What Does it Mean to be Indian?

Just as work is integral to our lives, so also is the structuring of our economy and society central to our existence. From subsistence to barter to commercial basis of various life transactions, how have we structured our economy to facilitate the provision of goods and services to people? Hunting-gathering, nomadic agriculture, settled agriculture, industrial manufacturing are the major stages through which economies of the world have moved from ancient to modern times.

Modern economics views progress as the shift towards making industrial production of goods and services as the mainstay of an economy.

If we look at our own history, we find that agriculture and artisanal production has been the mainstay of our economic and societal structuring.

Uttam kheti, madhyam bhaan, adham chakri, bheekh nidhaan has been a value system which has been given very high significance in our society.

A premium has been put on agriculture as the occupation of choice. Working on one’s own land to grow one’s own food to feed one’s own family is perceived as the best occupation. Owning of one’s own resources and using one’s own labour to work for one’s own self has been the basis of structuring work, of structuring exchange and barter, of structuring production of goods and services in the economy. This has promoted a cultural preference for self-employment for the majority of the population as compared to other-employment which has been looked down upon.

Self-employment for the majority, in harmony with nature, integrating our lives and work with nature implies encouraging integrated agriculture and related activities as the occupation of choice for the majority.

Self-employment for the majority also implies integrating uncertainty and risk into our lives in a decentralized mode.

Again, integrated agriculture becomes the occupation of choice. And we can see that for several thousand years India has remained an agricultural society.

The multiplicity of occupations and the structured diversity we see in our society is a way of dealing with risk and uncertainty which is inherent in integrated agriculture, of combining variable and fixed streams of income to ensure sustainable livelihoods for the majority of the population, of combining cash and kind incomes, and of building a foundation of artisanal production of goods and services.

It is this societal structuring which has enabled India to be a world leader in the global economy for over 2000 years. The decentralized means of production and the decentralized mode of risk-taking have an inherent quality of strength – which is what the acclaimed writer Nassim Nicholas Taleb describes in his book Anti-Fragile –Things that Gain from Disorder.

The forces of mechanization, scale, automation, and digitization have been progressive developments in the march of the Industrial Revolution over the past 200 years which have changed the contours of the economy at a global scale and also opened the floodgates of ecological unsustainability.

The market economy tries to change every facet of life into a commercial transaction to be paid for in money and replace the subsistence and subsistence-cum-commercial bases of life transactions.

The transition to the modern economy has been a difficult process for India, which is changing the foundation of production of goods and services from the artisanal to the industrial mode. Agriculture has been replaced by manufacturing and services as the mainstay of the economy in terms of economic growth, though the numbers of people dependent on agriculture is very high. The economic policies are trying to replace self-employment for the majority by other-employment for the majority though it is not really translating into reality on the ground. Instead of focusing on work and income, the policy framework is measuring jobs and salaries/wages. The limited liability joint stock company listed on the stock markets has become the dominant form of business in terms of the mainstream of money. Its scope has been extended through limited liability partnerships and one person companies. Understanding this process of transition and its capacity for inclusion of the majority of our population can help us to analyze the present reality of the Indian economy.

How is economic risk related to economic and societal structuring?

How does economic structuring balance between self-employment and other-employment?

How does the structure of the economy change with production by the masses and mass production?

How does the structuring of the economy change with shift from variable to fixed streams of income forming the major component of earnings for the majority of the population?

How does the structure of the economy change with the varying combinations of cash and kind as the means of exchange?

How does the modern fractional reserve banking system affect the flow of money and credit in an economy?

How does the traditional Indian concept of corporation and the modern global concept of corporation lead to different types of structuring of the economy?

How is the concern for sustainability integrated in the economic functioning?

Don’t bargain for fish that are still in the water

Dependence on another is perpetual disappointment

Worldly prosperity is like writing on water

Don’t delay today’s work until tomorrow

If one is lazy even nectar turns into poison

There is nothing noble in being superior to some other person. The true nobility is in being superior to your previous self

No strength within, no respect without

A tree starts with a seed

The worst kind of poverty is to have too many debts

Amass that wealth which has nothing to fear from kings or thieves and which does not desert thee in death

A work prospers through endeavors, not through vows

As the light goes out with the exhaustion of the oils, so fortune fails with the cessation of human endeavors

• Received wisdom in Indian tradition says if wealth is lent out it can double, if is invested in business it can increase four times, if it is invested in agriculture it can increase a hundred times.
• The power of aggregation based on community ownership of resources strengthens community bonds and reciprocity of relationships in the economy. Scale of operations as well as risk-taking are addressed differently when the interests of the whole community are at stake. This has implications for concentration of resources and the nature of income and wealth inequality. Similarly, the power of aggregation based on proprietory and partnership forms of ownership incentivizes human endeavour for economic growth but contain risk-taking behavior within limits.
  However, the power of aggregation in limited liability ownership structures has unleashed rash risk-taking behavior and predatory growth patterns which have led to unimaginable scale of operations, concentration of wealth, and extreme inequalities in income and wealth.
• Sangha, shreni, mahajan are uniquely Indian concepts for juridical persons which have existed traditionally and continue till the present times in some form or the other.
• Kautilya’s Arthashastra, written between the third and second century BCE, is an Indian treatise on wealth and polity which has described 40 generic ways of stealing. It is a comprehensive list which cautions the king to be aware of losses to the treasury. It is difficult to visualize a 41st generic way of stealing even today.
  Raid is another name for stealing.
• Another aspect of received wisdom in Indian tradition says that income is to be divided into four parts – one part for meeting living expenses, one part for re-investment in business, one part to be held in land, and one part to be held in gold.
• Barter, jajmani system, subsistence and subsistence-cum-commercial basis of life transactions, agriculture as the best occupation, the material and spiritual well-being of all are a set of mutually reinforcing factors which can be seen in India since ancient times.

Can we see the relevance of these to modern times, especially in the Anthropocene Age, where ecological sustainability has become the biggest challenge for the survival of the human race itself?

The future is indefinite. How far into the future do we want to see? A time frame of five years, fifty years, five hundred years or even more for understanding economic growth leads to very different analytic insights about the cyclical patterns of economic activity. The emphasis on short term economic growth is an outcome of the market economy where the stock markets dominate the economy and market capitalization has to be maintained at any cost. This model of economic growth and its concomitant institutional architecture has evolved in the West over the past two hundred years and has slowly spread to the rest of the world to become a critical yardstick of progress and development for the whole world.

‘One person-one occupation’ is a Western idea evolved from the needs of the Industrial Revolution. ‘One person-multiple occupations’ is a universal idea which has continued in the East since ages. The conveyor belt, the assembly line, and the breaking down of work into specialized bits have evolved from the industrial mode of production of goods and services. The value of holistic work to increase the motivation of people for superior quality work and performance is then sought to be re-introduced through organization development interventions of team building, group autonomy in the organization, and so on.

But holistic work has been the basis of structuring the economy prior to the Industrial Revolution and these patterns are still prevalent in the East though they have largely disappeared in the West over the past two hundred years. Holistic work is making a comeback but within the context of machine supported work.

In the West, identity and anchoring of the individual in the community has changed in modern times to anonymity and drift. Lack of social cohesion, loneliness, alienation are some of the challenging issues being addressed in the context of urbanization and of a work identity.

Time is equal to money as a value system has also emerged out of the compulsions of the Industrial Revolution where efficiency of production and the profit motive dominate the use of time. Time is not equal to money alone is a value system still prevalent in the East, though it is getting eroded quite rapidly.

The evolution of economics as a discipline, as understood presently, is a result of Western understanding of the economy and what motivates human beings to work. Western economists like Stephen Marglin have written extensively on analyzing economics as a dismal science because it replaces the earlier notions of community by market forces and the consequences of this shift. Other authors like David Pilling have analyzed the concept of measuring economic growth with the tool of Gross Domestic Product (GDP) / Gross National Product (GNP) and its limitations.

The United Nations Development Programme (UNDP) has also come up with new concepts like Human Development Index (HDI) to counterbalance the excessive thrust on GDP growth. Economic sustainability and ecological sustainability do not converge in the pursuit of material wealth unleashed on the world since the Industrial Revolution. But they are being forced to converge now with the threat of climate change and global warming. Indices such as Global Hectares (GHA) are evolving to measure ecological sustainability.

The East has something to offer in terms of understanding the limits of the market economy and re-anchoring our lives in community belonging. Economics as a discipline can learn a lot about valuing the role and contribution of community and community ownership of resources.

We need to understand these gaps in economic theories and draw upon our own life experiences of being grounded in community to offer viable alternatives for holistic work and livelihoods.

The structuring of the relationship between labour and capital is critical to the type of economy which evolves. Labour and capital can be combined to be in the hands of the same set of people or they can be separated to be in the hands of different sets of people. The evolution of the modern economy has been in the direction of separating labour and capital and increasing concentration of capital in fewer and fewer hands. The meaning of trust and the enforcement of contracts, the meaning of compliance and enforcement protocols under verbal and written transactions, the centrality of written transactions, the entrenched emphasis on the employer-employee relationship are fall-outs of this evolution of the modern economy.

This has led to the challenge of how to converge the mainstream of people and the mainstream of money.

Economic growth is pursued through organic and inorganic routes. The growing emphasis on inorganic routes is also a challenge.

Similarly, pursuing economic growth up to infinity is a challenge for ecological sustainability.

Real and virtual wealth in the economy is a modern reality. Proprietary ownership, partnership, and community ownership economic structures based on full liability have been the forms which have existed over the ages. Limited liability joint stock ownership structures in the form of companies listed on the stock markets have emerged over the past couple of centuries. The stock markets as determiners of economic value in the form of market capitalization lead to virtual wealth.

Employee Stock Options in the context of full liability economic structures creates an ownership pattern which contains risk within limits, whereas employee stock options in the context of limited liability economic structures create an ownership pattern where risk is not contained. Inorganic economic growth, virtual wealth, limited liability, and employee stock options combine to create the unsustainable pathways of economic wealth which exist today.

Private equity, hedge funds, mergers and acquisitions, valuations, pensions, insurance in the context of real and virtual wealth i.e. with and without the stock market as well as with and without limited liability lead to two very different types of systems of economic functioning and economic sustainability.

The relationship between trade and aid is crucial for the economic well-being of all – how this relationship gets mediated with raid is the critical underlying force. Legitimized raid is permitted through legal provisions and does not get stigmatized. The modern economy is increasingly moving towards this direction.

What can we learn from the economic history of India which enabled us to be a world leader for two millennia?