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Poverty reduction continues to be among the highest priorities for global policy makers. Significantly, even after two centuries of unprecedented technical and industrial progress, billions of individuals continue to subsist on less than $2 per day.  In addition, 25,000 people die of hunger or hunger-related causes each day according to the United Nations. It is therefore, imperative for policy makers to examine the effectiveness of their existing policies that are aimed at creating a more equitable world order.

Policy makers have largely structured their economies on two very different socio-economic models (Marxism, Capitalism) during the past century.  Significantly, both of these models evolved out of a profound inquiry into the nature of Man.  Capitalism, of course, has its origins in the Libertarian philosophy of The Enlightenment which considers Man to be rational.  By contrast, Karl Marx believed man to be exploitive.

CAPITALISM

To be sure, the philosophical foundations of both Capitalism and Marxism must be put to closer scrutiny.  Is Man rational? On the surface, it appears so.  The prosperity of Western Europe and America is self-evident.  America’s per capita income has increased from $4,000 to $40,000 during the past century.  Further, it has led the world for over a century in innovation and productivity thanks to its free market economy.

However, if Man is rational then why does he engage in frequent instances of irrational behavior? Why, for example, have rational American consumers over leveraged themselves?  Why did rational lenders engage in irresponsible lending practices?  Why did rational market participants invest heavily in derivative instruments without understanding their downside risks? Particularly after Warren Buffet referred to such investments as “financial weapons of mass destruction” in 2002?  Perhaps more importantly, why did rational ratings agencies continue to assign AAA ratings to these securities even as the implosion of the U.S. housing bubble became evident?

If Man is rational then why do we observe frequent instances of irrational exuberance by rational market participants?  Consider, for example, the technology bubble, housing bubble, credit bubble and commodities bubble?  Indeed, how do we explain the rapid rise in the price of petroleum during a period of global economic weakness and falling demand?

If Man is rational then why does Harvard University continue to receive significant endowments even though its existing endowments totaled $37 Billion as of September 13, 2008? 

If Man is rational then why is it easier for a Silicon Valley startup (with a low probability of commercial success) to raise capital than a microfinance organization from a developing economy which has a 99% loan repayment rate?

If Man is rational then why did the Bush Administration effect a regime change in Iraq when it was incapable of replacing that regime with a viable alternative?

Finally, if Man is rational then why has America refused to join other advanced economies in pledging 0.7% of GDP in aid to poor countries when it can apparently afford to spend $2 Trillion on a war based on spurious evidence of WMD?  

MARXISM

Not surprisingly, proponents of Marxism contend that their perspective with regard to the nature of Man is supported by empirical evidence. Indeed, no student of world history, particularly the British subjugation of India, would be able to conclude that Man is anything other than exploitive.  Moreover, the deplorable condition of the peasant class in feudal societies, the Slave Trade and slaughter of the indigenous peoples of the Americas (i.e. “pagans”, “heathans”) by European colonizers further substantiates this view.

However, if Man is exploitive then why does he engage in philanthropy? Consider for example, such eminent philanthropists as Jamsetji Tata, Andrew Carnegie, Bill Gates, George Soros, Warren Buffet and Bill Clinton?  Moreover, why did several world leaders at the Monterrey Conference in 2002 agree to give 0.7% of national income in aid to poor countries?  To what do we attribute the rapid growth of social entrepreneurship (i.e. Kiva.com, Red products, Ashoka Foundation and Skoll Foundation, Google.org and the Omidyar Network) and micro-finance organizations in developing economies?

In short, neither view with regard to the nature of Man appears to hold up to closer scrutiny.  Not surprisingly, both Capitalism and Marxism have largely failed to improve social equity because they rest on flawed philosophical foundations.   To be sure, an effective solution to the problem of extreme poverty is attainable.  To that end, policy makers will have to craft a new socio-economic model that is based on a more enlightened insight into the nature of Man. That is, Vedanta.

VEDANTA

In a previous age, ancient seers looked towards the heavens and pondered one of the great mysteries of life, “Who Am I”?   “Am I merely flesh and blood or am I something more”?  The system of philosophy that arose out of that inquiry is known as Vedanta, i.e.  ”the end of knowledge”.

The essence of Vedanta is captured in three words “Tat Tvam Asi”, which translates into English as “That Thou Are” or “God You Are”.   The implication is that Man himself is That very divinity which he seeks.

Significantly, Vedanta reconciles both Libertarian and Marxist perspectives with regard to the nature of Man.  Vedanta agrees with the philosophers of The Enlightenment in believing Man to be rational.  But Vedanta goes further still. According to Vedanta, Man is not only good, he is God. Yet, he is unaware of his own divinity because each jiva atma (individual soul) is covered by a sheath. In some, this sheath is thin, like dust on a mirror.  Such people are more likely to demonstrate positive attributes such as rational logic, creative insight, honesty and compassion. In others, this sheath is believed to be considerably more dense.

But if Man is good then “why is he often compelled to commit evil acts, as if by force” Krishna was asked by Arjuna?  Krishna answered that Man commits acts of evil out of kama (desire for material sense gratification).  Thus, Vedanta also agrees with the Marxist view of the nature of Man.  The Vedanta not only acknowledges that Man engages in exploitive actions against his fellow Man but more importantly explains the root cause of this behavior and the solution. 

The following is an excerpt from the great exponent of Vedanta philosophy, Swami Vivekananda:

Men and women are taught from childhood that they are weak and sinners. Teach them that they are all glorious children of immortality, even those who are the weakest in manifestation. Let positive, strong, helpful thoughts enter into their brains from very childhood. Lay yourselves open to these thoughts, and not to weakening and paralyzing ones. Say to your own minds, “I am the Atman. I am the Infinite.” Let it ring day and night in your minds like a song, and at the point of death declare, “I am the Atman.” That is the Truth; the infinite strength of the world is yours. Drive out the superstition that has covered your minds. Let us be brave. Know the truth and practice the truth. The goal may be distant, but awake, arise, and stop not till the goal is reached.

Vedanta provides a more enlightened perspective with regard to the nature of Man which reconciles both the Libertarian and Marxist perspectives.  Thus, the first step in creating a more equitable world order is for policy makers to adopt a universal religion based on Vedanta. At this time, however, there appears to be little consensus with regard to the role of religion in society.

UNIVERSAL RELIGION

People of faith believe religion to be of great importance to society while Karl Marx opined it to be the opium of the masses.  Which view is correct?  From, the Vedantic perspective, both explanations have equal merit but perceive the truth from different vantage points.  Indeed, while love and compassion form the core of Jesus’ teachings, Man has manipulated His Word to serve his own selfish ends.

Constantine, for example, used the symbol of the cross to conquer his enemies. Christian preachers have all too often focused on “Hellfire and Brimstone” in their sermons in order to control their flock.  Witches have been burned, crusades have been waged, scientists have been persecuted and non-Christians have been killed with impunity all in the name of Christ.   Today, Christmas is synonymous with materialism.  

Thus, if by religion we mean all the superficial rites and rituals borne out of blind faith, the pomp and show of the Church or the materialism that is currently associated with Christianity then in that regard Karl Marx is indeed correct.  These elements, which were never sanctioned by Christ, have overshadowed his original teachings.

That is, of course a valid perspective. And yet, one can look at religion from a different perspective which is equally valid.  From the dawn of civilization, Man has attempted to understand the meaning of life.   That yearning for truth is as relevant today as it was in previous ages.  Thus, if by religion, we mean the universal truths propounded by various teachers throughout the ages then it would be impossible to understate the importance of religion to society.

That is, religion can be viewed as both the opium of the masses and of central importance to society, depending upon one’s perspective.  In Vedanta, the focus is solely on the universal truths which pertain to the meaning of life, i.e.

1. There is One God which people call by many names
2. God is loving and compassionate towards all; irrespective of race, religion, gender, class, etc.
3. All spiritual paths ultimately lead to that One God
4. All men are created equal by their Creator
5. All men have a divine soul which is their true essence
6. Man must strive to conquer his desires for material sense gratification
7. In serving humanity one serves God

The adoption of a universal religion that is based on the above shared beliefs will foster a global consciousness with a greater focus on humanity’s similarities rather than its differences.

GLOBAL INTEGRATION

Global political integration is the second step in creating a more equitable world order. It is conceivable that individual nation-states would gradually coalesce into a super-union, similar to the European or American Unions. To be sure, the recent formation of the Group of 20 Nations is a good beginning. The individual nations comprising the Group of 20 should further work towards rationalizing their taxation policies and tariffs to facilitate trade and commerce. In addition, member states would be well served in adopting a single currency and central reserve bank. With regard to defense, all member states should pledge to reduce defense spending to 1% of GDP within a specified time period in order to allocate greater capital towards development.  International disputes would be resolved by a world tribunal.  In addition, a joint military alliance will be constituted to intervene in world affairs by consensus among member nations.  

GLOBAL SAFETY NET

As noted previously, the adoption of a universal religion with an emphasis on Non-Materialism and service to humanity is the key to creating a more equitable world order.

When this realization gains widespread acceptance then extreme poverty will vanish.  Individuals with surplus resources will voluntarily reallocate those resources towards helping others that are unable to meet their basic needs for survival. 

However, until that awareness takes hold, policy makers will have to employ alternative tools for creating a more equitable world order. To that end, policy makers within the Group of 20 nation states, discussed above, would be well served in establishing an individual income floor and ceiling.  An income floor would ensure that all individuals receive sufficient financial resources to meet their basic needs.  Today, the global median per capita income is $10,000.  Therefore, an income floor of $1,000 per capita would be adequate to ensure that each individual will have access to basic food, shelter and clothing.  An income ceiling in combination with redistributive tax policies would help to fund this economic safety net.  

CONCLUSION

Both Capitalism and Marxism have failed to produce an equitable world order because they rest on an imperfect understanding with regard to the nature of Man.  Vedanta offers a more enlightened insight with regard to the nature of man and the meaning of life. 

To create a more equitable world order, policy makers should adopt a universal religion based on Vedanta.  In addition, they should commit themselves to working towards greater political integration.  Until such enlightened consciousness takes hold, policy makers will have to create a global safety net to ensure that all individuals have access to their basic needs for physical survival.

Raju Agarwal