Economic crisis and opportunity for a good life

back to issue

THE financial tsunami is threatening to snowball into a full-blown economic crisis. In the age of globalization no one is immune and the crisis is more or less impacting all countries. Although oil prices have fallen recently, in the longer term they are bound to rise, leading to a renewed energy crisis. We have already seen the impact of the alarming rise in food prices and food shortages, especially in the poor countries. The climate crisis is looming large on the horizon and according to an overwhelming number of leading scientists, global warming and climate change is imminent. At the same time modernization, individualism, unmindful economic growth and opulence marked by hedonism and consumerism results in anomie, loss of meaning, depression, instant gratification and green house gases. This trend could be called the crisis of meaning and true happiness in life. All these apparently differing crises are inter-related and mutually reinforce each other.

The collapse of Soviet communism at the end of the eighties has found an echo in the economic crisis of capitalism today. In both situations, far too much power was concentrated in a few hands which were both unaccountable and operated without transparency. Those at the helm inhabited a financial fantasy land, playing with numbers wholly removed from productive economic activity. Karl Marx described commodity fetishism as the alienation of the worker from the product of his work and its social use. Similarly, we can talk about finance fetishism which is disconnected from productive activity and its social use.

John Keynes, during the great depression of the 1930s, noted that markets, especially financial markets, were to be blamed for their inherent inability to distinguish between ‘enterprise’ and ‘speculation’ and for their tendency to be dominated by the activities of the speculators to a point that ‘enterprise becomes the bubble on a whirlpool of speculation.’ This led to the level of employment and output in the economy, and thereby the livelihood of millions of people, becoming dependent on the whims and caprices of a bunch of financial speculators, ‘a by-product of the activities of a casino.’ Sounds so familiar today but no lessons were learnt. Keynes, though not a socialist, advocated socialization of investment or state intervention to ensure full employment. Amartya Sen too points out that while markets may be good for managing demand in the economy, they are inadequate for social and human development.

We cannot go back to Soviet totalitarian socialism but at the same time the market fundamentalism of Reagan and Thatcher too is now relegated to the dustbin of history. Without being imprisoned by dogmas and rigid ideologies we have to find a healthy mix in favour of the poor, the environment and for well-being and human development of all – perhaps akin to the Scandinavian countries. Markets and corporations have to be democratically regulated, made accountable and socially responsible. Second, integrated globalized economies are no more the model. Globalization needs to be selective and democratic. Multinational corporate and IMF-World Bank led neo-liberalization has also to be made accountable to a global democratic process, including all stake holders. Speculative finance and equity markets should be taxed (to be used for social development and aid to poor countries) and not be allowed to work as casinos.

Andrew Simms of the New Economic Foundation suggests that the first shift might be a radically different approach to public spending. Now that they have seen their governments spend eye-popping sums of money to get out of a crisis, should not voters demand similar largesse to solve other pressing problems? For decades, politicians have told constituents that there simply isn’t sufficient cash to pay for, say, the £3 bn that would be needed to halve child poverty by 2010, or the annual £8 bn it would take to get 20 per cent of our energy from renewable sources! Stated thus, the rhetoric of public discussion on spending could change drastically, now that voters’ patience for arguments of prudence has evaporated. Voters may well ask that if governments can find the money to clear up the mess left by a few greedy fat cats, surely they can find the paltry sums for the needy.

Young people with brilliant minds who graduate from top business schools and enjoy huge pay packets are narrowly focused on short-term profits and targets and have little concern for ethical business, social responsibility and a wider horizon. The present education system is only good at producing bright minds to make the bad system work more efficiently. What they do not teach at the Harvard Business School is how to cultivate a ‘good business’ heart and wider ethical perspectives.

Opportunities for new modes of thinking may arise when old dogmas fade away. For example, there can be shorter working weeks as people accept that they will earn less and consume less; work may be shared so that there is less unemployment. Less work and less income may be compensated by more time for family, friends and leisure. Less consumption and production may mean lower economic growth but may possibly be substituted by improved quality of life in terms of relationships, engagement with the community and less expensive but meaningful leisure activities. Consumerism may be replaced by mindful consumption so that the environmental depletion and pollution can be halted.

Economic standards, particularly in the West in the last fifty years (and recently elsewhere), have grown enormously but without a corresponding increase in happiness. This is only partly due to greater reporting of mental health problems. Most studies show that after a certain comfort level, further increases in economic standards leads to diminishing returns in terms of happiness.

Individualist hedonism and consumerist lifestyles inspired by some norms of western culture, corporate globalization and advertising hype, now widely emulated around the world is leading to the rapid depletion and pollution of the environment. At the same time the pursuit of aimless affluence causes the disease of what has been called ‘affluenza’, where a life of high stress, instant gratification, breakdown of community and family and lack of meaning produces depressive modern angst. The solution of the economic and environmental crisis is deeply connected to a simpler but better quality of life and happy relationships rather than on having larger quantities of products. Redefining development and progress in terms of a harmonious relationship with nature as well as focusing on wellbeing and meaningful happiness rather than on GDP, economic growth and stock market index, is the key.

This is precisely what the New Economic Foundation in London is advocating with its Happy Planet Index. The Happy Planet Index combines measures for sustainable use of natural resources with indicators for a long and happy life. On the basis of its findings, the foundation argues that to live a happy and long life one does not have to consume natural resources extravagantly, but that we can find fulfillment through non-economic factors like quality relationships and community engagement. Similarly, Positive Psychology proposes good personal and social relations, doing fulfilling work through excelling in what one is good at and finding meaning through larger and altruistic purpose.

Many wise people across cultures have described their peak experiences as occurring while communing in or with nature or just being in nature. Connecting with nature in a sense connects one with one’s true and harmonious self which leads one to be at peace and at ease with the world. Peace and harmony within is deeply related to the sustained balance in the ecology of nature. Arne Naess, the Norwegian philosopher, maintains that the ‘deep’ satisfaction we receive from close partnership with other forms of life in nature contributes significantly to our life quality and well-being. Our larger ecological self, according to Naess, deserves respect as well. ‘Self-realization’, in other words, is the reconnection of the narrowed human individual with the wider natural environment.

Food shortages and rising food prices have become major issues today. A large-scale switch to organic agriculture could, in fact, feed a growing world population while decreasing environmental destruction. That’s the conclusion of a new report by Danish researchers, presented at a UN Food and Agriculture Organization (FAO) conference in May 2008. New methods can increase production in organic farming up to 40 per cent compared to traditional organic farming. Large scale farming and demand will make organic products cheaper, especially if environmental costs and benefits to health are included in the cost-benefit analysis.

A survey of literature on well-being, cross-cultural human values, psychological assessments, and social indicators by the Oxford Poverty and Human Development Initiative reveals the following common features: needs for survival, work and leisure, knowledge, relationships, empowerment and participation, identity and creativity, spiritual and self-fulfillment. Some years back, the King of Bhutan suggested the idea of Gross National Happiness (GNH). It represents a general aspiration towards environmental conservation, culture promotion, equitable growth, community living and emotional well-being. Recently Richard Layard, Professor at the London School of Economics, argues in his book Happiness: Lesson From a New Science, that public policy should be devoted to increasing happiness rather than wealth or success. Similarly, Paul Martin in his book Making Happy People, proposes how we can bring up our children to be happy because happiness is arguably the most important thing in life.

According to the findings of Positive Psychology, the Dalai Lama and some social scientists whose conclusions have been summarized in the book: Why Good Things Happen to Good People, altruism/compassion, is twice blessed. It helps the receiver as well as the giver who gains in happiness. Caring and sharing, instead of self-centred economic status, leads to more humane and ethical well-being. It is no coincidence that Denmark is reportedly the most equal as well as the happiest country. A more equal and a caring society also tends to have fewer social tensions and conflicts. Of course everyone, especially the poor, have the right to raise their economic standards to a comfortable level.

The countries of Scandinavia have consistently achieved very high ranking in terms of human development and well-being. Denmark, as the most equal and happiest nation, has already been noted. Norway is at the top of the gender-equity scale. Scandinavians enjoy a very high level of trust and peace and environmental care in their societies. They score high not only because they are homogenous societies with little history of wars and with a high standard of income, but also because they have charted a humane and caring way to overcome the ills of both capitalism and socialism, where redistribution and human development is as or more important than growth.

The slogan for our times is not globalize, but globalize for what? The financial and economic crisis, climate crisis, dependence on fossil fuels, and crisis of agriculture and food offer unique opportunities for redefining development as a life of lower consumption but higher well-being and happiness. It opens up an opportunity for organic agriculture to feed the world and preserve the soil and the environment at the same time. It is an opportunity to reassess the meaning in and of life, and our purpose in living. A good life does not have to cost the earth and true happiness does not require meaningless affluence.

Prahlad Singh Shekhawat


A weak and flawed foundation

THE Indian ruling classes and their political representatives are justifiably proud that the country has managed to build an army of highly educated and skilled technocratic and professional groups through essentially its own indigenous educational institutional system. Unsurprisingly, they advocate that these social assets be further consolidated and towards this end have planned large investments for expanding the capacity of high quality educational institutions in the field of science, technology and management studies. In pursuing this strategy, India is only following the footsteps of other class-divided advanced capitalist societies that quality educational institutions are meant for those who can afford an expensive higher education on the basis of their class status and the children of poor and the marginal strata of society should remain satisfied with indifferent and basic schooling. They conveniently forget that a democratic welfare state should also try to meet the educational and social needs of children of the marginal strata who cannot afford entry to educational institutions. The Indian Constitution, in chapter IV of the Directive Principles of State Policy had clearly articulated that ‘compulsory elementary and primary education will be provided to every child born in independent India.’ Yet it is only sixty years later, towards the end of 2008, that the Union Cabinet finally approved the Right to Education Bill making education mandatory for children in the age group of six to 14 years. Even this step was taken six years after the 86th Constitutional Amendment of 2002 making ‘free and compulsory education to all children of 6 to 14 years of age a fundamental right.’

The sad fact is that though the Indian state has the necessary resources to eradicate mass illiteracy and ensure decent schooling for all, probably since the children of the better-off have opted for ‘expensive and quality private schools’, education for the masses continues to be neglected. Despite the many schemes such as the Sarva Shiksha Abhiyan (SSA), National Programme for Education of Girls at Elementary Education (NPEGEE), Kasturba Gandhi Balika Vidyalaya (KGBV) or the National Programme of Mid-day Meals in schools, both the Economic Survey (2007-08) and the performance audit report by the Comptroller and Auditor General’s office make evident that progress towards achieving ‘education for all’ remains patchy and limited.

A recent report, ‘Elementary Education in India 2006-07’ by Arun C. Mehta reveals that though enrolment at both primary and upper primary levels in schools has substantially increased, a vast majority of underprivileged students continue to access poorly equipped and ill-serviced government and government aided schools. A few facts drawn from Mehta’s report substantiate the argument that neither quantity nor quality of education is ensured by the government. First, there are about 514 thousand para-teachers, constituting around ten per cent of the total number of teachers. The percentage of such schools is very high in Rajasthan, Madhya Pradesh and Chhattisgarh and these teachers who are purely temporary and on contractual basis, are the custodians of education for the poor children. These ‘para shikshaks’ who are on contract basis only receive a salary of Rs 3000, while regular teacher earn Rs 15,000 per month. When in desperation 80,000 such teachers of Jharkhand went on strike from 1 November 2008, the education minister responded, ‘If they don’t call off their strike before November 10, we will invoke the appropriate law to deal with them.’ How can teachers who are themselves on tenterhooks impart any education?

Second, Mehta points out that ‘with the possible exception of Daman and Diu, none of the other states have provided a pucca building to all its primary schools.’ Further, he points to the phenomenon of ‘single-classroom’ and ‘single-teacher’ for many primary and upper primary students. Is it surprising then that the dropout rate of children enrolled in such schools remains high? Even if the official claim that the retention rate was 70.26 per cent in 2005-07 is accepted, the goal of universal retention at the primary level remains unfulfilled. Third, since the primary and upper primary level of education for children is completely ‘teacher-centred’, it should be of great concern to all concerned citizens that nearly half the teachers who impart elementary education in the country have themselves not studied beyond the higher secondary level and that too in secondary schools of rather indifferent quality. The same is true of the para-teachers who are engaged in providing primary education to the poorest of India.

The Arjun Sengupta report on the unorganized sector points out that, ‘When 92 per cent of the country’s workforce is employed in the informal or unorganized economy (i.e. those who work in the unorganized sector), it is but natural that there is a high congruence between the poor and the vulnerable segments of the society who may be called the common people.’ The children of this strata of society need an active intervention and participation of the government for educational opportunities. Unfortunately, for the millions of rural and urban migrants working in the ‘unorganized sector’ as construction workers and in other allied daily wage linked tasks, their children are completely left out of the catchment area of the government aided educational system.

If at one level such a colossal failure of government agencies in the field of elementary and primary education for children has led to a proliferation of expensive ‘private’ schools, the resultant vacuum has been filled up by the emergence of denominational or sectarian schools where children are imparted education which is antithetical to the philosophy of our democratic secular Constitution. In particular, we need to pay greater attention to RSS-run Saraswati Shishu Mandirs or the Ekal Vidayalays (one-teacher primary schools). To take one example, in western Orissa alone, the Vishwa Hindu Parishad has set up ‘390 Hindu Ekal Vidyalayas and 50 orphanages’ to impart education imbued with Hindu ideology among the impressionable children. The Sangh Parivar’s Vanavasi Kalyan Ashram is very active in spreading a network of such schools in the tribal belt from Rajasthan, Madhya Pradesh, Chhattisgarh, Orissa and Jharkhand. Vidya Bharti, an all-India organization of the RSS, has established 30,000 schools, employs 80,000 teachers and close to three million children study in such schools. The story does not end here. Hindutva ideology is also spread through textbooks published by the RSS-run Sarasawti Shishu Mandir Prakashan and Vidya Bharati Publications (for details, see Aditya Mukerjee et. al., RSS, School Texts and The Murder of Mahatma Gandhi, Sage, 2008.)

The Sachar Commission has documented the colossal neglect of education for Muslim children by the government and how the space has been occupied by madrasas. Even in the national capital, Delhi, more than 1,000 madrasas continue to provide Islamic education to Muslim children. It is a pipedream to expect that secular state and society in India can be established on the basis of faith-based education imparted to millions of children in Hindu and Muslim schools. In his seminal essay, ‘On Education’, the philosopher Bertrand Russell stated that schools which cater to only male or only girl or only white or only black children create stereotyped images about ‘the other’ and such children develop an attitude of negativism or indifference to the ‘others’ with whom they have not interacted in ‘mixed schools’. This is happening in India. Children from Shishu Niketans or Bal Bharatis or madrasas develop great ‘social distance’ from other communities because in RSS-managed schools, children grow up only with other Hindus and have no contact with children of ‘other religions’. Similarly in madrasas, the teacher is Muslim (cleric), the student is Muslim and education is around Koranic teachings. Can India ever build a secular society in such a situation?

It is time that civil society turns its attention to these disturbing trends. In remaining satisfied with the education available to its children while continuing to turn a blind eye to the government’s neglect of quality education for the masses, we are only betraying the vision of India imbued in our democratic and secular Constitution.

C.P. Bhambhri