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There is only one goal. That is to be whole again.

There is only one goal. That is to be whole again. How human beings live and work determines whether they remain whole or are split. ...

11/23/09

What makes us work? We need to satisfy some basic needs in order to live. Let us call them x. We also want more than the basic survival needs in most cases. However at that point the variety of what we want is endless. Some people want more for their children, both materially and emotionally. Others want to explore their histories by delving into the past of their community, their race, and participating in activities that promote that. Still others look into the infinite future and seek comfort in faith, or relationships, social institutions that may extend further than individual human lives. A small portion of people simply want maximum profit. Whatever the desires may be beyond the basic level necessary for survival, they are many. We may call these y. So the basic motivation to work comes down to x + y.

Economics has traditionally defined y in terms of profit maximization. However there is no reason why that has to be so. There are really endless possibilities.

11/22/09

We must start with the individual. Not as consumer or producer, but as a complex whole. We are not people who act as producers for a while and then change hats and become consumers. We are human beings. What we do affects us to our very core. It changes us. In fact we are what we do.

Economics has traditionally broken the person up into his and her roles. We must start afresh putting the person at the center of our analysis. The whole person.

What matters is not what I consume but what I do. How do I live my life? What do I do all day. When I go to work do I do something fulfilling or do I simply move papers around for someone else? Working for institutions whether they are corporations, universities, or the government often feels like that. I work for a large corporation. I am 'compensated' for my work. Is that because my work is not really that meaningful to me? If it is not meaningful to me can it be meaningful to society? Can millions of meaningless actions taken by millions of workers in institutions end up creating meaning for society as a whole? I don't see how it could.

We must carefully build our new economics bit by bit first focusing on the individual, then the family, society, and the world.

11/20/09

A tractor will not feed a farmer's family. A tractor is only a tool. So are markets. Useful as they are waiting for the Market system to feed the hungry and clothe the needy will not work. We need to put markets, communities, and the government to work on small-scale, micro-development efforts to eradicate hunger.

A million children go to bed hungry each night in the United States of America.

It doesn't have to be this way. Kids can't vote and more importantly they can't cast 'dollar-votes.' It is up to each one of us to change the society we live in. Let us stop believing in Markets to solve our problems. Let us start by talking to each other.

11/18/09

These are dispatches from a former economist who is disgusted by his profession. The logical inconsistencies, the hidden agendas, the conservative bias in economics finally led to the financial crisis and a world-wide depression. Isn't it time to stop the madness? And take steps towards a new economics taking Gandhiji as our starting point. Not simply rehashing Gandhiji's ideas but developing new ideas in his spirit. This is not a Gandhist blog but a Gandhian one.

11/15/09

Economics is about relationships. These can never be reduced to supply and demand. When I go out to breakfast that is one kind of relationship. I am being fed, I am appreciative of that, I pay. When I teach that's a very different relationship. I am challenging, setting up puzzles, the student is perhaps confused even angry at first. A Market Driven university, a Market Driven health-care plan, a Market Driven work place all pretend that the various relationships involving work offered and accepted can be reduced to supply and demand. That is our number one error. There is no such thing as supply and demand.

6/19/09

A brief note on dignity value.

Last summer I introduced the notion of dignity value at the Goat Island symposium (July 2008). In this little note I want to point out the shortcomings of the two traditional notions of value in economics.

Classical economics acknowledges value as a central concept and defines it as value-in-exchange. The value of anything in this formulation is what it can exchange for. The problem with this is that there can never be a general increase in value. Anytime something increases in value, something else must necessarily decrease in value. Value is not only relative but it is also reciprocal. In a Robinson Crusoe economy, a favorite pedagogical device in Classical economics, when coconuts rise in value they do so not only in relation to but also inversely to let us say boats. Since there can never be a general rise in value, humans are stuck in a mad system of competition. I can only increase my value at an equal cost to someone else.

Marxian economics significantly improves on this notion of value by bringing in the concept of surplus value. While most commodities trade for their value-in-exchange, labor suffers from an asymmetry that explains the origin of value in the first place. While the fruits of labor receive their value-in-exchange, labor itself is only paid its value-in-use. Though a worker may produce ten boats in a day's work (value-in-exchange), labor is paid only what is needed to socially reproduce itself (value-in-use). Perhaps the equivalent of one boat is sufficient to keep the worker coming to work each day. This leaves nine boats for the capitalist which constitute the surplus value.

While Marx's construction of the concept of surplus value is a huge improvement on the Classical formulation, it has in recent times lost its power of explanation. After all surplus value makes sense only when people are engaged in largely creating things of value. But most things produced in our time have no dignity value at all. The exploitation is no longer in terms of the stealing of value created away from workers but the non-creation of value in itself. Value-in-exchange for the majority of material objects is high. Surplus value is high. But dignity value is close to zero.