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How To Solve From Poverty To Nuclear War”- (Democrism – Third Theory)-Part 1
DEMOCRISM – THE THIRD THEORY
By Prof Viswanathan,
Director,
International socio-Economic Research Bureau,India ( economist@dataone.in)
Introduction
1. The salient feature of this book is to unfold the implicit meaning of “Democratization of Economy” and its resultant impacts that are now dominating and intruding in all economic activities such as determination of volume of employment, volume of production, volume of consumption, volume of investment, fixation of just price and so on.
2. Inherently the term “Democratization of Economy” manifests, in essence, the judicial mode of “the distribution of capital to the people, the creation of investment for the people and the rule of economy by the people”
3. Precisely, in its true sense, the Democratization of economy prevents and prohibits all effective and active involvements and initiations of a few people or moderately some people as in Capitalism or the State as in Socialism, in the creation and the administration of capital at any parameter. In short, the capitalists the socialists will disappear in the execution of any economic activities of the nation as soon as Democratization of economy emerges with universal acceptance of people in the interest of economic justice. In other words the people, only the people, nothing but the people would be empowered with all economic powers.
4. The “Democratization” of the economy should not be put into identical terms with the ideologies of Capitalism or Socialism at any point of view. It is insulated from the existing economic systems which have plunged into chaos and confusion in solving economic problems since Industrial Revolution.
5. By the term “Democratization of Economy”, I mean the ‘economic rule of the people, by the people and for the people. So we can conveniently and convincingly translate it as “Economic Democracy”. On the contrary, the “Political Democracy” now practically means the “political rule of the majority, by the majority and for the majority”. The election mechanism and the party system have replaced “all of the people” by “the majority of the people”. But it is not now our concern to discuss on.
6. Hereafter I wish to introduce a new terminology “Democrism” in the place of ‘ Democratization of economy’. ” Democrism” is an economic system whereas ‘Democracy’ is a political one. Intrinsically ‘ Democrism’ rests on the concept of economic justice “who should have capital ownership” but the ‘Democracy’ on the ‘ vote-bank’ of people.
7. Practically it is the “ownership of capital” that determines what kind of economic system a country follows.
If the capital is owned by a few individuals we name it Capitalism. On the other hand if the same capital is owned by the State we call it “Socialism”. And if the capital is owned simultaneously both by a few individuals and the State we declare it as “mixed economy”.
In equation with the above concepts I justify the term “Democrism” ,if the capital is owned directly by all the people as a whole.
Once the seed of “Direct Ownership of Capital by the people” is sowed in theory and practice the following just and fair consequences will germinate with deep root in the socio-economic soil.
I. Capital Distribution:
The accumulated national capital stock employed in the production of goods and services would be equally distributed to all the working people automatically. This capital distribution just a book-keeping work. No one can merchandise his share of capital. The purpose to be served in the equal distribution of capital is to make the people realize that they are the justifiable owners of all the industries as a whole.
II. Classless Society:
On the equal distribution of capital in Democrism, the class discrimination of ‘capitalists and workers’ and ‘employers and employees’ will vanish automatically. On acquiring a share of capital all the workers will become capitalists and all the capitalists will become workers. There are two approaches to establish classless society. One is Negative approach and the is Positive approach. It is the Karl Marx who advocated the Negative approach to establish classless society by abolishing ‘Property right’ to all. The theory of democrism follows Positive approach by ensuring equal share of capital wealth to all to establish classless society. The ownership of capital wealth to all the workers will provide them inalienable economic power , economic security and economic equality by which they can protect themselves from exploitation and lead towards an Ideal Society.
III. Creation of investment according to wages:
On the same footing of the distribution of capital to the people, the creation of new investment for the development of economy will be borne by the people on the well defined and universally accepted principle. Since the principle should be based on economic justice and the investment is also a creation of labor force the core economic principle of all economic systems that ‘work according to energy and wage according to work’ should not be froze and become stand still up to this concept. It should be developed further into ‘ investment according to wage’ to respect and recognize the justice of labor. In order to enforce the optimum integrity to the well settled labor theory I wish to put one step forward as follows:
“work according to energy
wage energy according to work
investment according to wage”
For the creation of National Investment, every worker will contribute a specified share of his wage income. In other words every worker will contribute an Investment Share according to his wage. For instance, if a company is floated by issuing 100 millions shares of Re. 1 each at face value only, all the shares will be distributed only to the workers of the country according their wage. This process will be continued perpetually whenever share are issued. No individual will be allowed to swindle as many shares as he can buy with his money power.
IV. Interest-free economy:
In the composite setup of present economic systems the required investment is being derived from the savings(deposits). The required investment at a particular time from the pool of savings is not always ensuring a smooth process of equilibrium between ‘savings and investment’. The conversion of savings into investment inevitably necessitates a payment of huge volume of interest to attain and establish a smooth process of equilibrium between them. (Note: the marginal efficiency of capital i.e. profit is another deciding factor to determine the required volume of investment
V. Industrial Fraternity:
On the creation of investment directly by the workers according to their wage industrial fraternity of “each industry for all and all industries for each” will invariably emanate by the economic consequence of ‘investment according to wage’. In other words, all the workers will have a capital share in each industry and each worker will have a capital share in all industries.
VI. Workers’ Management:
When an industry is directly owned by all the workers of the country the management of the industry will consequently be entrusted in the hands of workers as a whole. Since all the workers cannot participate in the management of a particular industry , the management of the industry will be handed over to the workers of the industry on behalf of all the workers of the country. An elite management group of workers in the industry, well trained in the industrial and business management through business schools will take care of the industry. This elite management group is answerable to all the workers in business matters of the industry and the management group should keep accountability and transparency in all industrial activities.
VII. Dual Income (wage plus dividend):
When each worker ill have a ‘capital share’ in all the industries of the country the profit earned by all the industries i.e. National Profit or National Dividend, will be distributed to all the workers. Thus the workers will earn dual income, wage-income for their work and ‘dividend-income’ for their contribution of investment.
VIII. Egalitarian Society:
When all the workers contribute a particular percentage of share of income as investment to the National Investment according to their wage income, the ‘Investment burden’ of the low income group of workers will be greater than the ‘Investment burden’ of the high income group of workers. For example if low income group of people contribute Rs. 1,000 as investment out of their wage income of Rs.10,000, their investment burden would greater than that of high income group of people who contribute Rs.10,000 as investment out of their wage income of Rs.1,00,000 because the low income group of people have to sacrifice even the consumption of necessities as their saving power is nil at that wage income and on the other hand the high income group of people need not sacrifice any consumption of goods but only to convert their savings into investment. Therefore, the low income of group of people bear greater ‘investment burden’ for the development of the national economy then the high income group of people. Then it is the economic justice that the ‘more dividend’ should be paid to the low income group of people than the high income group of people on the basis of ‘ investment burden’. More the investment burden means , more the dividend and less investment burden, less the dividend. This distributive justice of dividend will lead the economy towards Egalitarian society.
First, the higher dividend received by the ‘low income group’ and the lower dividend received by the ‘high income group’ will reduce ‘Income Gap’ between the two income groups.
Secondly, in Democrism, the ‘concept of profit’ will not be used as a tool of exploitation of workers but as a ‘mechanism’ for the establishment of Egalitarian Society in the world.
Now the basic economic concept will widen its domain as follows:
“Work according to energy,
Wage according to work,
Investment according to wage,
Profit (Dividend) according to investment burden,
Equality according to profit (dividend)”
IX. Tax-free Economy:
For smooth operation of economy the ‘National profit’ will be divided into segments such as 1 .Income-compensation of profit; 2 .Tax-compensation profit; and 3 Producers’ deficit money-inflow compensation of profit.
Income compensation of profit: It means a part of National profit that is set apart to distribute as dividend according to investment burden to fill the income-gap between low-income group and high income group for the establishment of egalitarian society. It has been already explained above.
Tax-compensation of profit: It means a part of National profit that will be directly allotted to the government to meet its expenditure. This part of National profit is nothing but the government income which is so far earned from direct and indirect taxes. All kinds taxes will be abolished in the economy and the people will directly contribute a part of their National profit to the government for its expenditure. There will be “tax-free’ economy in the country. By doing so, a huge volume of money spent for collection of taxes will be will be wiped out. Moreover corruption involves both in the collection of taxes and in the evasion of paying taxes will disappear.
Producers’ deficit money-inflow compensation of profit: Stability of economy means the stability in volume of employment, production sale proceeds of industries at all levels of employment. If industries suffer to get ‘expected income’ by sale of goods a part of National profit set into flow towards the industries to compensate their deficiency of ‘expected income’ to sustain the level of employment and production. Unemployment will not arise due to deficiency in effective demand i.e. due to failure of consumers to buy the goods produced for them.
X. Maintenance of stable economy:
The vital factor that underlies in all economic systems is to maintain the economic machinery in perfect condition perpetually to ensure stable economic growth with required accelerated tempo especially to wipe out poverty and unemployment. The smooth operation of an economic machinery requires ‘ a perfect and sustained monetary equilibrium’ in the circular flow of money between producers and consumers. “The rate of money-flow( for example Rs.100 billion) from the producers to the consumers when the production of goods takes into effect in a particular duration of time should be equal with the rate of money-flow (the same Rs.100 billion) from the consumers to the producers when the consumption of goods takes into effect in the same duration of time”.
If the consumers create ‘a time lag’ in spending their money income of Rs.100 billion the producers will face deficiency (for example Rs.10 billion) in their required money income of Rs.100 billion, and it will force the producers to reduce the volume of production by Rs.10 billion in the next round of production and the level of employment accordingly. In order to wipe out the ” deficiency of Rs.10 billion in the producers’ required income of Rs.100 billion” to sustain the economic activities in the next round, the third portion of the ‘National profit’ i.e. “Producers’ deficit money-inflow of profit” will be utilized to fill the ‘Monetary gap’ of producers even if the goods are not sold. Goods may perish but not the life of workers due to unemployment as it is now happening in capitalism and socialism. If we want to put into Keynesian terms unemployment will not arise due to lack of effective demand when the third portion of National- profit is properly used.
In democratization of economy the very concept of profit will be expelled from the ‘factor of exploitation of workers’ but will operate as an economic crusader retrieving the workers (people) from clutches of taxation, economic inequality and economic disequilibrium. In other words the concept of profit will be sheltered here as an ‘economic technique’ to maintain stability in economic activities instead of an ‘exploiter’
XI. Prosumer Society:
On the democratization of an economy and subsequently in consequence of the principle “Investment according to wage”, all the consumers (workers) will become the producers. So the economic discrimination between consumers and producers will naturally disappear. A PROducer cum conSUMER society, known as PROSUMER Society will newly emerge in the economy. In the prosumer society we can deduce that all the consumers will naturally become the producers of the commodities which they want to produce. The people as a whole will determine what to produce, how to produce and how much to produce and they will bear the ‘risk factor’ of production to maintain economic stability.
XII. Just price:
Since all the consumers will enjoy the position of producers in a prosumer society it will be consumers only who will fix a price of the commodities which they want to consume. There will be tussle of demand and supply forces between producers and consumers in the fixation of price. It is the consumers (producers) who fix the price of commodities which they want to consume. There will be contentment and consentaneous general will among the consumers in fixation of the price instead of competitiveness. It is Just price because there is no room of ambiguous feeling the price level is higher or lower.
It is the just price because even if the price fixed is considered to be much higher than the cost of the goods, it will yield higher margin of profit. Higher the profit means higher distribution of the dividend; higher the dividend means higher the dividend-income to the consumers who are in the parenthesis of low and middle income groups. What the consumers pay more in the form of ‘marginally increased price’ will be immediately compensated more then that in the form ‘higher-dividend-income’ A rise in price-level will always tacitly help the consumers to fill their ‘income-gap’ instead of exploiting them. The profit created will be drained to the consumers as they are the producers as well in the Prosumer Society.
We have already seen there is ‘tax-compensation profit’ in the domain of National profit of the people. If the price-level is reduced to the point where it will cover only the ‘government expenses’, the people will get no dividend to enhance their income along with wage-income. The ‘profit-free price level’, though it will be comparatively low, will not help the low-income group of people to harvest the benefit of the ‘dividend-income’ to increase their total income. So the people will tend to push up the price-level up to a point where the national profit will be enough to yield ‘higher rate of dividend’ then the ‘marginal increase of price-level.
The higher volume of dividend than the ‘marginal increase of price level’ in respect of low income group of people will be termed as ‘income gain’ for them. We can put the ‘income gain’ in other terms as “Income Equilibrator”. For it reduces the income gap between low and high income group of people as ‘dividend is distributed according to investment burden’.
At a particular point on the curve of price level the poor will receive more dividend than the rich. Thus the ‘Income equilibrator’ transfers a portion of money-income of rich to the poor bit by bit. This gradual transfer of money income will reduce the income gap between poor and rich and will tend to attain economic equality. The economic equality cannot be attained at a single stroke of lightning. The combined socio-economic circumstances should be taken into account. In the name equality we should not crush and squeeze the rich. A universal harmony and consensus should prevail among the people in the attainment of equality.
There are various points on the curve price level at which the rate of dividend will be greater than the ‘marginal increase of price level’ Such a point on the curve of price level determines the ‘Just price’ of the economy at a particular level of production.
XIII. Inflation-free economy:
In consequence of democratization of economy the just price will act in smooth concerted way by increasing total income along with wage-income and increased dividend payment. Since any increase in the price level will increase the payment of dividend the total income, i.e. wage plus dividend, of the poor will increase their purchasing power. Moreover, the just price is determined by the universal consensus of consumers only. So, if the price level increases it is increased so in order to widen the profit margin and it will be effective to pay higher ‘dividend – income’ to the poor people. Therefore any increase in price-level will increase the purchasing power of the poor people but not forfeit it.
The vicious wage-price spiral inflation will not emerge in the democratization of economy. Here there is no ” market price” determined by the interaction of demand and supply forces, but only the ‘just price’ determined by consumers themselves. Therefore the mode of operation of the economy will be “inflation-free’ of any kind.
XIV. Administration of Natural Resources:
In the democratization of economy it is the people , only the people, will take utmost care and absolute control over the allocation and allotment of Natural Resources. The natural resources are not only very scarce but also remain very source of all production and distribution of goods and services of any economy. The people will take exclusive control over the natural resources and assume full liberty and authority in their allocation to the various production and economic activities quashing government’s participation in any way or in any form.
When the natural resources come under the direct control of the people, they will not allow the natural resources for the production of destructive goods like nuclear weapons which are now threatening the very existence of human race and such hazardous commodities like ganja, opium and other narcotic drugs which are harmful to human health. At present the narcotic drugs are widely spreading their wings throughout the world, especially among the youth, and posing hazardous risk to the very life of the people. Since there is world wide network in trafficking and strong nexus among the politicians, executives and underworld dons in the business of narcotic drugs for monetary benefits ignoring the welfare of the society and taking no thought of the health of future generation, the enforcement of laws and execution of punishments seem to be ineffective and impotent on checking and abolishing of the flourishment of the trade day by day. The only solution now remaining at last is the democratization of economy and entrust the natural resources in the hands of the people.
XV. Elimination of nuclear weapons:
If we deeply contemplate to find out the root cause for the production of “Weapons of Mass Destruction” (WMD) like nuclear weapons, ballistic missiles, poisonous chemical weapons, we deduce the fact that it is the State, only the State, having the ownership of capital, produces such kind of weapons throughout the world in the name of ‘self-defense’ or ‘military balance’ or to enjoy the dignity of ‘super power’. These weapons are produced by the State without the knowledge and approval of the people, though the capital used for the production of such weapons, is ravished from the tax payments of the people.
These weapons keep the whole world as ‘open battle-field’ and kill millions of innocent people. The people who pay the tax for their own welfare are not aware of the conversion of productive capital into destructive capital. They are always being kept in utter darkness.
The only solution for the people to save themselves from the nuclear holocaust is the immediate execution of democratization of economy i.e. ‘peoples’ direct ownership of capital. Because on the direct ownership of capital people will not allow at any cost their capital and their industries to produce the ‘weapons of mass destruction, and thereby to destroy themselves.
No summit meetings on reduction of nuclear weapons, no bilateral or multilateral treaties on non-proliferation of nuclear technologies will ensure world peace. I believe the only hope for human survival and scope for the world peace anchor on the democratization of economy apart from solving poverty and unemployment.
XVI. Elimination of Global Terrorism:
The Statement, ‘One man’s terrorist is another man’s freedom fighter’, has become not only a cliché but also one of the most difficult obstacles in coping with terrorism. The matter of definition and conceptualization is usually a purely theoretical issue but in the struggle against terrorism, the problem of definition is a crucial element in the attempt to coordinate international collaboration.
The attempt to confound the concepts of “terrorism” and “national liberation” come to fore in various official pronouncements from the Arab world. For instance, the fifth Islamic Summit in Kuwait at the beginning of 1987, stated in its resolutions that:
The conference reiterate its absolute faith in the need to distinguish the brutal and unlawful terrorist activities perpetrated by individuals, by groups, or by the states from the legitimate struggle of oppressed and subjugated nations against foreign occupation of any kind. This struggle is sanctioned by heavenly law, by human values, and by international conventions.
-(Al –Anba’a, Kuwait, January 30,1987)
The Statement, “One man’s terrorist is another man’s freedom fighter” justifies “means” (terrorism) in terms of the “end” (national liberation). The former President of the Soviet Union, Leonid Brezvev, made the following statement in April 1981, during the visit of the Libyan ruler, Muanar Qadhafi:
“Imperialists have no regard either for the will of the people or the laws of history. Liberation struggles cause their indignation. They describe them as ‘terrorism’
-(Ray S.Cline and Yonah Alexander, “Terrorism as State-Sponsored Covent Warfare”-Virginai Hero Books, 1986, p24.)
It is impossible for any organization to be both a terrorist group and a movement for national liberation at the same time.
Senator Jackson was quoted in Benyamin Netanyahu’s book “Terrorism: How the West Can Win” (p 18) as saying:
“The idea that one person’s ‘terrorist’ is another’s ‘freedom fighter cannot be sanctioned…It is disgrace that democracies would allow the treasured word ‘freedom’ to be associated with acts of terrorists”
Without answering the question of “What is terrorism”, no responsibility can be imposed on countries supporting terrorism, nor can steps be taken to combat terrorist organizations and their allies(see Security Council Resolution 1269). Without a definition of terrorism, it is impossible to formulate or enforce international agreements against terrorism.
Modern terrorism is increasingly dependent on the support of nations. State sponsoring terrorism use terrorist organizations as a means to their ends, while these organizations depend on the assistance they receive from such countries at the eco, military, and operational levels. Some organizations are so closely dependent on the assistance of states that they become “puppets” functioning at the initiative, direction, and with the complete support of these states. It is impossible to contend effectively with terrorism without severing the close tie between the terrorist organizations and sponsoring states. This tie, however, cannot be severed without agreeing on a broad definition of terrorism, and thus of the states that sponsor it and of the steps to be taken against them.
The struggle to define terrorism is as hard as the struggle against terrorism itself. Under these circumstances it seems to be difficult to arrive consensus of opinion among the world countries in defining terrorism. Because every country wants to get rid of from the clutches of branding terrorist state. In the absence of universal consensus the affected countries make bilateral agreements to combat terrorism though they know it will not help much in combating terrorism. Though “terrorism is the deliberate and systematic assault on civilians and civilian agents to inspire fear for political ends” the world countries hesitate to take unanimous and strong decision to eliminate terrorism for ulterior motives. If so, how can we eliminate terrorism as mankind badly need it.
Terrorism is a theory and the terrorist is an executor of the theory. A terrorist is a person, armed with destructive weapons, with an aim to kill innocent civilians at large to attract the immediate attention of a state or the world to fulfill his political end irrespective of its worthiness. A person could not become a terrorist until and unless he is equipped with deadly and destructive weapons. At present the global terrorism is either state sponsored or underworld don sponsored like Bin Laden. In both the cases the terrorists acquire deadly arms and ammunitions, and long range missiles and weapons, and dangerous explosives and poisonous gases directly from the state administration or from vested interests. The world economy is such that its mode of production and distribution is at random and it is for purely profit motive so that the terrorists can conveniently procure the destructive weapons to meet their political motive. In the allocation of scarce natural resources for the production of destructive weapons, the profit motive of capitalists and the political motive of terrorists are in coordination.
The destructive weapons in the hands of wrong persons induce them to indulge in terrorism. If there is no destructive weapons there is no terrorist activities. For instance, the terrorists cannot hijack planes with bare hands with the intention of destroying the twin towers of World Trade Center in New York and terrorize the whole world by killing three thousand people at a stroke of lightning. In stationary vehicles, in flying planes and in suitcases arms and ammunitions and deadly explosives are used to kill innocent people. We can find no terrorists with bare hands to fulfill his political ends. There is a notion among people that Saudi Arabia is the epicenter of global terrorism where huge monetary resources are available in the name of heavenly law. The arms and explosives constitute the basic element for terrorism.
The production of such deadly weapons cannot be properly controlled and cannot be prevented to pass into hands of terrorists in the capitalistic mode of production whose only aim is profit motive but not social welfare. Before shifting the epicenter of terrorism from the Saudi Arabia to other parts of the democratic countries, we have to close all the venues and mode of production and distribution of destructive weapons. Even human suicide bombers cannot turn into terrorists unless they are equipped with explosives. The capitalistic mode of production is never effective to keep the self-interested capitalists under control in the production and distribution of such destructive weapons required by the terrorists. May the aim and pattern of terrorism be any design, the accessibility to the destructive weapons by the terrorists should be wiped out completely for the eradication of terrorism in the world.
Only in the democratization of economy the people as a whole would have absolute ownership of natural resources and control over the allocation of them for production and distribution of such terrorist-weapons. The individual consumers will be served with only consumption goods; no terrorist group or the state will gain access to procure natural resources for the production and distribution of weapons that terrorists require. Sooner the democratization of the economy, sooner will be the world peace on the eradication of terrorism. If the views and visions of the people in this regard are clear and courageous, the result will be peace and prosperous
XVII. JUST A LAW : “The Economic Theoretical Gap”
On my comprehensive technical diagnosis of basic structural economic laws I find out a vital ‘economic gap’ between the present complicated and confusingly textured economic systems, i.e. Capitalism and Communism, on one hand and the well ordered and universally acceptable economic system that we want to establish on the other hand is, of course, very narrow and to be capable of filled up. The establishment of well ordered society is not very far away beyond the celestial horizon. It is only at our arms length and in our hands. It just requires an enactment of one and only one ‘basic economic law’ for the creation of capital by “One Share to One Person”.
Economic gap and Capitalism:
By the term ‘economic gap’ I mean the difference in the ‘ownership of share capital’ by an entrepreneur or a State and the vast majority people(workers). The extent of width of economic gap in an economy determines what economic system a country pursues, whether it is Capitalism or Communism (Socialism). When the extent of economic gap in the ownership of share capital of a company between a person or a family and vast majority of share holders is very wide, the company is capitalistic in nature. For instance, when 51% or more than that of share capital of company is owned by a single person (or usually a family) – active share holders- and 49% or lesser than that of is owned by waste majority of people – passive share holders- by 10 or 20 shares at the least out of millions of shares, we can call the company as capitalistic type of organization. In precise words it is nothing but Autocratic Capitalism. For example the Billgate (Microsoft) in USA, Narayana Moorty ( Infosys), Premji(Wipro) and Mukesh(Reliance) in India, to mention a few, are autocrats of capitalism. These autocrats distribute billions of dollars as dividend to them selves and only a few dollars to vast majority of share holders according to the number of share ownership. The active share holders can exert control not only over the capital including the share capital of the vast majority but also on the management and decision – making of the company but the passive share holders can only get a meager amount of dividend income.
When the capitalism was collapsed during 1930 throughout the world, the economists and politicians wanted to inject a dose of ‘democratic principles’ in the creation of capital for the establishment of business organizations. But they do not follow ‘distributive justice’, the very foundation of democracy, in issue of shares for the creation of capital. With nefarious designs the policy makers to protect the vested interests have prohibited the equality in wealth and income to uphold the ‘distributive justice’ by allowing a person to buy as many shares as he can buy in creation of capital. Though it is argued that democratic principles are followed in the establishment of business organizations through the distribution of shares to the people. But in practice even a single person is allowed to buy huge volume of shares and vast majority of people are left to buy only 10 or 20 shares out of billions of shares issued in public. This share ownership has created a huge economic gap and has resulted in the emergence of Autocratic Capitalism once again in the name of democratic principles.
In order to protect the democratic principles and distributive justice in the creation and the ownership of capital, some economists and trade unions in European countries and even in United States have established ‘ Capital Ownership Groups’ (COG) to raise ‘investment funds’ from the workers to buy the shares of the company in which they are working and new shares that are issued for public. The great hurdle that the Capital Ownership Groups is now facing is the lack of government support and the inability to raise sufficient investment fund to buy vast majority of shares to take control of a company to inject ‘distributive justice’ and to exert democratic power in the management of a company. So it requires a new economic strategy and a new economic technique not only for the creation of new capital but also for the distribution of existing capital to the workers only in line with democratic principles and distributive justice so that we can eliminate economic gap between capitalists and the workers.
With the strong intention of establishing ‘Economic Democracy’ to replace autocratic capitalism, some economists and trade unions in the most of the European countries and even in United States have organized CAPITAL OWNERSHIP GROUP’S (COGs) to raise ‘Investment Funds’ from the workers. The aim of COGs is to utilise the Investment Fund mainly to purchase the shares of the company in which the workers are working to inject a dose of democracy in the management and to reduce the Economic Gap between the capitalist and workers by increasing dividend income of workers to uphold ‘Distributive Justice’.
The gruesome hurdle the COGs face is the lack of support from the government and the policy makers to accumulative the ‘Investment Fund’ of COGs as far as possible to reduce Economic Gap. Moreover the COGs are unable to raise as much investment fund so as to compete with the capital wealth of a few capitalists. Keeping with a meager volume of shares the workers are unable to protect their economic liberty, economic equality and economic security. So we have to excavate a new economic strategy and new economic technique which will empower the workers to purchase equal volume of shares as others to vitalize ‘distributive justice’ and ‘economic democracy’. It requires an enactment of just one law as ‘One Share to One Person’ in the creation of capital for the establishment of new business organizations and disinvestments of the existing capital to the workers on the same principle of ‘One Share to One Person’.
Economic Gap and communism:The Economic Gap in the ownership of capital between the State in Communism (or Socialism) and the workers seems to be infinity. The State claims absolute ownership of entire capital of the nation as a whole and the workers are denied any bit of direct ownership of capital even in the organization they are working. In communism the capital is not created by issuing shares to the public so that no worker can buy any share capital. The capital is created out of the tax payment of the workers. The workers are denied to enjoy the Economic Rights such as Right to participate in the management and decision-making, Right to Economic Liberty, Right to Economic Equality, Right to Economic Security, Right to choose a job a worker is willing. The same economic scenario is also prevailing in the capitalistic organization . Because in both the systems a huge volume of capital is occupied by a capitalist in Capitalism and by the State in Communism. The vast majority of workers are denied to own adequate and justifiable volume of capital to protect themselves from the encroachment of their vital Economic Rights.
In Communism the workers are allowed only to get wage income according to their work. The national capital is also created by the workers according to their work but they are not permitted to claim a share of capital according to their work. According to the work the workers produce not only goods and services but also the capital. But they are allowed to get only goods and services and not to claim any share in their capital. They are producing capital for State and goods and services for themselves. Therefore, the Economic Gap in the ownership of capital between the State and the workers as a whole is infinity and immeasurable. The measurement economic gap tend to zero to infinity.
In the present context of cutthroat competitiveness among the countries to boost their Gross National Production the Communist counties like Russia and China want to reduce their Economic Gap by allowing their a part of State Capital to be distributable among the workers in the form of shares. They believe if the workers get some amount of share capital they would work with enthusiasm and vigor to increase their productivity and GNP. Instead of keeping the Economic Gap at infinity the communists now want the Gap at a measurable value. They have now introduced privatization in some production sector especially in electronics. China is able to compete the world market with their cheap electronic goods and toys. They communists slowly allow the Multi National Companies to set up their organizations in their soil. The change of world economic scenario is now forcing the Communists to reduce the Economic Gap between the State and the workers to considerable level. But how much extent they will reduce the gap? It is the necessity of their economy has to answer for their future generation.
Law of Economic Systems:
On my discerning what factors that decide the economic systems to differ from country to country I find out the ‘ economic gap’ plays the predominant role. If the ‘economic gap’ between capitalists and the workers is ever widening we can dare to say that the economic system autocratic or dictatorial capitalism. On the same track if the gap is at infinity and immeasurable between the State and the workers, the economic systems is nothing but dictatorial Communism (or Socialism). And if the economic gap is going on reducing between the capitalists or the State on one hand and the workers on the other hand we can predict that the economic system moves ‘towards democratic economy’. On applying some economic strategy and technique if the ‘economic gap’ is fully eliminated between the capitalists or the State and the workers, the economic system is converted into ‘Democratic Economy’ for the establishment of which we are striving for years together.
Economic Gap and Democratic Economy:
With the glowing spirit of solving economic problems the economists now realize to establish ‘One Economy’ in the place of multiple economic systems. As far as I am concerned the establishment of ‘One Economy’ will solve the acute economic problems such as poverty, unemployment, economic inequality, economic insecurity and some political problems such as terrorism and nuclear holocaust to mention a few.
The establishment of ‘One Economy’ requires the merger of multiple economic systems especially Communism and Capitalism in a justifiable manner. I strongly advocate the only technique to merge Communism and Capitalism is the elimination of ‘economic gap’ that exists between the employer (capitalist or the State) and the employee (the working class). On the complete elimination of ‘economic gap’ the distinction between employer and employee will disappear and all workers will become share holders and all share holders will become workers. This will pave way for emergence of ‘Democratic Economy’. The Democratic Economy will satisfy all conditions for the establishment of ‘One Economy’ that the economists require for.
Moreover on the abolition of capitalists (employers) a classless society will emerge and the workers will be emancipated from the clutches of capital arrogance of capitalists and the State for their employment. I discuss the matter later in detail. Now my main concern is to deal with you how to establish ‘Democratic Economy’. It requires an enactment one law, just one law, in the constitution. The law demands that in creation of capital by way of distribution of shares, the shares would be allotted on the principle of ‘Distributive Justice of Equality’. It means the shares would be allotted on the democratic principle of ‘One share to One person’. To uphold the principle of equality all the workers would be allotted equal number of shares without discrimination on the basis of social status, income and occupational position.
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Source by Prof Viswanathan
