Beyond the Budget: Economics for revival of balanced life – Part I
The world has seen enough philosophers who can speak of the larger issues that plague the mankind across domains – social, economic, political and religious. Each philosopher has brought to the table certain new ideas, thoughts & challenged the existing ones. And over time, they got challenged by the newer thoughts. And at times, the older paradigms, customized to the current times, become more powerful and relevant, thereby bringing the life to a full circle, but at a higher equilibrium. Like in the case of vertically circling cycle, that comes to the same position but at a higher level.
Today, the world has moved to an indisputable homo economicus mode. This means, the man (read also as woman inclusively) has put primary focus on the economic domain alone. The antecedents include – individualism, YOLO philosophy (You Only Live Once) that further celebrates consumerism to the exclusion of others almost, libertarianism (my life my rules as one apparently harmless example) clubbed with the utilitarianism – that measures everything from the point of view of cost & benefits.
The outcome sadly has been the debacle of the society as one would have ideally envisaged. Breakdown of the family system (pls note – we are not even referring to the larger joint family system, but to the basic family system itself) has been a big unfortunate outcome that is seen across the globe – partly organic due to the factors mentioned above and partly due to strategic planning of the Global Market Forces. A consumer durable seller is happier if there are 4 separate homes from among 10 family members than with just one home from the same 10 members. This behavior of the producer & seller is incentive driven, while the nihilist forces would want to break families for reasons of individualism, pseudo feminism, consumerism etc. The final outcome is a society that is no more strong from within, is unsustainable to the core and has a bleak future at the societal level.
While the reversal of this condition requires multipronged approach (social, religious, political and economic), we look at economic aspects alone in this article – that can help one get a better perspective on how relevant economic policies and framework can ensure incentive part of the behavior can be controlled. And that can be a good start for India, as we enter the third consecutive term for PM Modi.
Let us have a look at the current dominant western thinking and the impact that it can have on the society and the economic policies as well.
- Welfare should flow directly from the State to Individual, in the backdrop of welfare state concepts framework – this puts the entire onus of the individual to the state, in a way even robbing the family of both the privilege & responsibility of taking care of the next Generation.
- Individualism as a corner stone of all world views – The entire concept of welfare, wellbeing, rights and privilege start with the individual and sadly, ends with the same person. In a country as diverse and complex as India, expecting to the State to take charge of all individuals is the sure shot way to disequilibrium and unstable situation.
- Rights framework – meaning the entire architecture is based on rights and has no corresponding duties attached to the same for the individual. The State is tasked with the mandate of providing / ensuring rights to the individuals, while they have no corresponding duties to the state / future generations whatsoever.
The problem with the above framework is that in economic terms, all upside is available for the individual and only downside is left out for the state. This becomes an unsustainable situation.
In contrast to the above, the Indic framework brings in a network of stake holders and their interconnection that can lead to a stable equilibrium viz. State – community – Family – Individual. Please note here that between state and individual – there are two more categories of stake holders. State is an enabler and force multiplier rather the direct responsible party is the concept that is emphasized here. The western thinkers have stressed a direct connect between state & individual, that bypasses or breaks the family & community structure. And incidentally it is the middle layer of family & community that brings strength to a country. The Indian society, despite thousand years of onslaught of Muslim and then British atrocities has survived all these only because there was a strong intermediate structure viz. community and family. So, the individual during those times didn’t lose out even if the state was not benevolent to him / her.
In this context – it becomes important for Bharath to show the way to the world. The “third way” as described by Shri Dattopant Thengadi ji, is the way to a sustainable world. Focus ONLY on economic matters leads to a world that is inherently unstable. While the good balance among Dharma, Artha, Kama and Moksha – 4 purusharthas – ensure that material as well as spiritual pursuits are done, providing a meaning to life on all matters – social, economic and spiritual.
What can the Government of the day do in this regard? Can there be policies that can act as a catalyst to make this more effective as well as practical? Can economic incentives be provided by the Government that can change the behavior of the society to some extent, away from home economicus to homo sapiens?
We look at some probable policies as a matter of illustration on how the Government can help in behavioral change via incentive policies in the second and final part of this article. The end result expected is simple – in-between the individual and the State layers, strengthen the middle layer of family and community – so that as an end outcome, all the 4 stake holders become stronger. And in the bargain, Bharath sees a win-win prosperity on a higher note.
Dr. Samir Kagalkar is an economist and holds a doctorate from IIMB.
