By Prof. Dhanjoo N. Ghista
First published in Gurukula Network, November 2011, Issue 33
This article is offered in support of the people occupying the financial districts in many cities, to voice their repressed unmet needs and their disillusionment with the corporatized capitalist democratic system. Let us remind ourselves that this land does not belong to corporations and political parties. Rather, in the words of our ancestors in the US, This land is your land, this land is my land, From California to the New York island, From the red wood forest to the gulf stream waters, This land was made for you and me.
The Current crisis of Governance and Economy
Today, we are facing intensive economic crisis, with massive unemployment and the inability of countries to look after the basic living needs (let alone social and economic security) of their citizens. The reason is that we have never had genuine democracy, and instead governance by political parties (supported by capitalist corporations) who have their own agendas which have little to do with public welfare.
It is the obligation of the government to fulfill the basic living needs of the people. These needs include equitable access to education and healthcare. Take the United States, for example. Not everyone has access to healthcare and a means of livelihood; a big percentage of the population has no access to healthcare, because they cannot afford privatized health insurance governmental policy under pressure from these insurance companies.
Not only that, but capitalist political parties also give free rein to capitalism minded institutions (banks, pharmaceutical companies, insurance companies) that are solely for profiteering at the expense of the people. Why have banks been allowed to be enterprising, to dupe clients to buy house mortgages that they could not afford, and to also be allowed to gamble with their clients’ savings?
Another aspect of corporate capitalism is to make money at any cost, and this is why so many weapons-making corporations profit by wars, at the expense of the people of the war-torn countries. It is the general opinion that the war crisis has been caused by pressure from these weapons making and distributing corporations.
Now in the US, the big manufacturing corporations have shifted their manufacturing to South-East Asian countries (like China), to take advantage of the cheap labor. Thus, US exports have dwindled. Also, big corporations manage to pay very little income tax, and this is yet another reason for the US being in debt.
How can we expect democracy to provide stable governance and stable economy? Political system and economy are inter-linked, and this is why it is more appropriate to use the term political economy since economy by itself has no basis. So, the current economic crisis is verily a crisis of political economy.
In corporate capitalist economy, the financial elite and the elite corporations constitute a separate class who control the government and their policies, for their own profiteering. They are responsible for all these maneuverings.
When some of these capitalistic financial systems started to fail (due to their corrupt practices) and fold, they had the political clout to be bailed out; their managers could hence continue to have exorbitant salaries and bonuses at the expense of their employees. The actions of the U.S. government and the European Union government in 2009, to bail out the culprit corporations, are testimonies to how the political elite allowed the financial elite to manage the system to its benefit. This created a massive political problem, which was hushed up by the governmental bail-outs in the US and European Union’s nations. This bail-out saved these financial systems from the public opinion that the financial elite had violated all principles of fiduciary, social and moral responsibility in seeking their own personal gain at the expense of society as a whole.
So now in the last year or so, this has created a massive political and social crisis, which is truly a systemic crisis, compared to which the crisis of the financial institutions can be regarded to be trivial. The question now in people’s minds is why was the political system not capable of fixing the crisis and holding the perpetrators responsible for it? Alternatively, if the financial crisis did involve criminality on the part of the elite corporations, how could the political system not have created laws to render such actions criminal?
There is hence now a crisis of confidence in the financial system and a crisis of confidence in the political system, which is why people are protesting around Wall Street, the symbol of the capitalist democratic system.
Solution for the Governance and Economy Crisis
The Occupy Wall Street movement symbolizes the pent up frustration of the people who could no longer endure and sustain the unfair socio-economic-political policies and injustices meted out by the political parties acting in cohorts with their sponsors the capitalist corporations solely interested in profiteering with not an iota of humanism. This ongoing suppression of peoples’ rights to fair living is due to the political parties regimes and the unfair linkages between the political and economic elites. So then what is the solution?
There are two domains of solution: 1. Economic solution, and 2. Political or Governance solution.
Economic Solution based on PROUT
By way of an economic solution, let us enunciate some of the tenets of a new Cooperative Economics model, based on the socio-economic and political philosophy called PROUT (Progressive Utilization Theory), propounded by the sage Prabhat R. Sarkar (Refs 1, 2 and 3).
- The first tenet is the common patrimony of the natural resources of this planet. This, for instance, means that private companies should not be allowed to patent plants with medicinal value.
- The second tenet is that the minimal necessities of living need to be guaranteed through 100% employment and minimal wage.
- The third tenet is that the productivity of commodities needs to be proportional to the demand, so that prices can be kept stable; this will help augment purchasing capacity and standard-of-living.
- As a fourth tenet, it is advocated that all businesses be cooperatively structured and managed, so that all employees who contribute to revenue generation also share the profits. In cooperatively managed corporations, everyone is allocated corporations’ shares, and the employees’ contributions in the corporations’ performance are recognized and the profits are shared among them. Hence, properly managed cooperatives need to replace these capitalist corporations, in which (i) the employees have a low status below the managers and the administrative officers, and (ii) only the managers and administrators share the profits and reward themselves by bonuses.
- The fifth tenet is that the socio-economic system should have a moral and spiritual base, so as to foster the spirit of collective welfare.
This equitable economic model can be termed as Cooperative (or Collective) Economics, as opposed to Corporate Capitalism (or Free-reigning Market Capitalism), in which: (1) self-interested groups and individuals maximize their own welfare (in a free-market environment) at the expense of the general public; (2) bank agents unscrupulously induce people to buy homes that are above their means for mortgage payments; (3) bank heads resort to enterprise banking by investing in company stocks, while risking the bank clients’ monies; (4) corporation heads have ridiculously disproportionately huge salaries compared to other employees. In fact one of the main causes of today’s economy debacle is this unchecked capital-grabbing by self-interested groups and individuals. It is hence advocated that a PROUT economic system of cooperative economics replace the corporate (or free-market) capitalism system.
Governance Solution based on Economic Democracy
The foremost charter for the governance of a state is (i) how to increase the standard of living of its citizens through its economic system and structure, and (ii) how to enable everyone to participate in the governance system and in the constitution of the policies. Economic and political centralization in the state (in communism) or among the super-rich and capitalist corporations is not conducive to the fulfillment of this governance charter.
In this regard, the Decentralized Economy (of PROUT), coupled with people’s participation in the governance, will provide economic prosperity, social security and fulfilling living to the people. People’s living problems include employment, adequate purchasing capacity, equitable healthcare delivery system, education and social security. If these living problems are solved, then people can also devote themselves to the development of their psychic and spiritual potentialities, which will further contribute to a progressive society.
So then, the principles of Decentralized economy (Ref 1) are: as follows.
- The first principle is that in a socio-economic unit, the natural and material resources required for industrial development should be controlled by the local people.
- The second principle is that production should be based on consumption needs, so that the supply meets with the demand. There should not be over production for profiteering purpose, by creating artificial demand through clever advertising.
- Thirdly, as mentioned earlier in the economic model, both production and distribution should be organized through cooperatively managed corporations.
- The fourth principle is that there should be emphasis on improving and utilizing the skills and expertise of the local people. Hence, local people should be given the first opportunity for employment in the local economic enterprises.
- The fifth principle is that development of indigenous industries and business enterprises should be encouraged in the development of the community and region. Hence, locally produced commodities should be primarily used by the community people, to enable them to improve the standards of their agricultural and industrial products. In other words, regionalization should precede globalization
- The sixth principle is that multi-faceted rural development should be undertaken, so as to enable people of all professions to practice their professions, and have fulfilling employment in their rural communities. Rural development, through agro-industrial and hi-tech industrial development, will prevent urban congestion and unemployment. In this regard, it is recommended that rural universities be set up, with the charter of social transformation and agro-industrial development. In the US, this Go-Rural movement will motivate rural migration of production industries, and turn around the phenomenon of the so-called multi-national corporations taking their production abroad to take advantage of cheaper labor and thereby cause unemployment at home.
- This decentralized economy constitutes the basis of a model civilian democratic system (to replace the exploitative capitalist corporate pseudo-democratic system), in the form of Economic Democracy, propounded by the sage Prabhat R. Sarkar (Refs 1, 2, 3).
In the book Socio-Economic Democracy and World Government (Ref 2), a governance solution is offered, in the form of a neo civilian democratic system (CDPS) based on cooperative economics. The Economic Democracy system (ECDS) implies democracy based on equitable distribution of economic assets through PROUT. This ECDS first of all requires a grass roots mind set and psychology change from ‘capitalism for personal wealth making’ to a more ‘spiritual psychology of collective welfare promotion’. This mind-set change in society needs to be promoted through education, from primary to secondary to tertiary education. Then in such a transformed spiritual society, our Economic Democracy will be (i) based on the above delineated six tenets of PROUT and the six principles of decentralized economy, and (ii) implemented at the grass-roots level, in the what can be termed as functionally sustainable communities (FSCs) , as defined and designed in Refs 2 and 4.
This Civilian Democratic Political System (CDPS) would be structured such that the local governments and legislatures would be composed of elected members of the people-centered professional associations, such as the lawyers’association, farmers’ association, doctors’ association, teachers’ association. These associations would elect their most socially oriented competent members to serve on the legislature and government, thereby ensuring that the government policies address people’s needs and welfare. These associations should verily represent the people and their needs, and the most competent members of these associations would serve on the government, thereby ensuring people’s welfare based policies. Thus this Civilian Democratic Political system would not need and involve political parties, and would represent people’s (or civilian) democracy. We will thereby have democracy sans political parties.
This Economic Democratic governance system and its Cooperative Economic system (PROUT) need to be first established at the grassroots level, in the form of sustainable communities with the theme of all for one and one for all. So then, what constitutes a sustainable community?
Functionally Sustainable Communities
A functionally sustainable community (FSC) is defined to comprise of several cities with a large rural hinterland, together providing economic sustainability to the community. In the developing and emerging countries, sustainable development for cities and towns would be concerned with developing adequate standards of living, based on the provision of community services and environmental quality, maintenance of trade linkages with their rural hinterland, and measures of social justice. On the other hand, sustainable development in the rural hinterland would have to deal with the means of generating revenue (by supplying their produces to the cities and other neighboring FSCs), so as to support their community services (such as healthcare, public transport, education, water supply, sanitation, electrical power) and sustain small businesses (Ref 4).
In rural areas, there also needs to be professional opportunities and adequate level of education to service industries, so as to avoid migration to cities. The problems that FSC(s) need to address are: (i) Economic: financial capacity to afford community services, low affordability to pay for community services because of poverty, and encouragement to the private sector by way of facilitating their operations (export and import, etc); (ii) Social: growth of slums in cities because of rural-to-urban migration, poor public transport, provision of safe drinking water, low level of entertainment facilities (like parks) to enhance the quality-of-life, and exploitation of migrant labor from rural areas.
The solutions for these urban-rural compounding problems are: (i) determination of appropriate size of FSC(s), such that there is adequate rural hinterland size to cater to the needs of cities and thereby gather revenue for their own sustainability; (ii) adroit distribution of population in the rural areas, comprising of the revenue generating sector (about 40%), community service sector (about 40%), and small business and financial (cooperative banking) sector (about 20%), such that the revenue brought into the rural townships by the revenue-generating sector is adequate to afford community services and sustain the small-business sector; (iii) adequate industrial development and a competent services sector in cities, so as to provide adequate community services and quality-of-life to the city dwellers; (iv) civilian economic democracy, such that community sectors’ representatives in the Legislature have responsibility to cater to the needs of their respective sectors.
This civilian Economic Democratic system along with the PROUT Cooperative Economic system. will provide to the people socio-economic security and a fulfilling life, which they have not known before. This conjoint Civilian Socio-Economic-Political Democratic System can, in years to come, become adopted by nations, to replace the present-day Political Party Democracy or Corporate Democracy.
As we part company, we would indeed be echoing the benevolence of the supreme neohumanist Prabhat R. Sarkar, that everyone live in harmony and peace; everyone can have unbarred opportunity for all-round development and for contributing to mutual welfare. No one be neglected and threatened, be left starving and without shelter, be left ill and uncared-for, be tormented and made dysfunctional. All can move together in unison, to the pinnacle of human existence and cosmic desideratum. This article is dedicated to usher in such a neo-humanistic global order and era!
1. Sarkar, P.R. (1992). Proutist Economics: Discourses on Economic Liberation. Ananda Marga Publications, Tiljala, Calcutta 700039, India.
2. Ghista, D.N. (2004). Socio-economic Democracy and the World Government: Collective Capitalism, Depovertisation, Human Rights, Template for Sustainable Peace. World Scientific Publishing Co, Singapore 596224.
3. Dhanjoo N. Ghista (2011), Civilian Democratic Political-Economic System, for Liberated Countries with all systems of Government, Gurukula Network, Issue 32, May 2011.
4. Ghista, D.N and Sanyal, S (2007), Sustainable Development of Developing countries: A Holistic Socio-Economic-Political Approach, Journal of Environmental, Cultural, Economic and Social Sustainability, Vol 3 (1).
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