Gives Us Strength...

Upon the earthquake in our beloved province Yogyakarta, we feel so sad and send our deepest condolence for the unfortunate cause of death and injured. May God give us more strength to cope this sadden.

"This is my prayer to thee, my lord---strike,
strike at the root of penury in my heart
Give me the strength lightly to bear my joys and sorrows
Give me the strength to make my love fruitful in service
Give me the strength never to disown the poor,
or bend my knees before insolent might
Give me the strength to raise my mind high above daily trifles
And give me the strength to surrender my strength to thy will with love"

(Gitanjali by Rabindranath Tagore)

Euro music

Sorry for not economics at all this time. I cannot help myself not to share this great entertainment from Eurovision Song Contest 2006. You may find my detail posting related with this contest in here (with additional song lyrics in here). Just for now, let me do some “maksa” thing by relating Eurovision 2006 results with a bit of economics term. My main issues are about “product differentiation” and “consumer sovereignty” among European music audience.

As we all may know, a lot of song contest only prefers particular type of music which is mostly pop or ballads or sometimes rap or even hip hop (for Indonesia there are also KDI for dangdut music). Also, most of the performers are shape with glamorous, good-looking, fashionable style, and clear-nice voice. In economic term, we can say that a song contest would like to produce a well-defined package of merchandise that people will buy (vote). Therefore, this situation is – perhaps – violating the rule of ideal market mechanism.

Consumers (voter) have no other choice to buy because the variety of the product (song or music) was not diversified enough. Not mention that possibly there are potential consumers whose not vote because their preferences not available in the market (contest). Thus, if this choice of competition is still maintained then we can expect that there is no ‘growth’ in the society.

What we have seen in Eurovision 2006 is that another product has been offered by Finland. It was rock music. A rock band with ugly monster appearance called Lordi has been chosen to represent Finland in the competition with dominant pop or ballads song. Typical rock music style with fires on stage and loud music were performed by this band and they really rock monster! And surprisingly they gain most votes from 35 European countries audience. Even, many commentators said that this year Eurovision is the best ever, mainly because of this band uniquely-superb performance. (You may see their performance here)

IMHO, Eurovision (especially Finnish Eurovision committee) has gain very good point by giving a chance for rock music to compete in the contest. It is not only creating a good opportunity for other music genre but also offering people with more choices, which mean more audience and potential market. Simply by saying that product differentiation is still important in music market and need to be further expanded. Such a good spirit and approach on managing a big competition for a continent like Europe. Also, the consumers in this market (I mean the voter of Eurovision) show a significant sovereignty by responding very well on a new product offered.

To call for comments or opinions, I am wondering if in Indonesia there will be such a contest where all kind of music and performers may compete. It does include different island and culture in Indonesia’s diversity on folk’s music. Any of you have connection with TV broadcast? Maybe we can sell this idea…

Finally, keep the music play please...

Tell me, my migrant friends!

Tell me, my migrant friends, what did you expect from migration to the more developed countries such as the Netherlands, Belgium, Norway, and Italy? Why did you not just stay in Indonesia? Before you moved, what did you desire? What motivated you to come here? And when you are now living in these countries, is your expectation met already?

Those questions of mine were triggered by my actual experience as a mover. And I was not the first one who actually asked those questions. There are many studies focusing on migration decision process (motivations, expectations) and on migration consequences (rate of return to migration).

Migration decision is considered as an important decision, i.e. it has profound consequences on our lives, and usually driven by certain motivations. Our motivations were shaped by internal factors within individuals (characters, preferences), and external factors outside the individuals (the opinion of important others, our families, our budget, etc). In this writing, I am trying to identify the process of our migration, based on what I have learned (and please correct me if there are any improper lines or incorrect concept!).

1. Free decision
I think it is safe to assume that our decision to migrate abroad for studying is a 'free' decision (not forced). So, our migrations are not forced migration such as caused by natural disasters or war. (For basic concepts on forced migration, see Boyle et al 1998).

2. Bounded rational
Usually, when we studied in economics, we assume the decision-maker as a rational being. Now, let me introduce you to a concept called 'bounded rational'. Rationality in economic theory assumes full information. Bounded rational is a concept that defines rationality as bounded by limited information and how an individual perceive that information. The information is contextual, which is gathered from one's immediate environment (for further reference, see De Bruijn 1999).

Therefore, we do not assume 'unlimited' and homogeneity of choices. As an example, a person who lives in Madura might consider (bounded by one's contextual information) to move to Surabaya or to Banjarmasin. But he/she might never think to move to Biak at all! In microeconomic theory, we will approach the choice to move for this particular person either to Banjarmasin and Biak as homogen.

(Berly was informed about STUNED scholarship and thus created contextual information for him different from those who never heard such a scholarship).

3. International migration
Our migration is an 'international migration' because of its temporal and spatial dimensions. It is across the boundary of a country (from Indonesia to Italy or Norway), and for relatively permanent period of time. More than 6 months is usually the common period for a movement to be considered migration (see, for instance, the definition of migration from Indonesia CBS) instead of circulation or commuting.

4. Our motives!
What were our motives to migrate? De Jong and Fawcett (1982) identify the motives for migration as follows: wealth, status, comfort, stimulation, autonomy, affiliation, and morality in their Value-Expectancy model. A person weighs these motives to migrate with one's expectation of the outcome. For instance, a male farmer in Banten might has a motive for better wealth by moving to Jakarta, but if he thinks the chance to get better wealth is not high, he might decide not to move at all. A female worker might think that being close to her husband (affiliation) is more important than her income (wealth) that she considers to move with her husband and thus loosing her job.

Based on value-expectancy model, our stronger motives might be wealth and status. We want to get higher degree and usually we expect better income later on. For me, I also consider stimulation, i.e. having pleasurable activities as one of my motives. I like to travel, and I want to see big cities in Europe!

5. Our dreams come true?
This is something that is very interesting for me. Usually, we have certain expectations prior to the move. Now we already moved. Do we meet our expectations? How is our post migration situation? Probably, some of us get more respect when we had vacation in Indonesia (better status) because we are pursuing higher degree. We probably miss home a lot ('hunger' of affiliation).

Through time, our motivations might evolve, and we see things differently. We expected certain things, get some things, and loose some things. That is what happened to me. I expected what a person who pursued a higher degree expected: better status, better wealth, stimulation, among others. But I evolved to see things differently. My biggest gain from my migration is not what I ever expected before coming here to Groningen: I found the meaning of my life....and I think there is no theory on this motive of migration yet! And in this sense, I think I can say that my dreams have come true! How about you?

Reference:

• Boyle, P., K. Halfacree and V. Robinson (1998), Exploring contemporary migration, New York:
  Addison Wesley Longman Ltd.
• De Bruijn, Bart (1999), Foundations of demographic theory: Choice, process, context, Amsterdam: Thela Thesis Publishers.
• De Jong, Gordon F. and James T. Fawcett (1981), “Motivations for migration: An assessments and a Value-Expectancy research model, in Gordon F. De Jong and Robert W. Gardner, eds., Migration decision making: Multidisciplinary approaches to microlevel studies in developed and developing countries. New York: Pergamon press.
  

Productive people of the world, Unite!

by Berly

Worker and labour is the big things on May. After all May day just passed and all the fuss about Indonesian labour law still on the front-page.

And my history of economics class just has a session on Marx. The teacher is a ardent (albeit moderate) Marxist and currently writing a book with working title of “Marxism as Freedom.”

Don’t get me wrong, one of the reason (beside behavioural and institution approach) I applied to the PhD in Economics program at University of Siena is the left flavour in curricula and within faculty members, which is rare on mainstream program. I read the materialist interpretation of history and The Capital part I during my undergrad. I still feel that exploitation, imperfect mobility of labour and asymmetric bargaining power is under-addressed in current economic analysis.

But I have a problem with the Marxist rallying cry of “Worker of the world, Unite!”

In classic Marx analysis, there are two classes of people. There are capitalist who own capital/factory and there are worker who only has their labour to offer. I am not even going to talk about labour theory of value where different skill and effort of labour force is not acknowledged, just rambling about definition.

First, who are the labour & capitalist now?

We must admit that labour is such a wide ranging category now. An MBA from Harvard that work in Wall Street, PhD in economics that advise governments’ policy, surgeon on hospital, bankers in J.P Morgan/Citigroup, football star in Italian Serie A and IT engineer in Silicon Valley are all labour. Of course the sweatshop worker and farm labourer also in the category of not owning the mean of production. It’s safe to say even if they all equally labourer, some are more equal than other.

And the capitalist… there are still conglomerates like Salim group in Indonesia, Rupert Murdoch in media and McDonald/Coke in consumer product. But that definition also include owner of small tile factory, small shop/restaurant and artisans that could not be mistakenly taken as the previous groups.

Second. Are being a worker is certainly worse than being capitalist/factory owner?

Would you rather be Michael Jordan or Broto family in Losmen Sinetro? The first is a worker and the second are owner of mean of production. Just put people in those two category is no longer enough to explain (econspeak: degree of correlation) their welfare.

Third, how can someone become capitalist?

The classical Marx concept is sufficient to explain the society of Industrial revolution era where class membership is determined almost solely by birth. It is inevitable that those two come into conflict. But now the role of education (even if the richest person in the world is still a college drop-out) and market opportunity (J.K. Rowling is richer than Queen of England now) are big determinant of wealth. Welfare and social status is more merit-based today than it was two hundred years ago. (but I still prefer to be Michael Jordan).

So I prefer the unity of productive people for good cause (not a fan of rich heirs wasting their family's money). A rockstar teaming with software billionaire and Professor in Economics done more for Africa than all the class conflict and land seizure that could be done there. (btw, that is capitalist and worker working together).

Amartya Sen once asked “Equality of What?.” Do you want a world where everyone have equal wealth (but each person’s need maybe different), regardless of contribution (how to make people contribute according to full ability). Or do you prefera world where everyone start equally, no family and all brought up in a commune? Or do you would like to see a world where everyone has equal chance to success?

Call me a conservative but I like the arrangement of modern welfare state (especially in Europe). I find it a bit Rawlsian that basic need is within reach of everyone. Here they got health services where (almost) everyone is insured, education where quality and cost are not inversely related and rule of law. I’d say they put big stress on equality of process/opportunity and some application of equality of starting point (if you are very poor, state will provide income). You can be successful and rich, but that mean you pay more tax (worker and capitalist). Don't just take it from me, Jeffrey Sachs seem to think along similar line (to read click here).

Flaming rhetoric is still needed to shake people from completely accepting the world inequality. But it is the quiet and behind the screen policy that could make the real difference.

Pertamina, Shell dan... Telkom?

KORAN TEMPO - Metropolitan, Jum'at 05 Mei 2006

Some Quotations:
"Bersaing dengan Shell, Pertamina Banting Harga"

"Juru bicara Pertamina, Muhammad Harun, membenarkan adanya kebijakan banting harga itu. Menurut dia, kebijakan banting harga itu dilakukan untuk bersaing dengan kompetitor yang ada. Namun, kebijakan itu hanya untuk lima pompa bensin yang ada di Jakarta dan Tangerang. "Daerah lain tidak, hanya yang berdekatan dengan kompetitor," ujarnya".

"Dengan adanya kebijakan banting harga itu, kata dia, masyarakat akan diberi kebebasan memilih. "Yang penting masyarakat diuntungkan," katanya".

Telkom, kapan giliranmu?