Why Limited Wealth Possession

Unlimited wealth accumulation is root cause of recession and sufferings

Let me begin with a story.

There was a king who had lot of gold coins. One day he saw, those gold coins were getting mouldy (covered with fungal growth) because of long disuse. So, he spread the gold coins in the sun to dry and a frog picked up one of the smallest pieces. At this, its belly puffed up and its throat swelled up and it began to sing “Why shouldn’t I sing. I am as rich as king”. At this everyone asked the frog “What wealth do you actually have?” The frog spun that little coin around at least 700 times saying, “Am I less than king?”

Another popular story

Once a sea frog came out to enjoy sand. He could hear croaking of frogs in nearby well. He went to meet those frogs to welcome them to vast sea. He saw there was hardly any place in the well and it was filled with frogs. He went inside well to invite them to sea. In response, proud leader of the well frogs said “Is your sea bigger than this well?” The sea frog replied “yes it is”. The well frogs did not accept the fact. After many hours of word battle, well frog agreed to visit sea and was astound to see the vastness of the sea.

Coming back to the topic

PROUT’s first principle states – “THERE SHOULD BE NO ACCUMULATION OF WEALTH WITHOUT THE CLEAR PERMISSION OR APPROVAL OF SOCIETY”.

As per Oxfam report, Wealth of 9 richest Indians is equivalent to bottom 50% of country. If we look at net worth of individuals provided by Hurun Research Institute, anyone can be astonished with wealth accumulated by the handful of high networth individuals. Moreover, if this is the declared wealth or white money, then imagine how much money will be in form of black money.

I want to say that this earth is a very tiny dot as compared to this vast universe. Amassing such huge amount of wealth in this planet- Is it similar to frog who kept a gold coin and was thinking of himself to be rich.  These rich are nothing as compared to this universe and can never be there. Are they like frogs of well? They are considered as wealth creators but they do it for own profit and not for charity. With automated machines coming up, they will create wealth for themselves and not for others. They don’t bother how much others are suffering or deprived of resources because of this uneven wealth distribution. 

I don’t vouch for equal distribution but for rational distribution, such that everyone can meet their minimum requirements. The gap between minimum and maximum salary should not extend beyond a certain ratio like 1:20 depending on the socio-economic unit’s wealth distribution. If minimum salary is fixed at Rs 20000, then maximum salary / income per month should not be more than Rs 4 lakhs. There must be efforts to minimize this gap further and upper limit should only be increased as minimum salary level is increased not the vice versa. The intellectuals or meritorious deserve to be rewarded else innovation will decrease or disappear but there must be a check to avoid increasing disparity. Of course, there should not be any tax on income or income tax, as wealth is already being restricted.

May be owl has been shown as transport of Goddess Lakshmi because it is foolish to run after material pleasure and wealth when human body can be used to attain psychic and spiritual pleasure. Owls cannot see during day light and the people running after wealth become blind towards humanity. Running after physical things is underutilization of human frame. Businessmen look for maximum utilization of resources but in this case they don’t realize what value they are letting off go.

Money as power

In today’s world, money is synonymous of power. This power is leading to corruption and such pathetic condition of society. If common people support for economic democracy, the politicians will not have economic decisions power and corruption can be minimized. Read my blog on Economic democracy here.

 

Aparigraha

For a healthy progressive society, its better, people should move in unison and follow the principles of Yama and Niyama which are well defined that individual’s conduct should not harm the collective psych of society. One of these principles is Aparigraha (non-greed) which means; to avoid accumulating material possessions more than required. By accumulating more and more, we may deprive others of the resources.

It is human nature to have something preserved for future or contingency. So a decent limit of possession should be allowed but not that much, what we are witnessing with handful of richest individuals. If we are able to provide affordable or free healthcare and education, people’s concern for contingency will drastically reduce.

I remember a story where a person ordered a lot of food and paid money but he wasted most of food. While he was leaving, the person serving him told, politely but firmly, that money belongs to you but resources does not belong to you. So, we should ensure a holistic system that resources should be available for the utilization and welfare of all and money should be the medium for it only.

Psychic and Spiritual wealth

Psychic and spiritual wealth are unlimited. Psychic wealth is which gives us mental pleasure. If a person buys one bread, it can be eaten by him only. But if things like music is there, it can be shared with many people. So, physical wealth possession should be constrained that everyone can meet their necessities.

Humans are psychic beings. Eg- If a person insults you and then gives bread to eat, you will not eat but a dog would accept it even if it has been insulted. Therefore, humans should progress more towards psychic and spiritual pleasure.

Spiritual wealth is feeling proximity to God. This is also unlimited though I have not experienced it completely :) 

 

To conclude, I will say; Mother Earth produces plenty to nourish its children as a mother’s breast produces sufficient milk for her child.  It is our greed and mismanagement of resources that we are not able to feed everyone and live happily.  Physical wealth at any given time is limited. Uncontrolled accumulation by few persons deprives others of their due share. Hence, a ceiling on wealth is a necessity.

To know more about fundamental principles of PROUT, visit- https://prout.info/five-fundamental-principles-of-prout/

Why fast rolling of money is needed

I will start with a story. There was a little town where people were going through tough times. Everybody was in debt and lived on credit. A rich tourist came to a hotel in that town. He did not like the hotel much but still agreed to give him a deposit of 100 dollars so he could inspect the room. While the tourist was inspecting the room, the hotel owner paid those 100 dollars to the butcher from whom he was buying meat for his guests. The butcher in turn rushed to grocery owner from where he purchased his grocery. The grocery owner had once arranged for some guests of his to stay at the hotel and had to repay his due. He immediately went to the hotel owner and paid back those 100 dollars.

The tourist, after inspecting the room carefully, said he did not like it and wanted his money back. The hotel owner returned him his 100 dollars as this money had come back to him.

None of the people in town had money but still they managed to repay their debts. Why? Because the money exchanged hands quickly. Had the money being sitting idle at some place, some of them would still have been in debt in the above story.  The key point is money should be in circulation as much as possible.

The present capitalist system allows limitless accumulation of wealth, which is mostly unutilized. Further, money stashed for various reasons like evading taxes or transferred to tax heavens or other foreign countries is generally either not utilized or utilized for the country, where it is hoarded.

Also because of lopsided wealth distribution, most of the money is not in circulation. As per an Oxfam report, the gap between rich and poor is increasing every year. 1% of rich Indians hold 73% of wealth in India. A rich person will not spend money beyond a certain limit or requirements. A poor person will not typically buy his most basic everyday necessities with a loan. When more people have a decent amount of money, the higher the expenditure and the more the economy will therefore prosper. Some people argue that the wealthiest people create jobs to poor. In today’s scenario of prevailing jobless growth, however, the richest people in India are making more money by investing in machines without giving more employment to people. So, even if givernment thinks of taking money from Reserve Bank of India and pumping in the system, it wont be giving much employment to people.  Supply side economics can't work in current scenario.

Whilst I  don’t discourage use of machines, distribution of wealth should also be borne in mind. Profits should be shared more widely rather than being concentrated in the hands of a few.

In the present day centralized economy, goods are produced in bulk. For example – people in some states of India are getting money by selling their natural resources. The money earned from it goes to purchase products manufactured in different countries like China. It has gone very far now and with growing imbalance of trades, it is less likely to come back to your local community.

Just to leverage economies of scale, local economies deprive themselves of money that, if circulated in the locality, could have led to an aggregate benefit for the community. When consumers decide to pay less for a product (especially the imported ones) they do so taking account of the immediate cost savings; but what is not calculated is the spillover benefits of buying local.

At the national level, we further take loans from certain countries and then pay them interest which is collected from people’s pocket in form of tax. If we avoid this trap, our tax should decrease. What is lost due to missing the better deals enabled by economies of scale, we should benefit in terms of tax. 

That’s why a decentralized economy is needed today. PROUT (progressive Utilization Theory) propagates concept of 'Economic Democracy' which will be achieved by adopting the principles of a decentralized economy. It suggests to form different socio economic units and circulate the money within that socio economic unit. These socio-economic units will be based on common economic problems, common potential, culture and expression of people, sentimental legacy. Each socio-economic unit should be made self-sufficient to the extent possible so that it has to import minimum products. Even during import it should be kind of barter trade so that balance of payment is maintained. Import should be offset with export as much as possible. 

I would like to conclude with, governments across globe should ensure the movability or mobility of money as maximum as possible. Their economic policies should be such that money reaches hands of many rather than remaining concentrated in hands of few. Every region should be supported to be self-sufficient. It will ultimately strengthen the overall economy as well. 

Looking for your suggestions – Should we have completely digital cash based economy so that people don’t hoard physical cash? This will keep maximum money in system.

It could be somewhat better but still it will not solve the problem of inequality.

Why Economic Democracy

Why Economic Democracy?

Ever wondered why the people in places with rich natural resources the poorest or are engaged in some conflict? Why the people of states like Orissa, Chhattisgarh, Jharkhand in India are working as wage labors outside their states even though they are so rich in natural resources? Why are African countries in conflict even though they have so much vast resources? Why are Gulf countries in conflict even though they have huge reserves of oil? Why Ukraine is in conflict? Why Qatar was blamed as supporter of terrorism when natural gas reserves were found with them? Is there really a conflict of religion or is it more about grabbing natural resources? 

Countries pioneer in industrialization understood they need more and more natural resources to earn more profit. More profit leads to more accumulation of wealth and more objects of physical enjoyment. And from thereon colonialism started to grab these resources. Be it through hook or crook, they ensured to collude with power in different countries and capture their resources at cheapest price, process them at their factories and sell back to these people at higher rates. This way they made profit. With this capitalistic system, it became a system that government will have right on all natural resources.

Now in capitalistic system, big industrialists or riches made politicians to dance on their whims based on power of money. Capitalists fund these politicians to win elections by hook or crook. Whatever it takes, whether by threatening media and other protestors, or buying the people, manipulating them or getting the protestors killed. These capitalists like to place politicians at the helm who gives them maximum benefit. These crony capitalists captured the resources in name of license fee. In turn, people were displaced from their homes or paid a paltry amount to give up their land.  

Nature has been kind enough and has given natural resources in most of the places so that humans can make their living. But it is human’s greed that we are trying to capture everyone’s resource without caring about the people there. They are allowed to exploit the nature as much as possible for their profit and now people are seeing impact of it in global warming, ecological imbalance and other health hazards.   

In communist system, everything belongs to State and they use it as per their whims. It is state which takes all decisions and individual liberty is minimal. People are badly oppressed. In one of the communist country, their own people are not living good life but that country is giving loans to other countries and trapping them in debt to rule over them so that it can get their natural resources. 

What should be done to address this?

That’s where Economic Democracy is important. People need to have their rights on natural resources for the areas they belong to. They should have usufructuary rights over resources like forest, minerals, mines and ores etc and it should not be partitioned to be sold. They should collectively decide how to make finished products of it and then they can export it or consume it. It has to be done in controlled manner to preserve balance with nature and government should be helping them in setting these industries. Economic decisions for resource utilization rights should be with local people rather than government giving rights over resources to their pet friends/ industrialists / financers. There has to be standardized system to curb misuse of the system.

With current political system in India, taxpayers’ money is wasted at whims of government. They introduce various schemes in name of pro-poor. Most of these are to make money for themselves, generate fund for their party or to win seats in next elections. Someone promises that he will bring all black money stashed in foreign banks and wins elections but after winning election, nothing is done as they receive funding for party. Some will announce lucrative schemes like free travel for women. Someone announces free monthly basic income for poor. Do we really need such schemes?  Are we looking for free things or better quality of life? Shouldn’t we aim that everyone gets sufficient opportunity to make their own living instead of living on government doles? People are dreaming that present political class will do good for them. In today’s world, this is not going to happen as there is party pressure to bring funds for party and fill their own pockets. People will have to shun this “expectation from political government” mentality and take collective decisions for their benefit.

In today’s scenario, first contract is given to construct new road by breaking old road which still has some decent life available. Once the road is constructed, it will again be broken to construct drinking water pipeline. Again the road is repaired and it will be broken to put drainage system. It is just loot of public money to fulfill their own pocket by receiving kickbacks for every contract. These kind of decisions should be at the lowest level planning body and it should be very transparent mechanism.  Technology has evolved a lot and transparency is not difficult if one wishes. People can vote for economic decisions in their area. Technology can play big role here.   

Comprehensive solution for Economic Democracy 

PROUT (Progressive Utilization theory), propounded by Shri PR Sarkar is a socio-economic theory which explains how economic democracy is important and will give more employment to local people based on decentralized economy. It discusses about planning at lowest level for development. In today’s world plans come from top but the problems of various areas are different. Government tries to force one plan for every state. There are some areas which have problem of flooding, some areas are hilly and hence don’t have sufficient water being stored.

People with common economic problems and cultures need to be united. Proper plan should be chalked out by the intellectuals (social workers, academicians,  having good knwoledge of flora and fauna) amongst them to uplift their condition rather than depending on corrupt politicians. 

This issue is vast and will try to cover bit by bit in other posts to help develop a comprehensive understanding of the subject.