Economics has the potential to illuminate global issues and their resolutions, contingent upon individuals' belief in and understanding of its theoretical and practical dimensions. This is a conviction I hold. One of my initial inquiries’ centers around the question of whether the future of Oman's economy rests in the hands of Omani capitalists.
It is a universal truth that no country is devoid of economic challenges. So, what are these economic problems, whether on a microeconomic or macroeconomic scale? While the Omani government plays its role effectively, what about Omani capitalists and affluent individuals?
Microeconomics involves the study of choices made by individuals and businesses and how these choices interact and are influenced by governments. Examples of microeconomic questions include deciding between a 3D TV and a standard one, predicting the impact of a price cut on Nintendo's Wii sales, evaluating the influence of an income tax rate reduction on work hours, assessing the impact of a gas tax hike on the preference for hybrid or smaller automobiles, and pondering the effect of music streaming on song downloads.
Macroeconomics, on the other hand, delves into the aggregate effects on the national and global economy resulting from the choices made by individuals, businesses, and governments. Macro-level questions encompass the slow expansion of production and jobs worldwide during Covid-19, the disparate income growth rates in China and India compared to other Asian countries, the high unemployment rates in Europe and several Asian nations, and the reasons behind the significant daily borrowing by Americans from the rest of the world.
Determining the quantity of production of commodities raises questions about whether individuals can ascertain their own needs and wants or if capitalists play a pivotal role in this dynamic. What constitutes an individual's needs as a consumer? Do capitalists consider the overall economy, or is their primary interest in consistently increasing their personal wealth? What repercussions might the country's economy face if capitalists do not align their thinking with the right direction for its well-being?
The book "Foundations of Microeconomics" presents a compelling argument: the answer to the question of "For whom are goods and services produced?" hinges on the income people earn and the prices they pay for the goods and services they purchase.
Acknowledging the existence of considerable income inequality globally, evident in disparities between genders, educational levels, and continents, prompts a realization that these are economic issues that require resolution by the economy itself.
How do capitalists perceive these economic problems, and what solutions might they propose? These are crucial questions that merit exploration and contemplation in the pursuit of a balanced and equitable economic system.
The writer, Mohammed Anwar Al Baluhsi, is an Academic Lecturer and Advisor, Oman College of Management and Technology