A caring society and caring economy

The economy must serve society, rather than society being distorted to serve economic efficiency and GDP. Twentieth-century economics is unable to solve 21st century problems. In fact, it has caused many of them, including environmental degradation that has caused climate change, and increasing inequality between those who can accumulate wealth from financial investments and those who must work to earn enough.

?Policymakers must re-examine their concepts of formal work and formal enterprises. Economists lament the excessive informality of India’s economy, with too few “factory form” formal jobs, and too many “family form” informal enterprises. Modern economies take humans out of family forms of life and plug them into factory forms of work. Human beings are forced to work like cogs in these machines to earn money. The balance between work and life is distorted, causing social pathologies and psychological problems. These have become widespread in the advanced industrial economies in the 21st century.?

?The “caring” economy and “green” economies, in which employment will increase in the 21st century, require more work to be done locally and within families and communities. Instead of the industrial solution of moving women out of families and communities into formal economic enterprises to increase GDP (and their incomes), the work that caregivers do in families and communities must be given much higher value by economists. Please read the full text below, and in Business Standard.

https://www.business-standard.com/opinion/columns/family-and-factory-economics-124052301554_1.html

?The economy is too important to be left to economists. They argue about quantities: the GDP, interest rates, and market indices. We the people must determine the qualities of the society and economy we want.

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FAMILY AND FACTORY ECONOMICS

Reforming the economy to fit society

“It is the economy, stupid”, that matters most to citizens, Bill Clinton’s strategist James Carville advised political leaders. Nearly 70 percent of US voters say their country’s economic and political systems need major changes — or even to be torn down entirely (according to a NYT/Sienna polls of US voters reported in the New York Times on 13 May).?The survey asked respondents to pick their topmost concern from a list provided. They chose “The economy (including jobs and the stock market)”. The US stock market is breaking records, and many jobs are being created according to employment reports. Yet, in the runup to elections in November, Biden is losing support to Trump, the survey reveals.?

Economists are puzzled why citizens are dissatisfied with the economy. The NYT says that Wall Street and Washington have begun monitoring another worrying economic indicator: “the struggling consumer”. “This is an economy of the haves and have-nots. The haves just have so much more spending power”, an economist explained to the Times.

?India, the world’s largest democracy, has gone to the polls already. India’s stock market is booming, and GDP is growing. The poll’s outcome will be determined by many factors; insufficiency of jobs and incomes is one of them. While the wealth of the top 1% is increasing (almost all coming from stocks and financial investments), real incomes are stagnant, even declining for many citizens. Less than 5% of Indian citizens are invested in stock markets directly or through mutual funds. The rest earn money by working. They cannot provide a boost to India’s economic growth if they cannot get enough income from work.

?Family, factory, informality

Policy makers must re-examine their concepts of formal work and formal enterprises. Economists lament the excessive informality of India’s economy, with too few “factory form” formal jobs, and too many “family form” informal enterprises. Aldous Huxley had warned in Brave New World in 1932 about the excessive “Fordism” of economies when they industrialise. Economic enterprises and government bureaucracies are set up like the assembly lines in Henry Ford’s factories to improve their efficiencies and increase their scales of output. Charlie Chaplin spoofed the effects of these economic machines on the lives of common people in Modern Times. Modern economies take humans out of family forms of life and plug them into factory forms of work. Human beings are forced to work like cogs in these machines to earn money. The balance between work and life is distorted, causing social pathologies and psychological problems. These have become widespread in the advanced industrial economies in the 21st century.?

?George Orwell caught the world’s imagination with his portrayal of the Big Brother in his dystopian novel 1984 (published in 1949).? Citizens want to hide from Big Brother but cannot escape his technology-enabled surveillance. In Huxley’s novel, citizens voluntarily line up to be de-humanised in factories because they have no other choices to earn sufficient money. Fordism has been further strengthened by Facebook-ism according to Byung-Chul Han in Infrocracy (2022). Whereas they were hiding from Big Bother in 1984, they voluntarily reveal personal information on social media which the owners of enterprises sell to make wealth for themselves. In the 20th century world of Big Ford they sold their work to owners of enterprises; in the 21st century world of FAG (Facebook, Amazon, and Google) they sell their identities.

?Hazel Henderson, a feminist, a founder of the World Watch Institute, and a member of President Jimmy Carter’s economic task force, wrote Creating Alternate Futures: The End of Economics in 1978. She pointed out that “The values and attitudes that are favoured and vested with political power are the typical masculine values—competition, domination, expansion, etc.—while those most neglected and often despised—cooperation, nurturing, humility, peacefulness—are designated as female”. “The masculine values are essential for the male-dominated industrial system to work, but feminine values are most difficult to operationalize,” she said.

?Reforming economics

The economy must serve society, rather than society becoming distorted to serve economic efficiency and GDP. 20th century economics is unable to solve 21st century problems: in fact, it has caused many of them. Formal economic institutions are designed to exploit Nature’s resources to increase economic output. Humanity must return to natural ways to save the planet from overheating and environmental destruction. Public health has become a major concern everywhere. Health specialists (e.g. Michael Marmot in The Health Gap and Vivek Murthy in Together) have explained the impacts of social conditions on human health. Breakdowns of families and communities affect mental health and increase social pathologies such as drug abuse, violence, and suicides.

?Children benefit from nurture in family-like environments. Medical advances and improvements in living conditions are enabling people to live longer. The proportion of older persons to younger is increasing around the world, in India too. People living longer need more care as they age. Integrated solutions for public health, care of the environment, and societal well-being are essential now. They require community form solutions, not more large factories. The informal economy, and enterprises and the work done in them (done mostly by women), are not “unformed”. They have forms. Their forms conform with family values: not with factory principles which are efficient for increasing financial valuations.

?21st century economies must be built with cooperative and family forms of enterprises. They are necessary for solving 21st century problems. The “caring” economy and “green” economies in which employment will increase in the 21st century require more work to be done locally and within families and communities. Instead of the industrial solution of moving women out of families and communities into formal economic enterprises to increase GDP (and their incomes), the work that caregivers do in families and communities must be given much higher value by economists.

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