3. DEVELOPMENT PARADIGMS AND POLICIES ON CROSS ROADS
- Prof. Trilok Kumar Jain - Prof. Sandeep Kumar
Various measures of satisfaction with life or happiness in developed countries appear not to have risen in recent years despite developed countries' high per capita incomes. The growth in per capita income has also proved to be a bubble as many economies are now experiencing difficulties in sustaining their status. There is some problem in the economic model adopted in those economies. The economic policies are now in conflict with environmental policies and objectives and they create negative effect on nature, social life and personal well being. The authors try to look into the questions and put some propositions along with possible roadmap. The authors discuss the concept of Relative Economics as propounded by Acharya Mahapragya as a solution to the current economic problems. The paper is intended to raise some issues and some questions primarily focused on policy makers. This is an introductory and explorative paper. The ideas in this article are derived from literature reviews, personal experiences and academic discourse with scholars.
Keywords economics, developed countries, welfare economics, economic growth, happiness, reference graps, relative income, subjective wellbeing.
Policy makers across the globe are busy in creating economic policies that serve the human beings the best. They have tried their best to create economic policies and systems that can ensure fastest development. The ultimate objective of economics is to bring prosperity, happiness, well being, and wealth to the nation. This can be achieved only through a set of policies to reduce gap between haves and havnots, policies to promote entrepreneurship, policies to raise the level of marginalized sections of the society, policies to help the social entrepreneurs and change agents and policies to achieve a fine balance between stringency and relaxations. Economic policies bring out the best of a nation. It is difficult to isolate economic policies from other policies. Economic policies are interrelated and interconnected with the political policies, foreign policies, and technological policies. For years, the scope and objectives of economics have been debated. People tried to expand the scope of economics in stages – and its ambit increased from mere wealth science to welfare economics. If we look at Indian thinkers, we find many broader perspectives available. If we look at Chanakya's economics or Mahaveera's economics, we find that those concepts are far more broader and take into account the multiple dimensions of economic and political system. Acharya Mahapragya has presented before us the concept of Relative Economics , which is presented in modern reference (its origin lies in Mahaveera's ideas). It is a multifaceted concept, where spirituality, morality, ethics, environment, non-violence and other related subjects have not only a positive role, but do affect the shaping of relative economics. Besides economics social sciences, psychology etc. have also direct bearing. Therefore, a holistic approach is necessary for conceptualizing Relative
Thus instead of expanding the domain of economics in stages, this concept takes economics in its truly desired perspective. This concept takes overall happiness and well being of everyone over long period of time as its objective. In economic terms, we can say that relative economics tries to eliminate absolute poverty and minimize inequalities
Many countries have achieved remarkable economic prosperity (in terms of GDP and per capita income). The developed countries' very high per capita income and impact of liberalization on rate of economic growth in some countries since the start of economic reforms is generally assumed to have raised the economic welfare of the common people dramatically. In China alone, in less than three decades, average real income per capita rose more than six times and that more than 250 million people have been lifted out of 'dollar a day' poverty (Ravallion Chen, 2007) . Moreover, within a quarter of a century its 'human development index' rose from 0.37 to 0.68 (UNDP, 2010). These data and instances create attraction for such economic policies. The developed countries have always created an attraction and glamour for the youth of the developing countries. Any economic policy adopted by developed country is easily imitated by other countries. However, we have to look at the other side of development also. Every coin has two aspects and so is the case with the development planning. The development planning of the present times ignores nonhuman beings. It is focused on material progress and prosperity and creating greater comforts for only human beings. The developmental plans have looked only at the statistics that churn out numbers and figures only and have ignored the impact on surroundings, impact on other living beings and impact on our values and belief system. It is not surprising that more and more species are becoming extinct everyday. It is not surprising that more and more catastrophes (which are indirectly man-made) are emerging. We are witnessing changes in climate and our surroundings. The last few decades have been the hottest in the last 1000 years. It is predicted that in the next 100 years, the average temperature of mother Earth will rise by 4 to 5 degrees which will make life difficult for human beings also. The number of cows dying due to eating plastic contents is well known. The rising pollution has made the living difficult for human beings what to talk about other living creatures.
NEW DEVELOPMENTAL FORMATS
New formats of industries and companies have wiped out the survival possibilities of small, cottage and household industries. These trends are enabling larger and larger companies to dominate, which will ultimately create a new economic systems favouring larger scales of economies. The indirect impacts of these trends are many, which we fail to notice today. The larger companies create impersonal work systems and convert the work environment into mechanistic work systems, which alienate people from each other and from the environment at large. Larger companies spend a great deal of money on CSR practices, but their own internal processes cause substantial harm to environment and ecology. With these systems developmental planning must be wholistic. It must take into account long term development perspectives. GDP or other economic data are insufficient to look into development perspectives. We must take more broader measures. We must look at impact of policies on human beings and also on environment. We must try to look into the impact on people in terms of qualitative measures also – like happiness, health and fitness and overall satisfaction.
The present development planning and economic policies are making people individualistic, personal goal oriented, and materialistic development oriented. This approach will ultimately bring down long term prosperity of people. We have to change the developmental processes and perspectives and
make our development more broad-based.
Issues for development planning :
Developmental planning must look into the long-term well-being of people, which cannot take place unless a wholistic approach is adopted. We have to keep environment, ecology, also in our perspectives. We have to remember that lopsided developmental plans cannot sustain. We have to adopt technologies, which are appropriate for our sustainable development. We have to create a developmental perspective plan, which should look for broader measures rather than just GDP. Some of the issues are as under : a. education b. health care c. fresh air, fresh water and fresh food for
people d. greenery, environment and balanced eco
system e. harmony with nature, environment and
ecology f. happiness and well-being and joy of living g. technologies that foster sustainable development rather than quick profits
There is a need for concerted efforts to evolve long term developmental goals, which can help our civilization. The myopic developmental planning has landed developed countries in utter confusions today and the people are finding disillusioned inspite of material prosperity and economic progress (in terms of statistics).
Differences in perspectives of developed and developing countries
The i ssues for developed and developing countries are different. Developed countries are looking into issues relating to redistribution of wealth, while the developing countries are coping with basic issues like food, clothing, housing, health care etc. The impact of developmental planning on wellbeing and happiness is also a matter of study. Easterlin & Sawangfa (2009) made a careful descriptive study of 12 developing countries for which sufficiently long and comparable time series data were available. All 12 countries experienced rising real income per capita. Three (China, India and Chile) appeared to experience a fall in their average satisfaction with life whereas nine showed a rise in their score, although in only two (Mexico and Venezuela) was the rise statistically significant. However, the change in the score was not positively related to the growth of income per capita, and in every case the change in the score fell short of that predicted by the cross-section relationship within a country.
Is developed countries' experience common to all economies? Easterlin (2009) examined happiness scores in 13 ex-communist countries of Eastern Europe. Happiness collapsed when their economies collapsed, but it failed to recover commensurately with income. This was attributed to the non-income changes that accompanied the transition to capitalism, such as rising unemployment, inequality and insecurity. The socioeconomic changes accompanying economic transition appeared to reduce happiness. The ultimate goals of our developmental plans to raise the level of happiness, thus require broader measures.
Lack of concensus on development goals
There are divergent approaches to development. Developed and developing countries are not unanimous about most of the issues. Whether it is agriculture, free trade, climate related issues, or trade in services, the divergence is well known. These issues are far more smaller issues in comparison to broader issues like developmental planning, human development index measures, happiness index, spiritual well-being and conscious capitalism. How can we have a consensus on these measures and concepts, which are not only more important than any other issues, but also more difficult to measure. We have to evolve a common understanding first for the cause of our civilization and for our next generations.
Human dimension to growth pattern and direction
There is a need to give humane dimension to our growth pattern and direction. We have to look at subjective aspects of development and broader measures of growth. We have to look at overall happiness and overall satisfaction of people. We have to promote systems which promote collective well-being rather than individual accompalishments. We have to promote plans and programmes that focus on long term satisfaction and value based development rather then material well being. Consumerism has not come by chance, we have brought i t through sustained efforts. Advertisement wars and modern marketing tactics have been planned and taught to our executives and students which have created the new materialistic perspective. When we can spread consumption orientation through the modern marketing perspectives, we can also wipe it and re- instate human oriented developmental plans. Inspite of all the materialistic work culture, there are still cases of great initiatives for human cause. These cases need to be promoted. This promotion should take precedence in our economic plans also. We must remember that economics affects political systems , social fabric and value framework. We have to use economics for transformation of our civilization.
Perspectives of Relative Economics
The concept of Relative Economics is based on the vision of development as propounded by Lord Mahaveera. This concept has been popularized by Acharya Mahapragya. Relative Economics is for harmonious relationship around human beings and nature. For years, economists have focused on exploitation of resources. Governments after governments have adopted only one stance – to exploit the natural resources. 'Exploitation' seems to be an objective of the private entrepreneurs, but how can it be the objective of the nation, which is having symbiotic relationship with the nature and environment. For decades, developed countries gave the highest priority to the achievement of rapid economic growth. In the last five years, however, the balance of policy objectives has moved somewhat in the direction of creating a 'Harmonious Society', for instance, showing greater concern for reducing income inequality and for improving social security. That move can be seen as a response to the issues that underlie this paper. Now developed countries are also realizing the flaws in their policies and now they are talking about sustainable development.
Concept of Sustainable Development
Sustainable development environment or eco-system is the top priority and ensures that we meet our requirements without destroying environment. Brundtland Report (1987) of the UN stated that "Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs." The concept of sustainable development is still popular in developed countries only. The economists in developing countries are not yet taking this concept seriously. The reasons of this dichotomy is that the economists still continue with narrow perspective of economics of wealth maximisation.
ALTHERNATIVES AND THE PATH AHEAD
We need to spread the concept of relative economics. For attaining the desired results from the concept of relative economics, it is necessary to involve large mass of people, rather than restricting this discipline to a few intellectuals and accelerate the pace of implementation. We must remember that there would be conflict in the traditional concept of economics and the concept of relative economics. The traditional concepts of economics emphasise on i ncreasing
consumption and (sometime unreasonable) exploitation of resources, but the objective of relative economics is to limit consumption, through controlled desires and checking comforts and luxuries.
There is a crisis of confidence in masses. People have started accepting difficulties as a part of their lives. People have started accepting disruptive policies as natural consequences of development. People are uprooted from their employments, their place of work and from their land, but they fail to raise their voice. There is crisis prevailing among economists and planners. They go with the assumption that happiness, wellbeing and relative economics or other similar concepts are not practicable. They go with the assumption that happiness is the outcome of wealth creation. They go with the assumption that economic system will correct itself. It is not easy to break these assumptions. The intellectuals are hard to convince. They require empirical evidences. We have to start from the individuals. We have to document case studies of those entrepreneurs, who adopt fair practices and restraint in their personal and professional life. We have to train people in social entrepreneurship and spiritual entrepreneurship. We have to prepare case studies of successful practices of economic growth, coupled with ethics and these case studies should be popularized so that people can rediscover their confidence in fairness, honesty and age old Indian values. Where and how to start it? The starting point should be a group of teachers, volunteers, writers and thinkers who fully understand this concept and are willing to abide by this. They must share this concept. Efforts should be made to incorporate this concept in the curriculum of different courses and there should be workshops to train masses in this concept. There should be a research institution exclusively dedicated to undertake case studies and experiments on this concept and to develop the required resources, literature, teaching aids, books and audio-video aids. Certainly, let us change the individuals, they will form groups of like minded persons and slowly we will be able to build understanding and opinions about concepts of relative economics. Blanchflower, David and Andrew Oswald (2004). 'Well-being over time in Britain and the USA', Journal of Public Economics , 88, 7-8: 1359-86. Clark, Andrew and Andrew Oswald (1998). 'Comparison-concave utility and following behaviour in social and economic settings', Journal of Public Economics, 71, 1: 133-55. Clark, Andrew, Paul Frijters and Michael Shields (2008). ' Relative income, happiness and utility: an explanation for the Easterlin paradox and other puzzles', Journal of Economic Literature , 46, 1: 95-144. Di Tella, Rafael, John Haisken-DeNew and Robert MacCulloch (2007). 'Happiness, adaptation to income and to status in an individual panel', NBER Working Paper 13159. Di Tella, Rafael and Robert MacCulloch (2006). ' Some uses of happiness data in Economics', Journal o f Economic Perspectives , 20, 1, Winter: 25-46. Di Tella, Rafael, Robert MacCulloch and Andrew Oswald (2003). 'The macroeconomics of happiness', Review of Economics and Statistics, 85, 4: 809-27. Durkheim, Emile (1897 [ 1952]). Suicide. A Study in Sociology , translated by J.A. Spaulding and G. Simpson, London: Routledge and Kegan Paul. Easterlin, Richard (1974). ' Does economic growth improve the human lot? Some empirical evidence'. In P. David and M. Reder (eds), Nations and Households in Economic Growth: Essays in Honor of Moses Abramovitz , New York and London: Academic Press: 98-125. Easterlin, Richard (1995). 'Will raising the incomes of all increase the happiness of all?' Journal of Economic Behaviour and Organization , 27, 1: 35-48.
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