The Devil of Economic Fundamentalism

by Javed Jamil

virtue of sympathy of sharing the feelings of others”. He attempted to unveil the selfish face of the businessmen by stating that “it is not from the benevolence of the butcher, brewer, and baker, that we expect our dinner, but from their regard for their own interests”. Despite Smith being an advocate of capitalism, he was quick in denouncing the self-interests of the merchants and manu­facturers. He stressed that “profit hunger conflicts with public interest”. He went as far as defining the monopoly as “infamous covetousness.....which does not shrink from terrorization and crime”. He remarked that “people of the same trade seldom convene without their entertainment ending in a conspiracy against the public or a scheme for an increase of prices”. He vehemently pleaded for the reconciliation of private and public interests. He judged that there were two price theories and out of the two only the one for competition was a part of the system and the one for monopoly was only a foreign body. He lambasted the desire of man to “reap where they had not sown”. He had rightly described the joint stock companies as doing business on other people’s money. But Smith’s concern for the people was unfor­tunately not shared by the latter economists. Malthus reinterpreted nature and reason and was cruel enough to draw the conclusion that “poor are themselves the cause of their own poverty”. Thus he exonerated the capitalists of the charge that they were re­sponsible for the plight of the poor. Several writers have argued that Malthus’ comments were aimed at appealing to the poor to improve their conditions by their own efforts. They forget that in the world of exploitation there have to be the exploiters and the exploited and without exploiting others one can hardly improve one’s condition; and if it is so, it is impossible for all the people to become rich. What is however possible is the transfer of poverty from some individuals to others. It was also Malthus who was responsible for the development of the idea of excessive population growth, which has lately become the greatest tool in the hands of the economic fundamentalists to absolve them­selves of all the responsibility to improve the conditions of the poor and also to divert the flow of money from the agricultural producers to the industrialists. Malthus had also emphasised the necessity of a social class of people who were in the habit of spend­ing their money.

  The first indication of the desire of the manufacturers and traders to globalise economic can be noticed in the Manchester Doctrine which achieved fame in 1846 when Corn Laws were dissolved in the UK. The proponents of this doctrine, also known as the Vulgarized Theory, expected that the spread of free trade would lead to “diminution of the importance of political borderlines, integration of the several national economics into one worldwide economic system the constituent parts of which would be not the national economies but the private business enterprises partici­pating in production and trade, and world peace resulting from international intercourse and from the impossibility of waging war in conditions of over-increasing mutual dependence." Bastial introduced the concept of service to the consumer as the explana­tion of any kind of income and thus gave a new voice to exploitative practices under the name of laissez faire. Fredrich Last, on the other hand, was sharply critical of free trade. He gives an argument that speaks volumes of his understanding of the exploitative tendencies of the merchants. He lambasted free trade as a conspiracy by the special interests posing as the general interests. He also emphasized that industry was not a natural growth and it was the creation of luring men who change in his­tory. From among the early socialists, Rodberus drew a historical conclusion which he gave as economic explanation of imperialism saying that imperialism was nothing but the use of military power of the national state to subjugate pre-industrial countries and capture their markets.

  Marx, the most known socialist of the history, built up his revolutionary economic theory against capitalism. He concluded that “accumulation of wealth at one pole.... (meant)...at the same time accumulation of misery, agony of toll, slavery..... at the opposite side.” The members of Historical School too opposed the policy of laissez faire, and insisted upon the need for governmental intervention. They reckoned that state alone was competent enough to secure for the people a justice which is impossible to achieve by pursuing the policy of laissez faire. They however had no inkling of the fact that the economic fundamentalists had developed plans even to manoeuvre the governments. Even if the right of state to intervene remained, at least in principle, it would intervene only in a negative way because the politicians would not ignore the interests of their masters in the industry.

  Marx had accepted labour alone as the genuine income, and alto­gether disclaimed profit or capital. The neoclassical economists rediscovered the classical principle that capital was “previously done labour” and explained that capital was land and labour employed for deferred ends. The earlier neo-classicists stressed the need of an equilibrium in economics which denoted the coin­cidence of the maximum satisfaction of the individual with that of society. But later the equilibrium was reduced to the satisfaction of the individual. The German economist, Heirich Von Stackelberg proved that due to imperfect competition, “if the economic world disintegrates into a wasteful struggle of monopolies without a spontaneously integrating force, then the force of state must be called upon.” He regarded this to be a Fascist form of economics and suggested that “order through liberty” would have to be replaced by “order through force”. The time had arrived, he emphasised, when it must be recognized that the concept of a system of monopoly was the very negation of everything economics stood for.

  The economic theorists who explained the interests of the busi­ness class in a better way continued to be glorified. Wisksell was the first after 150 years to establish a correlation between the theory of interest and that of money and defended the tendency of businessmen to demand easy money. He argued that the “natural rate of interests” was that at which the available supply of capital was easily absorbed by those seeking funds for invest­ment. Keynes, one of the most acclaimed modern economists, pointed out that saving was dangerous for economy; for instead of au­tomatically increasing investment, it was in itself a reduction of effective demand.

  The present economic system has travelled a long way to establish a hold of the economic fundamentalists in the world. It can be summed up that this system is mainly based on the creation of demands through whatever means possible - disinformation, high-pitched advertising of the positive aspects of the products, reconditioning of tastes and utilisation of human weaknesses. Terms like "consumerism" and "capitalism" too are in fact deliberate creations of the economic fundamentalists. By blaming consumerism, they want to shift the blame for the current socioeconomic problems of the world on the common people. They seem to suggest that, if they are selling consumer items and are earning high profits out of it, it is simply because the people are becoming increasingly inclined to use these items. Had there been no demand, they argue, how they could market them. They ignore the fact that the demands, as mentioned above, are not always natural; more often, they are artificially created. It must also be clear that the demands are not always genuine; many of them are based on covetousness and are in total disregard of their impact on the surroundings. All demands therefore need not be met with. For example, if there is demand for destructive weapons, would they be made available in the open market; if there is a demand for poison for the sake of killing others, would it be made available to whoever seeks it? For most of the supplies made by the market forces, no demand was in fact made by the people. The truth is that the majority of the people do not even have any prior knowledge of what would be supplied to them in the coming future. The economic fundamentalists study the weaknesses of human beings and then exploit them in creating demands. And after the creation of demands for a certain item, they attempt to monopolise its market by popularising a specific brand.

  Similarly, to blame capitalism is also erroneous. It also provides the economic fundamentalists with a tool which they use with tremendous effect. They can say that they are earning prof­its, even if
somewhat on the higher side than is expected from them, because they invest the capital. Without capital, they assert, production is not possible and, therefore, they deserve profit for that. It is now the right time to tell them that if capital is important for production labour is no less essential, Furthermore, if capital is a “previously done labour” and is therefore, entitled for profit, why is the 'current labour' enti­tled only for wages and not for profit. Still more important is the fact that even the capital they boast of is only partially theirs; a large portion of it also comes from the people, either through banks or stock exchanges. They may of course be entitled to some additional gains for their entrepreneurship but the importance of professionals, the skilled and unskilled labours and the money of the people cannot be denied; without them, entrepreneurship would not have any value. Justice, therefore, demands equitable distribution of profits among all those who contribute in production.

  Thus it can be said that the development of