ECONOMIC ENLIGHTENMENT

FERLINA MUTIARA FARAH

2117410118153533

Universitas Widyagama Malang

2022
A. Microeconomics in General
Microeconomics is a branch of economics that studies the behavior of
consumers and companies and the determination of market prices and quantities of
input factors, goods and services that are traded.
Microeconomics as a science that studies the behavior of producers and
consumers as well as determining the quantity of input factors, as well as what goods
or services will then be traded with reference to market prices.
Some aspects of analysis in microeconomics themselves include market
models, industry, benefit analysis, demand theory, cost and supply analysis, elasticity,
production theory to price theory. In addition, microeconomics also plays a role in
making company policies regarding resource management such as price management.
The existence of policies within the company can also make the company
more strategic and innovative. Microeconomics plays a very important role in
predicting and designing a company's future strategy. Microeconomics will make it
easier for a company to understand consumer behavior, wants and needs.
Here are some definitions of microeconomics according to experts:
1. Mary A Marchant and William M Snell
Microeconomics is the study of individual, household, and corporate decision makers
in the economic process.
2. David A. Moss
Microeconomics as a step of analyzing a decision made by an individual or group
starting from the factors to the consideration of costs and benefits.
3. Adam Smith
Seeing the various rational considerations in making decisions chosen by economic
actors.
4. NG Mankiw
In his book he writes, the notion of microeconomics is a science that discusses the
role of individual economic actors, how households and companies make decisions,
and how they interact in certain markets.
Microeconomic studies aim to analyze the failure of an economic decision,
generate rational analysis and generate theoretical analysis results that allow a
perfectly competitive market.
This behavior is useful in analyzing its effect on the demand and supply of
goods and services, determining prices, and determining the amount of supply and
subsequent demand. (Ahmad, 2021)
B. Economics in Liberalism, Socialist and Mixed Perspectives
 Economics in the perspective of Liberalism

A liberal economic system is an economic system based on the

freedom of individuals and companies in determining various economic
activities, such as consumption and production. This economic system
determines the balance by relying on the ability of the price system, namely
the attraction between supply and demand.

The characteristics of a market economy system are private property

rights, freedom of business and freedom of choice, self-interest motives, free
competition, prices are determined by market mechanisms, and the role of the
government is limited. (Pasys, 2020)

Profit
There are several advantages of a liberal economic system, namely:
 Growing community initiatives and creations in regulating economic
activities, because people no longer need to wait for orders/commands from
the government.
 Every individual is free to own production resources, which in turn will
encourage community participation in the economy.
 There is a spirit of competition to get ahead from the community.
 Produce high quality goods, because of the spirit of competition between
people.
 High efficiency and effectiveness, because every economic action is based on
profit motive.

Weakness
Apart from having advantages, there are also some disadvantages of a
liberal economic system, namely:
 There is an unhealthy free competition when the bureaucrats are corrupt.
 The rich are getting richer, the poor are getting poorer.
 There is a lot of public monopoly.
 A lot of turmoil in the economy is due to the wrong allocation of resources by
individuals.
 Equitable income is difficult to do because of the free competition.
(Wikipedia, t.thn.)

 Economics in a Socialist perspective

The command economy system is an economic system in which the
government makes all policies regarding production, distribution, and
consumption. In this system, government control is very high, namely
regulating all aspects of economic activity.
 The characteristics of this economic system are that individual rights
are not recognized, prices are determined by the government, and the role of
the government is very dominant. (Pasys, 2020)
Quoted from the book Introduction to Business (2022) by Destiana Kumala et
al, the following are the advantages of the socialist economic system:
a. Government-controlled economic activities and problems
b. Minimum gap
c. Ease of arranging goods and services
d. Government interferes in price formation
Disadvantages of the socialist economic system:
Turning off creativity and innovation Because everything is controlled
centrally by the government, the socialist economic system is able to turn off
creativity as well as individual innovation. There is no freedom to own
resources. One of the shortcomings of the socialist economic system is the
lack of freedom for each individual to own and cultivate existing resources.
Goods and services do not vary The drawback of a socialist economic system
is the minimal variety of goods and services produced. Because, everything is
limited to government regulations. (Putri, Kelebihan dan Kekurangan Sistem
Ekonomi Sosialis, 2021)
 Economy in Mixed perspective
The mixed economic system is a combination of a market economy
system and a command economy system. In this economic system, the
freedom and rights of individuals or companies in determining economic
activities are still recognized. But the government also intervenes in the
economy as an economic stabilizer by enacting various policies.

Apart from being a stabilizer, the role of the government in this system is
also to prevent too much concentration in the hands of one person or private
group and to help the economically weak.

The advantages of a mixed economic system are:

I. Its economic development is relatively stable, because the role of the
government, the private sector, and the community is equal
II. There is encouragement and innovation to create business activities
Government mediation can limit syndications (combinations of
entrepreneurs) from the private sector as well as the community
III. The government is more focused on the involvement of Micro, Small and
Medium Enterprises (MSMEs)
IV. Separate government and private sectors
V. Economic activities controlled by the government are more directed to the
interests of the community
VI. The combination of economic activity by the government and the private
sector benefits both parties
VII. Personal rights are recognized.
 Reporting from the book Business Ethics (2020) by Eko Sudarmanto et al,
the disadvantages of a mixed economic system are:
a) The burden on the government will be heavier than the private sector
b) Less than the maximum profit obtained by the private sector
c) Unclear limits on government influence in the economy
d) The existence of inequality in business competition and inappropriate
resource management
e) The emergence of the assumption that government employees have a
higher status than the private sector
f) The production sector is more profitable if it is managed by the
government
g) It is difficult to meet the various needs of the community
h) Corruption, Collusion and Nepotism (KKN) is easy to emerge due to
weak government supervision. (Putri, Kelebihan dan Kekurangan
Sistem Ekonomi Campuran, 2021)

C. Islamic economics
Islamic economics is a system of knowledge that focuses on economic
problems. Just like other conventional economic concepts. Only in this economic
system, Islamic values become the foundation and basis in every activity. Some
experts define Islamic economics as a science that studies human behavior in an effort
to meet needs with limited means of meeting needs within the framework of sharia.
However, this definition contains a weakness because it produces incompatible and
non-universal concepts. Because from this definition, it encourages someone to be
trapped in an a priori decision (a priori judgment), right or wrong, must still be
accepted. ((P3EI), 2011)
A more complete definition must accommodate a number of prerequisites,
namely the characteristics of the Islamic worldview. The main requirement is to
include sharia values in economics. Islamic economics is a social science which of
course is not free from moral values. Moral values are normative aspects that must be
included in the analysis of economic phenomena as well as in decision making that is
framed by sharia.
Islamic economics has the objectives to:
a. Provide harmony for life in the world.
b. The value of Islam is not only for the life of Muslims but for all living
creatures on earth.
c. The essence of the Islamic economic process is the fulfillment of human needs
based on Islamic values in order to achieve religious goals (falah).

D. Implementation of the Economic System in Indonesia

The economic system implemented by Indonesia is the Pancasila economic
system. So, normatively Pancasila and the 1945 Constitution are the ideal foundation
of the economic system in Indonesia.
 The legal basis of the economy has actually been regulated in the 1945
Constitution Article 33 Paragraph 1 which states that the economy is structured as a
joint effort based on the principle of kinship and the 1945 Constitution Article 33
Paragraph 4 which reads that the national economy is organized based on economic
democracy with the principles of togetherness, efficiency with justice, sustainable,
environmentally sound, independent, and by maintaining a balance of progress and
national economic unity (Yustika, 2014).
The main teaching of Pancasila economics is that the economy is not solely
motivated by prioritizing and maximizing profit and economic utility, but rather on
the family aspect. The fact is, the government in practice is physically more
concerned with the rich or conglomerates, because the conglomerates are closer to the
state and they pay more taxes and it is undeniable that to occupy positions in an
institution, their role is very large. In practice the populist system cannot prosper the
people themselves.
Mubyarto (2002: 37) argues that the economic system must be in favor of the
wider community, while the existing economic system only serves large companies.
Based on this, the purpose of this study is to analyze how the existence of the
implementation of the people's economy as an economic sub-system based on
Pancasila faces the onslaught of global capitalism in every economic policy taken by
the government. (Era Rosalina Marsudi & Ayuningsih Purbasari, 2022)
References
(P3EI), P. P. (2011). Ekonomi Islam. In P. P. Islam, Ekonomi Islam (p. 14). Jakarta: PT Raja Grafindo
Persada.

Ahmad. (2021). Pengertian Ekonomi Mikro: Ruang Lingkup, Teori dan Perbedaannya dengan
Ekonomi Makro. From Gramedia Blog:
https://www.gramedia.com/literasi/ekonomi-mikro/#A_Pengertian_Ekonomi_Mikro

Era Rosalina Marsudi, K., & Ayuningsih Purbasari, V. (2022). Implementation of the Pancasila
Economic System in Indonesian Government Policies. Implementasi Sistem Ekonomi
Pancasila , 29-31.

Pasys, R. (2020, November 23). Pengertian dan Contoh Sistem Ekonomi, Liberal, Sosialis dan
Campuran. From Grid Kids: https://kids.grid.id/read/472439529/pengertian-dan-contoh-
sistem-ekonomi-liberal-sosialis-dan-campuran?page=all

Putri, V. K. (2021). Kelebihan dan Kekurangan Sistem Ekonomi Campuran. From Kompas.com:
https://www.kompas.com/skola/read/2022/07/02/090000869/kelebihan-dan-kekurangan-
sistem-ekonomi-campuran

Putri, V. K. (2021). Kelebihan dan Kekurangan Sistem Ekonomi Sosialis. From Kompas.com:
https://www.kompas.com/skola/read/2022/11/05/130000069/kelebihan-dan-kekurangan-
sistem-ekonomi-sosialis?page=all

Wikipedia. (n.d.). ekonomi liberal. From Wikipedia: https://id.wikipedia.org/wiki/Ekonomi_liberal