The Devil of Economic Fundamentalism

by Javed Jamil

must be explained that the sexual development and the desire to have sexual relations are normal part of life. But they must be told in unambiguous terms that there are certain boundaries for this, that these boundaries are essential for the development of healthy families and peaceful societies, and that the violation of these boundaries is responsible for several diseases. They must be told in detail why marriage is the only correct way to satisfy sexual needs. As marriage brings certain responsibilities, one must wait till one is competent to shoulder these responsibilities; but if one cannot keep chaste till that time, one must choose to have matrimonial alliance rather than indulge in fornication. They must also be told about the medical, legal and social implications of sexual misdemeanours on their part.

  Moral education must not end with the end of the professional or academic courses. It must continue even during services and all employees must be encouraged to join moral training classes. Half an hour daily for moral and spiritual enlightenment will serve the purpose remarkably well. This will ensure a better life and will be quite beneficial in overcoming various forms of stresses. It will also strengthen their resolve to live peacefully with the members of their families, and those of society, and will curb any violent or criminal instincts in them.

  Democratisation of Economy

  The economic fundamentalists have not only been busy in generat­ing wealth by commercialising even those activities that were not meant for commercialisation, and by creating conditions often at the cost of healthy, family peace and social equilibrium, favouring the sales of their products; they have also taken every possible step to monopolise wealth. They have achieved this by

  a)giving more importance to economics than any other department of social life,

  b)establishing a banking system that puts at their disposal colossal public money with which they generate huge profits, while giving virtually nothing to the real owners of that money,

  c)establishing stock exchange that attract the public money at much less risk and conditions than the banks,

  d)supporting a tax system that enables them to part with the least possible portion of their possessions,

  e)maintaining an infla­tionary trend which enables them to recover most of the money they have to pay as taxes or interests (f) insisting on increasing privatisation that helps them expand businesses,

  f)projecting misleading statistics and criteria of development,

  g)changing the taste and perceptions of the people through steady campaigns.

  In order to crush economic fundamentalism it is, therefore, mandatory to take steps ensuring that more equitable distribution of wealth takes place, and the economic development does not create health, family and social problems.

  The importance of money lies in the fact that it is needed for a comfortable healthy and peaceful life. But, if instead of achiev­ing this, it begins to destroy these very objectives, it no longer remains a boon. It is, therefore, essential that, while planning the economic growth at any level -- individual, family, national or global, these objectives must never be lost sight of; any econom­ic activity that creates serious hazards to health, leads to disintegration of families or promotes societal tensions cannot, and must not, be permitted. The economic planning must entail the truth that man is neither a machine nor an animal; and human beings have a propensity to misjudge; they are selfish, and tend to be carried away by the short term gains. Society, and therefore the government must keep in mind human strengths and weaknesses in taking various measures. The role of the government in all the affairs including the economic must neither be that of a dictator nor that of a helpless spectator. It must act as a perfect guardian who grants sufficient freedom to his wards, but is alert enough to see that this freedom is neither misused nor becomes dangerous for their own lives. The government while allowing the economic freedom must see that its benefits are shared by the people, and are not misused by the vested inter­ests harming the interests of the common people.

  The economic policies of the government play a crucial role in establishing the direction of national economy. One of the most important functions of the government is to levy and collect different forms of taxes. In a world ruled by the economic fundamentalists, it is hardly surprising that the fiscal policy of the government is less inclined towards the common people; the indus­trialists are the major beneficiaries.

  Before entering into a discussion on the relative merits of various taxes that are in vogue today, let us spell out what the aims of taxation must be. The taxes are aimed at generating enough revenue for the expenses of the government, and to sustain an upward movement in the national economy. Ironically, however, the tax-structure, that is popular these days, seems to punish those activities that are good for economy. Taxes must ideally be imposed only on such activities as retard the process of economic progress. For a good economy, it is essential that the people must earn as much as possible, and must spend most of their earnings. It is a travesty of economic thinking that the taxes be imposed on the incomes, the sales and the consumptions. Impos­ing tax on income means that, for evading the tax, which is the tendency of the majority of people, they would either have to reduce their incomes or conceal them. Both ways, it is hazardous for the national economy. As a result of the people resorting to the former option, the national income would show decline, and as a conse­quence of their choosing the latter option, black money would be generated; a big portion of this black money would get convert­ed into immovable assets that would no longer be a part of the economic activities. What is, in fact, the worst thing for a coun­try is the transformation of money into assets, as it removes the money from the ongoing process of circulation. This, coupled with inflation, further widens the disparity between the rich and the poor. The fiscal policy must propel the rich to share the fruits of their wealth with the common people, and not vice versa. It can be achieved only by exempting the income and instead, taxing the assets. Here, distinction has to be made between the assets and the wealth, for there have been taxes on wealth in certain parts of the world. A person's wealth includes all that he owns including what he has invested in business. The assets, on the other hand, at least, for the purpose of taxation, must comprise only the properties, materials and cash that are not part of any business activity, and whose values increase, remain constant or decrease slowly over a long period of time. The cash kept in the banks should be deemed as investment and not asset. The assets may thus include the bungalows, plots, precious metals, jewellery, cash kept in private safes, costly items like cars, golden watch­es, VCR's Video cameras, costly furniture, carpets, and other durables. For each item, a taxable limit must be fixed in accordance with the conditions prevailing in respective countries. Similarly, the rate of taxes may be modified form time to time.

  For instance, in India, Rs 100,000 may be the limit for tax on a house, Rs. 25000/- for jewellery, and the first car owned by a family may be exempted form tax (except a de luxe car). A cash of Rs. 20000 may also be allowed to be kept in safe for emergency use.

  The replacement of the income tax by the assets tax will have far-reaching consequences on the economy. First, people will no longer have to conceal their income in order to avoid taxes; they will have no hesitation in depositing their money in the banks or investing in the stock market. Secondly, people will find it less profitable to create assets. They would prefer to invest, either directly, through their own enterprises, or through the banks and the stock exchanges. It would be doubly advantageous; it would save the assets tax, and would also increase their income Thirdly, with the sloping demands for land, houses, gold and precious items (because they will be taxed), the prices of these items will show a downward trend. In fact, the inflation­ary trend will generally be in check. Fourthly, the rich will prefer to use their own money rather than take loans from the financing agencies, for it would be more expedient as well as beneficial. The less privileged will have greater chances to get their applications of loan accepted.
Fifthly, with the generous supply of money, the rates of interest on loans will tend to decrease. Sixthly, with the houses available at lower prices, the middle class and the poor will have bigger opportunities.

  Another tax that must be introduced for strengthening a healthy economic system is Production Tax. Production tax can be imposed on the companies and the agriculture. It shall not be in the form of money but in the form of products. 5-10 percent tax may be levied on all the produces of the companies and the land, i.e. 5-10 percent of the items produced shall have to be handed over to the government. Thus the government will have a big depot of the essential and consumer items produced in the country. These may then be distributed through its public distribution channels, either free of cost to the extremely poor, on concessional rates to the workers, the employees and the middle class people, and as incentives and awards to those achieving distinctions in the field of research, teaching, police, military, administration, arts, sports, literature, service to the poor and the underprivileged, health, justice, etc. Production tax will greatly benefit the poor without