(Intent Editor’s note: Towards a Spiritual Economics will be divided into three posts. This first post describes the failure of capitalist economics. The second and third posts will delve into the outlines of why we need an economic theory grounded in more spiritual-based concepts.)
Many people think that capitalism and market economics grew out of materialist philosophy that classical physics has given us. But this is myopic thinking of people who have missed the evolution of consciousness in the affairs of the manifest world.
First notice that during the period that capitalism developed in the hands of such luminaries as Adam Smith, it was Cartesian dualism under the modernist umbrella that was the influential metaphysic, not materialism. In modernism, mind and meaning are valued.
Second, notice that capitalism replaced feudalism and the mercantile economy (Adam Smith’s term for the economy prevalent in England in his time) in which the pursuit of meaning is highly limited and vast numbers of people are denied it. Compared to Feudalism in which wealth or capital remains in the hands of a fortunate few, capitalism and market economy have certainly brought capital in the hands of many more. This has given a large number of people the economic freedom and flexibility needed to pursue meaning in their lives.
Third, notice that the only serious challenge to capitalism after the demise of feudalism/mercantile economy is Marxist economics. And it was a failure! Instead of Adam’s Smith’s “invisible hand” to drive the market and distribute capital, Marx envisioned that such a distribution can be done more effectively under a dictatorship of the proletariat in which the labor directly takes over the distribution and equalizes wealth. But Marxist economics so far has been installed only under the politics of communism (in which the dictatorship of the proletariat become more like a dictatorship of a bureaucracy) and it failed miserably. And the failure is primarily due to the fact that most people just cannot work hard when it is not for the benefit of their own private property and private wealth.
Unfortunately, it does not take a genius to see that capitalist economics as is practiced today is also at a crisis point. First, present-day capitalism is based on continuous growth and expansion that require unlimited resources; this cannot be sustained on a finite planet. The finitude of resources may already have caught up with us. The finitude of the environment is an additional constraint on unlimited growth.
Second, free market does not seem to be free any more. Why? And what is the remedy?
Third, capitalism and its continuing economic expansion produces higher and higher standards of living and wages do not keep up with it without producing inflation. To meet the demands of higher standard and its higher cost, people are forced to give up their higher needs such as the need of children to have a non-working mother or leisure time to pursue meaning. Thus invariably some of the basic promise of capitalism are shortchanged by the nature of the beast itself.
Fourth and most importantly, no thanks to the development of multinational corporations, the management-labor equilibrium that feeds the equalization of the movement of meaning between the classes are stalled. What is the remedy for this?
Actually, capitalism is better than Marxism because it recognizes one basic need for people: the survival and security of their physical body. This basic ego need requires private property and any economics that ignores this basic need of people is bound to fail.
But as the psychologist Abraham Maslow pointed out, beside this basic need, we have an entire hierarchy of needs. One major defect of the capitalist economics is the ignoring of the people’s higher needs. Following Maslow, but modifying his theory according to the insights of my general approach to spirituality, science within consciousness, we can easily see what these higher needs are.
To be continued in Part 2 and Part 3.
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