The book has open my mind to the which I describe "Economist Thinking”, which is to not look at the direct consequences from the impact of the plan only but also to look at the farther impacts, or in other words, at the indirect consequences. Because these indirect consequences may affect the third party or the subsequent events to occur that was not even in the picture or in our imagination in the first place. (Which make this relates to the book: Thinking, Fast and Slow by Daniel Kahneman)
The same goes in governing the country, such as ‘Subsidy’ should be a ploy to certain essential commodities only that will benefit most of the taxpayers in return. The set price of commodities should be sufficient to encourage the largest production and sales volume to meet the long term demands. Then, the country should also support local businesses to encourage more export activities to meet larger demands overseas.
Hence, the country profits (taxes) from exporting can be fork-out to subsidy on essential commodities. Other than that, these profits can pay for the import commodities to supply the unavailable resources in our country.
From the reference of the equation above: (Note: Assumption ‘B’ will not set high markup because it will reduce their sales.) Add subsidy at the Left side of the equation will simultaneously change the Right side of the equation. As an example, to stabilize the economy, the government will add tax on other less essential products at the Right side of the equation.
Other than that, the book also discussed ‘Efficiency’, which can be increased by the implementation of technologies such as automation or artificial intelligence. Subsequently, machines may replace our jobs. However, this also will make us evolve on how we will work or most importantly “Financially Survive”. All this time jobs always change in front of our eyes, the obvious change was, children and overaged are no longer needed to work anymore compared to a couple of decades ago.
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