The old adage that charity begins at home never seems truer than in the middle of an economic recession. It seems intuitively sensible to take as much as you can and give as little as you can. This is how people get by when times are hard — they hold on to their hard-earned cash. But is self-interest really the way out of global recession?
In Joseph Heller's novel, Catch-22, when the antihero, Yossarian, said that from now on he was only going to think of himself, he was challenged to ask himself what would happen if everyone thought that way. His answer, Heller's answer, was, “Then I'd certainly be a fool to behave any other way!”
Selfishness has always been encouraged in economic transactions, and admonished in moral ones.
And yet here we are, in the middle of what is arguably the deepest economic downturn in history.
What is required to get people spending again, to get banks lending again, to get economies moving again?
Consider a simple scenario: A man buys something for Dh15, uses it for a few years, and then sells it, for Dh10.
The item was a TV stand — a ludicrously cheap one, I grant you, but fully functional all the same. The stand would have sold had the asking price been five times higher, and yet the vendor was happy to let it go at Dh10.
Now, consider the buyer. He is very happy with his purchase, and leaving with his TV stand and his two children in tow, he finds that he had enough money to buy them an ice cream each, which he does.
The children are both happy, the ice cream seller is happy, and so is Daddy. Similarly, the sellers are satisfied with the transaction, even in the knowledge that they could have got five times the price settled upon.
Trade moved on because of this transaction — this transaction took place because the sellers were not willing to ask too high a price.
Had the price been too high, the TV stand would have remained unsold, Dad would have made a journey for nothing, and the children most probably would not have been treated.
The sum total of transactions would have been zero; our little three-way microcosm of the economy would have remained stagnant.
Trust is what is required. That and a bit of selflessness.
Actually, people living their daily lives are the engines — corporate entities aren't living entities, and any growth they achieve is at someone's expense. Real, lasting growth is achieved by people behaving like people rather than the selfish automatons economists assume we are.
— The writer is an Al Ain-based educator and Gulf News reader.