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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 ...

12/15/13

Gandhiji introduced his concept of swadeshi after much careful thought and meditation upon the matter. It may be recalled that he immediately demonstrated its effectiveness as a principle by applying it to three seemingly separate spheres: language, religion, and economics.

The same idea, the same principle, if it is to be a good one should be applicable to all spheres of thought and life. In that sense a good Gandhian economics is not separate from Gandhian philosophy or Gandhian living.

12/8/13

saving = investment

Another key identity in economics is that between saving and investment:

saving = investment

Once again economics as the world knows it interprets this very narrowly to mean what I put away in terms of money is exactly what is available for the creation of capital. I put away $100 in saving in my bank and $100 is made available for some entrepreneur who can now borrow that money to buy some capital, perhaps a machine. But once again we are only focusing on one tiny aspect of the equation, that of quantity

If we acknowledge the equation

saving = investment

in its holistic sense then it must mean primarily that the character of the saving equals the character of the investment; that the nature of the saving equals the nature of the investment; that the purity of the saving equals the purity of the investment; and the multi-generational effects of the saving equals the multi-generational effects of the investment.

Furthermore, our key principle of Gandhian economics teaches us that means and ends are convertible terms. Thus the qualitative attributes of the investment undertaken must be equal to those of the saving! If we are truly awake to the fulness of the meaning of these terms we would not mess around with them so freely and take careful steps into this territory.

We would look at not just how much we save but at how we save. Hoarding out of fear, out of a desire for profiting at the expense of our neighbor is not a positive form of saving and in its investment will cause nothing short of grief. On the other hand saving our seed, our precious culture and its related work implements, our books and knowledge, our live capital, lovingly, without fear will undoubtedly create a beautiful investment.

If our world looks so dark, if in the midst of our financial prosperity the outlook for our future and our children's future is so grim it must be because we have misunderstood the basic equality between saving and investment.

I hold that to be a crime against wisdom. 

12/1/13

There is only one principle

There is only one principle: means and ends are reversible terms. Once a person understands this, meditates upon it daily, and becomes it, no more study of so-called economics is necessary.

There are identities in economics that have been only partially recognized. Due to this these have become half-truths and insofar as they contain some seed of truth and much falsehood are far more dangerous than out and out falsehoods that may be clearly seen for what they are.

One fundamental equation in economics is the following:

spending = income

Modern economics has caused great harm to the world by interpreting this identity very narrowly to mean that the quantity of spending measured equals the quantity of income measured. While this is true, it is a trivial truth. However much I spend ends up as income for whoever receives it. That is not actually very interesting as a description of life. I would like to remind the reader that spending = income actually means a lot more than that. For instance, the quality of the spending equals the quality of the income. How I spend equals how I receive! That is much more significant for how we live our lives than how much we spend or receive.

Now reverse that. How I earn equals how I spend. Can it be that this meaningless mass spending of billions of dollars over this weekend called Thanksgiving in the United States reflects the fact that the people spending that money recklessly on shoddy goods made overseas using underpaid labor (often children) working in unsafe unhygienic conditions are themselves working and earning at meaningless occupations that have little to do with their values and those of the earth?

11/2/13

Adam Smith, Father of economics, talked in glowing terms about the Division of Labor. He thought it was the engine of wealth. I think many of us are familiar with his visit to the pin factory where he observes stupendous increases in productivity by the simple fact that each worker does one very small part of the overall production process. One worker sharpens the tips of the pins all day. Another puts them into paper wrappers all day. And so on.

Division of labor has expanded exponentially since Adam Smith's time. We are all mostly engaged in tiny aspects of highly complex tasks most of which are related not to producing anything at all. That is how we earn our income.

Think about it. What does division of labor mean? Labor is an abstract concept. But it is actual people who do the work not abstractions of people. There is nothing like labor separate from the people who actually do work. If you are dividing labor conceptually, the result of that very practically, in the real world, is that you are dividing people. My family members, brothers, nieces, nephews, uncles, aunts, children are all being divided up as people. That causes productivity to skyrocket but what does it do to them? It takes away their wholeness, their humanity.

The problem with economics is that abstract concepts may be a lot of fun to think of and manipulate but when applied to real people--to you, your neighbors, your children--they have the chilling effect of dividing them up, splitting them.

Don't you think it is time to look for wholeness and let go of all this nonsense?

The tragedy is this: though I grew up speaking several Indian languages I am unable to communicate substantial ideas in these languages. These languages are beautiful and they are mine as no others are. But they are only for saying hullo and how is it going and getting the round of local gossip. Beyond that my facilities at my own mother tongues fail me. I can not even begin to express myself the way I am expressing myself in this blog.

English was the language of my education. I was sent to what were considered the best schools and colleges in India and while I was fed a mountain of facts, I learned very little about myself. In fact the use of the English language was exclusive because we were punished for speaking our own languages.

This may be the experience of many others growing up in India. I do not know. What this enforced inability to express ideas in my own language did to me is split me into two. These pages are my attempt to find wholeness using the language I have to express ideas, while shedding the mindset that the language brings almost automatically. That was what Gandhiji was so brilliant at doing. He could use English to communicate but be at the same time tapped into the Indian consciousness. To me Gandhiji is Indian consciousness and he is my friend and guide.


9/2/13


The system of economics in use around the world today is based on self-interest and maximizing behavior. If we were honest with ourselves we would acknowledge that self-interest is selfishness and maximizing behavior is greed. So our world is being run on the principles of greed and selfishness. And we wonder why there are so many problems in the world.

I must say the obvious. Selfishness and greed are not the best principles developed by humans. We have a long history on earth and a long history of thoughtfulness. Religions have developed from the need for human beings to transcend their smallness and accept their larger roles in life. Philosophy has developed to examine ways in which human beings can use reason to expand their understanding of themselves. The arts, the sciences, the humanities, literature, theater, dance, film, painting, sculpture, have all developed as a result of our innate ability to think big and to think large. To think big is to not be petty and to think large is to embrace all of humanity and its future on earth.

An economics based on selfishness and greed seems to me a particularly small view of mankind. By starting from a point of view of humans at their very least, their most base, crude, and thoughtless instincts, modern economics is sadly out of date with the evolution of human consciousness.


7/25/13

My purpose here is not to set a dichotomy: x is good and y is bad. I do not think that the issue of the right means of organizing society's economics can be answered in a black and white way. The problem is that we have been seeing economics too narrowly. We have been ascribing to greed the guiding principle for action by calling it self interest. There is nothing wrong with greed. To be human is to be greedy. I know I myself am greedy.

However there is a slight possibility that on occasion I display, to my surprise, actions that are not guided by greed. Once in a while I do things that in fact go against my greedy nature. That benefit others. Or the communities that I belong to. I sometimes sweep away the plums that had fallen in our community garden and are lying rotting on the paths. Once in a while I pick us garbage right off the street. This leads me to believe that I am not wholly greedy. I may act greedy but I am not greedy: greed is not the sum and substance of who I am. There is a slight possibility that I may have much more complex motivations and given a guide for behavior other than modern society's atomistic, every person for himself and herself attitude, I may be capable of other kinds of behavior motivated by very different kinds of things.

I find that in the few instances when I am able to overcome my very natural, very human greed, and act from a higher, inexplicable need to do what is right rather than what benefits me immediately, I feel good. Engaging in such action a few times makes me feel much lighter and engaged with the world in ways that I did not know of before. Why am I doing such and such a thing when it does not feed my greed/self interest? I often do not know why because the motivations are more subtle compared to the dense reason that I am greedy.

What I am saying here is this: is it possible for each of us to expand just a little bit outside of the purview of greed each day? What if we do one thing every day that is motivated by anything other than greed? We would suddenly find ourselves with the possibility that life is rich in ways that go beyond what greed and self interest can measure. So we remain in the world that we inhabit and create a new habit to pursue each and every day. It is that simple.

7/24/13

Adam Smith argued that the good of society lay in the good of the individual. Hence the father of classical economics placed self-interest at the heart of his system of economics. Self-interest means the most profit at the least cost for the individual. A prosperous individual means a prosperous society. The assumption here is this: a prosperous society is a good thing. In fact the assumption presupposes that prosperity is the only thing that makes society good!

Gandhiji calmly asserted that the good of the individual lay in the good of society. Hence the father of the nation placed selflessness at the heart of his system of economics. Selflessness means thinking about the whole: family, neighbors and the village as a whole. Selflessness leads to a good society is a very different sense from the one Adam Smith had in mind. Prosperity has its place in a good society amongst a number of other important interpersonal and social dimensions such as good relationships, nurturing of nature, the use of live capital, and seeing people as whole rather than split as labor stripped of their humanness and hence their dignity. Gandhiji's economics allows the holistic development of society and through the society of the individuals living in it. 
To change the system we must offer civil disobedience. But how?

Gandhiji said that civil disobedience should be offered in a way the even the poorest are able to offer it. Making salt from sea water is a perfect example of that during his time.

What form would it take in your community today?

7/23/13

I walked down to Andronicos today. It is our local grocery store chain. I had run out of apples that I purchased at the farmers market and I thought I would get a few apples from Andronicos to last us until the next farmers market, later this week. When I got to the fruits section I noticed two things: All the apples were from either Chile or New Zealand. We live in California so that means these apples had been transported a very long distance all the way from the southern hemisphere and now they were sitting here in the store. The second thing I noticed was the price. These apples were priced at $4 a pound! I stood there amazed at the profound stupidity of modern economics! Let me explain:

This year the shifting weather patterns has meant that apples have arrived at the local farmers markets three weeks early. These are local organic apples grown a short distance away and brought to the market by the apple grower. He has priced his apples at $2 a pound. My local store on the other hand uses modern supply chains to create a complex process of orders that create a number of disturbances on the environment: shipping apples such a long distance means that the environment is burdened as the  shipping and transportation creates costs that are not accounted for: pollution, use of fossil-fuels and the accompanying wars that support a fossil-fuel based economy. After all this complicated, convoluted processes that are supposed to create massive economies of scale for the 'consumer', the store has to charge twice as much as locally-grown apples that are in season.

There is a massive illogic to classical economics that we accept meekly if we do not create change in our communities. Unchecked, this illogic will destroy us slowly. That is why I write. 

7/20/13

(A) Let us say you do something. If your action is simple you can trace the trajectory of your action carefully and evaluate every step. If each step meets our criterion of means and ends being reversible terms, you go ahead with the action. You may repeat it with confidence.

(B) However if your action is complex. Say you press a button. And something happens. In this case you may not be able to even begin breaking your action down into steps. One moment you had not pressed the button. The next moment you had. In this case it is no longer possible to trace the trajectory broken down into the steps involved. You find that you can not evaluate your action, broken down into its component steps, based on our criterion of means and ends being reversible terms. You are no longer able to have a guide for action. You struggle. You look for gurus, authority figures to tell you what to do. Eventually you have a crisis of meaning and start questioning everything.

B above is modern society based on classical economics. Let us return to our roots in A. That is the only next step available to human beings if we are to survive and thrive. 

7/15/13

What kind of world do we want to live in? Is the madness of modern living, with its deadlines, distractions, and death of the spirit worth spending our lives on?

Alfred Marshall famously defined economics as the study of man in his ordinary business of life. I guess women did not figure in his world. And the ordinary business of life for him involved only man's grossest instinct: that of self-interest and immediate survival.

Women and men are much more than that. Krishnamurti distinguished between and individual and a human being. An individual is just you, separated from everything around you, from life itself. That is Alfred Marshall's 'man'. A human being, on the other hand, is part of an interrelated web in nature. We are all connected. We are one. Classical economics is so narrow that it can not contain that idea of a human being and instead splits us into men and women and creates a denuded, deluded, and dead individual.

7/13/13

People not labor

Classical economics views labor (L) as human effort. By doing so it splits the human being artifically and separates effort from the person as if that were possible. By focusing on a single aspect of a multi-dimensional whole. it causes much harm. Both to individuals and to society.

Gandhian economics views the person as a whole. Instead of talking about labor we talk about persons and people (P).

We replace the L with a P. With that act we remove the violence done by economics to human souls. 

7/12/13

What does it offer other than money?

My friend A (who is a doctor) came to me the other day seeking my advice. He had been approached by someone, a very well-known person, I could say a celebrity doctor. The idea was that my friend would share some of his working methods, his research, and then this celebrity doctor would produce a line of products for sale that could potentially do very well.

My response was immediate. What does he have to offer you other than money?

It is a good guide for action. Take money out and see what the situation has to offer. Your answer will be there, sparkling and luminous.


Capital

Capital is defined by classical economics as the 'produced means of production'. This needs to be examined carefully and developed. It is time we did that.

Today I saw three men standing around a ladder that extended, to start with, upwards to the third floor of the building across from us. They are chatting quietly amidst their concentration as one man supported the ladder, another climbed up the ladder, and a third expertly pulled on a rope to extend the ladder higher and higher as the man on the ladder climbed higher.

Capital is created by human beings. That is, in the production of capital, the human being has to be present. We take a lot of dead material and with human ingenuity put it together. And we have a piece of capital like a hammer or a machine. In everything that goes into making capital all elements are replaceable except one: the human presence. Without the human being no capital would be produced. Without any one of the dead or inert materials we may have many substitutes now and in the future. But there is no substitute to the human element in the creation of capital.

In other words capital is in its entirety dependent on the human presence that created it. The quality of the capital created, its very nature, is dictated by the quality of the human presence behind it, that went into making it. So to classify capital we must look at the nature of the human presence in its making and its use.

We may define live capital as capital with a living, higher human presence. We may also define dead capital to be its opposite: a lower human presence that is close to dead.

Capital that is live is the kind of capital that Gandhiji encouraged. Back in Gandhiji's day, the charkha, or spinning wheel, was a wonderful example of live capital. Gandhiji attached himself to it to demonstrate its effectiveness and power of symbolism. It is very hard to mistake a charkha for an industrial cloth mill!

Now we come to my point: today, this very day will we come alive to the necessity to recognize live capital in our midst and even more, create live capital in our own communities?

The ladder that I mentioned above that extended, eventually to the fourth floor, is live capital. The three men were getting some important work done. They were doing it as a team, with great sense of concentration. They were also alive to each other's presence, chatting amiably, using the capital in their hands as a valuable tool in their work and friendship. 

7/11/13

Freedom from awareness

We need to free ourselves from awareness. The idea of awareness has been causing a lot of trouble. We need to simply live and do our work.

The problem is this: How many of us know our work? How many of us do it well?

Not many, least of all the so-called enlightened, 'aware' ones.

Let us leave all nonsense behind and do our work.

7/5/13

My article has been published

 My article has been published in Performance Research vol. 18, issue 1.

"Abhay Ghiara's text is a series of fragments, like a necklace of beads, perhaps worry beads (kombolói), and as in the Greek practice we are invited to turn each one and reflect for a moment. In Thirteen fragments of life and death Abhay Ghiara weaves autobiographical memories of fire - from Parsi ancestors, temple rites, travels across India and ultimately the teenage challenge to jump through a hoop of fire. These fragments are interlayered with short interjections on economics, Adam Smith and Gandhiji and residing behind all of the fragments is the question as to whether fire itself can be defiled or whether it only ever cleanses and purifies (a fundamental difference in Parsi and Hindu beliefs and practices)." -- The Editor.

You can read the article by clicking on the link below:

>> Thirteen fragments of life and death: Gandhian economics and a hoop of fire

6/24/13

Swadeshi is an idea created by Gandhiji which means starting from who you are and moving outward. As an organizing principle of Gandhian economics swadeshi provides a powerful alternative to classical economics.

An economy based on swadeshi will be

a) Small enough to make it possible for each person in it to be fully conscious of their wholeness and move outward from that point,

b) Simple enough to make accurate decisions based on an understanding of the economy,

c) Sufficient for meeting the needs of the individual and the community.

Swadeshi means small, simple, and sufficient.