Most of the atention of political analists in recent weeks in Latin America have been focused on the proper interpretation of election results in Argentina, Venezuela, and Bolivia.As a follow up it comes the expected outcome of Equator (2017), and Brazil Government survival of current investigation about corruption charges, against high ranking advisers of Brazilian Government.
But focusing on these eletion results, what are the most likely hipothesis?:
a.- Within the conventional wisdom ,there are two lines of approach:The first , deal with voters shifting away from soft government. which means government based upon people `s will, no matter the cost.In latin america it is called "Populist kind of government policies".The second one, comes out from the old left-right axis,which in this case means a supposed shift of voters to the right .There is a third line of approach, which goes on the old school of Government management policies, which split government performance on two groups: The left government comes along when public incomes are rising , so voters look for someone to spend them.The right government comes along when public incomes fall, and voters look for reponsible people to solve the situation.
Although these hipothesis are both relevant and not self excluded explanations, they do not cope with some fact which represent a new trend for future elections.This line of approach, goes on the side of non conventional analisis, but get closer with the changing mood of voters in latin america.Let review some issues about it:
a.- The economic boom of the beginning of the 2000 decade, and the moderate expansion afterwards(2006-2014),average of 3,3%,meant that average GDP per capita increased from USD 5500(2006) to USD 9100(2014).These economic outcomes changed the social landscape of latin america, as long as poverty and unemployment decreased, and at the same time middle class segment, became an important segment of the new voters.-
b.- These new voters, demand different kind of policies from Government.They focus on the quality of health, education, and public service as a whole:They do not require the Governmenet to do what they can do by themselves.They realize how important is to count on their proper means to prosper as entrepreneurs,small business activities, complementary services and the like.These people cares more about inflation, social stability and a good environment for pursuing their goals, and so imporve their expectations about the future.So, they are in the stage , such that they no longer whant a paternalist government , but an efficient and effective one.
c.-These days, people have better means to make clear what it is like to be uneasy about a government which do not fulfill their expectations, or to care more actively about corruption,and other social bads, such as nepotism,discrimination, and its implications.The access to new technology tools (cell phone, On line communication,Internet facilities , and the like),increase citizens involvement in public affairs.
So, What is it really happening?.An alternative hipothesis would be that , Latin American voters mood,changed as a result of years of high economic growth, such that on this regard it was no a missed opportunity for them.It rather seems that it was a missed opportunity for Governments , specially those which did not bother to become closer to voter needs and expectation, and instead focused on their own interests and self benefits.Thus, The success of incoming government and policies will depend upon the identification with what new voters need and expect, more than what government ideology may suggest.
What technology means for economic analysis?. It is surprising that very much of the unexplained exogenous source of growth,(aside from labor and capital rate of change) deals with total factor productivity, which may be affected by a variety of variables ,including technology change.Endogenous sources of growth instead, deal with human capital , innovation and business initiative, which have an impact on the quality conditions for economic growth. Usually the former than the later approach ,get the most when it comes to explain the economic growth trend against the potential output which allow the well known output gap. It is s, because it make easier to influence the design and implementation of economic policy.(Taylor´Rule).
Technology impact growth throughout factors productivity. Thus, all the technology progress since the nineties aplied to production and management, has increased productivity of both capital and labor,changing both the quality of capital goods, and the profile of labor demand increases toward better and different complementary skills.
Having said all the above, the main constraint for growth is still the resource scarcity.The premise is that technology, somehow it only change the way resources are mixed.Those which are freed in some sector, goes to other ones, given a total unchanged endowment.
But What if the technology becomes more efficient?.Let say to download 18 movies in one second, or within supermarkets throughout the lighting system, the manager send information to consumers iphone about the new bargaing in some specific aisle?.
Technology is about to surprise everyone of us changing from the wi-fi, to the light-fidelity (LI-Fi), which will increse the speed of data and information flow, to such an impressive level hard to cath up for human understanding abilities.-
Leaving aside the implication for the development of robotic of higher generation (intelligent machine), the fact which concern to the economcy as the science focused on solving resources scarcity, is that these will no be scarce any more.We will be plenty of resources because technology will widen up the available supply. Actually 1% of labor force, is able to supply food in developed countries. However, whithin the framework of knowledge society, information is what count the most. With the new faster pace of technology ability to cope with data volumen, economic agents will have more information they are capable of dealing with.
Thus ,the real problem will not be to maximize, because it will be out of reaching for humans, to be able to understand millions of data available at the light speed, in any monet in time (one second), before making a decision.
Therefore, the challenge will be to minimize losses from missing information.To minimize losses from wasteful of higher endowment of resources, such as for instance ; time.Tehcnology will free time for aditional uses,aside from the trade off between leisure and work.-
How well prepared is the economic sience for this new framework, away from resources scarcity as the key restriction, to be replaced by human understanding and emotions (feelings) as the new one?