Grass root economics
Zubin Meher-Homji
Courtesy of Eleanor Stalenberg ("Malagasy Bushtaxi")
GDP, inflation, budgets…. The dull words of the modern economist. In Madagascar you see economics at its grass roots.
***
Madagascar is one of my favourite places to travel. Just like the cartoon, the country is jam packed with charismatic lemurs and breathtaking landscapes.
Amid the beauty lies a sadness. Madagascar is one of the poorest countries in the world. In the south, I saw men cut grass with a machete. The roads are abysmal - the pot holes on bridges are big enough to sink a bush-taxi. And the Malagasy people have an absolute obsession with growing rice - a natural protection from the nasty famines that occur regularly.
While Madagascar may be poor, the people work damn hard. Intense economic activity is all around. Farmers tend the crops, markets spill into dusty alleys, and everyone is an entrepreneur.
*****
Econ-talk is a term I use to describe the language of us modern economists. Budgets, financial markets, models, models... and more models.
Driving around the Madagascar countryside makes you see economics at its grass roots. There is something very local about the economy. People sell their food to each other, tradespeople are from the area, teachers live in the village.
Seeing it unfold in front of you takes you back to early thinkers such as Adam Smith. Although famous for the throwaway line "invisible hand" he also asked: what is an economy, and why do some countries do better?
***
What lies under the dark art of economics? For me, there are two central concepts that define an economy. Specialisation (rather than doing it all yourself) and trade (getting what you need by selling your specialisation).
Think back to the daily life our ancient ancestors. Self sufficiency would have been the mantra. Hunt, cook, eat, repeat.
At what point did humans take the risk of specialising? What entrepreneurial spirit possessed an ancestor to go hungry for the week. Instead develop a fishing technology they could flog to the cave next door. If we go back to this moment, maybe we can say we discovered the origins of an economy.
*****
The modern economy looks very different to our ancestor's time. The best analogy is a multi-dimensional spider web, a bit like the internet. Globalisation and financial markets mean we are all economic pawns caught in the web.
The sheer complexity makes the life of an economist impossible. It is why very few of us predicted the global financial crisis. How could some dodgy lending in the deep south of America lead to the crash of the financial market?
This is why my experience in Madagascar helped me reflect on economic fundamentals. It has helped me to focus on patterns that have a foundation and shape. Will the property market crash? I can only guess, but at least I will attack the question by asking why people want property, and what impacts their motivations.
Courtesy of Xi Liu