Investing in stocks, cryptocurrency, foreign exchange trading, Ponzi schemes, and other gray businesses seems to be trending among the younger generation and the middle class who hope to get rich quickly, while many people turn to lotteries. But no matter the products, “they are all based on the hope of economic and social mobility,” said Asst. Prof. Dr. Thanee.
“If we happen to belong to the lower or middle classes, especially the former who did not attend reputable schools, or were born into good families, don’t own a business, nor any assets for collaterals in starting a business, and then hope to become rich or move up the social ladder, what can we do? Buying a lottery ticket is the only hope in life to have the opportunity to have 6 million baht in the bank account. There is no denying that having 6 million baht in the account from work is not easy, so the lottery denotes an opportunity to move up the social ladder.” bangkok university
So why is there such a low rate of upward mobility in Thai society? Asst. Prof. Dr. Thanee poses a very pertinent question and further discusees “State Capture”, a term that first appeared in a World Bank document, published in 2000.
Asst. Prof. Dr. Thanee explains the meaning of “state capture” as being about how large capital groups could influence state policy, especially economic policy. The term emerged right after the collapse of the Soviet Union, resulting in the emergence of a small group of countries where capitalists or large capital groups control resources, be it oil or energy, and these capital groups influenced the government through economic dominance and could dictate the direction of economic policies.
“In the beginning, we did not realize the problem of state capture because the capitalists’ role in economic policy helped the economy to continue growing. But today, we are starting to see the negative consequences of state capture, namely the monopolization of funds and financial resources by these capitalists who formulated economic policies that favor the industries they are holding for increasing profits, hence intensifying income inequality.”
The state capture by these capitalists enabled the rich to get richer, while the poor find it harder to access resources, and cannot have access to wealth because the economic policies do not allow the poor to grow, but allow the rich access to profit.
“Most people in the middle to lower classes, no matter how hard they work or struggle for money, can only get richer up to a point. As time goes by, the inequality grows exponentially based on legitimacy determined by policies that benefit businesses.”
The problem of economic inequality does not affect only Thailand, but many other countries in ASEAN as well. The millionaires and wealthy families are still the same people they were 20-30 years ago.
“Thailand is a small country, not very wealthy, but we have an astounding number of the world’s top billionaires. This is a reflection that this group of people is becoming richer and richer, although the country’s GDP is not very high. The lower-class people who make up the majority of the country may have a better life, but at a smaller rate, or are comparatively poorer.”
Asst. Prof. Dr. Thanee offers a comparison with case studies of Western countries with economic freedom, for example, the United States, where new billionaires over the past three decades consist of some new faces.
“There may be some of the same names, but new faces keep popping up on the list, which means that people in their country have a high chance of social mobility.”
Domination of power through economic policymaking is a major cause of high inequality. Asst. Prof. Dr. Thanee concludes.
“State capture is evident in a country whose government is incompetent in economic management. This is normal and has nothing to do with morality or ethics. Our country may have a government that comes from bureaucrats, the military, or politicians who don’t have an aptitude for business. If this happens, government advisers come from big companies, and these people may unknowingly have the opportunity to formulate policies that are more conducive to big companies. State capture takes on many forms, such as funding political parties, use of the business sector to promote political parties or mutual support through connections.”
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