How to achieve economic freedom In developing countries

IT is well known that uncultivated and unimproved or underdeveloped land does attract income or rent due to no efforts whatsoever on the part of the land-owner, but as a result, wholly and solely, of pressure of population, proximity to industrial or commercial activities, or some other causes to which the land-owner has made no contribution whatsoever.

Even when a land-owner improves his land or builds on it, more often than not the building attracts rent out of proportion to the reward appropriate to the amount of capital invested in it.

Again, the entrepreneur who takes advantage of over-supply of labour coupled with short-supply of the commodities which he produces, makes an extraordinary profit or an unjust gain which he is perfectly entitled to keep as his private property.

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The extent to which a person may employ his energy and property as he likes depends on the state of supply and demand which is quite outside his control. In circumstances where the demand for any commodity is great under conditions of limited supply, it is absolutely idle to talk of equality of contract as between the sellers and buyers of such commodity.

Apart from being a contradiction in terms, the postulate of egoistic altruism has never achieved the laudable ends which economists, since Adam Smith, ascribe to it. On the contrary, the relentless pursuit of his own self-interest and greed by every individual or interest group, has led mankind to the realms of incalculable wastes and miseries. Adam Smith’s ‘invisible hand’ has turned out to be the blind umpire of a fierce and savage struggle in which the casualties in dead and wounded far outnumber recorded survivals. As a result, the entire productive paraphernalia of capitalist countries in Western Europe and America are today in the hands of a very few people who are the economic dictators of the capitalist world.

Besides, the capitalist system, under the guidance of the ‘invisible hand’, is always either breaking down or threatening to break down. From the birth of the industrial revolution in Europe, Britain has witnessed more than twenty-five trade’ cycles, and innumerable strikes and labour disputes and strifes; which means that those countries, with which she has trading intercourse, have also been afflicted by the same maladies to a more or less extent.

Various causes, beginning with Jevon’s Sun-spot Theory, right down to Keynes’s Savings/Investment Theory, have been assigned to explain the phenomenon of trade cycle. A careful examination of all the theories of trade cycles however, will reveal that its basic cause is economic MALADJUSTMENT: maladjustment of supply of goods to demand, of supply of money to available goods, and of savings to investment.

This maladjustment is endemic because of the inescapable lack of co-ordination (I) among the producers interse, (2) between the producers and consumers, (3) between the producers on the one hand and the Monetary Authorities and Banking Institutions which handle savings on the one hand and the investors, or buyers of savings, on the other.

Furthermore, the injustices which arise from the processes of production, exchange, and distribution, are too inherent and deep- seated in the capitalist system for such injustices to be eliminated or even satisfactorily minimised.

Land and labour are the primary agents of production. In the beginning, all capital flows from the union of labour with land.

This was done by the combined processes of deliberate and inevitable abstentions from consumption. As time goes on, however, more and more capital is produced by the union of labour with land, aided by the agency of pre-existing capital set aside for the dual purpose of assisting these two primary agents in producing more wealth and capital.

This being so, the total wealth produced by the union of labour with land should, after necessary deductions for input depreciation, and new capital, go to labour. That is, labour of all kinds and gradations including skilled and unskilled, and technical, managerial and administrative labour-power. But under the capitalist system, the lion’s share goes to the so-called land-owner, owner of capital, and the absentee shareholder in the forms of rent, interest and profit.

The operations of supply and demand or of the marginal concept clothe practically all transactions relating to exchange of goods or services, with legality but with manifest social injustice and inequity. As we all know, exchange takes place between, shall we say, A and B, when either of them has preference for what the other is prepared to exchange.

But the sole determinant of the quality and value which the one is obliged to give to the other in exchange for that other’s goods, in order to make the exchange effective, is the forces of supply and demand and of the margin. If at any time A produces more or less than B requires, he will get less or more value, in the course of the exchange; and vice-versa.

If for some reasons with which we arc all quite familiar, the conditions of demand relative to supply favour A more than they favour B For a considerable length of time, A may become fabulously enriched at the expense of B, whilst the latter becomes miserably impoverished. This will be the case not because A works harder and more efficiently than B, but simply because the law of supply and demand and of… To be continues