JAPANESE Prime Minister Shinzo Abe is pursuing an economic policy called the “three arrows” with the aim of boosting the economy and lifting the country out of long-lasting deflation.
The arrows include:
1. Unlimited monetary easing to achieve 2% annual inflation
2. Ramping up public spending
3. Pursing a long-term economic growth strategy
The first arrows helped boost the stock market about 40% as well as devalue the yen 20% against the U.S. dollar. But since Japan’s underlying economy has changed little, stocks and the currency have been fluctuating widely due to the uncertainty of the third arrow, the growth strategy.
A Philosophical View of the Economy
THE British philosopher A.N. Whitehead had many wise things to say about business and society. One of his wisest observations was his statement that a great society is one in which its busi- ness leaders “think greatly of their functions.” When they fail, Whitehead concludes, the consequences are “orgies of exploitation” followed by “a descending standard of living.”
This philosophical way of thinking about business and society is strikingly different from the dominant view of economists and politicians. They favor a more technical picture of economies operating in accord with impersonal laws. In this view economies are semi-autonomous entities obeying laws that are independent of the norms, mores and characters of the societies in which they are embedded. The moral vision of the nation’s business leaders carries little economic weight.
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