1 - Economic Analysis and Development Planning (1963)

Summary

Introductory Note: At the beginning of the 1960, the Indonesian economy was in a tragic state. The standards of living in society were very low and were undergoing setbacks from year to year. One of the main sources of this situation was the strong government opinion at the time that economic affairs were unimportant. There was also the firm notion in government circles at the time that economics was completely useless; it was even considered a cause of social degradation. There was a strong view among the public at that time that the science of economics was totally useless textbook thinking. Some even viewed this science as something that could harm the way of life of the people.

In 1962, I was appointed professor of economics at the School of Economics, University of Indonesia. As normally practiced by colleges in Indonesia, a new professor is expected to deliver an inaugural speech in the relevant discipline. The core of my inaugural lecture in 1963 was that the economy was important to public welfare and had to be built through planning. For this development planning, economic analysis was required. This statement was a stark contrast to the prevailing and dominant view among government officials and a certain section of the society.

We are all aware of the reality that mankind is currently undergoing a process of enormous change as a result of the progress of science and its applications, which directly affect all aspects of life. The human race has succeeded in making rapid advancements in an effort to better understand its natural surroundings and to better formulate the prevailing laws of nature, which human beings consciously utilize to improve their own existence. The human capacity to grasp the essence of natural laws and apply them is so great that today mankind stands at a crossroads: one leading to the end of human existence as a consequence of the destructive forces created by science, and the other potentially bringing the entire human race toward higher standards of living more suited to the dignity of mankind.

The latter alternative is still only a potential reality because the astonishing capacity of men to conquer nature has yet to be coupled with a corresponding ability to manage and control themselves as human beings.