30 - The Primacy of Political Economy in Asia

Summary

It is a complicated subject, this thing we call Economics. I do not always know what it means.

I remember once talking to Robert Kuok about it. His reply was (and I paraphrase from my vague memory of that conversation): ‘Economics is simply about living, isn't it? As you live, you learn to live – that is economic knowledge’.

That is the gist of what I understood from what he said. I offer my apologies if I misunderstood his point. But what I understood then made sense to me. In fact, his description comes very close to the original meaning of the term. ‘Economics’ has Greek origins, coming from the word okionomia, which means ‘household management’.

However, no household exists by itself, and so Economics cannot be about the management of a single household. It has to deal with the management of multiple households. The existence of multiple households means politics, of course. Therefore, when the subject of Economics emerged as a distinct modern field of study, it went under the title of ‘political economy’. Such was the case when Scottish economists Adam Smith (1723–90) and David Hume (1711–76) and the French thinker Francois Quesnay (1694–1774) made their greatest contributions by using systematic and secular terms to explain the creation and maintenance of wealth by studying the complex interactions between political, social, economic and technological factors.

Since then, Economics as an academic discipline has branched out in many directions and there is really no definition of Economics today that anyone calling himself an economist agrees on. One can see why. If the focus is on the individual household, then we see how Smith's notion of ‘the Invisible Hand’ can argue how the collective effect of self-interest also serves the common good. For some, this approach ignores the state a little too much and disregards what we today see as a central tenet of political and economic studies – National Interests.

The preference for the individual in understanding economics was further undermined by Karl Marx (1818–83), who put forth powerful arguments that economic trends and dynamics are best understood as part and parcel of an unending class struggle within any societal form.