Poverty & Ethics
By Ratan Lal Basu
Copyright 2017 Ratan Lal Basu
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Any observant visitor venturing through the congested cosmopolis of Kolkata cannot but be bewildered by the striking contrast in the juxtaposition of dazzling riches and loathsome poverty, posh dwelling houses and stinking slums, and the fine blending of gorgeously attired patricians and bare bodied, semi-naked or shabbily dressed commoners in the unending stream of commuters. A thoughtful person would immediately visualize a perfect replica, a miniature model of the global scenario checkered with scintillating opulence and suffocating indigence. He might even be overwhelmed by the sudden zooming in of the ghastly reality (as if in a Hitchcock horror film), the inner story of our glorious civilization, the haunting shadows of poverty , deprivation and oppression lurking behind the hallmarks of human civilization – the lofty Pyramids, the invincible Chinese Wall, the exquisite Taj Mahal, the magnificent architectures and technological marvels.
The strange revelation may turn a conscientious economist irrational – in a momentary lapse, he may slip out of his well protected intellectual confines and inadvertently step into the forbidden arena of emotion and ethical paradigms which cannot be taken care of by theories and analytical tools he has been brought up with. Why irrational? Suppose we reverse the premises of our reasoning so that what seems rational in the conventional sense turns out irrational and the other way round! What if we put forward the queer proposition that poverty is out and out an ethical question? No doubt this would directly land us amidst the conflict between the positivist and ethical (may be loosely termed normative) approach to the analysis of poverty.
Both ethical values and so called facts discovered in pure sciences have the same source, human perceptive faculty. Thus, there is very little justification for shelving aside the ethical approach towards analysis of poverty on the ground of relativism and concentrate only on the materialistic aspects of poverty.
Now it is high time we try a meaningful definition of the all important term ‘poverty’.
The term poverty may be interpreted in both absolute and relative sense. In the narrow sense, absolute poverty refers to the lack of basic amenities for sustenance of life without any reference to the relative economic position of the person concerned vis-à-vis other persons in the society he resides in. Relative poverty, on the other hand, is concerned with inequality of income distribution and refers to the relative position of the person in comparison to richer counterparts.
These two concepts, in this narrow sense, may or may not be interdependent. In a very primitive economy, absolute poverty may exist without any existence of income inequality, e.g., in the ‘primitive communism’ referred to by Marx and Engels. On the other hand, in a highly developed country, high income inequality may exist without the existence of absolute poverty in its narrow interpretation. We use the term ‘narrow’ because the very definition of absolute poverty may itself change with rising income in a society. This is so because the concept of ‘minimum subsistence’ is likely to change with increasing opulence of a society. No wonder, an income level considered the critical level for defining absolute poverty in the USA may appear far above the average middle class income in an LDC like India. Absolute poverty has in fact both physical and psychological dimensions and here it becomes difficult to segregate absolute poverty from income inequality. Thus the question of poverty turns out to be a highly complex phenomenon unlikely to be amenable to treatment with oversimplified terminologies and definitions.
Leaving aside the definitions and linguistic juggleries it can hardly be denied that absolute poverty in the LDCs has in recent decades assumed a serious dimension in sheer physical terms and has posed a threat to the lives of millions of people residing in these countries. On the other hand, relative poverty as well as absolute poverty (even if in purely psychological sense) has been the basic source of social tensions in many a developed country. In the global context, poverty among nations has been widening nullifying all the predictions of meticulously constructed growth models emphasizing ‘convergence theories’. So far as the LDCs are concerned, low per capita income combined with extreme income inequality have forced these nations to the precipice of disaster.
Under this situation it may be worthwhile to look into the basic causes of poverty of all varieties. Is it purely a question of lack of economic development or otherwise inadequate care to the question of redistributive policies or none of them? It is no denying that absolute poverty in primitive societies may be explained by man’s limited power to manipulate Nature (and the underlying causes like limited scientific knowledge, primitive technologies and therefore limited productive capabilities etc.). But the same logic cannot be applied for societies which are capable of generating surplus value. The reasons for absolute poverty which has been a faithful companion of inequality ever since the emergence of private property and economic surplus, is to be sought elsewhere. In fact, all conventional approaches towards this question have always been bye-passing the basic cause.
The development of productive power and knowledge to have command over Nature through agricultural practices changed the situation that existed in the very primitive societies and clan lives. In course of time productive forces, through man’s increasing command over Nature, went on snowballing and at present material production has assumed a spectacular dimension by means of the trinity of science, technology and industrial innovation. Unfortunately human society is still being pestered with the nagging problem of poverty, haply in a more intensified form as compared to the malady as existed in the pre-capitalist societies. Both opulence and poverty have been marching steadily onwards with the latter taking the leading role.
The problem of poverty and private property emerged in this world as perfect twins. Prior to emergence of private property, poverty had very little association with social injustice. Poverty arose simply because of lack of material means of sustenance and it was equally applicable for all the members of primitive communities or clans. But with the advancement of methods of production and emergence of surplus value, it was no longer ‘poverty for all’ but poverty for the property less majority and riches for the property owning minority living on surplus values generated by the poor majority – poverty thus got associated with social injustice. Paucity of material means was no longer the basic cause of poverty but the cause lied deep in human psychosis – insatiable greed and resultant leanings of the propertied minority to perpetrate exploitation of the property less majority. Ownership or non-ownership of property also sprang from a basic vice, the cunning and unethical maneuver of the minority to grab all means of production.
Karl Marx could, to some extent, recognize this basic cause but erroneously fell into the same trap – sought the solution of the problem through material advancement alone. He failed to recognize that class division, inequality, exploitation and the resultant poverty spring from a deeper cause, the baser and unethical leanings in human nature (which exist side by side with nobler aspects in all human beings baring a few exceptions).
Among the Marxists, Mao Zedong of China could anticipate this danger and endeavoured through ‘Cultural Revolution’ to prevent the Communist Party of China from turning into a new instrument of exploitation (like communist parties in all other countries). However, the way he visualized the basic causes of this degeneration of the Communist Party and the Socialist State had nothing to do with the inner vices of human nature. He simply looked at the problem from the standpoint of “class struggle”. So ultimately this so called Cultural Revolution degenerated into a simple power struggle within the Communist Party of China, and in its termination, left the Chinese economy and society in utter chaos and doldrums.
Long before the emergence of Marxian concepts, Adam Smith could identify the basic psychic nature of human beings that are responsible for poverty amidst plenty. But he could not suggest any meaningful way out of the vicious circle – the intricately interwoven forces of baser human sentiments strengthening one another to give the unethical entity perpetuity.
As regards the basis of human nature, most scientific analysis is to be found in Samkhya, one of the six major philosophies that sprang from Vedic world outlook. But it is questionable how far it is practicable to translate the Sankhya based process into reality to bring about an exploitation-free, poverty-free world.
Before going into these intricate questions, let us first have a glimpse of the conventional poverty concepts and the suggested means for their solution. So we start with modern definitions of poverty.
Topics directly or indirectly associated with poverty have taken a lion’s share in modern economic literature as the phenomenon of poverty has posed the most serious challenge to development efforts in the new millennium. Sources of many other serious maladies are rooted in this primeval malady. So far as the majority of the population of the world are concerned, the question of absolute poverty has justifiably been considered as the most primary issue, although attention has also been drawn to the question of inequality, both intra-nation and inter-nation.
At present, the most pressing problem, of the third world countries comprising the overwhelming majority of world-population, has been the precarious situation generated by appalling absolute poverty and, therefore, at least on the theoretical plain, the major concern of economic policies of the government of each of these countries has been to devise appropriate and fruitful means to grapple with the problem of absolute poverty. The question has also been a matter of deep concern for the developed countries, but for completely different reasons. Continuation of abject poverty in the third world countries is likely to generate enough provocation for these countries to opt for communistic uprisings. Moreover, poverty in the LDCs leading to lack of effective demand delimits the global market of the Multinational Corporations of the developed countries.
Now as we turn to the question of removal of poverty, we immediately come up against the tricky question of quantitative measurement, without which it is hardly possible to frame any realistic target-oriented poverty removal policy. To this end the crudest approach considers income as the criterion of defining poverty and attempts to measure poverty by the Head Count Ratio (HCR). In this measure at first the minimum income necessary for provision of subsistence requirements is determined. This threshold income is called the Poverty Line. At the next step, data on the number of persons with income below this critical level are collected. At the final stage this figure is expressed as a percentage of the total population of the country under consideration.
The most perturbing question in connection with the HCR is the ambiguity in identifying the critical income level pertaining to the Poverty Line. The critical Poverty Line income differs from country to country depending on the variability of per capita income, structure of national income, ethnic and cultural factors that make a world of difference in the concept of subsistence requirement. Generally the Poverty Line income for a poor country is less than that for a relatively opulent country.
Notwithstanding these inter-country differences, the World Bank has defined a general Poverty Line for the world as an income of U.S. $1 per person per day at purchasing power parity. Although this may enable the World Bank to have a rough idea about overall poverty in the world, for policy framing of the LDCs, the standard may seem too high and for the highly developed nations, too low. The third world countries afflicted with abject poverty are compelled to set a much lower margin of income for the Poverty Line and device policies to raise income of the poor in relation to this critical level. For example, the official Poverty Line in Indian, based on minimum calorie requirements for sustenance of life, is much below this World Bank standard.
Apart from this conceptual limitation, the HCR has also revealed limitations from the policy stand point as the measure fails to quantify the income gap of the poor from the Poverty Line. Thus it does not provide any guideline as to the magnitude of the total income gap to be covered if a country wants to remove poverty of a targeted segment of the poor. Moreover this measure is also a poor instrument of inter-country comparison of poverty.
The poverty gap measures have been devised to take into income shortfall of the poor from the Poverty Line. There have been innumerable indices of this category devised to take into account specific aspects of poverty gap. The details of all these measures and the mathematical formulas are irrelevant for this study2. Amartya Sen has criticized the income-based poverty measures as they fail to take account of deprivations in terms of basic amenities of life (literacy, healthcare, safe drinking water, pollution-free atmosphere etc.). So he has defined poverty indices based on these aspects of human living, popularly known as capability-based indices (Sen, Amartya 1984, 1993). In this connection, the Human Poverty indices of UNDP are worth mentioning (UNDP, HDR 2003, PP. 342-43). Sen’s approach would be taken up in a subsequent section.
In modern economic literature, attention has also been drawn to various aspects of relative poverty or inequality both in terms of income and in terms of basic amenities. The common statistical measure to quantify inequality is the Gini Coefficient derived from the Lorenz Curve.
All surveys to quantify inequality in terms of this approach have revealed widespread inequality in terms of income, basic amenities and human development in most of the countries (irrespective of the level of economic development). Research works have also revealed wide differences in the degree of inequality in various regions of the same country. If we look into the world scenario and compare different nations on the basis of per capita income and Human Development Index, wide disparities among nations would become apparent. Time series data from the World Development Report and Human Development Report reveal widening disparities among nations over time negating all the nicely constructed growth models indicating convergence (WDR, HDR various issues).
Poverty Removal Measures in LDCs
So far as the LDCs are concerned, inequality and low level of development have combined to assign such a grave significance to absolute poverty that poverty removal has been the most crucial policy issue for all sensible governments, especially in the LDCs. The two major theoretical approaches in this direction are:
i) Trickledown Approach
ii) Direct Approach
The distinctions between these two approaches may be clarified with examples from India.
At the initial stage of planning in India it was expected that economic growth would automatically trickle down to remove the intensity of poverty at the lower strata of income. But this did not materialize as most of the fruits of planned economic development had been cornered by the well to do minority magnifying the intensity of poverty and inequality. So since the Fifth Five Year Plan (1974-79) the ‘trickledown approach’ was abandoned and emphasis was laid on direct poverty removal measures. Since then innumerable special poverty removal programs (like IRDP, SFDA, ILDDPAP, TADP, MNP etc) have been undertaken to grapple with appalling poverty in India (Hiraway 1986, Kumar 1993).
No doubt, this direct attack on poverty has produced some positive results, but they have been quite inadequate considering the magnitude of poverty in this highly populated country (World Bank 1997, 1998, 1999, Muqtada 1990).
Since the 1990s it has been emphasized that a combination of growth and direct programme would be the best measure for poverty removal in India. (Hanumantha Rao 1992). Other third world countries are likely to have similar experience. This has been in perfect harmony with the guidelines of the international institutions like the UNO, IMF and the World Bank. This is obvious from the exhortations in all the recent issues of the World Development Report, the Human Development Report and all other publications by the world bodies. But are these going to attack the poison tree at its very roots and destroy it?
Before going further into this issue, let us have a glimpse of the excellent account of the genesis of poverty provided by Karl Marx and Frederick Engels.
Marxian theory of the historical process of development of the human society gives an excellent account of the genesis of poverty and inequality. From economic standpoint Marx divides the process of development of human society till his time into four major stages: primitive communism, slave society, feudalism and capitalism. He predicts that capitalism would be replaced by socialism, which again will ultimately dissolve into Communism, a Classless Stateless society.
At the first stage, during primitive communism, poverty in the modern sense did not exist (poverty in the modern sense is meaningful only when its opposite, viz. opulence, exists). It was simply limitation of amenities, applicable to all members of a clan, because of limited knowledge to explore natural resources to meet human demand. These clan societies were characterized by equality. To quote:
“The household was communistic, comprising several, and often many, families. Whatever was produced and used in common was common property: the house, the garden, the long boat” (Engels 1884, Ch-IX, P.155).
Man-nature conflict gradually led to improvement in methods of production – man gradually having more and more command over Nature with its increasing knowledge. With acceleration of this process by increasing social division of labour, surplus over and above consumption requirements started emerging. And at the same time human values pertaining to fellow feeling and equality started degenerating into slavery – oppression of one class of people by another. To quote:
“The increase of production in all branches – cattle breeding, agriculture, domestic handicrafts – enabled human labour power to produce more than was necessary for its maintenance. At the same time, it increased the amount of work that daily fell to the lot of every member of the gens or household community or single family. The addition of more labour power became desirable. This was furnished by war; captives were made slaves. Under the given general historical conditions, the first great social division of labour, by increasing the productivity of labour, that is, wealth, and enlarging the field of production, necessarily carried slavery in its wake. Out of the first great social division of labour arose the first great division of society into two classes: masters and slaves, exploiters and exploited.” (Ibid. P. 157).
“The continued increase of production and with it the increased productivity of labour enhanced the value of human labour power. Slavery, which had been a nascent and sporadic factor in the preceding stage, now became an essential part of the social system” (Ibid. P. 159).
“The distinction between rich and poor was added to that between freemen and slaves – with the new division of labour came a new division of society into classes” (Ibid. P. 160).
With the emergence of money as the most convenient medium of exchange and the emergence of the parasitic merchant class, the process of property ownership and accumulation of wealth by a few and the consequent poverty and inequality were further crystallized. To quote:
“Here a class appears for the first time which, without taking any part in production, captures the management of production as a whole and economically subjugates the producers to its rule; a class that makes itself the indispensable intermediary between any two producers and exploits them both.” (Ibid. P. 162).
“The commodity of commodities, which conceals within itself all other commodities, was discovered; the charm that can transform itself at will into anything desirable and desired. Whoever possessed it ruled the world of production; and who had it above all others? The merchants.” (Ibid. P. 163).
“Besides wealth in commodities and slaves, besides money wealth, wealth in the form of land came into being.” (Ibid. P. 163).
Continued material progress, made possible by man’s increasing command over Nature, ultimately paved the way for the Industrial Revolution, which ushered in the capitalistic or bourgeois society. Capitalism enhanced the pace of materialistic development but at the same time it facilitated more ruthless exploitation of the labour class turning them into proletariats. To quote:
“With slavery, which reached its fullest development in civilization, came the first great split of society into an exploiting and an exploited class. This split has continued during the whole period of civilization. Slavery was the first form of exploitation, peculiar to the world of antiquity; it was followed by serfdom in the Middle Ages, and by wage labour in modern times. These are three great forms of servitude, characteristic of the three great epochs of civilization; open, and, latterly, disguised slavery, are its steady companions” (Ibid. P. 172).
“The bourgeoisie, during its rule of scarce one hundred years, has created more massive and more colossal productive forces than have all preceding generations together. Subjection of Nature’s forces to man, machinery, application of chemistry to industry and agriculture, steam navigation, railways, electric telegraphs, clearing of whole continents for cultivation, canalization of rivers, whole population conjured out of the ground – what earlier century had even a presentiment that such productive forces slumbered in the lap of social labour?” (Marx and Engels 1948, Ch-1, P. 48)
“In proportion as the bourgeoisie, i.e., capital, is developed, in the same proportion is the proletariat, the modern working class, developed – a class of labourers, who live only so long as they find work, and who find work only so long as their labour increases capital. These labourers, who must sell themselves piecemeal, are a commodity, like every other article of commerce, and are consequently exposed to all the vicissitudes of competition, to all the fluctuations of the market.” (Ibid. Ch-1, P. 51)
Now as regards the cause of oppression, exploitation, and increasing poverty and inequality along with material progress Marx and Engels held class society and the institution of private property responsible. But because of either superficial observation or obsession with some specific motive, they failed to visualize that these are but manifestations of some deeper cause inherent in human nature. They, in fact, identified the effect as the cause and lapsed into the tautological fallacy. They also invented the concept of class struggle as the sole cause of transformation of human society from one stage to another and also found in it the ultimate means of resolving the problem. To quote:
“The history of all hitherto existing society is the history of class struggles.
Freeman and slave, patrician and plebeian, lord and serf, guild-master and journeyman, in a word, oppressor and oppressed, stood in constant opposition to one another, carried on an uninterrupted, now hidden, now open fight, a fight that each time ended, either in a revolutionary re-constitution of society at large, or in the common ruin of the contending classes.” (Ibid. Ch-1, PP. 40-41)
“The modern bourgeois society that has sprouted from the ruins of feudal society has not done away with class antagonisms. It has but established new classes, new conditions of oppression, new forms of struggle in place of the old ones.” (Ibid. Ch-1, P. 41)
Marx insisted on overthrowing the existing State Machinery with the help of the weapon of ‘class struggle’, and replacing it by the rule of the proletariat class, the immediate task of which would be to abolish private property. To quote:
“The immediate aim of the Communists is the same as that of all the other proletarian parties; formation of the proletariat into a class, overthrow of the bourgeois supremacy, conquest of power by the proletariat.” (Ibid. Ch-2, P. 62)
“In this sense, the theory of the Communists may be summed up in the single sentence: Abolition of private property.” (Ibid. Ch-2, P. 63)
The class struggle would continue and ultimately end up in a classless, stateless, family- less society of eternal bliss. To quote:
“The bourgeois family will vanish as a matter of course when its complement vanishes, and both will vanish with the vanishing of capital.” (Ibid. Ch-2, P. 68)
“The state, then, has not existed from all eternity. There have been societies that did without it, that had no idea of the state and state power. At a certain stage of economic development, which was necessarily bound up with the split of society into classes, the state became a necessity owing to this split. We are now rapidly approaching a stage in the development of production at which the existence of these classes not only will have ceased to be a necessity, but will become a positive hindrance to production. They will fall as inevitably as they arose at an earlier stage. Along with them the state will inevitably fall. Society, which will reorganize production on the basis of a free and equal association of the producers, will put the whole machinery of state where it will then belong: into the museum of antiquities, by the side of the spinning-wheel and the bronze axe.” (Engels, op. cit. P.170)
Marx and Engels strongly asserted that their concepts had been derived from historical facts rather than invention. To quote:
“The theoretical conclusions of the Communists are in no way based on ideas or principles that have been invented, or discovered, by this or that would-be universal reformer.
They merely express, in general terms, actual relations springing from an existing class struggle, from a historical movement going on under our very eyes.” (Marx and Engels op. cit. Ch-2, P. 62)
The conviction of Marx and Engels that class struggle had played the crucial role in every qualitative transition of human society in the past is hardly convincing – it is neither supported by historical facts nor can it be substantiated by any logically consistent theory. So is also the prediction of a stateless-classless society. Moreover their apparently factual stages of development were based mainly on the observations of the economic history of some developed European countries, especially, the United Kingdom. These stages are difficult to find in Asiatic countries like India, China etc. Now think of the so called proletarian philosophy. The depth of knowledge and introspection required to grasp the essence of the Marxian world outlook can hardly be found among the wage-earning class. Thus it is simply a world outlook invented by the speculative faculty of a highly intelligent and well read middleclass intellectual like Karl Marx who claimed it to be springing from the historical experience of the labour class. Nothing could be more ludicrous than this.
Ironically, the Socialistic States, which were conceived as a means to do away with social injustice, ultimately degenerated into another instrument of human slavery (Fast 1957, Solzhenitsyn 1969, 1971, 1985). Ultimately, most of the oppressive socialist regimes collapsed during late 1980s and early 1990s.
Marx failed to realize (because of either superficial observation or myopic view or parochial obsessions) that causes of poverty, inequality, exploitation and similar maladies do not lie in private property, family relations, the state or any other visible phenomenon as such, but it lies deep in human nature, in the unethical sentiments like greed, pride, jealousy etc. So, eradication of the maladies, if at all possible, is to be accomplished by some process that would reduce the prevalence of these basic vices in human mind. There has been a misconception (which mainly sprang from the overenthusiastic observations of western authors like Joan Robinson that Mao Zedong’s Cultural Revolution was such a process of moral transformation. But any deep observation of the Cultural Revolution would reveal that the Maoist method was simply the shibboleth of class struggle. We shall take up the issue once again in section VI below.
Adam Smith, the father of modern economic thought (although officially a professor of ‘Moral Philosophy’), is the most misunderstood and misinterpreted among the eighteenth century intellectuals. It was Thomas Carlyle who first identified the science of economics by the pejorative term ‘dismal science’. It is held, not only by common people but also by eminent economists like J.K. Galbraith, that Carlyle’s conviction was provoked by the dismal ‘stationary state’ of Ricardo-Malthus interpretation of classical theory of economic development. (Galbraith 1977, P.35; Oser and Brue 1988, P.91)
But Carlyle’s vehement attack on the science of economics had nothing to do with Ricardo or Malthus. It came out of two reasons:
1. Carlyle’s Crusade against anti-slavery campaigns and
2. Misunderstanding/misinterpretation of Smithian economics
In 1843, Carlyle described preaching of existing science of economics as ‘Gospel of Mammon’ (Carlyle 1843) and it sprang from a misinterpretation of Smithian admiration for division of labour and capitalistic initiative as the motive force behind progress of human society. Carlyle rightly criticized the capitalistic exploitation of labour, turning the labourers into inhuman robots. Here Carlyle misunderstood Smith who had never appreciated these unethical aspects of capitalism. However, the inherent reason for Carlyle’s hatred of economics became clear only in 1849 when he wrote his anti-Negro and pro-racialist essay in Fraser’s Magazine (Carlyle 1849, Vol.11). Here he first described economics as ‘dismal science’ as it considered that whites and Negroes are not inherently different and both are simply human beings6. John Stuart Mill makes it clear that it was Adam Smith who was the principal target of attack by Carlyle as equality of all races and theory of ‘supply and demand’ were first unequivocally enunciated by him. (Mill 1850, Persky 1990)
The assertion that all men are basically the same can be traced back to Adam Smith’s Wealth of Nations. To quote:
“The difference of natural talents in different men is, in reality, much less than we are aware of; and the very different genius which appears to distinguish men of different professions, when grown up to maturity, is not upon many occasions so much the cause, as the effect of the division of labour. The difference between the most dissimilar characters, between a philosopher and a common street porter, for example, seems to arise not so much from nature as from habit, custom, and education. When they came into the world, and for the first six or eight years of their existence, they were, perhaps, very much alike, and neither their parents nor play-fellows could perceive any remarkable difference. About that age, or soon after, they come to be employed in very different occupations. The difference of talents comes then to be taken notice of, and widens by degrees, till at last the vanity of the philosopher is willing to acknowledge scarce any resemblance.” (Smith 1976, Book-I Ch. 2, P. 120)
Most probably the criticisms of Smithian economics by the followers of Carlyle like William Morris (Morris 1884), John Ruskin (Ruskin 1905, PP. 25-6) etc., sprang simply from misinterpretation. Unfortunately, the misconception and misinterpretation of the Wealth of Nations of Adam Smith had been carried forward to the future generations of thinkers. In this connection a funny rhyme by the Canadian Economist and humourist Stephen Butler Leacock is worth quoting:
“Adam, Adam, Adam Smith,
Listen what I charge you with!
Don’t you say
In the class one day
That Selfishness was bound to pay?
Of all doctrines that was the Pith” (Leacock 1936, P.75; also quoted in Sen, Amartya 1987, P.21)
This misinterpretation of Smithian view (that pursuance of self interest by each and every one is going to bring about equilibrium in a Laissez Faire system) arises from study of the Wealth of Nations in isolation. Smith was basically a moralist and never advocated self seeking as the true goal of human life. (Basu 2000)
In fact, the critiques of Smith have done great injustice to the “Father of Modern Economics” by depicting him as a staunch advocate of unrestricted capitalism. If we look deeply into the basics of Smithian world outlook it would be clear that the above view is simply a superficial understanding of Smith. So let us have a cursory glance at Smithian world outlook.
From the study of the progress of the Industrial Revolution Smith could realize that the ultimate progress of human society depends on the development of industry (and therefore the initiatives of the capitalists), which is free from natural limitations unlike agriculture, and where division of labour can be raised to a much higher level than in agriculture. But Smith was hardly satisfied with the social role of the private sector industrialists and merchants (the capitalists) and the undesirable outcomes brought about by Free Market Capitalism. Most of the allegations against Smith by his critiques are based on the conviction that he was a staunch advocate of the capitalistic system and had moral support for the selfish behaviour of economic agents that made possible the spectacular material progress under capitalistic system. If examined closely it would become clear how unfounded their allegations are.
For Smithian views regarding the capitalists let us examine the following excerpts:
1. “The interest of the dealers, however, in any particular branch of trade or manufactures, is always in some respects different from, and even opposite to, that of the public.” (Smith 1776, Book-I Ch. IX, conclusion, P. 358)
2. “To widen the market and to narrow the competition, is always the interest of the dealers. To widen the market may frequently be agreeable enough to the interest of the public; but to narrow the competition must always be against it, and can serve only to enable the dealers, by raising their profits above what they naturally would be, to levy, for their own benefit, an absurd tax upon the rest of their fellow citizens.” (Ibid. P. 358)
3. “The proposal of any new law or regulation of commerce which comes from this order ought always to be listened to with great precaution, and ought never to be adopted till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention. It comes from an order of men whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even to oppress the public, and who accordingly have upon many occasions, both deceived and oppressed it.” (Ibid. P. 358-59)
From the above excerpts it is quite clear that Smith had no illusion that the spectacular material progress brought about by unrestrained activities of the capitalists would be an unmixed blessing for the human race as a whole. Apart from historical evidences, Smith put forward a theoretical justification too. On the basis of Smith’s philosophical masterpiece, ‘The Theory of Moral Sentiments’ the basic sentiments of man can be broadly divided into two opposite categories: self interest and fellow feeling. All the major sentiments belonging to either of these two categories are assumed by Smith to be endowed to man by Nature. To quote:
“The great division of our affections is into the selfish and the benevolent.” (Smith 1759, VII.II.4)
All human ethics belong to the second category of the Smithian sentiments viz. ‘fellow feeling’. Material progress is brought about mainly by the motive of improving one’s own condition (a motive belonging to the self interest category) and in its full manifestation it becomes the dominant sentiment. To quote:
“It is this which first prompted them to cultivate the ground, to build houses, to found cities and commonwealths, and to invent and improve all the sciences and arts which ennoble and embellish human life, which have entirely changed the whole face of the globe, have turned the rude forests of nature into agreeable and fertile plains, and made the trackless and barren ocean a new fund of subsistence and the great highroad of communication to the different nations of the earth” (Ibid. IV.I.10) but “….is the cause of all the tumult and bustle, all the rapine and injustice which avarice and ambition have introduced into this world” (Ibid. I.III.23)
Capitalistic system opens up endless opportunities for material advancement of traders and industrialists and in their reckless drive towards achieving higher and higher gains, all ethical sentiments, fellow feeling and human values are bound to be swept away unless restrained by some outside force. As regards this outside force, Smith argues that all our notions of moral and ethical senses which as such are helpless in a conflict with self interest may be made effective by converting them into positive laws. The important steps in this regard as described by Smith are:
“It is thus the general rules of morality are formed. They are ultimately founded upon experience of what, in particular instances, our moral faculties, our natural sense of merit and propriety, approve or disapprove of. We do not originally approve or condemn particular actions because, upon examination, they appear to be agreeable or consistent with a general rule. The general rule, on the contrary, is formed by finding from experience that all actions of a certain kind, or circumstanced in a certain manner, are approved or disapproved of.”(Ibid. III.I.95)
The general rules of morality can be effective only if they are framed into positive laws of justice. To quote:
“As the violation of justice is what men will never submit to from one another, the public magistrate is under the necessity of employing the power of the commonwealth to enforce the practice of this virtue.” (Ibid. VII.IV.36)
These laws of justice can be framed also to restrain the harmful activities of the ‘dealers’ (the Smithian term meaning the capitalists and merchants). Smith was by no means an advocate of the ‘laissez faire’ doctrine and he, in fact, was in favour of imposing state regulations on the ‘class’ whose interest, he unequivocally considered, was always opposite to that of the public. This is an effort, though in embryonic form, towards devising an alternative to the free market capitalism. But here he is confronted with an insurmountable obstacle. To quote:
“From the beginning of the reign of Elizabeth too, the English legislature has been peculiarly attentive to the interests of commerce and manufactures” (Smith, op. cit. Book-3, Ch-4, P.517)
Smith was not probably aware that this was quite a natural outcome as the economically dominant class (in this case the capitalist class) also controls the legal system and the government. So how can the government impose ‘laws of justice’ to restrain the capitalist class and thereby make them work in conformity with the interests of the public? It becomes clear that Smith could not devise a way out of the vicious circle, the capitalist-politician nexus. Notwithstanding his incapability to suggest a realistic way out, Smith’s contribution is invaluable as he could correctly identify the inner cause of poverty, inequality and other maladies that inexorably accompany material progress – the baser human sentiment of ‘self interest’.
Once again we are confronted with a stark reality – the apparently indelible primeval vice residing in the innermost recesses of human psychosis and ascribing perpetuity to poverty and inequality. Should we be so much pessimistic? Can’t we make any way out? Let us examine the matter and endeavour to trace out the very root of the evil. This directly takes us to the ancient Indian Sankhya approach to the basic causes of human misery.
The ancient Indian view of human nature is most clearly presented in the Sankhya philosophy according to which human consciousness is a part of material manifestation of Nature and it is the combination of three modes, viz. satva, rajasa and tamasa, endowed by Nature. All these basic modes combine in different degrees to assign different characteristics to different individuals. If isolated in the abstract, unmixed satva pertains to goodness and virtue, rajasa to passion and insatiable desire and tamasa to darkness of mind, obsession and inertia. All our mental and intellectual faculties originate from these three basic modes. (Ballantyne 1885: Sankhya Aphorisms: I.61, I.125-27, I.141, II.27)
The creator is omnipresent and nirguna (having no attribute). But human beings are saguna (having specific attributes) which are of three kinds: tamasika (dominated by ‘tamasa’ mode), rajasika (dominated by ‘rajasa’ mode) and satvika (dominated by ‘satva’ mode). Satvika people are characterized by nobler qualities (like abstinence, self-sacrifice, love, philanthropy, mercy, self-confidence, diligence, composure etc.) whereas rajasika and tamasika people possess various combinations of baser qualities (like greed, envy, hatred, anger, selfishness, lust, idleness, cruelty, pride etc.) (Basu 2001)
The sacred Hindu scripture Gita describes in detail the various aspects of these basic attributes (Telang 1882: Gita: 14.05-09, 14.11-13, 14.16, 14.17, 17.12, 17.18, 17.19 -22, 18.20-39)
Nature fetters the eternal individual soul to the body by the three modes viz. satva, rajasa and tamasa.
A satvika person is free from egotism, seeks knowledge of self and the eternal, performs duties unselfishly and without attachment (i.e. without desiring rewards or fruits of the activities and being unperturbed by success or failure), is full of resolve and enthusiasm.
A rajasika person is activated by material desires (for wealth, power, sensual pleasures etc.) and is attached to his works (too much concerned with the fruits of work), is full of greed and selfishness, egotism, restlessness and excitement over the results of his works. He may undertake austerity, acts of sacrifice and charity, but only to get something in return (revenue, power, social positions etc.) and to make a show off. He cannot distinguish between righteousness and unrighteousness, and right and wrong action.
A tamasika person is full of inertia leading to ignorance, delusion, slowness of mind, carelessness, laziness, inactivity, excessive sleep, vulgarity, malice etc. He performs sacrifices only as a mechanistic ritual, observes austerity with foolish stubbornness, with self-torture or for harming others, and undertakes charity without paying respect to the receiver. His head is full of irrational and baseless knowledge, fear, grief, despair, and he undertakes action out of delusion, disregarding his abilities and loss or injury to others. He is always depressed and procrastinating. He accepts unrighteousness as righteousness and thinks everything to be that which it is not. V.R. Panchamukhi has given a simplified account of these characteristics of the three classes of people (Panchamukhi 2000)
Now let us take up another concept from ancient Sanskrit texts, viz. the concept of ripu. In general ripu means enemy. These ripus in Hindu philosophy are excesses of some basic instincts or reflexes of human mind or intellect. The basic instincts are necessary for our material existence. So, as such they are not enemies. But for beneficial effects they must be balanced and kept under the control of the mind. If they are in excess, they become our enemies or ripus and result in disastrous effects both for us and for the society as a whole. The western scholars often mistakenly translate ripu as sin. But ripus are not sins, rather reasons for sins or vices. There are six ripus: kama (desire for material pleasure/sexual desire/lust), krodha (anger), lobha (greed), moha (infatuation/attachment/obsession), mada (pride/vanity/arrogance), matsarya (jealousy/ envy).
The basic instincts, pertaining to the ripus, can be used for good or bad, but by themselves they are neutral. Sexual desire is normal and good, but sexual obsession is harmful. Controlled anger is also a necessary element that makes us human -- without it we cannot have respectability. Greed is a form of desire -- it can be an insatiable foolish desire or positive desire that can be used as an incentive for progress. Likewise, vanity and pride are necessary for self respect and envy can foster healthy competition. If the basic instincts are kept under control, they are always beneficial, but if they get the better of us, they turn into enemies and ruin us in the short or long run.
Gita considers kama (in the wider sense it means the desire for worldly pleasures), krodha (anger) and lobha (greed) the most serious among the ripus (op. cit.)
“Lust, anger, and greed are the three gates of hell leading to the downfall (or bondage) of the individual. Therefore, one must learn to give up these three.” (Gita: 16.21, op. cit.)
Gita describes how ripus originate from the perverted attachment to worldly pleasures and lead one on to the path of destruction (op. cit.).
“One develops attachment to sense objects by thinking about sense objects. Desire for sense objects comes from attachment to sense objects, and anger comes from unfulfilled desires.” (Gita: 2.62, op. cit.)
“Delusion or wild idea arises from anger. The mind is bewildered by delusion. Reasoning is destroyed when the mind is bewildered. One falls down from the right path when reasoning is destroyed.” (Gita: 2.63, op. cit.)
“A disciplined person, enjoying sense objects with senses that are under control and free from attachments and aversions, attains tranquility.” (Gita: 2.64, op. cit.)
The ripus take various major forms under different modes.
For satvika persons they are fully controlled and turn out benign – they reside in such a person in perfect harmony with ethical living. To him kama, in the narrow sense, gets sublimated by love and associated with birth of children, and in the wider sense it turns into desire for knowledge and wisdom; krodha becomes reserved demeanor that inspires respect in the honest persons, and awe in the miscreants, lobha turns into hankering for getting access of the unknown eternal being; mada turns into dignity, confidence and self respect; moha turns into strict adherence to ethical and righteous living; matsarya (jealousy) gets converted into love, fellow feeling and philanthropy.
For a rajasika person, kama in the narrow sense takes the form of preoccupation with sensual pleasure, and in the wider sense it leads to insatiable craving for power and wealth (by just or unjust means); krodha takes the form of secret planning and conspiracy for taking reprisals; lobha gets associated with achieving all sorts of material pleasures, power, fame etc.; moha makes him always pre-occupied with the fruits of his works and activities; mada and matsarya goad him to desperate and restless activity in order to supersede all his superiors.
For a tamasika person kama is associated with perverse and brutal sexual desire, forceful violation of the opposite sex, incest and unnatural sex behaviour. His krodha is blind and destructive, both for others and for himself; his lobha centers on all conceivable dirty and shabby pleasures – addictions to drugs, alcohol etc. For him, mada leads to false vanity and day-dreaming; moha is full of superstitions, baseless knowledge and inactivity; matsarya burns his soul and goads him to inflict harm to others.
Now let us come down to the relevance of the above concepts for a modern society. Although it is very difficult to isolate persons on the basis of the three modes, as in most of the persons the three modes remain intermixed. Still we may try a broad classification. In a modern society, on the whole, capitalists and businessmen belong to the rajasika category, whereas persons living in luxury on unearned income (rent income, interest income etc.) belong to the tamasika category. The labourers and all sorts of poor people belong to the tamasika category, but for a different reason than that for the rent earning class. For them it is because of abject poverty, oppression, illiteracy and the resultant hopelessness and fatalism. They are in that state because of the opulence of the capitalists and rent-earning class. Here the poverty removal measures and human resource development endeavours become relevant. Without lifting these persons out of the morass of abject poverty, it is not possible to enable them to move on to higher modes. But to this end the first and foremost task would be to infuse some satvika qualities to the business class. As such, in a capitalist system, satvika values cannot flourish among the capitalists and businessmen. This mode may naturally manifest only among the educated and thoughtful persons in the middle class. Satvika persons are visible in all sorts of religious and philanthropic organizations – among fathers of churches, Hindu swamijis and sanyasis, Buddhist monks, Muslim Sufis and fakirs, but they are mostly preoccupied with the religious world and , therefore, not directly relevant for our purpose.
In modern literature approaches to the analysis and removal of poverty have been initiated by educated intellectuals belonging to the middle class. Most noteworthy among them are Amartya Sen, Mehabub Ul Haq and Jean Drèze. Let us take a brief glimpse of their efforts and analyze the efficacy and sustainability of these efforts in the light of our analysis of human nature.
In recent years Amartya Sen’s contributions have assigned a new dimension to the ‘economics of poverty’, especially its ethical aspects. Sen’s major contributions in revitalizing the non-conventional economic thought have been remarkable. He gave a new lease of life to normative economics then languishing under ‘Arrow’s Impossibility’ theorem (Arrow 1951, Sen, Amartya 1970). He also played an important role in reviving the development economics (moribund under the onslaught of aggressive neo-classicism, reemerging with renewed vigour with the up-tide of the process of globalization) by redefining economic development in terms of entitlements and capabilities (Sen, Amartya 1984) and freedom (Sen, Amartya 2000). To quote:
“The process of economic development can be seen as a process of expanding the capabilities of people. Given the functional relation between entitlements of persons over goods and their capabilities, a useful – though derivative – characterization of economic development is in terms of expansion of entitlements.” (Sen, Amartya 1984, P.497)
Capabilities depend, besides exchange entitlement, on provision of public goods (market failure results in no private supply) – health, education, longevity, pollution-free environment, safe drinking water etc.
“But when it comes to health, or education, or social equality, or self respect, or freedom from social harassment, income is miles off the target.” (Ibid. PP.499-500)
Mehabub Ul Haq’s remarkable contribution was in the arena of human development. He was the pioneer of the quantitative measurement of human development (Haq, 1997). The Human Development Indices published by the UNDP are constructed on the basis of ideas originally conceived by Haq.
In some of his major works, Sen and his followers have brought to the fore the role of State Policy and Public Action in preventing the acute manifestation of poverty, viz. famine (Drèze and Sen 1989; Drèze, Sen and Hussain 1995; Sen, Amartya 1981). Their general observation in this regard is that many famines occurring in India during the British period (including the horrible Bengal Famine of 1943) and elsewhere in modern age were mainly due to ‘Entitlement-Failure’ and negative State policy and/or lack of political will.
Sen appreciates the role of the present government of India in tackling famines by suitable public action and appropriate policies. In this regard he emphasizes the role of freedom of mass media and public opinion in a democratic polity as in independent India (which is absent in ‘centrally-controlled’ states like China). To quote:
“The distinction between the ‘collaborative’ and ‘adversarial’ roles of the public has some relevance to this dichotomy between the advantages of political commitment vis-à-vis those of political pluralism. While a leadership committed to radical social change can often inspire more public collaboration, having a committed leadership is not adequate for – and may even be hostile to – the exercise of the adversarial role of the public. Since both the roles have value in combating deprivation, it is natural to look for the possibility of combining the advantages of committed leadership with those of pluralist tolerance. Whether such combinations are possible, especially in the circumstances that rule in most developing countries, remains a challenging question. There is no reason, in principle, why a political system that allows, encourages and helps the public to be active (both adversarially as well as collaboratively) cannot also lead to governments that provide bold initiatives and inspiring leadership. But it is obvious that in practice the actual possibilities are much constrained by social, political and economic circumstances, and the ‘ideal combinations’ are hard to realize, as the history of the world has shown again and again.” (Drèze and Sen 1989, PP. 278-79)
Sen, however, admits that socialist China has a better record so far as tackling chronic poverty is concerned. To quote:
“On the other hand, there is no such relief for the third of the Indian rural population who go to bed hungry every night and who lead a live ravaged by regular deprivation. The quiet presence of non acute, endemic hunger leads to no newspaper turmoil, no political agitation, no riots in the Indian parliament. The system takes it in its stride.” (Sen, Amartya 1984, P.500)
“Finally, it is important to note that the protection that the Indian poor get from the active news distribution system and powerful opposition parties has very severe limits. The deprivation has to be dramatic to be ‘newsworthy’ and politically exploitable. The Indian political system may prevent famines but, unlike the Chinese system, it seems unable to deal effectively with endemic malnutrition. In a normal year when things are running smooth, both in India and China, the Indian poor is in a much more deprived general state than his or her Chinese counterpart.” (Ibid. P.503)
Now, Sen hints at the possibility of combining the advantages of these two contrasting political systems. To quote:
“Whether the disparate advantages of the contrasting systems can be effectively combined is a challenging issue of political economy that requires attention. Much is at stake.” (Ibid. P.504)
In this connection it would be worthwhile to look into the merits of various major forms of political systems as regards ensuring social justice by minimizing poverty, inequality and deprivation. Here the main contenders are centrally control systems (Dictatorship, Monarchy and Socialism) and Democracy.
Dictatorship: Historical experience of oppressive aspects of all forms of non-socialist dictatorial regimes (in the past and at present) has unraveled their overwhelmingly rajasika-tamasika essence. So we rule out this form.
Monarchy: Ancient Indian Texts (especially Manusmriti and Arthasastra of Kautilya have laid down detailed rules and procedures to make an ideal king. (Basu 2005a) Unfortunately, in the recorded history, except Asoka (Thapar 1961; Sastri 1967, PP.201-48; Kosambi 1981, PP.157-65), there is no evidence of the existence of another ideal king. The great Greek philosopher Plato conceived of a Philosopher King (Plato 1901, PP.215-40). As regards his concept of ‘Philosopher King’ Immanuel Kant made an interesting comment. To quote:
“That ‘kings will philosophize or philosophers become kings,’ is not to be expected. Nor indeed is it to be desired, because the possession of power inevitably corrupts the free judgment of reason. But kings or king-like nations, who govern themselves according to laws of equality, should not allow the philosophers as a class to disappear, or to be silenced; rather should they be allowed to speak forth their maxims publicly. Nay, this is even indispensable to both for the mutual enlightenment of their functions. Nor should this process of communicating enlightenment be jealously regarded as a kind of Propagandism, because as a class the philosophers are by their nature incapable of combining into political clubs and factions.” (Kant 1795, Second Supplement: Secret Article Relating to Perpetual Peace). Plato later on abandoned this idea after a bitter experience. So monarchy is ruled out.
Socialism: Like the Indian concept of Ideal King or Plato’s Philosopher King, socialism is also a utopian concept and at the same time satvika in intention. It differs in one respect – unlike the former two concepts the means to achieve its goal is the tamasika ‘class struggle’. This is the basic reason that compelled the USSR, the first and the most powerful socialist state, to revert back to capitalistic path. (Basu 1999) In connection with socialism Mao Zedong’s Cultural Revolution deserves special mention as this exemplifies Mao’s relentless efforts to save socialism.
Mao and the Cultural Revolution: The ideal of socialism, although utopian and based on tamasika means, is satvika in its goal – to abolish the rajasika (and the raison-d’être of all poverty, inequality and exploitation) capitalistic system along with its rajasika culture and world outlook. Indefatigable Mao endeavoured to prevent China from going the Soviet way, although he, too, ultimately failed because of his wrongly chosen means, viz. the Marxist concept of class struggle. Nonetheless, it would be a grave injustice to Mao if we fail to appreciate his historical contribution as one of the greatest warriors against exploitation and injustice. So it is worthwhile to have a look at the Mao’s experience in course of two dramatic episodes in modern Chinese history, viz. the Great Leap Forward (GLF) and the Cultural Revolution (CR).
With some abstraction the main players in these two interrelated episodes may be interpreted in the light of the Sankhya principles in the following manner:
Mao Zedong: Satvika in essence.
Deng Xiaoping, Liu Shaoqui, and the Premier Zhou Enlai: Defeatist and tamasika in essence.
Jiang Qing, Mao’s wife and Lin Biao, the Defence Minister: Power mongering and rajasika in essence.
Red Guards: Tamasika in essence.
The following developments prompted Mao to hastily resort to the CR:
Mao wanted to adopt radical Marxist policies in order to pave the way for a rapid transition of the Chinese economy from a semi-feudal condition to socialism. The Second Five Year Plan (1958-63) was chosen as the starting point of the GLF. Mao, notwithstanding his noble intentions, failed to realize that his methods would not work in a country still dominated by tamasika and rajasika masses, government officials and members of the communist party. The inevitable consequence was miserable failure leading to economic disaster and death of millions of people by famine. Liu Shaoqi, Deng Xiaoping and Zhou Enlai got disillusioned with socialism and opted for Soviet type State-Capitalism. Mao was held responsible for the disaster and he resigned from the position of head of the state (although retained the position of Party Chairmanship). Because of his honesty and dedication, he was still the most revered politician among the masses. So Mao opted to root out the bourgeois world outlook (which, he rightly identified as the major cause of failure of the GLF) with the help of the masses and apparently radical socialists like Jiang Qing, Lin Biao, Chen Boda and Kang Seng. So he planned to launch the so-called CR. He, however, had been obsessed with the wrong notion about the students, peasants and the factory labourers, who were tamasika in essence. He also failed to judge the characters of Jiang Qing and Lin Biao.
Moreover, the declared means of the CR, for the removal of the capitalistic or bourgeois elements from power in the communist party and the government, was the tamasika class struggle. The following extracts from Mao’s directives are evidence of this approach of the CR. (Mao: Selected Works, Vol.-IX).
1. “The old Social Democrats in the past decades, and modern revisionists in the past dozen years or so. . . have formed a group of anti-communist, anti-people, and counter-revolutionary elements against whom we are waging a life-and-death struggle. There is no equality between us and them. Therefore the fight against them is a fight for our preservation and their extinction. The relationship between us and them can never be one of equality; it is a relationship of one class oppressing another — i.e. proletarian dictatorship over the bourgeoisie. The day when the people are happy will be the day when the counter-revolutionaries begin their misery”.
2. “The basic contradiction the great proletarian Cultural Revolution is trying to resolve is the one between the proletariat and the bourgeoisie, between the proletarian and bourgeois roads. The main point of the movement is to struggle against the capitalist roaders in authority in the party”.
To fight the opponents Mao wanted to take help of the students and the masses who could be easily moved by emotional and idealistic preaching. Red Guards (formed mainly with the emotional students) were directed to attack Mao’s opponents. To quote:
“The revolutionary red guards and revolutionary student organizations must form a grand alliance. As long as they are revolutionary mass organizations, they must form a great alliance according to revolutionary principles” (Ibid.).
Mao also realized that without control over the military force it would not be possible to combat and corner the opponents. To win the support of the military force, especially the Peoples Liberation Army (PLA) he forged an alliance with Lin Biao, the Defence Minister with the assurance that he would be the successor of Mao. Mao issued the following guidelines for Lin Biao:
“You must dispatch troops to support the broad left-wing revolutionary masses. Later on, whenever true revolutionaries need support from the PLA, you should do likewise. The so called ‘non-interference’ is untrue. [The PLA] has been involved for some time. I think on this matter you should issue new orders; the old ones should be cancelled” (Ibid.).
Now as regards the first and foremost task of the pro-CR student-mass-army alliance, Mao issued the directive:
“Bombard The Headquarters – My First Big-Character Poster” (Ibid.).
The consequences of the CR was simply devastating – chaos, anarchy, civil war, arson, looting, wanton damage of property and productive resources, killings and all other conceivable manifestations of tamasa. The CR left China in a condition experienced by a land gripped under a horrible cyclone. In course of the turbulent incidents, there were shuffling and reshuffling of power from one leader to another. It turned out to be a power struggle between two radical groups led respectively by Lin Biao and Jiang Qing. With the supremacy of the latter group, Chen Boda, a follower of Lin, was arrested and killed and Lin was killed in a plane crash while fleeing China in 1971. But then the wind took a reverse turn, now against the remaining radicals led by Jiang Qing. Mao died and then Jang Qing, the last supporter of the CR, was arrested in 1976. CR came to an abrupt end leaving China in shambles. (Barnouin and Yuchanggen 1993, Chen 1975, Domes 1973, Joseph et. al. (eds.) 1991, Lee 1978, Tang 1986)
Democracy: Now we are left with democracy, which, from the standpoint of human freedom, is the best conceivable form of government. We have already touched upon Amartya Sen’s views about the role of public opinion and the mass media in ensuring positive changes in the society. We also rest our ultimate hope on this form of government. But the present state of democracy in the world and the global trends are not at all encouraging. The Neoclassical view, based on ‘perfect competition’ and ‘laissez faire’ doctrine and playing the ideological basis of economic policies in the modern democratic countries till the early twentieth century, revealed its serious vulnerability during the ‘Great Depression’ of the 1930s. Keynesian economics emerging out of the bitter experiences of the Great Depression led to an abandonment of the laissez faire doctrine permitting state-intervention in the free-market economies, although to a limited scale. In the newly independent democratic countries like India during the post-war era, pervasive state-intervention in the form of comprehensive planning, control of the private enterprises, pioneering role of the state sector in strategic fields, price control, public distribution system for food and mass consumption commodities etc., became necessary both to break through the vicious circle of backwardness and to ensure social justice. But because of the rajasika and tamasika contents of the political parties and the government officials, both planning and public sector enterprises in these so called ‘mixed economies’ came up against serious hurdles.
Under these conditions, during the late 20th century, there was strong opinion among economists for revival of the free-market economy, completely devoid of state-interventions (Friedman 1980). In the meantime debacles of the socialist countries and planned mixed economies prepared grounds for the revival of Neoclassicism. The process of reversal got momentum with the spectacular communication revolution and ultimately the so called era of ‘globalization’ emerged.
With this backdrop let us look into the efficacy of the democracies in ensuring social justice with progressive reduction in poverty, inequality and deprivations in the new era.
We have already mentioned that Amartya Sen has strongly appreciated the role of public opinion and free mass media in ensuring social justice in the democratic countries. In this context Sen, however, failed to realize that unless the masses and the media men are made free from tamasika and rajasika obsessions, they cannot play the cherished roles. Moreover, the politicians and political parties in the democratic countries are but characters of the puppet-show – the operators are the capitalists, now-a- days, the rajasika Multinational Corporations (MNCs), whose sole mission is to shackle the entire world into slavery. Within the LDCs, the politicians (who themselves are slaves of the capitalists) thrive on slavery of the tamasika masses. This is the democratic world we are living in. In fact, whenever we speak of freedom of press and public opinion in the democratic countries one may pose the question: what roles did the mass media and public opinion play in a democratic country like the USA to prevent bombing in Vietnam during the 1960s and in Afghanistan and Iraq in recent times? The heinous role of the Central Intelligence Agency and the Neo-imperialistic policy of the democratic USA (Ali 2000, 2003; Coll 2001) are enough to make the most optimistic spokesmen of democracy disillusioned.
True democracy could be restored in individual countries and in the world as a whole only if it is possible to inculcate satvika values among the common men and also the capitalists. Unless the capitalists are purified, they would never permit the slaves to acquire satvika values and be free from their clutches. But here we are confronted with a serious problem – it is not possible to effectively inspire the common people with satvika values unless the rajsika character of the capitalists is moderated, which appears impossible as the capitalists would encounter a “Prisoner’s Dilemma” situation here – if all capitalists are imbibed with satvika values, it is well and good, but if not, then the adherents of satvika values would be rooted out by the existing rajasika counterparts.
We are in all praise for the Sen-Haq-Drèze approach for poverty alleviation. But we also emphasize that this is but a palliative and would never remove the deep seated cause lying in human nature. On the contrary, this may make the deprived dependent on outside help and thereby get further submerged in tamasa. Long ago, Rabindranath had warned against this attitude of helping the common people. At the same time he suggested how satvika values could be inculcated among the masses. To quote:
“For this reason, the most urgent necessity in our country is not to place begging bowls at their hands, but to make them confident of their own strength, to make them realize that a man united with others is a complete entity, an alienated individual is but a fragment.” (Tagore 1986).
In course of the above analysis we have endeavoured to bring to the fore the fact that the basic cause of poverty and inequality lies within human psychosis itself, the interplay of two baser modes of living, viz. rajasa and tamasa. The rajasika people fulfill their insatiable greed by keeping the tamasika majority in perpetual slavery. This is the root cause of poverty ever since the emergence of private property. The history of human civilization since then has been characterized by this dualism – the rajasika slave-owners and the tamasika slaves, the rajasika feudal lords (or equivalent classes) and the tamasika cultivators, the rajasika merchants/capitalists and the tamasika wage earners, rajasika leaders of the communist party and the tamasika common people.
In the era of globalization, the rajasika MNCs have gradually been enslaving the population of the entire world, by forcing them to be in tamasika state. Their global investment policies, sales efforts (through advertisement), work culture that is designed to make the employees thoughtless robots, all are directed to this goal.
In connection with the question of way out, we have come to the conclusion that remedial measures, if at all possible, could be undertaken only in a democratic form of government. Unfortunately, modern democratic governments are run by politicians who are simply the privileged slaves of the capitalists headed by the MNCs. So far as the common people are concerned, poverty of the majority is itself a hindrance to inculcating satvika values among them. So the foremost task is to contain the rajasika capitalists by infusing satvika values among them. But under the present circumstances, it appears to be a very difficult, if not completely impossible task.
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The author of this e-Book Dr. Ratan Lal Basu is a prolific writer of books and articles in economics. His articles, published in various journals, cover all conceivable branches of economics. He is one of the few scholars who have done their doctorate degree on the Arthasastra of Kautilya, a treatise on Economics, Statecraft and Espionage Mechanism written in India around 300 B. C. Dr. Basu is an authority on the economic ideas embedded in the Ancient Indian Sanskrit texts and his well-known Book ‘Ancient Indian Economic Thought: Relevance for Today’ has obtained wide acclaim all over the world. Dr. Basu may be contacted at:
Absolute poverty in the LDCs has in recent decades assumed a serious dimension in sheer physical terms and has posed a threat to the lives of millions of people residing in these countries. On the other hand, relative poverty as well as absolute poverty (even if in purely psychological sense) has been the basic source of social tensions in many a developed country. In the global context, poverty among nations has been widening nullifying all the predictions of meticulously constructed growth models emphasizing ‘convergence theories’. So far as the LDCs are concerned, low per capita income combined with extreme income inequality have forced these nations to the precipice of disaster. The development of productive power and knowledge to have command over Nature through agricultural practices changed the situation that existed in the very primitive societies and clan lives. In course of time productive forces, through man’s increasing command over Nature, went on snowballing and at present material production has assumed a spectacular dimension by means of the trinity of science, technology and industrial innovation. Unfortunately human society is still being pestered with the nagging problem of poverty, haply in a more intensified form as compared to the malady as existed in the pre-capitalist societies. Both opulence and poverty have been marching steadily onwards with the latter taking the leading role. The problem of poverty and private property emerged in this world as perfect twins. Prior to emergence of private property, poverty had very little association with social injustice. Poverty arose simply because of lack of material means of sustenance and it was equally applicable for all the members of primitive communities or clans. But with the advancement of methods of production and emergence of surplus value, it was no longer ‘poverty for all’ but poverty for the property less majority and riches for the property owning minority living on surplus values generated by the poor majority – poverty thus got associated with social injustice. Paucity of material means was no longer the basic cause of poverty but the cause lied deep in human psychosis – insatiable greed and resultant leanings of the propertied minority to perpetrate exploitation of the property less majority. Ownership or non-ownership of property also sprang from a basic vice, the cunning and unethical maneuver of the minority to grab all means of production. Karl Marx could, to some extent, recognize this basic cause but erroneously fell into the same trap – sought the solution of the problem through material advancement alone. He failed to recognize that class division, inequality, exploitation and the resultant poverty spring from a deeper cause, the baser and unethical leanings in human nature (which exist side by side with nobler aspects in all human beings baring a few exceptions). Long before the emergence of Marxian concepts, Adam Smith could identify the basic psychic nature of human beings that are responsible for poverty amidst plenty. But he could not suggest any meaningful way out of the vicious circle – the intricately interwoven forces of baser human sentiments strengthening one another to give the unethical entity perpetuity. As regards the basis of human nature, most scientific analysis is to be found in Sankhya, one of the six major philosophies that sprang from Vedic world outlook. But it is questionable how far it is practicable to translate the Sankhya based process into reality to bring about an exploitation-free, poverty-free world.