Unbridled capitalism, while creating wealth, also results in incredible inequity calling for regulatory controls to ensure social justice.
India has been in the news for its robust economic performance and for growth despite the recent global recession. The recent Indian Premier League suggests unbelievable investor confidence and provides great advertising opportunities, fantastic revenue, world-class sport, extraordinary entertainment, phenomenal television ratings and immense customer satisfaction. Yet, the incredible indices of development in India mask the inequity in the country and the human cost of the nation's progress. For millions of Indians hunger is routine, malnutrition rife, employment insecure, social security non-existent, health care expensive, and livelihoods under threat. The vibrant economy, “the shining India,” is restricted to the upper classes, while the majority in Bharat eke out a meagre existence on the margins.
Indices of wealth and development: The gross domestic product (GDP), the indicator of economic growth, is employed to assess the wealth of nations and the well-being of societies. However, its adequacy to evaluate the human condition or the welfare of nations has been questioned. An increase in GDP reflects economic growth but does not take into consideration its sustainability, life expectancy, health and education of people nor its impact on the environment. An example of its biased assessment is that misfortunes for some, due to natural disasters and wars, also mean economic opportunity and wealth for construction, pharmaceutical and defence industries and an increase in the index.
The Human Development Index (HDI) was conceptualised to focus on people-centred measures and policies, rather than on national incomes. The HDI employs life expectancy at birth, adult literacy and enrolment ratios and a measure of the GDP per capita to evaluate human health and longevity, knowledge and education and standards of living. While the HDI does provide a bigger picture when compared to the GDP, it has also been criticised for not capturing the complexity of the human situation.
Inequity in plenty: The Gini quotient is a measure of inequality of income and wealth. The mapping of this parameter shows that many countries with high GDPs also have a high Gini index, suggesting that the measure of economic growth hides gross inequity and high human costs within countries. Recent attempts at evaluating human well-being use varied indicators such as environmental impact, government debt, diversity of species, etc. Bhutan has suggested happiness as an indicator of national well-being. Measures like the Net National Product take into account the depletion of human capital. However, the use of a single index to reflect well-being does not make these new attempts superior, only different. Nevertheless, most people will agree that any such measure should move beyond economics and economists; the debate must involve diverse stakeholders and the indicator(s) ought to express the multifaceted nature of human well-being.
Capitalism and greed: The failure of communism, despite its ideals of a fairer society, to increase wealth resulted in its demise. Many nations now place their faith in capitalism and governments choose it as the strategy to create wealth for their people. The spectacular economic growth seen in Brazil, China and India after the liberalisation of their economies is proof of its enormous potential and success. However, the global banking crisis and the economic recession have left many bewildered. The debates tend to focus on free market operations and forces, their efficiency and their ability for self correction. Issues of justice, integrity and honesty are rarely elaborated to highlight the failure of the global banking system. The apologists of the system continue to justify the success of capitalism and argue that the recent crisis was a blip. Their arguments betray an ideological bias with the assumptions that an unregulated market is fair and competent, and that the exercise of private greed will be in the larger public interest. Few recognise the bi-directional relationship between capitalism and greed; each reinforces the other. Surely, a more honest conceptualisation of the conflicts of interest among the rich and powerful players who have benefited from the system, their biases and ideology is needed; the focus on the wealth created should also highlight the resultant gross inequity.
Inherent talent or inherited advantage: Capitalism results in the creation of wealth. The supporters of the system argue that the “American dream” can be achieved by hard work, diligence and resourcefulness and can be replicated across the globe. They believe that the system rewards hard work and talent. However, even a cursory examination of the assets of and disparity across peoples suggests that those who succeed have inherited advantages and favourable playing fields, compared to those who did not. The focus on apparent merit does not take into account the different histories, the varied physical environment, the divergent contexts and the grossly dissimilar opportunities. The many economic policies of the International Monetary Fund and western financial institutions, driven by ideology rather than by reality, have resulted in further enslavement of many developing economies.
The Indian context: The economic liberalisation and globalisation have resulted in massive and sustained growth in the Indian economy. Yet, an examination of the Human Development Index suggests that the country is poor on this measure. The trickle-down effect of development, talked about in theory, has little actual impact on the poor. The rights of the poor are probably more important than the rights of the rich who drive development. Economic policies should be clearly preceded by a careful assessment of their impact on the population, their lives and livelihoods. Care must be taken to ensure that regulations proposed by our legislatures and upheld by the judiciary are not pro-rich and at the cost of the rights of the poor.
The need for regulation: Ancient wisdom argues that, under normal circumstances, the rich will get richer and the poor, poorer. Civilised societies will necessarily have to employ different standards to achieve an egalitarian social order. Such democratic ideals imply the use of regulation to curb the excesses of “laissez-faire” capitalism with its penchant for minimal controls. For example, the practice of forcibly acquiring agricultural and forest land, displacing the poor and tribal folk with the loss of their livelihood and culture is too big a sacrifice from these people in return for commitment of a fraction of the wealth of corporate houses in order to increase the GDP. “Progress and development” are high sounding clichés from capitalists and often spell the destruction of older forms of social existence. There is a need to foreground justice and equity, the basic precepts of enlightened nations. Without level playing fields and affirmative action, inequity will persist and increase, resulting in injustice to the vast majority of people who are without capital.
Law and justice: It is generally believed that the theory of justice drives the practice of law. In reality, legal practice constantly engages with theory and re-equips it. It cites theory in specific contexts and provides perspectives, transforming and even re-making it. The demand for justice brings a case before the law; this claim puts the law under the scanner. Justice, then, renews the law and makes it contemporary; it extends its reach and re-interprets it. The demand for justice is never fully met, suggesting that the law needs to constantly keep up with the mandate for justice. The requirements of the context and the call of justice create the necessity for citing of the law in relation to the questions before it. Law-makers and the judiciary may opt to close the call of justice and renew the rule of the law in relation to the new question. Alternatively, they may take up the challenge and re-think, re-make, and cite the law, as best as they can, in ways that measure up to the call of justice. India needs to revitalise its statutes and transform its courts of law into courts of justice.
Much of the debate on the creation of wealth employs a private language, replete with insider jargon. A refusal to comply with the unstated rules in such circles often results non-compliant voices being frozen out of professional circuits. These operations produce papers for academics, assignments for bureaucrats, policies for governments, wealth for capitalists and stories for the media, but they often discount the bigger picture that should dominate the discourse. The inequity is ignored, the discrimination disregarded, the ideology justified and injustice normalised. India should not only focus on economic growth but regulate its markets and economy with equity and integrity to provide justice for all its people.
(Professor K.S. Jacob is on the faculty of the Christian Medical College, Vellore.)