By M.S.N. Menon
Rich in the morning, bankrupt by night?this is the world of the rich today.
Was it foreseen? Yes, by no less a person than the great John Maynard Keynes. He predicted the emergence of a ?Casino economy??an economy of global speculators.
Gone are the days of honest labour, of honest investment, of honest profit. Speculation has become rampant. It is turning the economy into a casino. The Sensex has already crossed the 8,200 mark. Have we lost faith in honest work?
Speculation, as a way of life, is ruinous. It will widen the gap between the rich and the poor as never before. And yet, not long ago, we were swearing by socialism!
According to David Corten, a former World Bank official the world is now ruled by a ?global financial casino, staffed by faceless bankers and hedge-fund speculators?.
The casino is not bound by any ethic. Nor is there any rationale in it. In a casino economy, men are driven to invest their savings in shares, not in a bank for an honest return. The idea is to generate greed, to stir up the gambling spirit, to create anxiety among our senior citizens. In short, to make life uncertain for all.
The rich are in a terrible hurry to get richer. Agriculture is no more their choice. Nor industry. These call for work and toil, involve gestation, call for patience. The rich have no time to wait.
Trade is better. It is faster. And gives better profit. Hence globalisation of trade. But speculation is even better. It gives a windfall. But this calls for free movement of capital. That is: Less sovereignty for nations. That is: Western dominance over the global economy.
Samuel Huntington says: ?The west, in effect, is using international institutions, military power and economic resources to run the world in ways that will maintain western predominance, protect western interests and promote western political and economic values.?
Globalisation is good for trade and not for much else. It is dangerous to allow capital to flow freely. We cannot allow blind Cyclops to roam around. Capital has only one motive?higher and higher profits.
The capitalist system is a mockery of what is said of it. George Soros, perhaps the world'smost famous speculator, says: ?The capitalist world? is coming apart at the seams. The current decline in the US stock market (of traditional stocks) is only a symptom of the more profound problems that are afflicting the world economy.?
The boom in infotech stocks has no precedent. People are ready to keep on bidding up the value of these stocks, although other stocks, even of giant companies, are in the grip of bear markets. Experts call it ?globalisation of insecurity.? It is the western way of life.
Over five years ago, Indian software was coming up fast. But it had no significant impact on other stocks. Now whatever happens on the Nasdaq in the USA is reflected in India! This is universalisation of insecurity. But those who take advantage of it see it in a different light: as ?equalistion of opportunity.?
Perhaps investors expect every company to end up as a Microsoft. This is not going to happen. Bill Gates do not grow on trees.
Unfortunately, no sane voice can be heard in this din. Perhaps everyone thinks that others are fools. The Indian stock market never reflected the Indian economic realities at any time.
And yet the myth continued?that the market is a deus ex machina. The Washington Post says on this myth-making: ?You have heard an intolerable amount of bosh in the past seven years (Reagan years) about the deep and infallible wisdom of the markets. In fact, markets are perfectly capable of nervous breakdown.? And this from a paper, which is committed to capitalism!
If the speculative mania has seized the Indian business?at least a segment of it?there is no wonder. It had always wanted to follow in the footsteps of the West. Of them JRD Tata says: ?Insatiable lust for money regardless of scruples?this has come to be characteristic of Indian business.?
This speculation will not take the India of our dreams very far. We must be the leaders of an ethical world. We must be the innovators. We must pioneer a new economic model.
The Indian Institute of Management (Kolkata) proposed to open a Centre of Management of Human Values. I do not know what has happened to it. But that is the kind of innovation that India should pioneer in the world. Above all, in economics.
But values must have roots in the culture of the country. Where do we look for our roots? Where else but in our scriptures? To start with, in the Rig Veda.