Whenever a great new technology or innovation surfaces on the horizon, the common fear is that it would lead to unemployment.Thinkers and economists like Tolstoy, Gandhi and E.F. Schumacher felt that sophisticated technology causes misery to the masses through the resulting unemployment on a massive scale. In fact the early struggles against computerization and I.,T. were founded on fears of unemployment. True, technology reduces need for human labor. It reduces need for drudgery. With proliferation of sleek gadgets and high tech devices, it is no wonder that there is wide spread unemployment even in the advanced countries.They have more leisure. And fortunately Facebook, Twitter, Pinterest, Flickr and what-else-have-you occupy them and me to fill the vacant hours. But is there starvation?. I doubt.
The dimensions and the causes and effects. of unemployment in underdeveloped and poorer countries are different. There is a considerable volume of unemployment coupled with poverty, disease and hunger, especially in the rural areas. But the reasons for this misery are not just technological developments. For, there are many forward looking and educated farmers who have adopted the new technologies to farming and have been prospering. The misery and the starvation mainly arises from factors like ignorance, superstition, poverty and alcoholism,on the one hand and usury, greed and cunning on the other. Not that usury, greed and cunning only hit the illiterate rural masses and are just a current times phenomenon.. They have been with man since his birth. Only they surface and succeed when regulation is lax.
When one thinks of the financial mess prevailing the world over in the present times one wonders whether we will ever learn from history. Take for example, the unbridled subprime lending facilitated by the contrived ballooning of money through the floating of worthless financial instruments by unscrupulous bankers and speculators The world got once again cheated by unregulated obnoxious instruments . I say once again, take for example a very close parallel, the public land speculation fuelled by spiralling paper money during the mid-1830s in the USA. (The land scams and the telecom scams we are witnessing today in India are of course the results of political and corporate greed and nepotism, let us leave it for the present to Anna Hazaare and his friends .),
Deregulation ought not to mean, unbridled power to banks and financial institutions to wreak havoc not just in the countries of origin but across the world, in effect making them super powers independent of sovereign checks. The world needs leaders like Andrew Jackson to tackle them squarely.
Mahatma Gandhi said that the world has enough resources to satisfy the needs of everyone, but it would never have enough to satisfy the greed of a few.
All around us we see a mad and obsessive concern with growth, the greed to benefit through speculation, the recourse to debt to fulfill profligate consumption , the mad wastage of fossil fuels ( we do not seem to realize that they are in the nature of capital assets to generate revenue, but rather than revenue per se),
We see poor nations selling premium food, commodities and other precious resources at throw away prices to other countries for profligate consumption, just to earn foreign exchange needed to pay for imports not just of, essential equipment or materials or essential requirements of fuel they lack but even of wasteful trinkets and harmful processed foods and drinks to meet the fancy needs of the few.
We talk of the need of foreign capital to fuel growth. Are we able to tap the local resources? Rising salaries are going to increased conspicuous consumption and into avoidable imports rather than into savings and investment. .
The rupee continues to be volatile. Nay it has reached its nadir. What are the reasons and what does it mean to the common man ?
The depreciation of Euro in the context of the uncertainties in Spain, France and Greece, the consequent withdrawals of overseas capital and deposits of risk-averse investors seem to have a role in this.The exchange reserves continue to fall. The current account deficit is causing anxiety to the country. Why should there be this CAD?
The reason, even a novice like me knows, is due to the imbalance in imports and exports.
I do not know how much of the exchange reserves belong to the country, I mean, are earned through exports and how much of them borrowed in our anxiety to fulfill the short term needs to pay off overseas commitments arising out of imports, ( God Knows how much of the imports are essential and useful for the country) And some of the exports we resort to, may in the long run, be injurious or loss-full to the country.
In our anxiety to spur growth we invite import of capital and debt. But we do not seem to realize that this capital and debt is not an asset. It is a liability At the hint of the slightest turbulence it could be called back and reinvested in some other place say Indonesia or Polynesia. Let us hope it would be of genuine use to them. Growth, sustained growth does not come about through speculative capital.
While the volume or the nature or the remuneration we get from out of exports is not . enough to match the bill to pay for the growing imports, imports are allowed not of essential goods but luxury goods for which there could be better and lot cheaper indigenous substitutes.Common sense dictates that we reduce the volume of exports to the necessary minimum so as not to deprive the common man of his needs just for meeting the current account deficit. This requires that we curb imports of such goods or products which are of just snob value or for which there are good and competitive local substitutes.
We need not shy away from this. Our exports face surreptitious duties in the importing countries which are aimed at making them uncompetitive. And heavily subsidised goods dumped on us, tempt us to import them irrespective of need or necessity.
It is said that a bit of inflation doesn’t matter, it stimulates demand and spurs growth. The question is, demand for what and how does it affect the CAD. And what about the erosion of the purchasing power of the common man.
Globalisation ought to be for the benefit of everyone across the world, not for encouraging waste and greed. There is need for leaders with a broad international outlook who can transcend their narrow domestic walls and possessed of a vision not clouded by parochial concerns but embraces the whole humanity.