Featured Post

I = S - M

The modern way of thinking about economics has been I = M - S Where I is the I as in me, M is what is 'mine' and S is what ...

12/10/10

Classical economics is based on an inanimate logic. The logic of machines. Each factor of production is paid on the margin, that is what the last unit employed contributes. It is the economics of the status quo. Values are exchanged but are static, never enhanced. Commodities trade for money which trades for commodities.

Marx improved on this system considerably by pointing out that labor was different from the other factors of production. Under capitalism labor was paid not according to its contribution but simply a socially conditioned subsistence wage that was below its contribution to production. This yielded surplus value which was appropriated by the capitalist. Thus money trades for commodities which bring the capitalist even greater sums of money.

Gandhian economics is the economics of the whole person. Engaging in living, the person does many things both spiritual and material. One aspect of living is working and trading with neighbors. The interrelationships created by living and exchanging commodities with others allows the person to grow.

While other approaches to economics treat money and commodities as the central aspect of economic life, Gandhian economics is a holistic economics with humans as it central point and the possibility of growth, both spiritual and material, as its promise.

No comments: