Three topics
BREAKTHROUGH - Elfren S. Cruz (The Philippine Star) - June 27, 2019 - 12:00am

Today, I was unable to decide what I would write about. So I decided to write on the three different topics on my list. 

Letters from readers

I seldom reprint letters from readers;  but, recently I felt that there were two letters worth reprinting. The first one is a response to my column on “A Just and Living Wage” from Mahar Mangahas, an economist, columnist and head of the leading polling organization -SWS. In  my column,  a living wage is defined as the minimum income necessary for a worker to meet their basic needs – food, shelter, clothing, utilities, health care, education.  Most businessmen, however, contend that we have to keep wages low to be competitive with low wage countries like Bangladesh. However, even in Southeast Asia, the most prosperous countries are those with the highest average wages – Thailand, Singapore, Malaysia.

Mahar Mangahas wrote to me: “As an economist, I find it embarrassing  that many economists regard high wages as a handicap to development. On the contrary, I think, it should be one of the signs of successful development.”

The second letter was a response to my column basically about the book Money Land: Why Thieves and Crooks Now Rule the World. It was a book on how money laundering and an international financial system that accepts and even encourages corruption. Thanks to “offshore” created in the 1950s by a small group of bankers in London, oligarchs, gangsters and corrupt politicians acquired unimaginable power and zero accountability. 

The book shows the technical side of international finance that fuelled and encouraged the creation of a vast reservoir of secret wealth that encouraged insatiable greed. However, a reader sent her own observation that I felt should have been included in the book. Ana Q. Sy-Quia wrote: 

“Thieves and crooks rule the world because they are comfortable in their corruption.

Do we refuse an invitation from a corrupt friend/batch mate/ relative who wants to show off his mansion or vacation home?

Many people readily accept the invitation, compliment the host/hostess on how beautiful or marvellous his/her place is.

Do we turn down a request to be a sponsor to a wedding of a corrupt friend/relative/politician?

Do we turn down an invitation to the birthday/anniversary or whatever celebration from somebody we know became rich because of corruption?

Public officials are invited to cut ribbons, become guest speakers, become sponsors to weddings even if we know how corrupt they are – because he/she is a relative? A friend? A former schoolmate? A brod in a fraternity or a sis in a sorority? A boss?

That is why corruption flourishes. The corrupt are comfortable in their corruption because society does not only accept them but receives them with open arms.”

Congratulations, De La Salle University

In the 2019 Times Higher Education (THE) World University Rankings, only two Philippine universities are included - UP-Diliman and DLSU-Manila. This means that DLSU is among the top 3% of higher education worldwide and is the only Philippine private university to be included in this list. It is also the only Philippine private university included in the list of Emerging Economies University Rankings, Asia-Pacific University Rankings and Asian University Rankings. 

In addition, according to THE,  DLSU is the highest ranked institution in Engineering and Technology in the Philippines and the lone Philippine Higher Educational Institution to be included in the list of universities’ Impact Rankings measuring impact on society. For 2019, universities across the globe were assessed and ranked  according to their“ ...success in delivering the UN Sustainable Development Goals.”

The Times Higher Education is the premiere institution conducting rankings of the world’s best research universities. It requires a minimum threshold of Scorpus publications, combined with data on teaching, innovation, international outlook and reputation. 

Behavioral Economics

I became interested in this topic when I read in 2017 that economist Richard Thaler was awarded the Nobel Memorial Prize in Economic Sciences. So I  set out to read the book MISBEHAVING: The Making of Behavioral Economics by Thaler. It is an entertaining book because Thaler is master storyteller. His book is full of stories or case studies.

However, as someone who was educated in “traditional” economics, I found the book difficult to comprehend. As I have been taught, the core premise of economic theory is that markets behave by optimizing. This is the basis for economic models as simple as the “law of supply and demand”. 

Thaler’s premise is  there are myriad ways by which people depart “...from the fictional creatures that populate economic models.“ He says there is nothing wrong with human behaviour; but “...rather the problem is with the model being used by economists, a model that replaces homo sapiens with a fictional character called “homoeconomicus” or Econs.” In contrast Humans do a lot of “misbehaving” which means that economic models make a lot of bad predictions. Which is why virtually no economists predicted the 2008 financial crisis. 

Robert Shiller,winner of a Nobel Prize in Economics wrote: “Richard Thaler has been at the center of the most important revolution to happen in economics.” In this book he lays out evidence for behavioural economics. MISBEHAVING is the best guide to this new and exciting field of economics. 

Creative writing classes for kids, teens, adults

Young Writers’ Hangout on July 6, 20 (1:30 pm-3pm; stand-alone sessions), for adults, Writing with Humor and Satire with Jack Wigley  on 29 June at Fully Booked BGC.  For details and registration,  email writethingsph@gmail.com.

Email: elfrencruz@gmail.com

ELFREN S. CRUZ
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