Academic Foundation of the ‘Science of Prosperity’

 

1. Is it possible to become ‘science of prosperity, as a sector science of economics?

 

    In order to become a certain research as a sector science of academy it should full fill following the terms of conditions;

 

                  ·        Possession of the value reflecting the characteristics for special sector.

·        Suggesting the present problems of related sector.

·        Suggesting the new approaches to solve the problems

 

2. Emerging the ‘Science of development economics’ 

 

    Since the World War 2, international community started to concern in economic development for less developed countries. It focused to eliminate absolute poverty as a direct task and getting priority for economic development policies for sustainable economic growth structure. That was the starting of sector science of development economics'. The Bretton Wood Agreement as an international supporting system launched IBRD as a helping institution for economic development of developing countries and also IMF and GATT for the sustainable economic development of international community. These supporting systems have developed continuously and still remain as a central role for international economy management.

 

   Academic foundation of 'science of the development economics' was representing the strategy of 'Economic growth'. Through the economic growth, the quantity of GNP can be expanded, and simultaneously absolute poverty numbers minimized on this foundation. Industrial development policies were pursued as a detailed measure for economic development. In order to expand investment for industrial development, a series of economic policies have been tried like savings expansion, economic aids for development and trade expansion policy etc.  As a means for efficient pursuing these goals, many developing countries preferred to take a system of ' economic development plan'. Even now, a few of developing countries are fond of this like comprehensive development plan system.

 

   It has passed a period of time for 70 years after World War 2. During the period of time, some countries promoted to advanced countries and some upgraded to new industrialized countries as an emerging market. There are still remained as a group of developing countries and substantial number of absolute poverty groups but the share of number of those groups to total are diminishing.  At present, 34 countries joined to OECD member so called certified advanced economy. In case of Korean economy, Korea took the membership of OECD in 1996. Since then, Korean economy is getting recognition of upgrading the existing weight among the members.

 

    The influences of the financial bankruptcy of Leman Brothers in 2008 to the world economy were serious. The most significant thing was the fact that so called advanced economy which was one of the respecting model for developing countries showed their naked faces without cosmetics of taking deal with the real economic difficulty to world. From Greece, Italy, Spain, France, England to Japan, Ireland faced the similar difficulty. The naked figures of these countries made the rest of world understand they are not so great capability to overcome difficulties comparing with the rest of them. Those became  different meanings in terms of expectation which advanced countries might show a different style of overcoming difficulties with developing countries to handle the issues.

 

3. Confusion of the value system pursued by development economics

 

    Development economics started to be premised on the government directions in national economic management from the beginning because the pursuing goal was limited to economic growth. Also, naturally developing countries preferred to have economic development plan system in order to take a strategy of enhancement of the development performances within the limited time. It was the reason why many of developing countries have taken the economic development plan system because of the specific characteristics of development economics.

 

    On the other hand, so called advanced countries like US which were satisfied with the superiority of war winner countries have taken policies of swinging between Keynes and Hayek following the governments. After then two major changes came out since Reagan government of United State ‘money supply’ as a major policy variables equivalent to existing ‘national budget’ and ‘neoliberalism’ based on small government which was initiated by Friedman became a principal value for the national economic management. That also emphasized the importance of finance economy as well as the real economy. Naturally, Wall street started to show a significant role as a more important places for world economic management.

 

   On the other side, the invisible hand of Adam Smith asked to become the prerequisites of accuracy in market role but sometimes real economy failed to prove this in reality. Sinking of Leman Brothers in 2008 drove the world economy at edge of sinking together and in this period of time the influence gaps of economic emergencies between individual countries expanded following the individual economic situations.

 

   The confusions of national economic management of 21 century have been along continuing bearing with the structural contradiction in both of development economics and new free economics of neo liberalism.

 

   The strategic industry development in development economics created many of success stories and also became a basement for step forward but simultaneously showed the results expanding the gaps of development between the groups of participated and non participated. These gaps expanded unbalances of income distribution and pushed up the social issues of so called ‘have and have not group’.

 

   The social unbalances made taking care of the low income bracket become a important policy value as well as on the other side ‘individual happiness’ arising the importance of    the policy value. But there can be possible the conflicts becoming serious between values of individual happiness if the individual values too much seized to personal interest. In order to solve this problems, the ‘Rule of game’ is becoming more important policy values. Under the situations changes, general concerns about the development economics looks to start  fade away slowly.

 

 4. The value system pursued by prosperity economics

 

    The value system pursued by prosperity economics is continuing the sustainable economic development strategies. Based on the economic growth, it is pursuing the up grading income level and more deepening the economic development structure. Simultaneously it is toward maximizing the guarantee of personal freedom, equitability and happiness.

 

    As a means of developing value system, the existing two value systems of development economics and neoliberalism are needed to get merged together with as a value system. It is needed to develop the development economics based on economic growth and also succeeded the neoliberalism being prerequisite the market efficiency.

 

5. Suggestions for a new methodology of approaches

 

   The methodology of new approaches to succeed reaching new value system by prosperity economics emphasizes for supplying new policy alternatives, quick winning rather than a scientific theory development. But the new theoretical researches are also exploded

 

   1)    Based on neoliberalism

   2)    Re- systemize the function of government suggesting the necessities of market intervening and the limits to intervene rather than unconditional pursuing small government.

   3)    The positive government support system to the market failures be up graded to the level of ‘happiness pursuing right’. A little bit subjective theory differed concept from democratization of economy which is more political gesture and struggling between ‘have and have not’.

   4)    Fare trade order and rule of game should be pursued perfectly. The power balance between superior(甲) and subordinated(乙) no more becoming the elements of social conflicts.

   5)    New Brettonwood be pursued for the purpose of co-development together with the advanced economy and developing economy through the up grading IMF and WTO system which is more focusing on advanced economy oriented.