Economics is defined by the Merriam-Webster Dictionary as “a social science concerned chiefly with description and analysis of the production, distribution and consumption of goods and services”, and economists are obviously those who specialise in the study of this field. It is as simple as that.

Whether or not they have a left or right political bias has no bearing [on] the validity of labelling a person who engages in such study as an economist. The only thing their particular ideology, i.e. what they think, affects is their understanding and expression of economics. Similarly, a Marxist is as much a politician as a Christian Democrat, the only difference being in their policies.

I appreciate the fact that you brought up Hayek, though. Good man.

While I am not sure what the better option is, probably the more important question we have not asked is what will the impact of liberalization be on the people.

On one hand, there will be more investments; this should mean more jobs, but on the other hand, governments will be dealing with strong MNCs and may find themselves unable or have more difficulty to regulate crucial public interests.

What we need before we open the country up further are strong instruments and laws that guarantee protecting the interests of the ‘weak’ – i.e. the workers. At the moment we cannot even agree on giving maids a day off!

I would be very cautious with economic liberalisation – because the implications will cross into the social and political spheres.

The key is to manage corruption during the process (like AP for Naza), and to give every one an opportunity to participate (like abuses of NEP and government procurement and contracts, unfair toll contracts).

Africa is the extreme example of never finding a good time to liberalize. When would be a good time for Africa?

China in late 1980 was an underdog, did it wait to become miraculously strong before opening up? What would happen had it waited, perhaps until 2009?

Haven’t we waited long enough for international-level banking, telecom, and transport services?

Japan has been strong, but never really opened up its service sector when it was strong. Does it excel in its service sector?

Liberalization and globalization do not cause people to lose opportunities. They reduce your food costs, living costs, etc. In the case that liberalization seems to have increased costs, that is because costs have been shifted (from subsidies financed by high tax) or standards have been raised.

For example, private medicine is more expensive, but also better quality. The caring thing is to ensure the poor have choice in government hospitals. Private hospitals’ competition and training will raise the quality of medical care even in government hospitals. Foreigners coming in as medical tourists demanding for higher medical services raise local quality.

For a more positive example, Tesco and other hypermarkets – often opposed by bleeding-heart defenders of the poor – are exactly the kind of companies that will reduce the prices of oil, flour, eggs, satay, fish, for the poor families and small traders at pasar malam.

Even economists can be confused with the tenets of “comparative” advantage. “Competitive” advantage is not the reason for globalization, it’s “comparative” advantage.

Even if you are poorer and less competent, you can gain from trade. The key is you give up less to gain the same thing – reduce your opportunity cost.

Proton is an example. We are less good in making cars, so don’t do it. Rather than spending 10 people hours to make the car parts, why not spend that labour on making electronics and sell it at 3x the price of a car part we can make, then use one portion of that to buy that car part from Thailand? Same with rice planting.

The issue is do what we do best, at the least cost, and we will gain more than by trying to do what we cannot do best. That’s globalization – it’s about managing costs in many ways. While it means high-cost labour may lose, it means more people in the country will win from lower costs overall.

But it is often the few vested interests of high-cost labour who scream the loudest. Let them win, and the broader consumers pay higher costs, leading to a situation where they can no longer afford to pay, and that industry dies anyway. A high-profile example is US auto makers and their labour union.

The protectionists will never stop. Even where we are richer, protectionists will not want to buy cheaper food from our poorer neighbors like Indonesia, Thailand, and Vietnam.