Reply To: Vedic Economics

Forums Forums Vedic Philosophy Vedic Economics Reply To: Vedic Economics

Ashish Dalela

Do you agree with this? Is that kind of spending a necessity for technological advancement?

Yes. It is not for nothing that technology is called the military-industrial complex. Everything in your cell phone — cameras, wireless communication, encryption, internet, image processing, signal processing — came from the military. The development of this technology required vast amounts of investments with uncertain results and nobody makes those investments except the government because government investments are repaid by a large number of taxpayers.

Can we achieve the same levels of productivity and pricing of essential goods (such as electricity) without mass manufacturing / production?

You are only thinking about the production side. What about consumption? As productivity increases due to mass production, many jobs are lost, and with that loss comes a fall in demand. The industrial economy, therefore, has to constantly struggle to create new types of employment, because if the people displaced by the technology are not employed, then nobody will buy the new products, and whatever was invested in creating new technology would be lost. New job creation requires reskilling of labor, which requires new types of education and training, etc. This process has been repeated a few times now. For example, handloom operators were retrained to operate machines. But for how long and how many times can this process be repeated? At some point, either technological advancement must stop to keep people employed, or people will be forced to leave the economy because they cannot get trained to be employed in the new system.

As an example, with AI, you can think of self-driven cars and trucks. Now all taxi drivers and truck drivers will become unemployed. What are they going to do? Become AI programmers? How many such programmers are needed in the economy? There will be a net decline in jobs, then a fall in demand. Then, initially, the prices fall, then businesses fail, then production stops, then prices rise due to reduced production, but nobody has the money to pay for anything. The net result is rapid cycles of boom and bust. These cycles are so rapid that everyone is forced to borrow money to survive, and everyone is lifetime under debt. The government has to keep printing money to bail out the failing lender and give free cash to prevent societal collapse. Those who work hard and save, their savings are wiped out by inflation. And those who don’t save and just spend, always remain in debt. In short, there is net debt and zero saving. The end of this cycle is that people leave industries and go back to farming to just eat and survive.

Technological disruption is a good thing only when new jobs are created in parallel. This creation is not guaranteed. And if you get one cycle of technology disruption without new jobs, the whole system crashes upon itself. That’s how fragile the technological model of economics is.

Is private research spending a significant contributor toward technological progress? If yes, how can private firms spend in research without a global consumer base and fat margins?

Private research spending is only occurring where the returns are guaranteed. One such area is medicine. But the returns are guaranteed only if the government pays for healthcare. So, first public funds are given to private researchers in the name of ‘scientific progress’. Then the results of this progress are used for private profits. In short, the public pays for the same thing twice — once in R&D through the government, and then to the private companies for drugs and equipment. When the government doesn’t pay for such R&D (as in developing and economically weaker countries), there is no investment in research. Only the generic version of all medicines is provided. Again, in short, investment occurs only by government and taxpayer money.

Capitalism is socialism for the rich. The government pays for research, and costs are distributed. The businesses make drugs and the profits are consolidated. By repeatedly distributing costs and consolidating profits, the rich get richer and the poor get poorer. It happens slowly so people can never make out what is happening in the economy. They are just told: “you are free” when the fact is that they are slaving for others, getting a fraction in return for what they create.

Finally, I will request you to use your real name. Be a person, and interact as a person. Don’t interact using an obfuscated email hidden behind a pseudonym.