’ll just put them all in one basket and be super-solver for now.

Assume the idealistic view is right in that Indonesia has a lot of resources, and the realistic view is right in that we (or maybe “others”) have mismanaged the resources. The opposite assumptions are too disheartening; that somehow we are good managers, but don’t have the capital to work at. We’d rather be rich than competent right?

We have our problem: how do we manage our resources? There might not be a first best solution to this problem. I don’t care. Give me a second best then. Give me the most efficient solution possible taking into account all conditions.

Efficiency is measured in terms of utility. It’s efficient if you cannot increase the utiliy of one party without decreasing the utility of the other party. Utility is just economic term for ideals. It means your preference, your likes and dislikes, and ultimately your ideals, what you want and value the most. Without ideals, there’s nothing to improve or aim for.

If we start from this solution, the question is always about distribution, who gets the benefit (and how much) of that efficient solution. If I start from the other end, the question is about efficiency.

OK, the next step is to distribute the benefit so everyone can be happy. Wait, that’s not possible. Maybe we can try distribute it fairly, so no one can’t complain of injustice. (What? Did you say they can and will complain because they have different definition of fair and justice?) It doesn’t really matter, but I’ll just use Rawls’ arrangement of fairness (which is probably the view of the more idealistic camp). So, the least advantaged of the society should get the greatest benefit.

Let’s also assume away the details of actually implementing this principle, such as proportions, measurements, etc. So we want to give more benefits to some and reduce or take away from others. The latter will then lose some or all of the incentives to contribute efficiently. That means there’ll be less benefits to distribute. Even less than ideal, we might already have something better than what we have in the beginning. We might also we end up where we start, a very non optimal outcome.

I realize this has been rehashed before so many times, by so many people much more competent in this than me. I don’t have “the” solution. I’m just pointing out the realities. Knowing them, we won’t get carried away by too idealistic of a solution. Especially if it sacrifices a lot more benefits than what we have to.

We have rooms to improve. Often times we are afraid to improve, because the distribution will change. Don’t forget, once we get the benefits, we can always redistribute them if we wish so. Of course there’s always the price for being less efficient. It’s not perfect. Pick your poisons, and choose them wisely.