The global economy is at a critical turning point. It has been one bad news after the other, week after week. Some people believe that economic depression of monumental proportions is staring the world in the face. There is consensus on the need for major modifications, perhaps drastic changes in the form and governance of the global economy, as attested to by participants at the G-20 Summit of November 15-16, 2008. However, opinions are divided on the principles that should guide necessary changes. Governments that are committed to the capitalist economic system have different ideas from those that are less committed to capitalism or are inclined towards socialism. The United States Government, for example, asserted that any proposed changes should start with the presumption that the market economy (the capitalist or free enterprise system) is society’s best mechanism for producing and distributing the goods and services that their members need for their well-being. Obviously, not much progress can be made if there is no broad agreement about key principles. I believe that the time is ripe for a fundamental reexamination of national and global economic systems and practices. The following reflections are my contributions to the needed debate and discussion among policymakers. It is also for the consideration of all of us ordinary citizens of the world, since we are all economic actors and are the beneficiaries or victims of any global economic system that may emerge.
A question immediately follows: what constitutes the acceptable well-being of people? Food, shelter, and clothing are essential for material well-being and the right economic system must be able to provide these. But normal human beings require more than material well-being. They need love, they want beauty, they crave for justice and fairness, for self-worth, self-actualization, etc. In short, well-being in any age, perhaps especially in this third millennium, includes mental, psychological and spiritual satisfaction. Moreover, there is the much larger question of meaning and human purpose. What is the meaning of life and what is the purpose of human existence? Advanced thinkers of all ages and all cultures have long ago come to the recognition that there is a purpose to human existence and that life does have meaning with which we should all individually and collectively be concerned. A little thought would suggest that well-being might be pointless if it does not lead in the direction of the fulfillment of the purpose of human existence and does not make life truly meaningful.
The consensus of all wisdom teachings is that the purpose and meaning of life lie in spiritual maturing and advancement. They teach that the human being is, in its essence and core, a spirit incarnated on earth in order to mature and eventually to return to its true home in the spiritual realm. Sages of present and past ages also speak of natural/primordial laws or principles which one should observe in order to achieve life’s purpose. And they point out that each individual has natural endowments which must be used appropriately to facilitate attainment of human purpose and to find meaning in life. I do not wish to pursue this further but only to make the point that basic economic objectives should necessarily be in consonance with and be subservient to the larger spiritual purpose of human existence. Therefore, the processes by which we seek to assure people’s material advancement must not become obstacles to their spiritual well‑being. Indeed, any system which would promote material well‑being at the expense of spiritual maturing must be seen to be counter-productive and wrong. Thus, the first test of the validity of an economic system should be how it relates to the spiritual goal of human existence. This view, that our every action should in general be related to the purpose of human existence, is unfortunately, too little appreciated.
As noted above, people have certain natural endowments that are to help them achieve the spiritual purpose of existence. A truly progressive economic system must permit and encourage the development and full flowering of all such natural endowments. In connection with economic systems, Free Will is one such endowment that is of paramount importance. Any economic system that does not permit the full expression of the Free Will is simply wrong, and will ultimately fail even in a material sense. As regards the expression of man’s Free Will, the market economy is far superior to the other two main systems: economies organized according to Tradition, and economies run by Command or Planning, i.e., Communism and various forms of Socialism. In the market economy, what one does is not determined by the force of custom or the command of an authority. It is based on the idea that the goods and services that the members of a society actually need are most efficiently produced and distributed by allowing each person freely to decide what to produce and what to buy. It is asserted that the interests of a society are best served if individual members are allowed freely to pursue what they perceive to be their own legitimate interests. In the market economy, the goods or services produced by one person are exchanged voluntarily for the goods or services produced by another. And in the process, society as a whole gets the goods and services it requires. Experience shows that human beings are most creative and most innovative when they are free economic actors; they are much less so under an authoritarian or planned economic system.
However, everyone can become free economic actors only if society has in place a mechanism to ensure that, in the process of exercising one’s Free Will, one does not interfere with the right of others to exercise their Free Will. This responsibility is that of government. We may, therefore, assert that there is an inherent and crucial regulatory role for governments in the market economy. A major cause of the current crisis is, therefore, the failure of governments, especially the United States Government, to carry out its regulatory function. By their failure, governments have allowed anarchic, absurdly laissez-faire, economic systems to flourish; systems that in effect undermine the freedom of the majority and which are detrimental to the spiritual goal of human existence. Unlike the true market economy, anarchic economic systems are not sustainable and must collapse, and are collapsing.
To participate in the market economy, one must have something to offer. The situation is analogous to the matter of sowing and reaping; one reaps what one sows and one cannot reap if one has not sown. A system that does not permit one automatically to get something for nothing seems to me essentially just; in other words, the market economy is a just system. However, this aspect of the nature of the market economy highlights a major potential problem. Those who cannot enter into exchange transactions, for good or bad reasons, are left out of the market economy. For example, certain categories of handicapped people cannot participate in the market economy, and the market system per se cannot provide them any benefits. To address this problem, we require measures that are not inherently a part of the market economy as currently conceived and practised. The solution to the problem posed by those left behind, i.e. people who are unable to participate in the market economy, lies in the knowledge that justice and love are inseparable. They are like two sides of the same coin. When we permit justice without love, we create instability; we create harm, wittingly or unwittingly. The market economy is a system of justice which must be consciously balanced with a system of love, if it is to fulfill its objective of providing for the material and spiritual well‑being of society. A society to be sustainable must not only be just, it must also be loving. This principle should underlie any changes or modifications to the current global economic system.
It is, however necessary to clarify what love means in this context. It is the unselfish and benevolent concern for the spiritual good of another. It is the true love, which seeks what would give spiritual benefit to the one loved, not necessarily what is pleasing to either party. In the understanding that the purpose of life is spiritual and not material, true love would do to the loved one that which would advance his spiritual development, even if it brings him temporary physical pain or material deprivation. Thus, true love does not seek to create a life of indolent comfort and indulgence. In this sense, a parent who truly loves her children does not accept a perpetual obligation to provide their necessities. On the contrary, she provides them education and other assistance so that as soon as they come of age, they can take full responsibility for their own lives and their own needs. When children attain the age of maturity, the obligations of parents cease, and so does the parental authority. The same concept of love applies to the larger society. It is not love when a government seeks to take over the responsibility of able-bodied adults to fend for themselves. Every inwardly alive individual wants to fend for himself/herself, and requires only such help as enables him/her to do so. Anybody who is content and happy to live on handouts from government or from other individuals cannot be described as healthy and should not be encouraged. The struggles connected with earning one’s livelihood are healthy and beneficial, physically, mentally, and spiritually. Welfare and poverty alleviation schemes should be pay attention to this concept of true love.
People who, because of their physical or mental condition, are not able to help themselves are, of course, exceptions. Any genuine human being senses the absolute necessity to care for and support such members of society. And such acts of compassion must bring spiritual benefits to all those who participate in them, in accordance with the immutable Law of Sowing and Reaping. By analogy, this concept of balancing justice with love means that a viable global economic system must ensure that all countries can participate meaningfully in the global economy and those which, for good reasons, are incapacitated (normally temporarily) are assisted to help themselves. Perpetuation of unjust debts, one-sided and unfair international trade arrangements, under-pricing of commodities and products of poor countries relative to the costs of technological products and services of the rich countries, etc, are not inherent in the true market economy. Such practices which demonstrate lack of elementary morality (a situation not envisaged by Adam Smith - the father of the market economy) will ultimately undermine the sustainability of any global economic system. A new global economic system should be one that adds a system of true love to the market economy and should assure level playing fields for all economic actors (weak and strong, individual, corporate, national, and international). While making such changes, care must be taken simultaneously to foster the inherent justice of the market economy.
The use of money is a major pre‑condition for the emergence of both the market and the planned (communist or socialist) economies. Money as the medium of exchange replaced the cumbersome barter of the traditional economy, which required a double coincidence of wants: you must have what I need and want what I have. It is symbolic that problems in the credit/borrowing system are the trigger for the current global crisis.
For a long time now, some people have warned that the current monetary system is fundamentally wrong and that it cannot support sustainable economic development. They argue that it has many inequitable aspects that are not transparent. They propose an interest-free and inflation free monetary system that encourages free circulation of money. Borrowing to keep money working is made interest-free, while saving (keeping money out of circulation) is charged an interest. In practice, this would be linked to public ownership of land to ensure that it is readily available to those who actually need land and not for speculative purposes. Such proposals for a fundamental change in the monetary system ought to be carefully considered with respect to reforming the international monetary system and the International Monetary Fund (IMF).
An insufficiently discussed issue is the presumption of all current economic systems that perpetual quantitative growth of the economy is attainable and desirable. In the 1960s and 1970s, some individuals and small groups argued for limits to growth. Those arguments have since been largely ignored. The counter-arguments are based on the presumed limitlessness of the power of technology to bring about constant economic growth with less and less natural resources. Many thinkers advise us to note that endless growth does not normally occur in nature. It occurs only when disaster looms, as in cancer cells whose abnormal growth leads to their self destruction and the death of their host. The love of endless growth seems to me a faint reflection of the greedy, endless, and unthinking acquisition of incredible wealth by some people in virtually all societies. Limitless quantitative economic growth is as senseless as greedy acquisition of wealth. It is a symptom of spiritual poverty. The existing wealth in the world is more than enough to banish hunger, poverty, and homelessness from the face of the earth. What are missing are love and the hunger for justice on the part of wealthy nations and individuals. The prayer of a Christian leader comes to mind: “God give food to the hungry, and to the rich give a hunger for justice.” The race for unending growth to meet the insatiable needs of societies are obviously damaging the environment and causing unacceptable climate change. Attempts to reform the global economy must revisit the issue of limits to quantitative growth. Of course, qualitative improvements leading to better quality of life can always be pursued and will need to be pursued and such would not be harmful to the environment or climate.
by Stephen Lampe