[Part 8]Checking inflation isn’t as simple as walking into a market and claiming, “Inflation hasn’t risen.” Inflation is a complex economic indicator that measures the average increase in prices of a basket of goods and services over time. To properly monitor it, economists and statisticians collect data from a wide range of sources: retail prices, wholesale costs, energy, housing, healthcare, education, and more. They calculate the changes in prices systematically, often weighting items according to their importance in household consumption. The result is a comprehensive figure known as the Consumer Price Index (CPI), which provides an accurate picture of how the cost of living is changing across the economy. In short, inflation is tracked scientifically, not by anecdotal observations at the local market.By the way, why would a country prefer to maintain an economic growth rate of around five per cent rather than chasing figures as high as ten, fifteen, or even twenty-five per cent? The answer lies in the delicate balance between ambition and sustainability. While sky-high growth rates may look impressive on paper, they often come with hidden risks: inflation can spiral out of control, social inequality may widen, infrastructure can be overstretched, and natural resources might be depleted faster than they can be replenished. A steady five per cent, on the other hand, represents a “sweet spot” where progress is strong enough to improve living standards, create jobs, and attract investment, yet stable enough to avoid the destabilising shocks that extreme growth often brings. In essence, it is a deliberate choice to pursue quality over sheer speed, ensuring that prosperity is not just temporary but sustainable over the long term.
If a country manages to sustain an economic growth rate of 5% per year, it can bring about a range of significant positive outcomes, depending on its initial economic conditions, population dynamics, and governmental policies. Such growth often serves as a strong indicator of economic vitality and developmental momentum, provided it is managed with prudence and inclusivity.A consistent 5% growth typically means a tangible increase in Gross Domestic Product (GDP). This rise can lead to higher per capita income, consequently improving the overall standard of living for citizens. With greater purchasing power and wider access to goods and services, people tend to experience enhanced economic security and well-being.Steady growth also contributes to poverty reduction. As industries expand and businesses flourish, new employment opportunities emerge. When this economic expansion is paired with fair income distribution, lower-income groups gain better access to economic participation, ultimately reducing poverty levels and improving social mobility.Moreover, a robust growth rate of 5% attracts both domestic and foreign investors. The influx of capital stimulates faster development in infrastructure, technology, and industrial sectors, generating a multiplier effect throughout the economy. This cycle of reinvestment strengthens economic resilience and diversifies the nation’s productive base.In terms of fiscal capacity, such growth enhances government revenue through increased taxation and levies. With stronger fiscal stability, the state gains greater flexibility to finance infrastructure projects, education, healthcare, and social welfare programmes — all of which directly improve citizens’ quality of life and build long-term national capacity.Economic growth at this level also tends to foster social and political stability. When people perceive tangible improvements in their livelihoods, public satisfaction rises, and the likelihood of social unrest diminishes — provided the benefits of growth are broadly shared and not concentrated among the elite few.Furthermore, sustained economic expansion encourages technological progress and boosts productivity. Both industrial and service sectors become more efficient and globally competitive, allowing the country to integrate more effectively into international markets and adapt to emerging innovations.It must be noted, however, that a 5% growth rate is not an automatic guarantee of prosperity. The positive outcomes depend largely on the quality of growth — how evenly it is distributed, how sustainable it is, and whether it is supported by sound policies. For instance, if growth relies heavily on a single sector or fails to ensure equitable development, it can actually exacerbate social inequality instead of reducing it.Let us consider a practical illustration. Suppose Indonesia’s current Gross Domestic Product (GDP) stands at around USD 1 trillion, equivalent to approximately IDR 17,000 trillion based on an exchange rate of IDR 17,000 per US dollar.A growth rate of 5% would then translate to an additional USD 50 billion, or about IDR 850 trillion, in just one year. This extra sum of national output could, if well managed, be channelled into transformative investments that directly improve the well-being of millions of citizens.For instance, in terms of infrastructure, such an amount could finance the construction of thousands of kilometres of new toll roads, bridges, and modern public transport systems. Given that the average cost of building one kilometre of toll road ranges from IDR 50 to 70 billion, an additional IDR 850 trillion could theoretically build between 12,000 and 17,000 kilometres of toll roads — enough to connect remote regions and accelerate national logistics efficiency.In the field of education, the same amount could be used to raise teachers’ salaries, build new schools, and expand access to higher education. If the annual cost of educating one student is around IDR 10 million, this additional funding could support 85 million students for an entire year — a monumental step towards a better-educated generation.Regarding healthcare, IDR 850 trillion could fund the construction of new hospitals, the purchase of modern medical equipment, and the expansion of health insurance coverage. With the cost of building a major referral hospital at roughly IDR 500 billion, the country could build 1,700 new hospitals, dramatically improving access to quality healthcare.As for investment and employment, such financial resources could be channelled into industry, small and medium enterprises (SMEs), and technological innovation. Assuming each investment project creates around 1,000 jobs, the IDR 850 trillion could generate millions of new employment opportunities, stimulating productivity and boosting household income.In the area of social programmes, the same amount could enhance direct cash transfers, food subsidies, and poverty alleviation schemes. If each family were to receive IDR 1 million per month, IDR 850 trillion could sustain 70 million families for a full year, a move that would directly strengthen social resilience and purchasing power.When we turn our attention to employment, a 5% economic growth rate can have a profoundly positive impact, though the exact outcome depends greatly on the underlying structure of the economy and the policies adopted by the government. The relationship between growth and job creation is not automatic—it relies on how inclusive, diversified, and labour-intensive that growth actually is.Firstly, economic growth naturally increases the demand for labour. As the production of goods and services rises, companies require more workers to meet the growing market demand. Manufacturing industries, for instance, will need additional factory operators, technicians, and production managers, while service sectors such as transport, logistics, and tourism will expand their workforce to accommodate higher activity levels.Secondly, growth often stimulates investment, which in turn creates new employment opportunities. When the economy shows consistent progress, it attracts both domestic and foreign investors. New factories are built, generating dozens or even thousands of jobs, while infrastructure projects — including roads, airports, and bridges — demand engineers, construction workers, and various forms of technical support staff.Thirdly, a growing economy encourages the expansion of small and medium enterprises (SMEs) and start-ups. As consumers gain stronger purchasing power, their spending drives higher sales and market confidence. Simultaneously, access to credit and investment capital becomes easier, allowing entrepreneurs to expand operations. This leads to an increase in both formal and informal job opportunities, particularly in dynamic sectors such as retail, services, and technology.Fourthly, growth not only influences the quantity of jobs but also their quality. With economic expansion comes the potential for higher wages, better working conditions, and greater access to skills training. Modern sectors — such as renewable energy, digital services, and advanced manufacturing — often emerge, providing employment that is both more stable and more rewarding.However, there are also limitations and challenges. A 5% growth rate does not guarantee that job creation will be evenly distributed. If the growth is concentrated in capital-intensive sectors, such as mining or commodity exports, employment benefits may bypass the wider population. Similarly, rapid technological advancement and automation can replace human labour, resulting in job displacement. For this reason, governments must design inclusive policies, such as training subsidies, job placement programmes, and targeted investment in labour-intensive industries to ensure that growth translates into broad-based employment gains.For illustration, let us take Indonesia as an example. Suppose a 5% growth adds USD 50 billion to the country’s GDP. If new investments and expansions in labour-intensive sectors generate one job for every USD 50,000 invested, this would create approximately one million new jobs in a single year. The number could be even higher if the funds are channelled into industries such as construction, manufacturing, and services, where employment absorption rates are much greater.In conclusion, a 5% economic growth rate provides a substantial fiscal space for the government to improve living standards, expand infrastructure, and foster sustainable development, as long as the additional wealth is managed efficiently, transparently, and equitably.
In economics, there exists a practical boundary, often called a “sweet spot,” which represents the ideal range for healthy and sustainable growth. This number is not absolute, as it depends greatly on a nation’s economic structure, population size, and institutional stability. Nonetheless, economists generally agree on certain benchmarks that reflect the overall health of an economy.When growth remains low, below roughly two to three per cent, it is usually considered suboptimal, particularly for developing countries. Such slow expansion often signals structural weaknesses or stagnation within key sectors. The consequences can be severe: high unemployment, minimal investment, and sluggish improvements in people’s purchasing power. In short, a low-growth economy struggles to provide meaningful progress for its citizens. Well, when we look at the figures from BPS reporting economic growth around five per cent, yet in reality unemployment remains high, investment is sluggish, and household purchasing power struggles to rise, it is reasonable to question these numbers. Upon closer examination, a growth rate of around 2.5 per cent seems far more plausible given these circumstances.A moderate growth rate—typically between three and six per cent—is widely seen as both healthy and sustainable. This range is especially ideal for developing economies like Indonesia, where steady progress is vital for social and infrastructural development. Growth within this range tends to create new jobs, raise income per capita, and allow governments to invest more effectively in public services. For instance, many Southeast Asian countries deliberately target four to five per cent as their “sweet spot” to ensure balanced progress without overheating their economies.When economic growth surpasses seven or eight per cent, it may seem like a golden era of rapid advancement. Investors flock in, living standards rise swiftly, and optimism fills the air. Yet such high growth rates are often accompanied by hidden risks. Inflation may spiral out of control if production cannot keep pace with demand. Economic inequality may widen if prosperity is concentrated in just a few booming sectors. Moreover, an overheated economy can put immense pressure on natural resources, infrastructure, and social stability.In economics, “overheating” refers to a situation where an economy is growing too quickly, beyond its sustainable capacity, leading to imbalances and potential instability. Essentially, the economy’s productive resources — such as labour, capital, and infrastructure — are being used at or beyond their limits. When demand outpaces supply, it can trigger high inflation, asset bubbles, labour shortages, and pressures on natural resources. Overheating is risky because while short-term growth may look impressive, it often cannot be maintained without causing economic distortions or a sudden slowdown, sometimes resulting in a recession.In practical terms, an overheating economy might see soaring prices, wages rising faster than productivity, long lines for skilled workers, and overburdened transport, energy, and housing systems. Policymakers often respond with measures like raising interest rates, tightening fiscal spending, or slowing credit growth to cool the economy down before it spirals out of control.On the other end of the spectrum, negative growth—when the economy contracts—is clearly a sign of trouble. Shrinking output leads to job losses, declining purchasing power, and mounting social distress. If this persists, the country risks falling into a prolonged recession, eroding both confidence and resilience.For developing nations, maintaining growth within the range of four to six per cent annually is generally considered both good and sustainable. It provides enough momentum to improve public welfare, expand employment, and fund infrastructure, while keeping inflation and inequality at manageable levels.Let’s continue with a topic that doesn’t directly discuss cooperatives, but is very much connected to cooperative principles.
Together: The Rituals, Pleasures and Politics of Cooperation (2012, Yale University Press) by Richard Sennett explores the social and psychological foundations of human cooperation. Sennett investigates how people work together, not merely in economic or organisational terms, but in everyday life, through rituals, shared experiences, and mutual respect. He argues that cooperation is an essential human skill, cultivated through patience, trust, and social interaction, and that societies thrive when these cooperative practices are nurtured. The book also examines the obstacles to cooperation, such as inequality, isolation, and rigid hierarchies, suggesting that understanding the nuances of human collaboration can improve both personal relationships and collective institutions. Sennett sees cooperation as a skill, a pleasure, and a political act that shapes communities and human flourishing.Sennett defines cooperation as more than just working together to achieve a goal. It is a complex human activity that involves patience, trust, respect, and shared understanding. Cooperation, in Sennett’s view, is both a skill and a social art: it requires people to engage with one another attentively, to negotiate differences, and to participate in rituals or repeated interactions that build mutual confidence. He emphasises that cooperation is not automatic; it flourishes only when individuals are willing to recognise the humanity of others and to invest in relationships over time. Furthermore, Sennett presents cooperation as a source of pleasure and political significance—it shapes communities, strengthens social bonds, and enables collective action in ways that purely hierarchical or transactional interactions cannot.Sennett illustrates cooperation through simple, relatable scenarios. One example is a jazz band improvising together: each musician listens carefully to the others, adjusting their own playing to create harmony. This requires attention, patience, and a willingness to adapt—skills essential for cooperation. Another example is a neighbourhood project, like building a community garden. Neighbours negotiate tasks, share resources, and celebrate small successes together, turning mundane work into social bonding. Even in workplaces, Sennett notes that teams function best when members respect each other’s contributions and are willing to engage in small rituals, like daily check-ins or collaborative problem-solving sessions, which gradually build trust. Through these examples, he shows that cooperation is learned, practised, and experienced as a source of pleasure and shared accomplishment.
Sennett discusses the mental and emotional stance that enables genuine cooperation. He argues that cooperation is not just about external actions or rules, but about cultivating an internal attitude of attentiveness, empathy, and mutual respect. A cooperative frame of mind involves being alert to others’ needs, negotiating differences without hostility, and embracing the unpredictability inherent in human interactions. Sennett emphasises that this mindset is developed through practice, through repeated interactions, and through participating in shared rituals that foster trust. It allows people to collaborate effectively even when their goals or perspectives differ, and transforms cooperation from a mechanical task into a socially and emotionally rewarding experience.
Sennet argues that cooperation is not just an individual skill or choice, but is deeply shaped by the broader social environment. Social hierarchies, economic disparities, and segregated communities can hinder trust and make collaborative behaviour more difficult to sustain. Conversely, environments that encourage interaction, mutual respect, and shared purpose tend to foster cooperation more naturally. Sennett also reflects on the political and moral dimensions of this issue, suggesting that addressing social inequalities and creating spaces for inclusive engagement are essential for cultivating cooperative societies.
According to Sennet, cooperative relationships are inherently vulnerable, as they depend on continuous attention, trust, and mutual respect. Small misunderstandings, lapses in communication, or perceived slights can easily destabilise collaborative efforts. Sennett highlights that maintaining this balance requires both individual mindfulness and collective commitment, as well as recognition of the unpredictable nature of human interaction. The fragility of cooperation, he suggests, is not a weakness but an inherent feature, and learning to navigate it thoughtfully is part of developing social and emotional intelligence.
Sennet says that social and personal upheavals—such as economic instability, political turmoil, or shifting social norms—can unsettle established patterns of trust and collaboration. People often struggle to adapt their cooperative skills when familiar routines or expectations are disrupted, which can lead to conflict, withdrawal, or breakdowns in social cohesion. Sennett emphasises that developing resilience, flexibility, and an openness to learning from others is essential for maintaining cooperation in times of uncertainty. He presents the “unsettling” as both a risk and an opportunity: while it can threaten cooperation, it also pushes people to reflect, innovate, and renegotiate social bonds.
Sennet explores the various factors that cause human cooperation to become fragile and difficult to sustain. Sennett identifies three main contributors to this weakening. First, inequality—large disparities in wealth, power, or social status—undermines trust, because people are less likely to believe that others will act fairly or reciprocate their efforts. Second, the social triangle refers to societal structures in which power, prestige, and resources are concentrated among a small elite. This rigid hierarchy discourages mutual respect and collective engagement, shaping interactions in ways that promote competition rather than collaboration. Finally, the uncooperative self describes a psychological tendency in which individuals prioritise personal gain or self-interest over shared goals, particularly when social conditions reward such behaviour. According to Sennett, these factors—inequality, hierarchical structures, and self-interested behaviour—interact to weaken cooperation, creating an environment where trust is fragile and collaboration is constantly at risk. Addressing these challenges, he suggests, requires both social reform and the conscious cultivation of cooperative skills.
Let’s give concrete everyday examples of the three factors Sennett discusses. For inequality, imagine a workplace where top management receives huge bonuses while lower-level staff struggle with basic resources. Employees at different levels may feel resentful or distrustful, making team projects harder because people are less willing to cooperate or share ideas freely.Regarding the social triangle, think of a community or organisation where only a few people hold power, prestige, and decision-making authority. Everyone else feels like they have to follow orders, and their contributions are undervalued. This rigid hierarchy discourages collaboration, as people focus on competing for attention or recognition rather than working together.As for the uncooperative self, consider someone who constantly prioritises personal gain—perhaps taking credit for group achievements or withholding information to get ahead. When this behaviour is common, it undermines trust and makes others hesitant to collaborate, weakening the overall cooperative spirit.Sennett uses these examples to show that cooperation isn’t automatic—it needs fairness, equality, and social habits that nurture trust, and without these, even skilled and well-intentioned people may struggle to work together effectively.Sennet also discusses the factors that strengthen human cooperation. Sennett argues that cooperation flourishes when certain social, psychological, and cultural conditions are present. Key among these is trust, which is nurtured through repeated interactions, openness, and reliability; when people believe that others will act fairly and honour commitments, collaboration becomes more natural. Another critical factor is mutual respect, which allows individuals to recognise each other’s contributions and perspectives, reducing conflict and encouraging dialogue. Sennett also highlights the importance of shared purpose or common goals, which motivate people to work together beyond self-interest. Additionally, he stresses the role of rituals, routines, and social habits, which provide a predictable framework for interaction, reinforce trust, and create a sense of belonging. Finally, flexibility and adaptability—being willing to negotiate, compromise, and respond to change—help maintain cooperation even in complex or uncertain circumstances. Taken together, these factors cultivate a cooperative environment that is resilient, socially rewarding, and capable of sustaining collective efforts over time.
Now, let’s illustrate the factors that strengthen cooperation according to Sennett with concrete, everyday examples.For trust, imagine a team at work where colleagues consistently deliver on their promises, share information openly, and follow through on commitments. Over time, everyone learns they can rely on each other, which makes collaboration smooth and enjoyable.Regarding mutual respect, picture a community project, like organising a local festival. Even when people have different ideas, they listen to each other, value each person’s contribution, and negotiate differences without resentment. This respect keeps conflicts minimal and cooperation strong.For a shared purpose, think of a volunteer group building a community garden. Everyone is motivated by the same goal—creating a space for the neighbourhood—and this common vision helps them work together, even if some tasks are tedious or challenging.With rituals and routines, consider daily team stand-up meetings or weekly check-ins. These predictable social habits give structure to interactions, reinforce trust, and make people feel part of the team.Finally, flexibility and adaptability appear when unexpected challenges arise—perhaps the garden project faces a sudden rainstorm or a budget cut. Members negotiate new plans, adjust their tasks, and keep collaboration going despite changing circumstances.Sennett’s examples show that when trust, respect, shared goals, predictable rituals, and flexibility come together, cooperation becomes resilient, socially rewarding, and sustainable.The main message Richard Sennett conveys in Together: The Rituals, Pleasures and Politics of Cooperation is that human cooperation is both essential and delicate, requiring conscious effort, social awareness, and emotional intelligence. He argues that cooperation is not automatic or guaranteed; it must be cultivated through trust, mutual respect, shared purpose, and repeated interactions. Sennett emphasises that social structures, inequality, and individualistic behaviour can easily weaken collaboration, while rituals, routines, and flexible engagement can strengthen it. Beyond being a practical skill, cooperation is also a source of pleasure, social bonding, and political significance, shaping communities and institutions in meaningful ways. Ultimately, Sennett’s work encourages readers to recognise the complexity of human collaboration and to actively foster environments—both personal and societal—where cooperative relationships can flourish and endure.
Richard Sennett’s exploration of cooperation aligns neatly with key ideas in cooperative theory. At its core, a cooperative thrives on trust, reciprocity, and shared goals—just as Sennett emphasizes that human collaboration requires patience, mutual respect, and rituals that build social bonds. For example, in a cooperative, members contribute not only capital or labor but also a commitment to the collective well-being, echoing Sennett’s argument that cooperation is a skill nurtured through social interaction.Moreover, Sennett points out that rigid hierarchies and social inequalities hinder cooperation. In the context of cooperatives, this resonates with the idea that egalitarian decision-making and participatory governance are essential. Members must feel their voices matter; otherwise, the cooperative risks fragmentation. The “pleasure” aspect Sennett mentions—the joy of working together, celebrating small successes, or even engaging in shared rituals—mirrors the motivational factors that sustain cooperatives over time.Finally, Sennett’s political dimension of cooperation—how collective action shapes communities and institutions—reflects the broader social purpose of cooperatives. Cooperatives do not exist in a vacuum; they strengthen local economies, foster solidarity, and cultivate civic responsibility. In both Sennett’s framework and cooperative practice, cooperation is not just a means to an end but a skill, a shared pleasure, and a political act.
[Part 6]
