Economics touches every aspect of our lives, yet most of us pay scant attention to it. Paul A. Samuelson, the Nobel laureate and author of the most well-known book on economics, declared, “I don’t care who writes a nation’s laws, if I can write its economics textbooks”. Economics, being the language spoken in the corridors of power, empowers those who understand its intricacies. Conversely, those who fail to comprehend the jargon-laden talk of the economists stay powerless as they are unable to deduce the economic policies formulated in the highest spheres of power.
In India people are clueless why the 3Ps – politicians, plutocrats and public servants – always talk about “ease of doing business” aka deregulation and are hypervigilant about the movement of stock market indexes. Nor do they have any idea why are they obsessed with the fiscal deficit and keep harping on maintaining fiscal austerity. They forever remain under the impression that their leaders are doing it in the best interests of the entire society and are hardly aware of the fact that deregulation, rapacious speculation and socialization of corporate losses are the things that are responsible for transforming democracy into an arrangement that is ‘of the 1%, by the 1% and for the 1%’.
As the ordinary people simply don’t know how to safeguard their economic interests, it has become easy for the people at the helm of affairs to hoodwink them. Taking advantage of the situation, the 3Ps, who are brought together by the three forces – power, capital and campaign financing – continue to have their heyday.
The politicians and the economists are so impressed with laissez-faire economics that they seem to have come to the conclusion that if they can proactively promote the interests of the plutocrats, who constitute the 1%, the supposedly generous ‘invisible hand’ takes care of everything else, enabling the 99% to lap up the ‘tricked down’ things.
The 99% are not aware of the fact that our leaders are only bothered about the man-made capital and they left all the other capitals, namely human capital, natural capital and social capital to the free market. The free market, however, is only interested in man-made capital, and when the other three capitals are entrusted to it, it fully commodifies them which results in further marginalization of the underprivileged.
The market forces, with their excesses, have already caused irreparable damage to the three capitals. They commercialized health and education, which groom the human capital. They poisoned all the natural capital by mainstreaming the highly unsustainable consumerist culture. And, by paving the way for concentration of wealth in a few hands, they caused the waning of a sense of identity, trust and equality of opportunity, which constitute social capital.
The politicians, taking advantage of the uninterestedness and lack of awareness prevalent among the people on economic issues, manage to deflect their attention onto trivial yet potentially incendiary topics as part of their social engineering efforts to reap electoral benefits. And, in the process, they harm the social fabric of the society by turning our pluralistic ethos, which are undoubtedly our biggest strength, into a major vulnerability.
Our politicos, though they pose as the messiah of the masses during their electioneering, promote full throttle the interests of the big capital once in power by giving a big push to the neo-liberal economic policies such as tax cuts, deregulation and dilution in labor and environmental laws, for full four years. It is only after they suffer a few electoral reverses on the way to general elections, they realize that their social engineering efforts have lost steam and started yielding diminishing returns. And the realization makes them comply with the political business cycle, forcing them to introduce some big-ticket welfare schemes. These schemes, which are introduced with much fanfare, are mostly implemented half-heartedly only to be diluted slowly to cause their eventual demise.
The economics that is taught in the reputed universities, where most of India’s well-known economists were trained, is neoclassical economics, which is replete with mathematical equations that are detached from human psychology and the real-world situations. It appears that in the garb of complexity the vested interests want to promote a particular type of economic narrative that fits the requirement of the ultra-rich.
Three undergraduate students of University of Manchester, who got disillusioned with the kind of economics taught in the universities in the UK, expressed their dissent through their book titled ‘The Econocracy: The Perils of Leaving Economics to the Experts’, in which they questioned the monopoly status of neoclassical economics in the curriculum. They opined that “the monopoly of a particular and narrow form of economics, and the way the subject matter is taught (‘pedagogy’) amount to nothing less than the dictionary definition of indoctrination”. We should not forget the fact that the neo-liberalism advocated by economists such as Milton Friedman and FD Hayek, who sowed the seeds of concentration of wealth and working-class deprivation, is closely related to neoclassical economics.
Now the question arises as to why the prestigious universities all over the world teach economic theories that serve the interests of the big businesses? The answer lies in the fact that these universities receive donations from the plutocrats who own these big businesses to their endowments. With some exceptions, even the media, which is mostly owned by the big businesses, promotes the neoliberal economic thought very aggressively to make it mainstream. Therefore, an overwhelming majority of the institutions that exert major influence on the society are collectively promoting the economic thought that serves the interests of the plutocrats, which is detrimental to the interests of the commoners.
If we want to create an inclusive society, we need to incorporate alternative theories in the economics curriculum and even make it comprehensible to the commoners. Thomas Piketty’s ‘Capital in the Twenty-First Century, which brought inequality back onto the center stage, made a marvelous attempt in that direction. It’s high time the civil society gave a serious thought about the economic direction our country should take and how to incorporate the ideas such as equality of opportunity and sustainability into the economic thought.