Knowledge: The real measure of the development of a country

Knowledge: The real measure of the development of a country
By Daya Krishna

According to WDR-2005, America'sGross National Income (GNI) had risen to $ 10,946 billion in 2003, and, being the largest GNI for a country it formed 32 per cent of the world GNI. America'sper capita GNI at $ 37,610 was the fourth largest after the per capita GNI of $ 43,940 for Luxembourg; $ 43,350 for Norway; and $ 39,880 for Switzerland. And, America is a developed country because it meets the World Bank criteria of having a per capita income of more than $ 9,386 in 2003.

But, in spite of the fact of America being the leading developed country, several top intellectuals there, are very much worried about the welfare of the people of America in the near future because of the emergence of China and India with the highest growth rates of GNI in the world.

Craig Barrett, the renowned CEO of world famous Intel of America has sounded an alarm by saying: ?Watch out for China and India. They are out to eat America'slunch… If the world'sbest engineers are produced in India and China, that is where our companies and their jobs will go. Asian colleges now produce six-times the number of engineers produced in America. I very much worry for my grand children?.

America'sprison population, already the largest in the world, reached a new high of more than 2.1 million in 2004. This means that one in every 138 Americans is in prison. In crime, America leads other countries of the world by a big margin. The rate of incarceration in America at 726 per 100,000 residents is much larger then the rate of 142 in UK, 118 in China, 91 in France and 58 in Japan. The rate of growth of prison population in America at 2.3 per cent per annum is double of its population growth rate!

In her famous book titled It takes a village, Mrs. Clinton says: ?Everywhere children are under assault: from break-up of families; from temptations of alcohol, tobacco, sex and drugs; and from spiritual emptiness. Homicide and suicide till thousands of children every year. One in every four children is born to an unwed mother, many of whom are children themselves! A large number of children bring guns to schools every day.

Above para portrays a disquieting picture of the ruins of a society which had made America the richest country and also the most powerful democracy of the world. It tells us that the great institution of family which is the basic plank of human society is being shattered in America. Ethics, morality and spiritualism, the sustaining pillars of mankind, are a thing of the past. Mammon has replaced man as the focus of economic activity. Money has become the measure of the development of a country. This situation reminds us of the prognostications of Aristotle more than 2200 years backs.

Kautilya and Aristotle

Kautilya'sArthashastra written around 325 BC says that the people of a country are an integral part of its wealth. Therefore, the way to increase the wealth of a country lies in honing the innate faculties of the people. Aristotle agreed with Kautilya in so far as importance of ethics and morality in economics is concerned . Both agreed that the purpose of economic activity is to go beyond the basic necessities of life ?,and that good life means moral life.

But Aristotle had the apprehension that pleonexia i.e. unlimited greed will destroy good life. He cited the example of Midas in order to warn people against greed. But, in spite of this warning, European countries took to the path of greed after the industrial revolution, and the system became known as capitalism due to being based on the primacy of capital in the growth of economy. Realising continuous increase in capital stock became the sole aim of economic activity.

In the communist countries headed by Russia, increases in the stock of capital were sought to be realised through state control of economy, and in the democratic countries headed by USA, increases in stock of capital were sought to be realised through market control of economy.

HDR Reports

The collapse of Russia'seconomy in 1990 was called by USA as the victory of capitalism in the world. New endeavours were made by USA for pushing forward the capitalist approach of development based on the per capita GDP of a country. This approach is basically wrong and has been found to be so by the economists of repute. Amartya Sen of India and Mahbub-ul-Haq of Pakistan said that the real measure of the state of development of a country is the state of development of its people achieved through developing and honing their innate faculties. As a result of their efforts, the United Nations? Development Programme (UNDP) published the First Human Development Report (HDR) in 1990, and it has continued to be published as an annual report of UNDP.

The whole world has now accepted the approach of measuring the state of development of a country on the basis of the state of development of its human resources. The Human Development Index (HDI) is widely used for making comparisons between people in different countries and even for comparing people in the different states of the same country.

The world has gone back to Kautilya.

But the World Bank and the US continue to stick to the old conception of development based on ?per capita income in dollars?. Apparently, this is a part of their endeavours for perpetuating the supremacy of dollar in the world economy. But, the world economy is now moving towards a ?Knowledge economy ? in which India has already acquired a leading role.

Government of India has set up a ?Knowledge Commission? under the chairmanship of Sam Pitroda for devising strategies for a long-term development of India'seconomy. The Commission is expected to release its first set of recommendations in October 2005.