State of Economic Disparity & its Reason

According to the Economist, London, the USA in 1970 had only 17 billionaires. Latest figures show that now there are 177 billionaires and their number is increasing every year. The personal wealth of the top three billionaires of the world is equal to the total Gross National Wealth of 48 developing countries. Two hundred billionaires in the world – their wealth is equal to the total wealth of 2 billion people in the world. These are economic realities. These are moral sores on the body of civilization. We are living in an unjust world. A very pertinent question is: Why has it taken place?  It is submitted that the fundamental cause relates to the distinct approach of the Western Capitalist System – its one-dimensional approach. The lesson of history is that economic problems cannot be solved merely by economic means. They can be solved only if they are part of a comprehensive and balanced approach, where inhuman, moral and political considerations are twined together.

From the days of Adam Smith until now, broadly speaking, a major menace that has infested economics and turned it into a dismal science is the assertion that economics is value neutral. It is amoral, concerned only with means of efficient allocation and not with the ends of life and society. Efficiency in allocation of resources is important. It is essential but not sufficient. Equitable distribution is as important. Participation of all in the working of economy is equally important. Sharing the pie is as important. If the dimension of equity and justice is ignored, humanity is bound to suffer. As a corollary to this fundamental postulate of capitalism an effort was also made to reduce economics into a self-contained scientific discipline, not concerned with morality, ethics and religion. Not only was the link with morality and religion severed; even its relation with other social disciplines including politics was torn asunder. This made economics a menace, not a blessing for mankind.

With this drift towards so-called positivism, economics also became too abstract, too unreal, too divorced from reality. Moral dimension on the one hand and power relationship in society on the other provides the framework within which economic forces have to operate. Denial of these links makes economists only a tool in the hands of seekers after wealth and profit. The new fangled economics of the nineteenth and twentieth centuries tried to ignore both the ethical and the power dimensions. Why? Because that was the only way Capitalists could control and manipulate, and that is why Socialism and Communism came to challenge that thesis. Fascism also emerged as an amalgam of Capitalism and Socialism. Both challenged the assumption of state neutrality. But Socialism and Fascism instead of ameliorating the plight of humans further aggravated it. They treated man as an agent of the economic and political factors only. They failed to diagnose the real malady. They were as one-dimensional as Capitalism, although with a difference.

Source: Contemporary Economic Challenges and Islam, Churched Ahmed. Republished with permission.