Economy: A Two Dimensional Global Phenomenon [Archives:1999/29/Focus]
M. Sc., P. Eng.
Sheba GCCE Ltd, GM
Definition of Prosperity :
Webster’s ninth new collegiate dictionary describes prosperity as: “the condition of being successful or thriving; esp: economic well-being.” Therefore, by prosperity people usually mean materialistic achievements such as acquiring wealth or possessions. However, this writer believes that there is another dimension to the word prosperity. Without taking into account this new dimension, accomplishing material prosperity not only becomes temporary, fragile and impossible but also meaningless, harmful and dangerous. That is to say as how we look at things? What is the purpose of material prosperity? This dimension of life can be described as a metaphysical condition which reflects the state of mind, soul and spirit of each individual human being. Since the capacities of humans are limitless; therefore, a prosperous humanity, not only can move and make progress to gain infinite material accomplishments, but also, she/he must develop her/his limitless spiritual potentialities. A balance needs to be maintained between these two realities of life. Material well-being by itself can not survive, be stabilized or sustained without spiritual values. On the other hand, spiritual ideals do not find expression without material means.
It was mentioned that the prosperity of humankind has limitless potentialities. However, a minimum standard is required in order to meet the well-being and happiness of humans. Every human being must have the basic rights to shelter, food, security, education, health, employment, social services, etc. At the same time, he/she needs to have minimum spiritual standards. During the course of this paper, I will try to demonstrate that how these minimum standards for prosperity will be achieved and maintained.
Although material well being of man is promoted and emphasized; it has a secondary role in the reality of man and it should be subordinated to spiritual nature of him. Thus, prosperity of mankind should definitely reflect his/her spiritual maturity. It is a means of showing forth man’s true reality: his/her spiritual existence.
It is apparent that the humanity is at a stage that he/she realizes the existence of an unprecedented economic crisis prevailing the whole world. Billions of people are in the stage of extreme poverty and disease; starvation and poor health; homelessness and social insecurity. All remedial measures prove to be insufficient and ineffective. This paper does not elaborate on the aforesaid crisis, but tries to show the ways and means of overcoming it.
One may divide the influential factors which can improve the economic health of the people into two categories. Social and/or economic laws or principles; and, spiritual or moral laws or principles. These two categories of laws must concurrently operate and fulfill their goals in order to achieve long term favorable outcome.
At first it may seem irrelevant to attach importance to the spiritual principles in order to achieve economic goals! The rates of crimes, war, suicide, child abuse, family violence, alcohol and drug abuse, pornography, etc. are among the highest in the richest countries! How can these nations be content with having the highest standard of life while there is so much moral crisis in their communities? Does not this moral crisis have any effect on the economic and social health of the communities? Of course it does.
Human beings are capable of acquiring infinite spiritual virtues and qualities. Here, we can describe some of them to some extent:
This will abolish all misunderstandings and provides a common ground for discussions to arrive at constructive conclusions.
The Spirit of Service:
Each individual will serve his/her fellow human beings in order to create a better world and, considers work as worship.
will create order in the community
is a form of sacrifice in which you prefer the well-being of your brothers and sisters to your own. This principle safeguards the establishments of humanitarian and welfare organizations.
provides a chance for further growth and development. Thus, it is evident that the individuals are encouraged to forgive, while society has the duty of making order in the community by means of reward and punishing the aggressor and promoting justice.
Chastity detachment and contentment:
promotes family institution and inhibits spending on economic problems resulting from: family breakdown, AIDS, family violence, etc. Also, when one is greedy to acquire wealth, he indeed has lost his spiritual balance which undermines the very foundation of his existence. The economic impact of greed is obvious. It leads the society to possess more wealth for the sake of more wealth. A condition has been reached that masses of people feel that they are not satisfied with their possessions simply because they want to have more; while their basis economic needs are fully met such as: food, shelter, social and health services, security, etc. This of course has lead man to deplete earth’s natural resources, to severely damage the natural environment, to create war, to commit injustice, and last but not least to ignore his spiritual nature and moral values.
The aforesaid principles appear to be implemented by the individuals in the first place, and they do not seem to have direct impact on the economy. However, individuals are regarded as the cells for the body of the humanity. If the cells are not functioning properly, how then, the humanity which is the whole body can function properly? These spiritual principles are under the control of individuals and generally there is no immediate executing force behind them. Even if, some social institutions aim at safeguarding and upholding these principles, the ultimate responsibility rests upon individuals shoulders. At this point, the spiritual well-being of man becomes a necessity in order to control and discipline the human egotism: that part of man which always wants more pleasure, more wealth, more power, more comfort, etc.
Social/Economic Principles or Laws:
These principles must be integrated into the social, economic and administrative fabrics of the society at all levels; i.e., local, national and international.
The sphere of action lies not only within the grasp of individuals as mentioned earlier, but all institutions and controlling bodies would be responsible to uphold the accepted economic principles. For example, community and social institutions such as: private enterprises, corporations, charitable and social services organizations, all need to incorporate the principles into their mandates and policies. On the larger and/or hopefully global scale, governments agencies and world organizations are expected to promote and implement these simple essential principles and provide a system of economic control and development.
Now let us discuss several principles which have tremendous and decisive effects on the economic well-being of the peoples of the planet:
is a tool and means to arrive at the best decision for a specific situation. To use this tool we require special skills and rules. This method which is now being accepted and spread among corporations and governing bodies, usually sets general criteria or regulations and, details are left to the lower level executing bodies. Access to information and knowledge plays a crucial role in consultation process. Because, consultation not only involves knowing different points of views and opinions; but also, requires correct information and technical knowledge. Use of rapidly expanding computer technology, information and communication systems, has provided unprecedented new tools in order to assist and evolve consultation process.
This principle treats all human beings on an equal basis; emphasizes their integrity as a whole body; provides a harmonious global environment for all classes of peoples of different cultures, religions, races, sexes and of society to work together to build and create a better world. Thus, the economy would not become an isolated phenomenon but, an interdependent and united global system of smaller economies. The integrity of the whole will of course depend on the integrity of the smaller parts. Therefore, a global united system of control, management and organization will necessarily ensure local prosperity. Unity is a necessity at all levels: family, corporations, institutions, national and global organizations.
This concept is a profound expression of unity in a universal scale. A universal system of governance with its legislative, judicial and executive bodies will drastically reduce the expenses inflicted upon humanity by ruthless wars and conflicts. Each year the world is spending thousands of billions of dollars only on the subject of war. Another expression of world citizenship is to share knowledge, technology and large scale natural resources between all the peoples of the world. Global economy can only be managed and controlled by a global system, which is respected and upheld by all the nations.
A vast majority of the world population is suffering from economic crisis, simply because they do not possess people with proper or sufficient expertise or knowledge.
Human resources are the social and intellectual capital of the society. Development of human resources requires educating the masses in science and technology. Society has to have a minimum level of education in order to tackle the economic challenges of its rapidly changing age. At the present this minimum may be considered as having a high school diploma. Obviously, this standard has to be raised in the near future due to significant expansion of knowledge.
Abolition of Extremes of Wealth and Poverty:
Communism was an initial response to this problem; however, it has proven to be inefficient and defective as the absolute economic equality destroyed creativity and human development. It is not fair and equitable for billions of masses of peoples to suffer from economic hardship while a group of individuals possess thousands of billions of dollars in their hands. However, large capitals are necessary to be used for huge projects. This can be provided from banks, corporations or other institutions and not necessarily from individuals.
Abolition of extremes of wealth and poverty involves many economic and social solutions. For example, a taxation law may limit the amount of wealth one may possess; while it provides funding for social services to the masses of peoples in various basic forms such as: provision of food and shelter, health care, unemployment insurance, old age security plans, disability and natural disaster protection plans, etc.
Most major economic crises during the recent months or years have been due to the depreciation or strengthening of world currencies. In some occasions the fluctuations are artificially forced by government agencies; while in other instances the problem is caused by financial uncertainties provoked by: social unrest, war, budget deficit, inflation, excessive demand or supply, trade surplus or deficit, natural disasters, unemployment, interest rates, excessive printing of money without having gold or other commodities and products or services to support it , etc. A single world currency will provide a common ground for all the nations to cooperate together with confidence on an equal basis to develop their economy further. The initial stages for the implementation of this principle is already taking place in the world economy. Establishment of a single currency in Europe is a good example. The US dollar is widely accepted and dealt with in most countries for trade commercial transactions.
The development of technology and urbanization of population have created new and unprecedented environmental problems. If these crises are not dealt with both locally and globally, the occurrence of environmental disasters are imminent. This will lead to economic downfalls in order to remedy environmental catastrophes. Therefore, a healthy and long term economic growth and development, requires long term solutions to environmental issues. In particular, the development of nuclear weapons is not only a great danger to the lives of peoples but also, an extreme hazard to the environment. Global warming caused by greenhouse effect is a direct result of industrialization can only be solved by a unified action of all the nations. Water and earth’s atmosphere and natural ecosystems are fragile and delicate systems which require careful and scientific attention of world specialists.
is a mother industry which makes no harm to the environment and is a principal source of wealth and life. It is the generating engine of a healthy economy with minimal side effects. We need to make special provision for agriculture.
Capital Costs: Interest:
Funds in the form of cash money are the widely used form of capital in all businesses. It is the main driving force for carrying out any commercial projects or undertakings. As economic prosperity advances with passage of time, at the same time more wealth is produced in the form of cash money. Therefore, increased cash flow will lead to inflation. That is to say: money loses it value or purchasing power with time. Accumulation of funds without using them becomes irrational; because it loses its value and also it does not produce any goods and services and it does not accomplish any task in order to raise the standard of living of people. At this point money should not be accumulated without a constructive purpose or plan but, it should be spent or circulated in order to turn on the economic engine of the society.
Thus, financial institutions or individuals who are not able to invest their funds in feasible projects, would like to lend their funds to other enterprises who could effectively utilize them. As it was mentioned, because money loses its value with time it is reasonable that the borrowing agencies return the funds with interest. Obviously, the interest rate would be equal to the inflation rate plus an administration charge plus some profit.
Modern economics not only allows interest, but sees it as a vital principle for the economy. Lending money without charging interest is admirable. However, charging interest must be with moderation, fairness and justice which would bring abundance to people’s wealth. The details and terms for borrowing and lending funds should be outlined by the specialist according to the requirement of time.
Almost all the aforesaid principles are emerging in the economic, social and political spheres around the globe. A new human consciousness is developing which confirms these necessities for the New Era in human history. Humanity is converging to a New World Order but, unfortunately by the trial and error method.