"In the whimsical land of Ngastina, where the sun always seemed to shine a little too brightly, lived a group of self-proclaimed superheroes. These superheroes, known as the 'Lavish League' had a peculiar way of showing their patriotism. The Lavish League members are known for their love of luxury and grandeur. Despite their flashy ways, the Lavish League genuinely believes they are serving their country. They see their extravagant displays as a form of celebration and honour for Ngastina. Due to their high-profile actions and lavish lifestyle, the Lavish League influences public perception. They often attract media attention and are seen as celebrities in Ngastina. Every National Day, they would rent the most luxurious vehicles, no matter the cost. To them, nothing screamed 'national pride' more than cruising down the streets in golden chariots and diamond-studded carriages. They believe that their presence and appearance can uplift the spirits of the citizens. 'Look at us!' they would shout, waving to the bewildered citizens. 'We are the epitome of national pride!'The citizens, however, were not as impressed. They watched as their hard-earned taxes went up in smoke, as the superheroes’ vehicles often tended to catch fire due to their excessive embellishments. However, they did not dare to do anything, especially the poor, who were afraid that the superheroes would revoke the subsidy funds they had received so far.But the extravagance didn’t stop there. The superheroes decided that the old palace was no longer fit for their grandiose image. So, they embarked on a mission to build a new one, sparing no expense. Marble from the farthest corners of the world, gold-plated roofs, and crystal chandeliers that could blind anyone who dared to look directly at them. 'Ngastina deserves the best!' they proclaimed, as the cost of the palace soared higher than the tallest mountain in the land.While some citizens are dazzled by the Lavish League’s displays, others are critical of their excessive spending, especially when the country faces economic challenges. On the other side of Ngastina, lived the 'Sensible Antiheroes.' These folks had a different view of what it meant to be a hero. The Sensible Antiheroes embody practicality, responsibility, and ethical behaviour. They are known for their realistic and down-to-earth approach to solving problems. They focus on what is beneficial for the majority of the citizens. They have a deep understanding of the struggles faced by the people of Ngastina. Their actions are driven by a genuine desire to improve the lives of others.The Sensible Antiheroes believe in using resources wisely and ensuring that their actions do not put an undue burden on the nation’s economy. They prioritize the welfare of the people over personal gain. They lead by example, demonstrating that true heroism involves making tough decisions that benefit the greater good, even if those decisions are not always popular or glamorous. They believed that true heroism was about understanding the struggles of the people and acting with a sense of responsibility and ethics. They are not merely driven by idealism but also by a practical sense of survival and justice.'How can they be so blind?' the antiheroes would mutter, shaking their heads at the sight of the superheroes’ antics. 'This is not the time for extravagance. Our people are struggling. Okay, they have given subsidies to the poor. But do they want to let the people continue to live in poverty? Indeed, the Central Bureau of Statistics Ngastinapura shows data that the poor are decreasing, but the definition of poverty can be adjusted.'The antiheroes organized community meetings, where they discussed ways to improve the lives of the citizens. They built schools, hospitals, and community centres, all while keeping a close eye on the budget. They believed that true patriotism was about caring for the well-being of every citizen.As the sun set, the citizens of Ngastina gathered in the town square. They had seen both sides of the celebration and were left to ponder the true meaning of heroism. Slowly, they began to realize that while the superheroes’ actions were flashy and entertaining, it was the antiheroes who truly understood the essence of patriotism.The Wayang realm was filled with many mystical and enchanting places. There was the Forest of Whispers, a dense, ancient woodland where the trees are said to be alive with the voices of the past. As you walk through the forest, you can hear the soft murmurs of long-forgotten tales and secrets carried by the wind. The leaves rustle with stories of heroes and legends, and the air is filled with the scent of blooming jasmine and sandalwood. Another was the Lake of Reflections. Nestled in a hidden valley, the Lake of Reflections is a serene body of water with a surface as smooth as glass. The lake has the magical ability to reflect not just the physical appearance of those who gaze into it, but also their true inner selves. It reveals the deepest desires, fears, and emotions of the beholder. Many come to the lake seeking clarity and self-discovery, finding answers to questions they didn’t even know they had.In the end, the citizens of Ngastina decided to follow the example of the antiheroes. They embraced the values of responsibility and empathy. And so, in the land of Ngastina, true heroism was redefined, not by the grandeur of one’s actions, but by the benefit they had on the lives of the people.[Disclaimer: This story is a work of fiction and satire. The narrative is about societal issues. Any resemblance to real persons, living or dead, or actual events is purely coincidental]"Economic strength translates into international influence through trade, investment, and economic aid. A strong nation with a large economy can affect global markets, set economic trends, and offer financial assistance to other countries. This economic leverage can be used to build alliances, secure favourable trade agreements, and exert pressure on other nations to align with its policies," Seruni continued."Countries with strong economies have more resources to invest in foreign aid, loans, and development projects. This financial support can create dependencies, allowing the donor country to exert influence over the recipient's policies and alignments. A strong economy typically has a high GDP, indicating that the country is producing a big amount of goods and services. A growing GDP over time is also a sign of economic strength. A low unemployment rate suggests that a large proportion of the population is employed, contributing to economic productivity and stability. A strong economy often has a favourable balance of trade, meaning it exports more than it imports. However, a trade deficit can also be manageable if offset by other economic strengths. Controlled inflation indicates price stability, which is essential for economic predictability and consumer confidence. Hyperinflation or deflation can destabilize an economy.A strong economy supports a high standard of living, reflected in access to quality healthcare, education, housing, and other essential services. This is often measured by GDP per capita and other quality-of-life indicators. Economic diversity, with multiple thriving sectors (such as technology, manufacturing, agriculture, and services), reduces dependence on any single industry and enhances economic resilience. A strong national currency relative to other currencies is an indicator of economic confidence and stability. It suggests that investors and the global market have confidence in the country's economic prospects.A strong economy is underpinned by a robust financial system, including well-capitalized banks, a dynamic stock market, and stable interest rates. This system efficiently allocates capital and supports business growth. Both domestic and foreign investments are indicators of economic strength. High levels of investment in infrastructure, technology, and education can drive future economic growth.A stable political environment and effective governance contribute to economic strength by ensuring the rule of law, protecting property rights, and fostering a business-friendly environment. A strong economy encourages innovation and the adoption of new technologies, leading to increased productivity and competitiveness on the global stage. A strong economy is often associated with responsible fiscal policies, including manageable levels of public debt and a government budget that supports growth while maintaining stability.When a country exhibits these characteristics, it is generally regarded as having a strong economy, capable of providing a high quality of life for its citizens and remaining resilient in the face of economic challenges.Gene Sperling who served as the Director of the National Economic Council under two U.S. presidents, explores how economic strength should not only be measured by GDP growth or financial metrics but also by the ability of an economy to provide economic dignity to its citizens. He emphasizes the importance of employment, fair wages, and a robust social safety net as essential components of a truly strong economy. He introduces the concept of 'economic dignity,' which emphasizes that the ultimate goal of economic policies should be to ensure that all individuals can live with dignity. This means having the opportunity to contribute meaningfully to society, care for one's family, and lead a fulfilling life. Economic strength, in this sense, should be evaluated based on how well it enhances the dignity of all citizens, not just on aggregate financial outputs.Sperling argues that traditional financial metrics often fail to capture aspects of life that contribute to well-being, such as access to quality healthcare, education, job security, and work-life balance. A strong economy should enable a high quality of life for all citizens, beyond just material wealth. While GDP growth indicates overall economic expansion, it does not account for how wealth and resources are distributed within a society. A country can have high GDP growth while simultaneously experiencing rising inequality, where the benefits of growth are concentrated among a small portion of the population. This can lead to social and economic disparities that undermine the overall health of the economy.Economic strength should also consider long-term sustainability, including environmental impacts and the preservation of resources for future generations. GDP growth that comes at the expense of environmental degradation or unsustainable practices does not contribute to lasting economic strength. Rather than just focusing on the number of jobs created (which might be reflected in GDP figures), Sperling stresses the importance of the quality of those jobs. Are they providing fair wages, safe working conditions, and opportunities for advancement? An economy that only produces low-wage, insecure jobs may grow in GDP terms but still fail to provide economic dignity.Sperling argues that while GDP growth and financial metrics are important, they are incomplete measures of a truly strong and healthy economy. A comprehensive assessment of economic strength should include how well an economy supports the dignity, well-being, and quality of life of its people.Mariana Mazzucato challenges conventional economic metrics like GDP by arguing that these metrics often fail to distinguish between activities that genuinely create value and those that merely extract it. Mazzucato emphasizes that traditional economic metrics, such as GDP, tend to aggregate all forms of economic activity without differentiating between those that create value and those that extract or redistribute it. For instance, financial speculation or rent-seeking behaviours, which may generate significant profits, are often counted as positive contributions to GDP. However, Mazzucato argues that these activities do not create new value in the economy; rather, they often involve the extraction of value created by others, such as workers, entrepreneurs, and innovators.By failing to distinguish between value-creating and value-extracting activities, GDP can lead to the misallocation of resources and misguided economic policies. For example, excessive focus on financial sector growth, which may boost GDP in the short term, can divert resources away from sectors like manufacturing, education, and healthcare, which are essential for long-term economic and social well-being.Mazzucato points out that some activities included in GDP calculations do not contribute to productive output. For instance, activities like marketing, advertising, and lobbying are counted in GDP even though they may not lead to the production of goods or services that enhance societal welfare. She argues that these activities often serve to redistribute existing value rather than create new value. Traditional economic metrics like GDP also overlook the social and environmental costs associated with certain economic activities. For example, GDP might rise due to increased industrial production, but this growth could come at the cost of environmental degradation or poor working conditions. Mazzucato argues that a true measure of economic strength should account for these externalities and consider the sustainability of growth.Mazzucato's critique of GDP and other conventional economic metrics is that they fail to provide a comprehensive and accurate picture of economic health. By conflating value creation with value extraction, these metrics can lead to policies that prioritize short-term financial gains over long-term societal prosperity and sustainability. Mazzucato advocates for a rethinking of what constitutes value in the economy. She suggests that value should be defined by its contribution to the common good, including public services, innovation, and sustainable development. By focusing on activities that genuinely contribute to societal well-being, rather than simply those that generate profits, policymakers can create a more just and sustainable economy.Mazzucato also critiques the rise of financialization on an international scale, where financial markets, institutions, and elites exert influence over economic policies and priorities worldwide. She argues that this shift has led to an emphasis on short-term profits and shareholder value at the expense of long-term investment in productive activities, innovation, and public goods. This global trend impacts national economies by prioritizing financial returns over broader social and economic well-being.Mazzucato also explores how international trade and global value chains are structured, often benefiting multinational corporations and leading to value extraction from developing countries. She points out that many countries are integrated into global production networks in ways that primarily serve the interests of wealthier nations and corporations, leading to inequalities and imbalances in economic power.Economic powerhouses can dictate trade terms and create favourable trade agreements, giving them leverage over other nations. Countries dependent on these trade relationships are more likely to align their policies with the economically dominant country. Countries with economic strength often control essential global resources, such as oil, technology, or rare minerals. This control allows them to wield significant influence over countries that rely on these resources.Wealthy nations or corporations can invest in infrastructure, technology, and businesses in other countries. These investments not only boost the host country’s economy but also create a degree of influence, as the host country may align its policies to maintain favourable relations with the investor. Economic power often supports the export of culture, media, and technology, which can spread values, norms, and ideologies. This cultural soft power can shape global perceptions and increase a country's influence on the world stage.Mazzucato discusses how international intellectual property laws and patents can stifle innovation and reinforce global inequalities. She argues that the current global intellectual property regime often allows companies in developed countries to extract value from innovations that were publicly funded or developed in collaboration with other countries, without adequately compensating those who contributed to the value creation process. Mazzucato advocates for a more cooperative and equitable approach to innovation on a global scale, where investments in research and development, especially in areas like healthcare and environmental sustainability, are shared and managed in ways that benefit all countries, not just the wealthiest. She argues for the need to reimagine international economic policies that prioritize global public goods and ensure that the benefits of innovation are widely distributed.Mazzucato also critiques the role of international institutions, such as the International Monetary Fund (IMF) and the World Bank, in shaping economic policies across countries. She argues that these institutions often promote neoliberal policies that prioritize austerity and market liberalization, which can lead to value extraction rather than value creation in the economies of developing countries.Dani Rodrika prominent economist, examines the complex relationship between domestic economic policies and global economic forces. Rodrik explores the tension between globalization and national sovereignty, arguing that the pursuit of global economic integration can sometimes undermine the ability of countries to implement domestic policies that reflect their own social and economic priorities. As countries integrate more deeply into the global economy, they often commit to international agreements and institutions that set rules governing trade, finance, and investment. These global rules can restrict the range of policy options available to national governments, particularly when it comes to protecting local industries, regulating markets, or implementing social policies that may conflict with global norms. For example, trade agreements may limit a country’s ability to impose tariffs or subsidies that could protect domestic jobs or industries, even if such policies align with national priorities.Global economic integration can lead to a 'race to the bottom' in labour, environmental, and regulatory standards as countries compete to attract foreign investment. To remain competitive, countries might lower taxes, weaken labour protections, or relax environmental regulations, even if such actions conflict with their social priorities. This race can erode the ability of governments to maintain higher standards that reflect the values and priorities of their populations.Global economic integration often involves ceding some degree of national sovereignty to international bodies like the World Trade Organization (WTO) or the International Monetary Fund (IMF). These institutions can impose policy conditions on member states, especially in times of economic crisis, which can limit a government's ability to pursue policies that reflect its citizens' preferences. For instance, austerity measures imposed by the IMF during debt crises may prioritize fiscal stability over social welfare, leading to cuts in public spending that can harm vulnerable populations.As countries open up to global markets, they become more susceptible to global economic cycles, financial crises, and market fluctuations. This vulnerability can force governments to adopt policies that prioritize short-term economic stability over long-term social goals. For example, a country experiencing capital flight or a sudden drop in exports may feel compelled to implement austerity measures or deregulate industries, even if these actions conflict with its social or economic priorities.Rodrik argues that global economic integration can weaken democratic accountability by shifting decision-making power away from elected officials and toward international institutions, multinational corporations, and global financial markets. This shift can make it harder for citizens to influence economic policies through democratic processes, as key decisions are increasingly made in international forums or by market actors that are not directly accountable to the public.Global economic integration can create conflicts between the interests of global markets and the needs of local communities. Policies that favour global economic efficiency, such as liberalizing trade or privatizing public services, may lead to job losses, reduced access to essential services, or other negative outcomes for certain segments of the population. These conflicts can make it challenging for governments to implement policies that prioritize local social and economic needs over global market demands.Rodrik argues that while global economic integration can bring benefits, it also imposes constraints on domestic policy-making that can undermine a country's ability to pursue policies aligned with its social and economic priorities. He suggests that a balance must be struck between global integration and maintaining sufficient policy space for governments to address the unique needs and values of their societies.A strong economy funds a powerful military, which in turn supports international influence. Military alliances and security arrangements are often tied to economic power, making economically strong nations key players in global security.Nicholas Mulder provides a compelling case for the critical role of economic power in international relations. Mulder explores how economic sanctions have become a powerful tool of international influence, showing how economic measures can shape global politics, affect international relations, and enforce compliance from other nations. He traces the origins of economic sanctions back to the early 20th century, particularly during and after World War I. He highlights how sanctions were initially conceived as a peaceful alternative to military conflict, with the idea that economic pressure could compel nations to change their behaviour without the need for armed intervention. The League of Nations, formed after World War I, was one of the first international bodies to endorse the use of economic sanctions as a way to maintain global peace and security. This marked the beginning of economic sanctions as a tool of international influence.During the interwar period, economic sanctions became more sophisticated and widely used. Mulder examines how sanctions were applied in various geopolitical contexts, such as against Italy during its invasion of Ethiopia in the 1930s. The effectiveness of these sanctions varied, but they demonstrated that economic measures could be used to exert pressure on nations, influencing their policies and actions on the global stage.World War II saw a serious escalation in the use of economic measures as tools of war. Mulder discusses how the Allied powers used economic blockades and sanctions to weaken the Axis powers. This period cemented the understanding that economic power was integral to wartime strategy and international influence. The post-war period saw the creation of institutions like the IMF and the World Bank, which were designed to promote global economic stability but also served as instruments through which powerful nations could exert economic influence.During the Cold War, economic sanctions became a key component of the strategy to contain communism. Mulder explores how the United States, in particular, used its economic power to impose sanctions on the Soviet Union and its allies, aiming to isolate them economically and politically. The use of economic tools during the Cold War reinforced the idea that economic power could be as effective as military might in shaping international relations.In the latter part of the 20th century and into the 21st century, globalization expanded the reach of economic influence. Mulder discusses how global trade, investment, and finance have become key instruments of international power. Economic sanctions have continued to evolve, with targeted sanctions (such as asset freezes and trade restrictions) becoming more precise and effective in influencing the behaviour of specific nations or individuals.Mulder suggests that the use of economic sanctions as a tool of coercion and control in international relations can be defined as 'The Economic Weapon'. According to Mulder, economic sanctions are measures that restrict a nation's trade, financial transactions, and access to resources, with the aim of compelling that nation to change its behaviour or policies. Mulder critically examines the ethical implications of using economic power as a form of control. He highlights the potential for economic sanctions to harm civilian populations and questions their long-term effectiveness in achieving political goals, provoke unintended consequences, and create long-term economic and political instability.On the international level, the ability to raise substantial tax revenue enables a country to engage in foreign aid, investment, and international institutions, thereby increasing its global influence. For example, countries like the United States and European nations use tax revenues to support international development projects, which enhances their influence in recipient countries.While taxation can be a powerful tool for enhancing economic influence, it also comes with several potential downsides that can undermine both domestic and international economic stability and influence. Next, will discuss briefly the evolution of taxation, biidhnillah."Then, Seruni recited a poem,In Konoha’s streets, the engines roar,With rented cars, a grand decor.A palace new, they flaunt with pride,In Konoha’s heart, the palace gleams,A symbol of their grandest dreams.
Citations & References:
- Gene Sperling, Economic Dignity, 2020, Penguin
- Mariana Mazzucato, The Value of Everything: Making and Taking in the Global Economy, 2018, Penguin
- Dani Rodrik, The Globalization Paradox: Democracy And The Future Of The World Economy, 2011, W. W. Norton & Company
- Nicholas Mulder, The Economic Weapon: The Rise of Sanctions as a Tool of Modern War, 2022, Yale University Press
