By Dr Dipak Basu
Since 1991 India has adopted the so-called ?Economic Reform? policy, designed by the international financial and trade organisations like the World Bank, International Monetary Fund and the World Trade Organisation, which was called GATT before 1995. The purpose of these organisations is to create a worldwide market system in which the multinational companies can freely invest, relocate, and redesign the domestic economies to maximise their profits.
This is commonly defined as ?the globalisation process?, which, according to the Western media, is now all-pervasive. No country can escape from its embrace. Thus, every country needs to reshape its national priority and accept a subordinate role by giving up some parts of the national sovereignty.
Questions can be raised whether it is sustainable or desirable. If a country'sculture and heritage do not accept the fundamental philosophy of this ?new international economic order?, the resultant discontent can in course of time disrupt and destroy the system. While the purpose of this globalisation process is to shift the advantages to a minute part of the society, ignoring the vital interests of the majority, the question of desirability was never answered by the proponents of the ?Economic Reform? programme.
The purpose of these organisations is to create a worldwide market system in which the multinational companies can freely invest, relocate, and redesign the domestic economies to maximise their profits.
Philosophy of Globalisation
The philosophical basis of the ?globalisation? process is the philosophy of capitalism, i.e. the utilitarianism of Bentham (1983), James Mill (1986), John Stuart Mill (1999) and other writers. The idea is that maximisation of self-interest is the virtue and the rationalism. Individuals, while maximising selfishly their own interests, maximise the combined social welfare of the society; the process was explained as the ?invisible hand of the market? by Adam Smith (1998). This virtue of self-interest is the motive force of capitalism and is the so-called ?Protestant ethics? (Weber, 1946, 1993). The idea of the modern-day economists who are the high priests of ?globalisation? are not any different from their 18th century predecessors.
According to Bentham (1983): ?What is good is pleasure or happiness . . . therefore, one state of affairs is better than another if it involves a greater balance of pleasure over pain.? John Stuart Mill (1999) said,
?. . . Pleasure is the only thing desired; therefore pleasure is the only thing desirable.? General happiness that results from these pursuits of pleasures is the effect but not intention. All human actions are based on self-preservation and self-interest. Selfishness is a virtue, which brings economic prosperity. In the pursuit of profit maximisation, the producers allocate resources only to satisfy demands so as to use the most efficient production system to minimise cost. Consumers are satisfied to receive high quality goods at the lowest cost. Because economic growth depends on acquisitive actions, self-serving behaviour is justified. To enhance economic growth, the State should intervene as little as possible, restricting itself to the defence and judicial system, leaving everything else to the spirit of free enterprise. That is exactly what Manmohan Singh declared in the Parliament in 1995.
This doctrine of ?laissez-faire? was propagated by the originators of modern Western economics, David Ricardo and J.B. Say and further decorated, using mathematical tools, by Jevons, Marshall, Knight, and Walras and very recently by Milton Freidnman or Robert Lucas. The argument remains the same although the society has changed and the ?perfect competition?, as imagined by Adam Smith, is not a reality in the days of monopolistic market of large multinational corporations. The idea is that capitalism, leaving it to itself, can recover from any crisis and any public intervention can only make things worse. Thus, all public actions are nothing but distortions to the system, which must be minimised so that the multinational companies can pursue their self-interests freely, so as to maximise the interest of the world economy.
The efficiency of the market is to satisfy demand, which can only be created by people who can afford to create demand. Those, who cannot, are rejected by the market. As prices are determined by the monopolistic multinational companies, the number of people rejected by the system cannot be determined by the policies of the national government. For a country with poverty, the number of these rejected people can go on increasing, thus producing a growing army of the so-called ?underclass?, who exist in large numbers even in the developed countries.
Although India and the developing world along with the former socialist countries since 1991 have adopted such ethics, whether the society and its cultural basis in these countries can accept it is questionable. In India, for example, the idea of Bentham was known to Raja Ram Mohun Roy, the father of the Indian renaissance in the 19th century, but was ignored. It was mocked at by the famous 19th-century writer Bankim Chandra Chattopadhya as ?the philosophy of the stomach? (Chatterjee, 1986). Whether the doctrine of selfishness as a virtue can be acceptable to the Indian culture, which is based on renunciation and selfless work, is debatable. The issue is the same for other cultures as well.
(To be concluded)