Issue link: https://maltatoday.uberflip.com/i/1546781
THERE is a particular danger in prolonged success. Failure forces reflection. Crisis creates urgency. Scarcity imposes dis- cipline. Success, by contrast, can slowly weaken all three. When an economy grows year after year, employment remains abundant, property prices rise and consumption expands, it becomes easy to as- sume that the system produc- ing these outcomes must be fundamentally sound. Prosperity gradually stops feeling like something that must be earned and protected and starts feeling like the natu- ral state of things. Expectations adjust. What was once excep- tional becomes normal. What was once a luxury becomes an entitlement. And uncomforta- ble questions about how long it can continue become surpris- ingly easy to postpone. Malta risks becoming com- fortably numb. This is not an argument that the country is failing. Quite the opposite. We have become extraordinarily focused on outcomes visible today while paying insufficient attention to the systems that determine tomorrow: Education, produc- tivity, infrastructure, institu- tions, demographics, capital allocation and the quality of our environment. The present keeps rewarding us, so the fu- ture struggles to compete for our attention. Pharaoh's dream There is an ancient econom- ic lesson hidden in Genesis that feels strangely contempo- rary. Pharaoh dreams of seven healthy cows followed by seven gaunt ones, and seven abun- dant ears of grain consumed by seven thin ones. Joseph in- terprets them as seven years of plenty followed by seven years of famine. But the interesting part of the story is not the pre- diction. It is the response. Dur- ing abundance, Egypt stores part of its harvest so that pros- perity becomes resilience. The good years are not treated as permission to consume more. They are treated as an oppor- tunity to prepare. Modern economics dresses this principle in more sophis- ticated language: Countercy- clical policy, precautionary saving, investment, resilience, fiscal buffers, human capital. The underlying wisdom has barely changed. Good times are precisely when societies should undertake difficult re- forms because they possess the resources and political space to do so. Yet good times also make re- form psychologically harder. Why change something that appears to be working? That question sits beneath many of Malta's current con- tradictions. We have enjoyed extraordinary economic ex- pansion while productivity remains the harder challenge. We want higher wages but have not sufficiently trans- formed the productive capac- ity required to sustain them. We aspire to become an in- novation economy while capi- tal continues to find property exceptionally attractive. We speak enthusiastically about artificial intelligence while recent educational outcomes raise serious questions about foundational literacy, math- ematics and science. We cel- ebrate population and em- ployment growth while roads, electricity distribution, health- care and other infrastructure periodically remind us that systems have limits. None of these observations negate Mal- ta's success. They expose the difference between generating growth and building capacity. Property, predictable returns and incentives Property perhaps illustrates the psychology better than an- ything else. For a generation of Maltese households, prop- erty has been an extraordinary wealth-creation machine. Buy, hold, rent, develop and watch scarcity do part of the work. Rising population reinforced demand. Tourism created ad- ditional uses for property. Banks understandably became comfortable lending against tangible collateral. Families accumulated wealth and busi- nesses discovered returns that could sometimes be obtained with considerably less uncer- tainty than investing in inno- vation. As economist Edward Lazear put it: "Incentives are the es- sence of economics." If the return from developing prop- erty appears more predicta- ble than investing in a tech- nology company, capital will gravitate towards property. If hiring another relatively inex- pensive worker is easier than redesigning a business around automation, firms will hire. If additional tourism gener- ates immediate revenue while changing the tourism mod- el requires difficult choices, volume becomes seductive. If another supermarket, hotel or development produces private returns while part of the in- frastructure burden is carried collectively, the individual in- vestment can remain entirely rational even when the cumu- lative outcome becomes in- creasingly uncomfortable. The problem, therefore, is not greed or some sudden deterio- ration in national character. It is that we have constructed incentives that frequently re- ward the present more strong- ly than the future. And incentives eventually be- come culture. Entitlement by unconscious design An economy that repeatedly rewards property ownership encourages people to think about wealth through proper- ty. An economy that can solve labour shortages by importing workers reduces the imme- diate pressure to automate. A political system rewarded for delivering visible benefits within electoral cycles be- comes biased towards what can be announced today rath- er than what might transform outcomes in 20 years. A soci- ety accustomed to economic expansion begins to interpret continued expansion not as an 18 maltatoday | SUNDAY • 27 SEPTEMBER 2026 OPINION JP Fabri Comfortably numb: Economist Strong economic growth gives us room to manoeuvre. We can invest in education before skill shortages become debilitating. We can reform pensions before demographics force harsher choices. We can redesign transport before congestion becomes completely paralysing