The Devil of Economic Fundamentalism Read online

building a society in which men and women consume more tea and coffee than milk, ghee and paneer, more ice-creams, soft drinks and wines than fresh fruits and sugar cane juices, and wear garments made up of synthetic fabrics more than cotton clothes. Such has been the impact of high-pitched advertising that the people opt for useless, often harmful and sometimes dangerous foods and drinks in preference to the rich, nutritious and salubrious. This of course is aimed at impeding the growth of agricultural sector and small manufactur­ers and traders. Big business has always dispensed the small scale industry and has been steadily contriving to asphyxiate it. It will be seen in the coming pages how the environmental issues and child labour have been used as tools for the purpose. The small sector faces extraordinary difficulties in the face of the onslaughts by the big industrialists who command all the neces­sary resources to influence the choices of people and the policies of the government.

  The state obviously plays a greatly significant role in the direction and growth of economics. One of the principal functions of any government is to collect taxes from the citizens of the country. This forms a major part of the revenue essential for the survival and functioning of government. At the same time, it also influences the direction of the growth in different sectors and distribution of resources and money. The fiscal policy is also responsible for inflationary or deflationary trends. Two types of taxes are popular all over the world: direct taxes and indirect taxes. The most well-known taxes of course are income-tax, sales tax, excise duty and custom duty. The government has to experience pulls from different directions -- the big industries, the small scale indus­tries, the traders, the farmers, the labourers, the servicemen and the other classes of common men. These groups often have strong votaries in different political parties depending upon their support bases. The government endeavours to reconcile all these forces in determining its fiscal policy. Nobody wants imposition of taxes but taxes being the major source of revenue are unavoid­able. The ostensibly reconciliatory approach of the government is usually deceptive; it tends to favour a tax system that best suits the interests of the classes and groups of people on whose support depends its short term or long term prospects as the leading political force of the country. But the industries are normally so powerful and have such subtle style of pushing through their economic designs that the government willy-nilly succumbs to their pressures. The industries maintain liaisons with almost every important political party each one of which depends on funds donated by the industries for its political activities. At the individual level too, the political leaders receive big amounts either in cash or in kind. The minimal, weakest and least vocal representation in the governments is invariably from the lowest strata of society. It is they who are most of the times the ultimate sufferers.

  The economic fundamentalists know that they have no option but to contribute to the revenue of the government. They are however hard bargainers. Whatever they pay as taxes is recovered in multiplied amounts through the friendly policies of the government and by manoeuvring the ministers and officials to favour them. Thus, despite the fact that several alternative forms of taxes such as wealth-tax and luxury tax have been time and again mooted, at different platforms, it is the income tax and sales tax that continue to hold sway in almost all the countries of the world. Income tax instead of wealth tax serves only the interests of the big business and the richest and has devastating effects on the economic interests of the rest of nation. The industrialists prefer the income tax over the wealth/assets tax due to several reasons. First, the income tax envis­ages a tax only on the preceding year’s income and has nothing to do with the cumulative assets which keep on growing. It can be easily noticed that the value of the assets held by the affluent is always many times greater than their annual income. Thus, the income tax is the minimum possible amount they have to sub­mit. Secondly, it has no depressing effect on the purchasing tendencies of people; the annual turnovers of the companies are therefore not affected. Thirdly, it is easy to evade income tax through subtle manipulations of the rules, purchase of assets that are bought either surreptitiously or are shown to have been purchased at much lower than their real prices, display into accounts of much greater expenses than actually incurred and bribing the tax-collectors. The damaging effects of income tax are multifold. The black money sustains its upward march; the prices keep on soaring; the land, the houses and the other immovable properties become cost­lier. Inflation helps the industrialists in strengthening their hold over the economy. The value of the assets amassed by them continues to grow, their annual turnovers increase, and whatever they have to pay as income tax or as interests on the loans is more or less neutralised. They conceal their own incomes, convert their savings into assets and avail their re­sources as sureties for taking huge loans from the banks and financial institutions. It means that the loans are availed only by those who do not need them; those who are in need of financial support have little chances of getting their application for loans accepted. It will be seen in the latter parts of the book how all these damaging effect on economy can be reversed by introduc­ing assets-tax.

  The other taxes, namely, the sales tax, the excise duty and the customs are paid not by the manufacturers or traders but by the customers. These taxes add to the cost of goods and whenev­er there is an increase in the rates of these taxes the result­ing spurt in prices causes additional burden on the shoulders of customers. It would not be wrong to assert that the coffers of the state are filled, not with the money of the big business, as they claim and is also generally understood but with the money of the lower, lower middle and upper middle classes. In India for example, more than 80 percent of the combined collections of the central and provincial governments comes not from those who hold 80 percent of the wealth but from those who hold the 20 per cent. What a travesty of social justice and the welfare system! The billionaires submit as taxes what they have amassed through manipulation, deceit and sordid machinations and want to be paid homage for the “great service” they are doing to the nation or mankind. And it is through the enormous influence wielded by these payments that they blandish the government to implement “economic reforms”. It is not that the government is unaware of the truth. It is happening, because the government finds it somewhat less tedious, and more, because the men controlling the government are regularly pampered by the industrialists. It is not the interest of the government or the nation it governs but the interests of ministers and officials that coincide with those of the barons of the business world. The result is that the grand exploitation of the masses by the industrialist elite and their minions continues unabated.

  The “economic reforms” that the economic fundamentalists and their economist friends have been clamouring for all over the world are nothing but the additional licenses to maraud the masses of whatever they posses or earn. They are in truth permis­sions for exploitation under the garb of free-market and are aimed the removing all the possible obstructions in their way to the ultimate destination which is to gain absolute control over all the resources of production -- material or human. The capital­ists have always attached unparalleled importance to the capital and have tried to slight the role of skill and minimise the significance of labour. With the advent of machines, they succeeded in reducing the role of labour in manufacturing. But they knew that even the machines were to be regulated by men and it was not feasible to develop instruments for every task. They then decided to exploit the labourers by giving them petty sums as cost of their work. Whenever the workers displayed unity and demanded increase in their salaries or allowances they either rejected their demands, threatening them with expulsions and sowing seeds of disunity in their ranks or, when they had no other choice except to yield in, they would recover whatever was conceded to them by raising the rates of the products of the company. The hike in the salaries of workers gave little respite to them as the prices of essential items proportionally in­creased. The irony is that even much of the capital the industriali
sts boast of belongs mainly to the common people and has been amassed through the institutions of banking and stock exchange.

  The huge differences between the incomes of the directors of the companies who possess very little knowledge of the functioning of various machines or instruments and the managing staff, skilled and unskilled workers are ample evidence of how the mental and physical labours of the employees are exploited. If the directors of companies will earn millions, the employees would earn only hundreds of thousands. With the price soaring high, the poor workers who labour for at least eight hours a day and whose work is no lees important are not even in a position to have balanced and nutritious food. Their inability to own their own houses raises their monthly expenditure as they have to part with a sizeable part of their paltry salary as rent of their small quarters. Not to speak of the labourers, most of the employees suffer the same fate. They cannot normally afford to send their children to standard schools. If