The Devil of Economic Fundamentalism Read online

limited their legal responsibilities in case the compa­nies failed. The stock exchanges serve their purpose by amassing wealth of the common people for their use at tremendously easy conditions. They would not have to face the innumerable con­straints put by the banks. The public would be easier to convince of the “enormous benefits” of investing in their companies. The biggest advantage of course would be that in case there are diminished returns, the loss would not fall on their shoulders alone. They would, without much of a difficulty, transfer the major portion of their losses to the small shareholders who have no option in such circumstances except to sell their shares at much lesser prices than that at which they were purchased. It is hardly surprising then that the frequent ups and downs in the stock-market are often artificially produced in order to benefit a major investor or harass a competitor in the market. The minor shareholders, the common people, have to almost always bear the brunt. Share-market has turned speculative on account of the increasing role being played by the middlemen. The companies being limited, the directors, in case the company is on the verge of collapse, use the manoeuvrability of the laws and regulations to minimise their own losses. But the minor shareholders, who together often own more than the directors, are in no position to avert the disaster. They have money to invest in the companies but no role to play in formulating the policies. The directors use their positions to safeguard their own interests, obviously at the expense of hundreds of thousands of minor investors. When the equities are declared open, the public has no method of its own to examine the credentials of the company and has to rely solely on whatever little information, obviously presented in a way so as to attract the investors and to avoid any legal implica­tions, is made available to them by the directors. There is no foolproof procedure to determine the genuineness of a company. With increasingly greater number of people falling to the lure of the share-market, which has became no less speculative than the lottery and bookies, several investment companies have surfaced. These companies succeed in luring the commoners because, unable to understand the nuances of stock-exchange, they prefer safety. These companies are adept in the art of investment and their guile helps them make big fortunes. Whatever they earn is naturally ultimately paid by the people. Betting has further complicated the matters and the bosses of the bookies use their links and influence to generate false ripples in the ex­change. To boost up public investments, the news of share-market and Sensex-indexes are broadcast daily on radio, TV and internet. The impression goes to the public that the survival of economy depends only on the Sensex.

  The economic fundamentalists have always longed for absolute independence. They have shown contempt for socialism as it advocates state’s control. The rapidly increasing popularity that socialism gained in the middle of the twentieth century in Asian and European countries was extremely agonising for them because it threatened their existence. They were frightened by the prospects of socialist ideologies taking roots in the capitalist societies as well. It was therefore a matter of life and death for them to resist tooth and nail the burgeoning socialist proclivities. They wanted the socialist model to fail as soon as possible. And when, partly due to inherent weak­nesses of the model and partly due to inapt handling of the economic affairs by the successive governments, the socialist Soviet Union breathed its last, their fears were finally allayed. It was easy to glorify privatisation now. 'Privatisation' signalled that the state would not have any direct access to the resources of wealth generation. The denial of this right to the state indicated that the public would cease to play whatever little role it earlier had and would be in no position to use these resources for its betterment. The galloping corrup­tion in all the state departments and at all levels from top to bottom and the ascendance of self-seeking, incompetent and depraved politicians combined to ensure that the economic develop­ment remained slow. The recurring hikes in prices made the state policies unpopular. Though the industrialists were responsible in many ways for this rot, they used their usual guile to cash in on the worsening situation. They were quick to pro­nounce that if the corruption was to be uprooted and the devel­opmental activities were to be carried, the panacea lies in ‘privatisation’. This process started a long time back in West and is now under way in the “developing” countries where the economies are being steadily decontrolled. The privatisation is engulfing one nation after the other. The economists who too have either been brainstormed or are employed for the very purpose of advanc­ing specific economic theories have failed to find fault with the new developments. The fact that privatisation would help the big business to further monopolise all forms of production has been advertently or inadvertently forgotten or ignored. The industrial development has become synonymous with national economic devel­opment; the Sensex is its most powerful indicator. The crowding of markets with consumer items is presented as symbol of prosperity of the nation. The economic growth and development, it is argued, rests on the flow of goods from the industries to the houses. The science or more appropriately the art of economics has been deliberately complicated by the introduction of hundreds of economic criteria and indicators.

  It should not be inferred from what is stated above that privatisation is wholly unacceptable. What in fact are dangerous are the ulterior motives. It is these motives that make unlimited liberalisation totally ineffective in approximating the chasm between the rich and poor. The truth is that the liberalisation is being used to maintain or widen the chasm. The bigger the gap the more is the monopolisation. Any talk therefore by the votaries of privatisation of alleviating pover­ty is absolute hypocrisy. It can be said that they are brigands who derive sadistic pleasure in robbing the masses of whatever little they possess -- directly (banks & stock-exchange) or in exchange with much less valuable goods (consumer market).

  To equate the industrial production with the economic development is grossly misleading. In truth, it is misplaced to call indus­trial production "production” because it has little to do with the real produc­tion and only helps in redistribution of the already produced material and wealth. Had even this redistribution been based on equitable and justifiable premises, the industrial activity could have been a great boon for mankind or the country. On the contrary, it has become an instrument in monopolising wealth produced anywhere on the earth into a few hands. This monopolisation has turned the would-be-boon into a bane. What we can call the real production is from the natural resources like land (farms, orchards, mines, animals, nuclear energy, etc.), water (oceans, rivers, etc.) and atmosphere (Sun Energy). It is through farming, cultivation of fruits, husbandry, poultry, fishery, mining and generation of electricity and nuclear energy that mankind receives regular supplies of products for their existence and comforts. The indus­try only remodels these products into items of comfort or grandeur. Thus the function of industries is to remodel and dis­tribute the material and wealth. This is important but when it leads to several medical and social problems and accentuates disparities in society, rethinking is required. If the present model of privatisation perpetuates, the affluent will continue to increase in affluence and the poor will continue to grow in poverty. This, of course has to be determined in relative terms. The Economic Disparity all over the world, instead of declining, is achieving new heights with every passing day. What a tribute to the modern economic model!

  It is a travesty of social justice that the original producers, namely the farmers, the orchard cultivators, the miners, the husbandry and the poultry farmers and the fishermen earn only meagre amounts for the most essential services they render to mankind providing food, cloth and several other items of essential use. In stark contrast, the secondary producers (the industrialists and the traders) earn enormous sums by performing functions that are relatively less essential. Is it not ironical that the former usually live in wretched conditions having no access to good schools, good hospitals and good services; and the latter lavishly live in palatial surroundings enjoying the best form of educa­tion, most advan
ced medical facilities and high class position in social and political hierarchy? The logic advanced is that the essential items must be available at the cheapest possi­ble prices while the consumer items may be allowed to be costli­er because the essential items are also used by the poor. I find this approach self-contradictory and the thinkers will have to reconsider it afresh. Would it not be more logical that the primary producers and traders of essential items get the maximum and the manufacturers and traders of the nonessential consumer items the minimum possible profits? This of course will be unacceptable to the economic fundamentalists who have vested interests in the continuation of the status quo. If the essential items start costing more, the people would have less money left for purchasing the costly consumer items. If the consumer items are priced relatively lower the big business would be the ultimate loser. How can this be allowed?

  By nourishing a consumer culture, the economic fundamentalists have succeeded in