Vedic Economics

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    You have outlined some of your economic ideas in articles like what the new world order could be. I would like to probe a bit further about your ideas.
    1. Technological progress over the last century resulting in overall medical, material prosperity etc can in significant part be attributed to governments spending toward military. Do you agree with this? Is that kind of spending a necessity for technological advancement?
    2. Capitalists speak of economies of scale, i.e., prices of products can reach a rock bottom only via mass manufacturing which is fundamentally at odds with locally constraining the scale of manufacturing. Can we achieve the same levels of productivity and pricing of essential goods (such as electricity) without mass manufacturing / production?
    3. 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?

    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.

    Sai Saurab

    Sorry, I don’t usually use my real name /email on internet forums. But I’ll make an exception here.
    Thank you for your comments.

    You are only thinking about production side. What about the consumption?

    About creating demand, I think this is why people like Bill Gates are advocating for a Universal Basic Income and taxing the robots – to extract more taxes from corporations and hand out free money to everyone. Any thoughts on that?
    Also isn’t there a natural demand always due to rising population? One could argue that we are already far from being able to feed, clothe, shelter and heal a significant portion of the population because of where the prices are at. We need much better technology to fulfill the existing demand. Who should be in charge for allocating the capital necessary for creating the technology? Governments have arguable failed to do that over the last few decades as is evident from the technological stagnation in almost all fields except Communications/IT (as observed by Tyler Cowen, Peter Theil etc)
    Also as an aside – if you agree with the technological stagnation part, is it due to improper capital allocation or have we run against fundamental scientific limitations?

    Ashish Dalela

    May I suggest that you read my book “The Yellow Pill”? It discusses these issues and describes the ideal solution. Society has existed for millions of years in a civilized manner. We know that from Vedic scriptures. People in the West don’t know that, so they think they have to create one solution after another, and when that solution fails, then create another. Nobody stands up and says: “This is the ideal solution” and they don’t own up to any responsibility for the past.

    We have to first understand how material nature is working. It is not due to the laws of modern science. Nature is working according to guna and karmaGuna means choice and karma means responsibility. The materialistic people don’t understand how choice appears, and they certainly don’t believe in natural responsibility, because according to Christianity, morality is given by God. That is not true. Morality is a natural law. You have to suffer the consequences of your deeds. It is not someone else that has to suffer. It is you–personally who has to pay the price.

    Ask all these so-called gurus one question: Will you live according to any of the solutions you are proposing? Will Bill Gates live on universal basic income? Certainly not. He wants his bank balance, mansion, lifestyle. So, his solution is not for himself. It is for other people. But we are not giving this solution for others. We are saying that this is how we are prepared to live.

    The proposals for taxing the robots are pie in the sky. No rich man is going to pay such taxes. They keep money in offshore tax havens, to avoid paying current taxes. And you are asking them to pay more taxes, which will never work. In the worst case, they will move to another country and live a good life there. But if they can prevent it, they will do everything to prevent it.

    A classic example is Bernie Sanders’ failed election bids. He talked about making the rich pay more taxes, and what happened? Did any of these do-gooders come in his support? Zero. They don’t even bankroll his campaign. They make sure that he is replaced by a “conventional” guy who doesn’t have ideas and opinions, and who will just do the bidding of the rich guys. Why will a rich guy who says the rich must be taxed, not support a politician who says the same thing? Or, for that matter, why doesn’t it surprise you when a rich guy says that the rich must be taxed? Have you ever seen a person who says “I have too much money”? Nobody says that.

    The basic need for all these people is how to get more control, more power, and more fame. They are not interested in any good for the people. They want to become the controllers of the world. They don’t have the power to do that directly. So, they want to bribe the government: “We will pay you more taxes”. And what do they get in return? They will ask for control over government policy, natural resources. And keep the people on basic income so they can’t say anything. It is a solution for permanent slavery, proposed as a bribe to the government in the form of higher taxes, and a way to control the population by telling them: “We are giving you your daily bread”.

    The essence of the contract between people and government is made through taxes. If you stop paying taxes, then you cannot demand anything from the government. And the business that pays the taxes to the government can demand whatever it likes. This is their ‘solution’. They will give some money to the government, get access to all the natural resources, feed people some crumbs, while they get to control the world according to their ideas, wealth, and desires.

    Sai Saurab

    Thanks again for responding with great insights. I was actually going to ask for a book/article recommendation. I will surely go through Yellow Pill. I read and enjoyed Godel’s mistake and am planning to re-read it.

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