Sunday, December 1, 2013

The Economy of Permanence

Through time spent in the Gandhi Ashram eco-system, I've often come across writings and books that exposed me to radically different constructs. One of the authors I came across was J C Kumarappa - a Gandhian economist who did some stellar work in re-constructing the theories of economics in a decentralized, service oriented context. During his years as part of the freedom movement, he invested a great deal in understanding India, and the spirit that has sustained it's communities for millennia. 

There is an interesting story about his time in the Sabarmati Ashram. A group of professors from Harvard were visiting Gandhi to better understand this model of economics that contrasted so starkly to the those emerging in the Americas at the time. Gandhi, of course, directed them towards Kumarappa. As they entered his office, they saw him seated on a chair, under two pictures. The one right above his head, was Gandhi's. 'He's my teacher' he said plainly. And above Gandhi, was a picture of a group of ordinary, simple villagers. 

'And them? Who are they?', the visitors asked.
'Oh them!' They're my Teacher's, Teachers!'

And that, was the guiding principle behind the movement that emerged at the time. What happens when we 'Put people first', as economist Schumacher described his seminal publication 'Small is Beautiful'? During his one year spent in jail as part of the Quit India movement, Kumarappa wrote a book that shared some of these thoughts through an interesting model. The book, an Economy of Permanence is an effort to outline 5 different types of Economies in nature. Each one serves a different purpose, but inherently, they tend to support relationships that are either transient, or more permanent in nature. 

1. The first type of economy, is the 'Predatory Economy' - the best example of this, is a thief who might kill you for your wallet or purse. If you view this as a transaction, the thief has gained some money, but you have lost your life in the process. Clearly, a win-lose situation. 

2. A less harmful version of this, is a 'Parasitic Economy' where someone might just mug you for your money, but spares your life. You've lost out, but not to the extent as the previous case. In nature, you also see this with animals. A monkey will take a couple bites of a fruit of a tree and move on to the branch of another. Again, there is very limited gain for the tree in this case.

3. As we move more towards equitable distribution of benefit, we see a system we are most comfortable with. The 'Economy of Enterprise'. It's a pretty simple equation like Barter - in return for money, you can buy yourself some goods. Perhaps, a loaf of bread. More money equals more bread. The beauty of this system is that we see equal, tangible benefit on both sides.

Most of us know of Adam Smith's work - The Wealth of Nations. Through the book (which most argue has shaped modern-day economics) he describes that a man's output is most efficient when he works for gain. And to push this efficiency further, he developed the concepts of 'Economies of Scale' and 'Division of Labour'. We're all familiar with these principles, but in essence, he speaks of the benefit of dividing labour into water-tight compartments, based on skills, creating processes that can be broken down to mechanical thinking. No doubt these principles have brought us systems that work in incredibly efficient ways, that we could not imagine earlier. 

However, Kumarappa argues, that all these systems, assume we are disconnected, separate identities from our environment. It's built on the belief that one literally has to use means to 'gain' from his surroundings. "Man Vs. the Universe" But what if we were to assume that we could trust our surroundings. As Albert Einstein asks, 'Is the Universe a Friendly Place?' - if we could trust one another, and see ourselves in our community, what kind of economies would emerge? Kumarappa says there's two more economies to consider when we move towards one-ness.

4. And that brings us to the 'Gregarian Economy'. It's been practiced for thousands of years in local communities. We look out for our loved ones, or those in our community who we build ties of trust with. It could also extend to our country (supporting fellow Indians) or our faith (supporting a fellow Muslim or Sikh). While it's a tremendous display of love for another human being, its still a conditional offering - in that if I choose to change my faith, or nationality, or community, I no longer have access to these ties of generosity.

5. What if we were to extend these ties of trust and one-ness unconditionally? He says the fifth economy - i.e. The Economy of Service emerges. It might sound idealistic, but it's not something we witness through special beings once every few centuries - in fact, its prevalent all around us. He says the best example of such a relationship is that of a mother with her child. Observe a bird taking care of her young ones in a nest and you'll know just what he's talking about. The fledgling will eventually fly out of the nest, offering absolutely no return on the birds investment, but that doesn't seem to deter the mother. He goes on to say, it's not just in nature, but in fact it was a primary designing principle for most of the communities he spent time with in the country. A cobbler, or artisan creating products for his community was more rooted in values of service, and as a result you could see these decentralized models sustain for millennia, in contrast to the globalized, centralized models we see today.

The larger question that Kumarappa poses and explores, is 'How does one Design for the Economy of service?' He says the confusion arises because we don't hold internal capacities to ask the right questions in the first place. It's not that the Economy of Permanence goes against what Adam Smith has to say. It's simply, a realization that the Modern Economics does a great job of designing for efficiency. But what happens when we dare to move beyond the assumption that man is led by personal incentive and greed? If we do, we realize traditional metrics like Return on Investment, and Efficiency start falling away. We have to start asking different using different paradigms and metrics. 

For starters, we have to use a Different Lens. We often use the lens of 'Efficiency' which is great for the Economy of Enterprise, but doesn't make sense while evaluating the Economy of Service. A mother who feeds her son with food made with love in her kitchen won't hold back on the ingredients based on cost. It's a different set of metrics that determine her offering to her child. When we serve guests at a Seva Cafe, instead of looking at guests as potential revenue sources, we ask volunteers to serve them like family - irrespective of their economic capacity.​ That means, we need to tune into far subtler aspects and stop looking for 'gain'. We would need to start asking 'What we can offer' as opposed to 'What we can get'.  

Secondly, we would need to focus on moving from a paradigm of 'Externalizing Costs' to 'Eternalizing Benefit.' Businesses that are focused on the bottom line, will very naturally work with the formula of maximizing revenue and minimizing costs. Manufacturing companies will therefore look towards taking costs like 'environmental damage' off their balance sheets. Service sector companies will reduce their involvement in their staff's well-being. But when we stop asking what's in it for us, the entire equation get's flipped around on its head. We start creating benefit, without seeking credit or profit in return, and that can potentially be more rewarding in the long term. 

While these are just some questions to begin with, the intention is to start taking a subtle leap of faith in the vast organizing capacity of nature. It's a shift away from a mind trained for profiteering, towards a paradigm that fosters  ties cultivated in unity. It's rooted in the belief that ripples we set forth in motion will eventually come around to hold our intentions. It's still early days, but we'll inevitably see that it's a shift that we're all familiar with - from Transaction to Trust, Consumption to Contribution, Scarcity to Abundance and Isolation to Community. 

~ For it is in Giving, that we Receive ~ 

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