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 ...

3/29/11

Economics is not and can not be value-free. In the act of using concepts such as supply and demand economists implicitly make value judgements. They are mostly unaware of that. But it is true.

For instance when we say demand. It is not a thing. It's a concept. This concept requires a peculiar world-view. We must suspend disbelief and accept a view of the world where we can quantify intentions and aggregate them. That requires a value judgement. We believe our action increases understanding and that that is a good thing. But that is in itself a belief. Further, the idea that intentions can be conceptualized requires a big leap of faith. That they can then be aggregated has been shown to be a fallacy by economists themselves.

Gandhian economics embraces value judgements. We start with them and use them at every stage of our analysis. Truth, nonviolence, and dignity value are our foundations. They are our means and our ends.

3/7/11

A Gandhian economics must be a nonviolent economics. It must also be an economics where we are constantly experimenting with the truth of the notions that we develop.

Gandhiji clearly gave us hint as to how such an economics could be possible. He said that means and ends must be reversible. So any action we take with an end in mind must pass this test: What happens when we exchange means and ends? Does the action still make sense or does it expose its ugly belly? If we are planning massive upheaval to create a dam (means) with the idea that farmers in the region will have water for their fields (ends) then that plan fails our test. Try it. Would you have farmers work on their fields, watering the crops and displacing people (means) just to achieve a huge ugly dam (ends)? That sounds absurd doesn't it?

Now consider Gandhiji's vision of a society where local communities engage in small-scale projects that lead to a better life for everyone. In all these cases an exercise in interchanging means and ends leads to pleasant, if humorous results. How about teaching neighbors to read and write (means) so that they may become better citizens (ends)? Reversing the two we get this: Create better citizens (means) so that there is greater literacy (ends). Sounds good to me.