The moral and intellectual crises in economic policies
Context
Delhi in the third week of January has framed the moral and intellectual crises affecting Indian economic policies.
Key Highlights
- In the first instance, speaking at a session at the World Economic Forum in Davos on India’s road to a $10 trillion economy, the Chairman of Tata Sons said, “For me, the three things most important are growth, growth, and growth.”
- 150 homeless people had been removed from beneath a flyover by police who had been directed to clear the city of beggars ahead of various G20 events to be held in the city.
- A man complained that I work in this locality, so how will I be able to earn anything if I am moved so far away.
Job demand, employment ‘informality’
Moral Crisis
- Moral crisis is the pathetic attempt to cover up the declining employment elasticity of India’s shining growth.
- Job creation has not kept pace with the demand for jobs.
- most jobs hardly pay enough and have no social security
- The Indian economy is not generating enough good jobs.
Conventional economics
- Agriculture sector must be improved by using more capital intensive methods and moving people out of agriculture and rural areas, into cities and into manufacturing and modern services (such as information technology).
- Employment is also crunched because the organized manufacturing and service sectors are also employing fewer people per unit of capital in order to improve their own labor productivity.
Current Status
- One Of the problems is the large size of the “informal” sector and the small scale of its enterprises.
- Around the world and in India too, innovations in business models are changing the forms of large enterprises and creating more informality of employment.
- Employment in the formal sector is also becoming informal with outsourcing, contract employment, and gig work.
- Concepts of “economies of scale” are changing to “economies of scope”, and enterprise forms from concentrated to dispersed units.
Confusion in employment policies
Challanges
- India’s formal sector cannot create enough good jobs.
- Few women in the workforce
- In the official narrative, too few Indian women venture out of their homes to earn money.
- More women in the workforce the economy would grow faster
- Economy ignores reality
- More Indian women have been working outside their homes to earn money than any other country perhaps.
- For centuries, they have worked in large numbers on farms, as caregivers and domestic workers in others’ homes, as municipal sweepers, and weavers and producers of handicrafts in small enterprises.
- They are also employed as teachers and as Anganwadi and ASHAs (Accredited Social Health Activists) providing essential services to communities.
- Increasing numbers of young and underemployed males are leading to more crime and violence, and sexual assaults of women in Indian cities.
Women’s Issue
- Essential services that women provide to society (including mothering and family care) are not considered productive work for the economy.
- Their work is not valued and they are paid too little.
- they are being pulled into the limited jobs the formal economy offers to increase GDP.
- Engagement of women in formal economy will not solve the basic problem — which is that the formal sectors of India’s economy cannot generate enough good
Downside of GDP growth
- Growth of GDP is like a disease.
- It kills the economy’s natural and social hosts.
- Natural resources are converted into commodities to feed the economic machine.
- Nature is reacting because Nature is reengineered for more GDP growth — more dams, more roads, and even more tourists in the Himalayas.
- Capitalism needs to reinvent itself.
- Paradigm of “growth, growth, growth” treats human society and nature as a means to its goals of producing more wealth for investors and more GDP.
What needs to be done?
- The state must take care of them because
- A platform service hiring motorcycle riders to deliver packages on time cares only about the efficiency of the work.
- Riders are extensions of their motorcycles paid only for on time delivery.
- Their human needs (for safety, health and sufficient income) only increase the cost of doing business.
- Growth of GDP is not the purpose of human civilization. India’s leaders must find a path to reach “poorna swaraj” social, political, and economic freedoms for all Indians.
- Economic growth must create equal opportunities for all to learn and earn with dignity and not harm the natural environment that sustains all life.
Conclusion
A new paradigm of economic science and policy is required, the development of which has become essential for humanity’s survival in this millennium. India should lead the way in the G20 and beyond.