Pope looking for Third Economic Alternative

The present Pope Benedict XVI has released his recent Encyclical letter on July 7, 2009 to express his opinions and also showing his frustration on the present-day capitalism. He also has spelled out his vision of a new economic model for the inclusive economic growth of mankind. He has timed it such that the G-8 bosses get the right message while debating over the present economic meltdown across the world. The G-8 meeting took place just three days ahead of his meeting with the President of the USA. It must have created ripples among the G-8 leaders. He puts squarely the blame on the politicians as a class for mismanaging the world economic affairs and creating unlivable conditions for the mankind. Politicians have in the past ignored every
Pope’s advice, as they do not want to have any link between religion and the state’s economic management.

Looking for Alternative Economic System

His frustration with capitalism is clearly seen in his latest 144-page Encyclical. He bluntly says that the capitalism as such is now effectively “obsolete” and must be replaced by a new form of market economy whose driving force is not the maximisation of profits. He rightly denounces the modern corporate business model, taking on the global Wall Street and its super bonuses, which lead to financial speculation and labour out-sourcing. He observes that in recent years, a new cosmopolitan class of managers has emerged who are often answerable only to the non-working shareholders generally consisting of anonymous funds, which de facto determines their remuneration. He rightly states that profit is useful if it serves as a means toward an end. Once profit becomes the objective for the exclusive growth, if it is produced by improper means and without the common good as its ultimate end, it risks destroying wealth and at the same time creating poverty.

He is harsh on the present exploitative concept of globalisation of the world economy. He says that we should not be victims of globalisation, but rather its protagonists, acting in the light of reason, guided by charity and truth and certainly not exploiting poor by the rich. He shows displeasure on multinational companies’ expansion in the world economies through the route of globalisation only for the sake of profits and economic and cultural exploitation. He challenges the modern gospel of material progress for the sake of progress. As both capitalism and Marxian socialism have proved utopian for the common man, the Pope is now in search of a new economic order for ensuring welfare of all. He is calling for a new world financial order as he sees very clearly the exploitative angle of capitalists. In his opinion, the mentality of earning profits at any cost and by exploiting the masses is mainly responsible for the recent-day the global financial meltdown. This way, he confirms the link between capitalism and bad ethics.

He further says that today’s international economic scene, marked by a grave deviations and failures, requires a profoundly new understanding of business enterprise. He suggests to find a very pluralistic of institutional forms of business giving rise to a market which is not only more civilised and ethical but also more competitive. He is quite aware that the present-day ‘free market’ is nothing but monopoly of some vested, self-centred and greedy capitalists. He denounces the present protected wageworker philosophy ingrained in the present form of capitalist economic system as well as in Marxian economics. He, on the contrary, insists that the new economic order must enshrine access to steady employment with total mobility for all as a core economic objective. He is angry over the present-day excessive zeal for protecting knowledge among affluent nations, through an unduly rigid assertion of the right to intellectual property (IPR). Indian philosophy on the other hand guides by saying: “Let the knowledge come from all corners of the world for mankind’s betterment. Knowledge is free and is not a property of anyone.” The Pope has, however, not mentioned the other monopolistic and exploitative privileges, such as, patents, limited liability companies, copyrights, trademarks, trade unions, etc., which are being used for self-aggrandisement. He now insists that the new financial order must be guided by ethics and search for the common good. He shows his awareness that capitalism and ethics do not go together.

Item 38 of the Encyclical explains his thoughts on free market philosophy. While doing this, he is definitely aware of the false marketing of present-day “free market” concept, which is nothing but a monopoly market system, but marketed as free market. The capitalist and even Noble Laureate economists of the West intentionally spread disinformation while marketing monopoly marketing as free marketing. He says that what is needed is a market that permits free operations, conditions of equal opportunity, enterprises in pursuit of different institutional ends to take root and express themselves without any fear or favour. Such a free market economy requires shape and structure to encourage those types of initiatives, without rejecting marginal profits. They should aim at a higher goal than the mere logic of the exchange of equivalents. Profit was useful only if it served as a means to brighter future for all the humanity. While clearing this concept of free market in Item 39, he states that earlier Popes have called for the creation of a model of free market economy capable of including within its range all the people and not just the better offs (monopolists). However, it was ignored by the capitalists and the governors of capitalist economies. Now he clearly blames the present-day monopolists by saying that efforts have not been made to build more human world for all, a world in which “all will be able to give and receive without one group making progress at the expense of the other”. There is nothing new in this thought of the Pope as our own visionaries like Mahatma Gandhi, Deendayalji, Dr Babasaheb Ambedkar et al. have been talking for decades. Hindu-economics has this message for mankind.

Eco-friendly Economy

He is insisting for maintaining just balance of ecology and preserving nature’s resources for future generations. This is possible when the consumerism and greedy minds of capitalists are changed to controlled-consumption and using natural resources not as source of unlimited source of raw materials but as Nature’s gift of resources for minimum material satisfaction of every human being of this beautiful planet. In Hindu philosophy, it is equivalent to aparigraha.

He is also suggesting decentralised finance functions and adopting the system of micro-finance for helping small entrepreneurs, consumer-cooperatives, socially responsible forms of business-units and the domestic-production-units. This is on the same line of thinking of Mahatma Gandhi and Deendayalji. This will avoid monopolistic structure in handling the financial systems. This thought must have come to his mind after witnessing the recently exploded huge bubbles in the centralised finance systems in the developed countries resulting in the meltdown of global economies. He makes it clear that man ultimately should be in focus and his development should be given highest priority while thinking of any material development. While explaining his thought in this regard, he states that economic activity cannot solve all the social problems through the simple application of the commercial logic—laissez faire. He further says that this needs to be directed towards the pursuit of the economic good for which the political community must also take responsibility. This is close to Deendayalji’s integral humanism.

He squarely blames capitalism for violating human dignity of human work; either because of low value of input-work and the rights that flew from it. He, however, forgets that human values and dignity could be increased to the highest point only when each of them starts his own productive activity instead of begging for favour of jobs from the capitalists. Mahatma Vidura has mentioned that self-employment is the best status for every human being. To this extent the Pope has not de-linked himself from the monopolistic powers of trade unions, which is a part of capitalist economic system. He should study the philosophy of Mahatma Vidura for illumination.

Closeness to Hindu Ethos

Most of the above thoughts expressed by the Pope are close to some of the propositions of Hindu economics and also to Deendayalji’s philosophy of Ekatma Manav Dharma. He must be given some credit for distancing himself from the present-day capitalist economic system, which has failed to solve the problems of mankind. Rather he has realised that the system prevailing in developed nations is responsible for pushing the entire mankind to the edge of the deep and dark abyss. It is good that he has realised this after associating with capitalism for a very long time. His empire also got benefits from the same capitalist economic system all these years. It is, therefore, the right time for all those to unite who think capitalism is incapable of elevating human beings to higher material and spiritual levels.

The Pope is going to be attacked for his harsh comments against capitalism by all those who are in small number and going to be seriously affected by abolishing the present capitalist economic system. All of them have enjoyed the highest materialistic and luxurious life-style. They are bound to lobby against the Pope for such a proposal of discarding capitalism. They are going to warn him to keep off from the state’s function and do not try to link the state and religion. This will be treated as interference in the state’s functions. On the other hand, Hindu ideology, deduced from the Vedic literature, does not connote the state like the one in the West. The king is like the state. The state is created by God, and the king has been endowed with powers to govern the state. As such the king is not antagonistic to the people. The king has to follow Dharmashastra, that is, the regulations enjoined by God. Past history shows that de-linking the state from religion has proved disastrous in the case of the Western economies. The Pope perhaps may be trying to build a bridge between the state and religion through the Encyclical. This situation was not unexpected as the days of capitalism are now numbered. We do hope he sticks to his version of the third alternative of economic system and puts pressure on the greedy capitalists and their well-wishers in governments.