I was going through some discussions on twitter where random people discussing on GDP of India and its comparison to the world in different parts of the history. This makes me think. What is GDP? Why is there a so much of obsession for this while thinking of an economy and its growth perspective. To start with it is gross domestic product that is how much it is producing. In traditional sense we look at produce and their growth of course in percentage to decide standings of an economy. The more this keeps increasing more is economy growing and so on. The cons of this concept sometime will be too much to consume and there after we will start looking at recessionary cycle. This is defined as business cycle in traditional economics.
Now the question here is growth year after year called expansion leading to recession has been accepted as a known phenomenon and complete business of the world is being built on this base. So much is being said, written, prophesied with so many serious people wearing ties and giving big presentation that we have forgot to question the fundamental flaw in this basic approach. Again if expansion will keep happening then at some time there will be saturation leading to recessionary trend.This can force imperialistic trend, unethical measures and many different choices which we have seen over the course of history and continues even today. Further it will lead to other complex political and economic steps and the chain effects continue degrading human condition of course.
With this comes another perspective illustrated brilliantly by Yual Noah Harari in his book Sapiens. It says that biggest farce that human history has been sold is agriculture revolution. This is because starting of cultivation thinking of future food security, the goal is still far from getting achieved. We will discuss on this in detail in subsequent lines.
Again back to gross domestic product. In all consideration this looks fair proposition and since human behavior cannot be changed this cycle seems far from being correct. But one thing that we clearly take out of consideration is human factor in it. We cleverly insist that its a human behavior but over the year with mechanical scale on which GDP is calculated takes out the factor of human in it. Because on the industrial scale of production we have started looking out on producing huge quantity and further looking to create a market for it by sales and advertisement.
In order to understand better we will have to look at some of the most popular branding today. Toothpaste companies in early twentieth century made fun of ingredients used traditionally for tooth cleaning in India are now advertising on same ingredients today. Hence we are looking at an economics which is built in order to help create a wealthy society with effective allocation of resources. It has further been successful in achieving the same also minus human happiness index which is falling every moment. We can easily see wealth of whole world concentrating in few hands, deteriorating human condition with increasing homeless population in so called first world countries and so on. (Socialism has even worse failures that we have seen over course of last one century). With this the agriculture revolution stands far from achieving its goal which it set out for as bigger chunk is getting thrown towards hunger and food insecurity every single moment.
What is the solution. We will have to understand economics in right perspective as Arthshastra which originated in India. The primary focus of which was human happiness index and was largely successful for many centuries without huge recession. This was formulated keeping in mind local beliefs and conditions, political situations, historical facts, ethical values towards nature and belief in human growth on spiritual, mental , wealth and societal level.The societies were built with Sanatan values which looked for inclusive ways. The bigger problem for today is economics a separate and isolated field of study which looks to implement universal principals all around. So what is arthshashtra and how is it different from present economics is a big question and needs detailed discussion which I will do in my next blog.