25 years of reforms since 1991, and we are still on the wrong lane.
Capitalism is (perhaps) the best known system for human growth & development, but, as with any other tool or system, it can cut both ways.
We are blindly following the western capitalist model of development without taking heed of looming roadblocks which have forced even some developed nations to contemplate switching lanes.
What do we want to achieve?
- Eradicate poverty
- Basic needs for all (food, water, shelter, etc)
- Happy, active, healthy & productive citizens
- Peaceful, friendly, equal & secular society
- A system which supports citizens to realize their dreams & potential
- A sustainable environmentally friendly economy which can fuel our growth & development for the foreseeable future (say next 100 years)
- A friendly nation that promotes global harmony and peace
And maybe a few other goals. These certainly look utopian, but its useful to chase audacious goals.
So, what can go wrong?
There are many reasons why a poor, large and fast developing country like ours can stumble & sputter, as we drive down the capitalist highway. But lets focus on just one big theme – consumption. We are largely dependent on consumption-led economic growth to achieve our goals. We are becoming more & more adept at promoting business & industry, and fast attracting wealthy investors worldwide. More business is expected to result in more jobs, higher salaries, more money to spend, which in turn will fuel more businesses. A nice virtuous cycle in theory which may turn vicious in the long-term. We are already seeing signs of strain in the developed world. Lets see how our goals will be jeopardized by runaway consumption.
- A consumption driven economic growth may not eradicate poverty. While we may indeed achieve poverty reduction in the short-term, the poverty line may simply shift over time. The poor may get jobs & benefits, earn higher income, but as their needs & consumption increase disproportionately, a vast majority of them will continue to languish in poverty and/or low incomes. And as the rich garner a disproportionate share of wealth generated, the poor may be pushed back even more. While a few smaller countries (like Singapore & Switzerland) have done well on this front, it’s too early to conclude their model is right. They may have to run twice as fast to keep poverty at bay. As long as our poor & rich are driven to consume more, poverty will stay.
- The problem with basic needs is that they change with time. What were basic needs a few generations back are now essential needs. Also what was a basic need a few years back is now not sufficient. We need bigger houses, more clothes, more gadgets, more everything. Our innate desires & needs are fueled further by rampant capitalism. The more we consume, the more we need. The more we need, the more we consume. Another vicious cycle. Consumption driven growth cannot satisfy basic needs. All the smart cities we build now will not be sufficient 50 years from now.
- Are we happy, healthy, active & productive in today’s fast paced urban jungles? Certainly not. Most of us are stressed in unhappy & unsatisfying jobs. Lifestyle diseases have become common. We may be productive in our jobs, producing & serving, making profits & earning salaries, but are we being productive in the way we really want to? Consumption driven economic growth will not create happy, healthy, active & productive citizens.
- Income or wealth inequality is possibly the primary cause of social disruption. Obscene income inequality and conspicuous consumption are the norm today. These are bound to disturb peace & friendship across social groups. It’s increasingly difficult to maintain equality & secular norms. Will income inequality go away over time? Not really, if we continue to drive down the lane of consumption-led growth. The rich will get even richer. The poor may do slightly better. The rich-poor gap will remain, and perhaps even widen.
- The present education system and employment market are not conducive for citizens to realize their dreams & potential. Kids are forced to take up studies which will help them earn well. An artist, sportsperson or musician cannot hope to indulge in his interests alone and live well. A consumption driven economy is typically controlled by a few key players (businessmen & politicians) and it is they who realize their dreams & potential. The rest of us just play a supporting role, compromising our own interests, dreams & potential.
- The rate of environmental & climate disruptions accelerated after the industrial revolution, when we started consuming more than we need. It’s quite clear that a consumption driven economic growth agenda and sustainable environmentally friendly businesses cannot co-exist. If we want environmentally sustainable businesses, we need to consume less. If we continue to consume more & more, we will not have a livable environment pretty soon.
- We certainly are not a peace-loving nation (see link below). We are not qualified (or prepared) to promote global harmony & peace.
Unbridled consumption can lead to our downfall, not immediately, but after the next few generations. Some developed countries are already facing challenges.
It can be dangerous (and sometimes stupid) to focus on ‘consumption’ as the only cause of all ills, but its hard to deny that it is the single biggest cause.
There are many ways to switch to a safer & sustainable lane on the capitalist highway, like consumption tax, welfare state, opting for slower growth, etc.
But the first step is to recognize the problem and accept the diagnosis.
Overconsumption (aka materialism) was shunned by all great wise men for good reasons. Lets not forget their lessons.