The globalised and de-globalised world
For decades, globalisation has been acknowledged as the only vehicle to bring the whole world towards growth and modernisation. We anticipated seeing globally conformed social, political, and economic structures as national boundaries are gradually diminished. However, the global society has later become more and more cautious about this trend after the recurrence of several economic crises and recent de-globalisation phenomena such as the Russia-Ukraine war, COVID-19 pandemic, and the United States (US)-China trade war.
In the past, many developing countries, which embraced this global trend, found that globalisation is a two-edged sword. Worse, many developing countries could not withstand the forces of globalisation and this could eventually lead to the collapse of their economies and social structures. In addition, there have been recent threats such as the trade war between China and the US, the global pandemic, and political tension in Europe. Many countries have been facing several challenges such as prolonged supply chain disruption, skyrocketing food and energy prices, and public health meltdown. Also, during the COVID pandemic, it became apparent to many countries that the cost of trusting other superpowers or other countries for help was high and may involve millions of lives. Therefore, causing them to lessen their economic integration with other countries and to reduce exposure to international trade and investment, a phenomenon called “De-globalisation”. This trend emerged in the 2008 Hamburger crisis but became more obvious after the global pandemic. In 2020, WTO stated that a decline in international trade was more than the global GDP decline. In that year, there were more trade restrictions such as face masks and medical equipment export restrictions. Some economic superpowers also emphasised on domestic sovereignty more than free trade lately as demanded by their citizens.
Despite some threats, globalisation’s benefits outweigh its risks if countries embrace it in the right way. The concept of globalisation is consistent with the current G20 maxim of ‘Vasudhaiva Kutumbakam’ under the Indian Presidency, which means the entire world is one single family. However, it is vital that a mechanism should be established to enhance countries’ resilience and mitigate international risks which will enable them to thrive in the globalisation wave. One model that can be leveraged is the sufficiency economy. This thought focuses mainly on citizens’ well-being and moderation when driving a country forward.
The philosophical thought on the foundations of global capitalism: Wealth and well-being in the context of sufficiency economy
Tragically, the 1997 Asian Financial Crisis brought Thailand’s decade-long economic miracle to an end. The country learnt from this experience and recognised that the development over the past decade has put too much emphasis on growing wealth through excessive economic expansion. The country had clearly ignored moderation by indulging in over-consumption and over-investment, which reduced the volume of savings and increased the reliance on foreign debt. Thailand, therefore, started to reconsider and change its course, increasing its reliance on internal values and promoting harmonious sustainable development rather than excessive growth.
“It is not important to be an economic tiger. What matters is that we have enough to eat and to live. A self-sufficient economy will provide us with that. It helps us to stand on our own,” said King Bhumibhol in his speech on 4th December 1997.
King Bhumibol of Thailand and several Thai economists have cited sufficiency economy as a solution to withstand the rapid global change. The philosophy can be used to tackle the current asymmetric development. Sufficiency economy was not irreconcilable with conventional economics theory since it emphasises mainly on trade and globalisation, and most importantly it embraced a concept of optimisation. Sufficiency economy is essential for figuring out what caused the 1997 crisis in Thailand and creating more suitable policies for the future.
The difference between wealth and well-being in the context of a sufficiency economy
Economists frequently utilise the concepts of wealth and economic progress but frequently do so without doing adequate analysis. Increased wealth is typically viewed as a positive trend since it helps people and nations live better lives. Better healthcare and the consolidation of a larger human resource base are made possible by material affluence. Therefore, it is generally believed that wealth increased well-being. In addition to being subordinated to the acquisition of wealth, the goal of enhancing well-being can also be misinterpreted to mean extravagance for a select few.
Certainly, wealth is not the same as well-being, let alone happiness. Economic development and wealth creation should not be overemphasised. As stated by Richard Easterlin that after fundamental necessities are addressed, economic expansion could not significantly enhance happiness, therefore, in a society that is extremely unequal, the desire for economic growth and increased income appears to encourage competition and envy among members of the society.
Sufficiency economy emphasises on happiness more than wealth. It does not prevent people from using the market economy for obtaining money or resources. In order for the system to have more wealth and resources to redistribute to those who are actually in need, it only asks individuals to moderate their demands and not hoard excess wealth and resources.
The general concept of sufficiency economy through moderation
Sufficiency economy should not be misinterpreted as self-sufficiency, manoeuvring directly opposite the globalisation trend, or retreating towards the mirage of a very modest life. Instead, it proposes a way to deal with the uncertainties of globalisation and allows us to achieve the goal of ‘Vasudhaiva Kutumbakam’. The sufficiency economy emphasised on the necessity for a certain level of self-reliance on the part of both individuals and nations to maintain equilibrium with the market economy and globalisation. In this context, sufficiency means both “not too little” and “not too much.” The moderation concept or the middle way can act as a balancing wheel to equilibrate between internal resources and external demands, between the fundamental necessities of society at the grassroots, and the unavoidable consequences of the globalised world.
“Sufficiency is moderation. If one is moderate in one’s desires, one will have less craving. If one has less craving, one will take less advantage of others. If all nations hold this concept … without being extreme or insatiable in one’s desires, the world will be a happier place”, said King Bhumibhol speech on 4th December 1998.
Conclusion
The deglobalisation from the trade war between superpowers and the global pandemic has further deteriorated the situation of the poor. The present issue may not be a lack of wealth resulting from inadequate economic progress, but rather the economic development philosophic ideology, which has focused extensively on wealth creation rather than the general well-being of people in the society. This makes countries trust one another less and thus leads to deglobalisation. The only solution is embracing the philosophy which allows all countries to be immune from external shocks in the globalised world. At the end of the day, a better development model may be created using the idea of a sufficiency economy to raise awareness of the difference between wealth and well-being and foster moderation at every level in the society. Not only will it address the problem, but it will allow us to embrace globalisation and achieve ‘Vasudhaiva Kutumbakam’.
This essay is a part of the commentary series on G20-Think20 Task Force 3: LiFE, Resilience, and Values for Wellbeing
