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The Need for a New Economic Vision

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The recent spate of attacks by the Maoists in India once again raises questions on how to deal with such extremism bordering on terrorism. Suggestions are being made that the government should go all-out against the Maoists till they are eliminated; the progress of the state cannot be held to ransom by a few extremists.

While the government of the day has to fulfill its constitutional obligation of preserving law and order, it would be prudent to take a more detached view of the entire matter. It is necessary to understand the root causes behind the Maoist discontent and avoid a piece-meal approach to the problem. The phenomenon of the perpetual poverty in rural areas and the growing rich-poor divide is actually worldwide. In this process one has to go into the fundamentals and take a universal view of matters.

First let us understand the current economic system prevailing in most of the developed and the developing countries including India. What is the meaning of development and progress that is understood by an average family? To be able to fulfill the worldly needs starting from basics like living in a comfortable house and to be able to buy whatever is needed in day-to-day life. This is the model accepted at the family, social and national levels thus forming the basis of the prevailing economic system at the global level.

It is assumed that such a materially oriented life would bring wellness (or happiness), which is only partly true. In reality the feeling of wellness comes from within oneself. One feels happy when there is fulfillment of the 'inner being'. However wellness is mistakenly thought to arise from external objects. Knowingly or unknowingly, everyone is drawn into a similar pattern of thinking. The economy of a nation is, as a result, cast in this mould. The global economic mechanism has been structured so that such a development model is sustained. It is presumed that for healthy economics, the demand for goods (or services) and the growth rate of GDP (Gross Domestic Product) need to be kept up.

Apart from making wellness to be dependent on externals, such a materially oriented model has proved to be socially divisive. Since the emphasis is on the GDP, the less productive sectors are down the list of the government's priority. Consequently, by design, there is little prospect for inclusive growth and prosperity. People are forced to migrate towards cities where economic activity is more rewarding. Thus rural areas remain impoverished while urban areas face the problem of overcrowding and pollution. It is easier for the rich to become richer and the rich-poor divide gets accentuated. Social tensions worsen.

To sustain this kind of materialistic development, there is over-exploitation of natural resources with ecological factors getting sidelined. Environmental degradation with build up of green house gases leading on to imminent disastrous climate change is a direct result of such a development model.

Even if individuals decide that such a materialistic development model has failed to provide wellness and are prepared to embrace a wiser model, it would be difficult to put it in practice since the national and global economies have to be restructured. Continuing to use the GDP as the chief index of economic development is misleading. It does not reflect the actual fulfillment that people get out of life. While society may need one thing, the government will be doing another thing based on the GDP, which is a deciding factor in framing policies and programs. A new economic index that is centered on wellness rather than material growth needs to be adopted by governments to reframe their policies and programs. GNW or GNH (Gross National Wellness/Happiness) is an index that would fit this requirement.

GNH has been studied systematically by Med Yones, who speaks of seven kinds of wellness: Economic, Environmental, Physical, Mental, Workplace, Social and Political wellness. In his own words: "While the proposed new GNW or GNH metric may not be all-inclusive or provide a perfect measure, the consideration of the above parameters is a good start when creating a new metric for the measurement of socioeconomic development and policy management". For example when the govt. assesses the worth of a new or existing scheme to generate employment opportunities, its real worth can be assessed in terms of its impact on the seven kinds of wellness mentioned above as opposed to the value merely in terms of its contribution to the GDP.

Compared to an indicator that measures only the economic aspect of wellness, an indicator that takes a comprehensive view of wellness is superior and closer to reality. While managing the economy of a family, the father and mother would be concerned with the education, health and overall development of their children and not merely with providing for their material needs.

Thus it would be in the fitness of things and conducive to humane growth and development that GNH or GNW, a new comprehensive index for socioeconomic growth and development is adopted at the national (and global levels). The Maoist problem in India and similar social tensions in other countries are symptomatic of an unsatisfactory economic system.

By opting for the new economic system based on an enlightened view of wellness, India (and the world) would be rescuing itself from an economic system that is built on false premises and ensure sound socio-economic development as well as peace and harmony.

Vijayaraghavan Padmanabhan is 56 years old, Physician by occupation, married and has two children. Based in Chennai, India. His interests include Spirituality, Politics and Economics.

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All that needs to be done is to recognise that all... by David Chester on Tuesday, Jun 8, 2010 at 5:58:52 AM