DEMOCRATISATION OF ECONOMY

DEMOCRISM - THE THIRD THEORY.
'How to solve from poverty to nuclear war'

Introduction

Democratisation of economy means 'the Direct ownership of National Capital by the People' which will create "Each Industry for All and All Industries for Each".Capital should be owned neither by a 'few capitalists' nor by the 'State' but by the people directly(Democrism-The Third Theory).Democrism,by its new economic technic "DUAL MONETARY SYSTEM", will solve all human problems 'From Poverty to Nuclear War'.People will create adequate 'Investment according to thier Wage' to solve poverty and unemployment BASIC CONCEPTS

In Democrism 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 other 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 workers 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 the mankind 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 freeze and become stand still up to this level of 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 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 also another deciding factor to determine the required volume of investment). The ‘interest’ technic has failed to create adequate investment to solve unemployment. So when the workers create required investment according to their wage they not only reduce the factor cost of production but also lead the economy towards full-employment.

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.

VII. 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 than 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 wage, Equality according to profit (dividend)”

VIII. 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.

IX. 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 democratisation 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 technic’ to maintain stability in economic activities instead of an ‘exploiter’

X.Prosumer Society:

On the democratisation 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.

XI. 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’ than 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.

XII. 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.

XII. 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.

XIII. 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.

XIV. 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 NewYork 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 epi-center 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 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 epi-center 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.

Related Essay About: