Today, G-7 nations like the USA and the UK are struggling at less than two per cent of GDP growth rate, yet no one maligns them as Christian rate of growth. However, Bharat’s sluggish economy during the 1950s to late 1970s was termed Hindu Rate of Growth. That actually could have been termed Nehruvian Socialistic growth. Why? As pointed out by Bharat’s Prime Minister Narendra Modi, at a leadership summit organised by Hindustan Times, “This was a well thought conspiracy to denigrate the family and cultural values of Bharatiya traditions. And make Bharatiyas continue to feel inferior and remain inflicted with deep-rooted slave-mentality, generations after generations.”
Decline of Global Industrial Output
The early civilisation of Bharat developed the economy of agriculture and craft. During the period 1-1,000 AD Bharat roughly contributed to 30 per cent to the world GDP.
By the 17th century, Bharat had been seeing a quarter of the world’s GDP. After that, when Bharat was ruled by the British, from the 18th century onwards, it experienced deindustrialisation and cessation of several craft industries. Its share of global industrial output declined from 25 per cent in 1750 to two per cent in 1900. (Angus Maddison in Wikipedia’s Economic History of India).
William Dalrymple, in his celebrated book
The Golden Road: How Ancient India Transformed the World, writes about the glorious past of Bharat. “In the millennium and half from c.250 BC to 1200 AD, Indian art, religion, technology, astronomy, music, dance, literature, mathematics and mythology blazed a trail across the world – a Golden Road that stretched from Red Sea to the Pacific. Today, in a world divided by national boundaries, we think of Cambodia as very far from India. But in the ancient and medieval world, the sea did not divide so much as unite. In what is now Sri Lanka, Myanmar, Malaysia, Thailand, Laos, Vietnam and Cambodia, new urban centres were springing to life; and Indian traders were sailing there carrying cargoes of beads, textiles, metal goods, etc. Cambodia, lying near China, had greater influence from Bharat.
Early Bharatiya traders used the sea roads of monsoon Asia to travel in two directions. Many headed Westwards on the winter winds to the East Coast of Africa and the rich kingdoms of Ethiopia. The journey from the Red Sea to Gujarat could take as little as forty days. Some economic historians now estimate that such was the scale of the Red Sea trade ..that custom taxes raised by Roman officials .. would alone have covered around one-third of the entire revenues that Roman empire required to administer its global conquests and maintain its legions, from Scotland to Persia and from the Sahara to.. Rhine and Danube.”
Influence of Indic Gods
The influence of Indic Gods and Indic religions, and the whole scholarly, cultural, and linguistic apparatus that came with them, eventually stretched over the greater part of Asia, from Afghanistan to Japan in the East, from Sumatra in the South to Siberia in the North.
But perhaps it is in scientific rather than spiritual ideas that Bharat stood out most dramatically…. By the time of the great fifth-century mathematician Aryabhatta (476-550 CE), Indian astronomers had correctly proposed a spherical Earth that rotated on its own axis, while using the decimal system and calculating the length of the solar year to an accuracy of seven decimal points.
The father of the first Barmakid vizier of Baghdad, Khalid ibn Barmark, had studied Indian mathematics in Kashmir. They began the process of translating the Sanskrit scientific classics into Arabic.. in Baghdad, the heart of the young Muslim world… Five hundred years later, in 1205 onwards, Leonardo of Pisa (nickname- Fibonacci) .. wrote the Liber Abaci F (Book of Calculation).. popularised in Europe the use of what were later thought of as ‘Arabic numerals’originated from India. Fibonacci writes in the introduction of his book: “I was introduced to a wonderful kind of teaching that used the nine figures of India’s. With the sign of ‘0‘, which the Arabs call zephyr (al-sifr), any number whatsoever can be written. The roots of these ‘nine figures of the Indias’ were first written down in Brahmi script in third-century BCE Bihar, at the time of Emperor Ashoka.”
Recognition at Global Stage
Now that the Indian talents are regularly being recognised on the global stage, youth of India is becoming aware of both their follies and inherent strengths & past legacies; and are willing to take on the challenges and anomalies head-ons, with newly found self-confidence.
The first malady that the global economy faces today is, whether GDP-growth is an incomplete tool to measure the real progress of all of society? This is where India has to look into her wisdom from the past, to find a third-way that can possibly put her and the rest of the world on the right path where economic growth truly leads to overall well-being of all of society as one entity. Not just benefit a few, at the cost of the majority.
Invented in 1934 by Nobel Laureate economist Simon Kuznets, following the great depression of 1929 in the USA, GDP is currently treated as the dominantly unique parameter to monitor and compare economic progress of any nation. The greater question is, why then do most developed nations like the USA, Europe, Japan, etc are economically falling during the past fifty years or so, despite continuing GDP-growth? As average American had 70 per cent+ prosperity in the late 1970s compared to -2 per cent or less in recent times.
- USA of 1970s: An average wage earner could meet basic family needs with just 30 per cent of working time, leaving 70 as surplus disposable income. The economy was predominantly creative, offering abundant wealth-creation opportunities.
- USA of 2025: That same wage earner now requires all or more of his normal working time just to manage basic needs for family, forcing many into multiple jobs to afford even modest comforts.
The answer perhaps lies in the research findings of eminent economist Thomas Piketty’s pathbreaking book, Capitalism in the 21st Century, highlighting that in the Western economic model, greater capital is gradually being concentrated in fewer and fewer hands, causing widespread poverty, homelessness among masses at large. The phenomenon is not just restricted to these developed nations, rather spreading to all emerging economies who are blindly following the Western GDP-growth model as panacea in their policy approaches.
Piketty’s diagnosis of the two maladies of modern economic architecture: “concentration of capital in few hands” and “widening disparity” are quite true and generally agreed by most; although his prescription of increasing wealth tax is debatable and even irrelevant from a root-cause perspective.
The solution instead lies in recognising the key problem with the way economists use GDP as the sole parameter of progress. The Economist fraternity is failing to recognise that GDP is not a scalar quantity, it is a vector having two directions, positive and negative. In lay person’s perspective, suppose an economy grows through selling Rs 100 of bad quality food, requiring Rs 400 of medicines to cure diseases, the scalar GDP would measure economic growth as Rs 500. Now assume that an alternate economy spends Rs 200 on good food plus Rs 100 on preventive healthcare, so the total GDP in this case is Rs 300 saving people from diseases. Which economy would we prefer for our children: Rs 500 of the former or Rs 300 of the latter kind?
The essence of this analysis is that while measuring GDP in quantitative terms (ie, speed of growth) is fine, ignoring the qualitative aspect (ie, direction of growth) is the greatest trauma that has led to destroying even already developed economies of the world. The quality of GDP’s ‘direction of growth as a vector’ is easily measurable, from the same set of data, with a little tweak through defining economic action in positive or negative terms, based on desirable and undesirable outcomes of actions.
Understanding Benefits of Shubh Labh
Here comes the genius of ancient thinkers from erstwhile Bharat, since times of Ram-Rajya, who recognised this folly, and incorporated the directional aspect of growth in its measure of economic growth, through an auspicious term called Shubh Labh (auspicious gains). In modern terms, economic growth may be summed up in two ways as:
- Shubh Labh: Goods and services that enhance life quality, support sustainability, and preserve ecosystems are classified as Positive GDP +ve.
- Ashubh Labh: Those that cause environmental damage, health issues, loss of productive workdays, or social problems are classified as Negative GDP-ve.
Shubh Labh offers a more humane alternative. Instead of valuing wealth only in financial terms, it balances economic gains with non-economic wealth- trust, family well-being, creativity, happiness, and sustainability.
One can now use the same GDP data, available for all nations, to re-classify in these two categories, and a new picture will emerge: GDP-growth rate (quantitative as is now) plus GDP-quality (qualitative as difference between GDP+ve and GDP-ve). So, one can understand why the USA, still being number one in GDP quantitatively, has a poor economy in reality today, as compared to itself in the 1970s.
Worse still, the unrestrained quantitative growth in GDP has resulted in excessive consumption of material goods and resources globally, especially over the past five decades. As a result, Western society today consumes more than 40 tons per capita per year, against the desired limit of 8 tons, based on a sustainability research study by Finnish scientists, the single most vital reason behind destruction of nature and the undue warming of the Earth.
We have the advantage of learning from the pitfalls of the GDP obsessed growth model that has dominated the world for decades. This “More is Less” approach measures value only in terms of goods and services produced, with stress on high per-capita figures while ignoring grim realities like rising homelessness, ballooning social security payments that more often fail to meet basic food needs, and a complete absence of metrics to assess non-economic wealth.
The beauty of Shubh Labh principle is still surviving and prevalent in India, through family traditions, especially in her rural regions. That is how the Western visitors often find it puzzling when they see even the poorest of poor in India being able to find happiness within their relationships. Economists need to recognise that the purpose of economic growth is to maximise non-economic wealth too, in the form of loving families, individual satisfaction, and achieving excellence, which are not measurable in terms of money.
With our unique concept of Shubh Labh Economics, Bharat can chart a new path where “Less can be More”, ushering in prosperity for each of our 1.46 billion citizens
Bharat today can emerge as a force of consciousness. With our unique concept of Shubh Labh Economics, we can chart a new path where “Less can be More”, ushering in prosperity for each of our 1.46 billion citizens. This is not just material prosperity, but wealth that enhances the non-economic capital of individuals, society, states, and the nation through economic well-being-making us truly one of a kind.
The world awaits current and future Indian generations to understand the lost wisdom of Shubh Labh economy from ancient Bharat and combine it with modern technological advancements, in a manner that prosperity-growth becomes a natural possibility for everyone in society. More importantly, one is able to utilise the gained prosperity for advancing one’s inherent potential within, through creative pursuits and excellence, that can never be measured by money. Pursuit of creative excellence is the ultimate motive for any human mind, anywhere in the world.
