FINANCIAL CAPITALISM AND SAMAJ ECONOMY (From barter trade to barter trade)

Barter Trade

-Surender Reddy

Emerging from lakhs of years of hunter-gatherer living, around ten thousand years ago with organized agriculture, human communities in habitats turned to barter trading, for transaction of goods and services. Around 2600 years ago an innovation over barter trade was witnessed in the use of clay tablets, and 'coins', which were of gold-silver alloy, found by archaeologists in a temple near Turkey. Thus the age of coins-bills-currency of money commenced. What is Currency Money as a medium of exchange "has the advantage of eliminating inefficiencies of barter; a unit of account, which facilitates valuation and calculation; and a store of value, which allows economic transactions to be conducted over long periods as well as geographical distances. To perform all these functions optimally, money has to be available, affordable, durable, fungible, portable and reliable. Because they fulfill most of these criteria, metals such as gold, silver and bronze were for millennia regarded as the ideal monetary raw material." (Niall Fergusson in his book ' The Ascent of Money) Simply, money is born in the creation of economic goods and services and extinguishes in their consumption. Historically money has developed multifarious identities in the exponential growth of economic transactions in the last two centuries with the advent of Industrial revolution, transforming the level of pastoral connectivity to global connectivity, besides unleashing stagnant population levels of millennia in just two centuries from 90 Crores to 820 Crores. We have moved from coins, bills, bullion, currency, to plastic and virtual money appearing on the screen of a desktop or a mobile device enabling millions of transactions and movement of billions of monetary wealth across the globe in a matter of seconds. Financial Capitalism Marx refers to Aristotle and barter trade; as he (Aristotle) goes on to show, the original form of trade was barter; but with the extension of the latter there arose the necessity of money. On the discovery of money, barter of necessity developed into trading in commodities, and this again, in opposition to its original tendency, grew into Chrematistic, into the art of making money. 1

Marx sought to explain that money was commoditized labour, which was appropriated by capitalist class. We have witnessed in the last few decades since the 70s financial capitalism with complex financial instruments, stock and commodity markets driven by insatiable capitalist lust for accumulation, disregarding production or consumption of essential goods and services for the community and provision of need based purchasing power through employment. Sovereign Currency and Reserve Currency All sovereign nations maintain their own currencies. Their production and circulation is their privilege and serves as legal tender in its territory. There are two major accounts of a country's economy. One is for internal income and expenditure or national budget conducted with sovereign currency. Second is current account or external, for payments and receipts from various countries for imports and exports of goods and services conducted in global currency. In the absence of global currency bilateral barter trade was conducted between countries until the end of Second World War in the 40's. Era of US dollar The destruction of the dominating economies of Britain and Europe in two world wars and emergence of US unscathed with fifty percent of the global GDP paved the way for the recognition of dollar as global currency linked to bullion at $35 per one Ounce of gold, at the Bretton Woods meeting in 1944. America also held at that time, two thirds of world's gold reserves. Alternate proposal advocated by eminent economist Keynes for a neutral world currency managed by a global bank and international clearing union, was rejected. Current crisis of global economy can be traced to this event in history. In 1971, US under Nixon Presidency unilaterally cancelled the direct convertibility of US dollar to gold and effectively ended the Bretton wood agreement system of international financial exchange, unleashing an anarchistic monetary market fundamentalism on a global scale. US at the Centre of crisis A current account deficit (CAD) occurs when a country is importing more goods and services than it is exporting (if the reverse was true, it would be in a surplus). US solved CAD by printing paper dollars while rest of the countries had to borrow from International Monetary Fund (IMF), European Central Bank (ECB) and World Bank (WB) which were controlled by US and allies (G-7) with stiff conditions and Interest, effectively draining the resources of the countries and appropriating wealth of weaker Nations. The IMF-WB-ECB are the bill collectors to G-7 lenders and the Banks controlled by few capitalists. 2

The phenomenon of external Debt of Less Developed Countries (LDCs) proliferated with corrupt leaders like Ferdinand Marcos of Philippines on the one hand and on the other hand, besides IMF-WB-ECB, the non-resident dollars based private global banks flush with petrodollars, lending to unviable projects in these countries, blurring the distinction between public and private loot of economic resources. Several countries cannot retire the outstanding external Debt including the US in the foreseeable future while many are struggling to service these outstanding Debts, foreclosing investment in public welfare. With a debt-to-revenue ratio of 312 percent, Greece is forced to borrow from ECB, while US with debt-to-revenue ratio of 358 percent funds its deficits both internal and external, by simply printing its dollar currency and raising its debt ceiling. The inhuman system of financial exploitation has its origins in Bretton Woods agreement of 1944 conferring US the privilege of printing dollars (global tender) instead of borrowing to pay for its imports like any other country. India on the Brink India's current account deficit has exploded 1125 per cent since 2007, going from $8 billion to $90 billion. India is importing $90 billion more than it is exporting. Note the heavy bills of Oil imports. Studies suggest that a current account deficit that is 2.5 per cent of a countrys GDP is sustainable. What makes India's situation dangerous is that it is currently at almost 6.0 per cent of its GDP. In 2010, India imported $40.80 billion worth of items, mainly finished products, from China, whereas its export to China was only $20.90 billion worth of items, mainly minerals. We are surviving due to remittances from people living overseas and from foreign investments. After 40 years of mixed economy and 22 years of market fundamentalism neighboring China overawes India economically and militarily. Every 13 minutes a farmer commits suicide and in General inequality Index India ranks 129 out of 146 countries. Beyond Cold War years US in the last six decades, has militarized the world apparently to enforce an unsustainable developmental model of neoliberal economics of market fundamentalism. This has worked for enrichment of 1 percent of capitalists and impoverishment and malnutrition of 99 percent of humanity and calamitous degradation of global environment. 3

As in the words of Marx accumulation of wealth at one pole is, therefore, at the same time accumulation of misery, agony of toil, slavery, ignorance, brutality, mental degradation, at the opposite pole The game of rent on money now plays out globally. Crony and casino capitalism of the rich One percent, revels in stock and commodity markets, while 99 percent are paying for it in blood and sweat. For once, occupy Wall Street was right on target. Every facet of life - culture, politics and economy turned subservient to the one percent masters of the monetized universe of financial capitalism, who control human and natural resources for maximization of profits for the few, while 99 percent humanity faces impoverishment and malnutrition, with inequality of income and opportunities, gathering momentum. Beyond Global Financial Crisis Communism and financial capitalism have resulted in centralization of economic power in the hands of a few commissars or capitalists. In Marxs words centralization of the means of production and socialization of labour at last reach a point where they become incompatible. Collapse of Communism had the same narrative with the commissar replacing the capitalist. The global socio-economic crisis has its roots in centralization of economic power and deliverance from all kinds of exploitation physical, psychic and spiritual- lies in decentralization of economic power to samajas of the world as envisaged in the socio-economic 'Progressive Utilization Theory' (PROUT) propounded by Shri P.R.Sarkar. PROUT Economy According to Sarkar, a developed economy is one with four major parts general economy, peoples economy, commercial economy and psycho economy. General economy comprises all the economic theories, including capitalist, socialist or proutist. Prouts general economy is a three-pronged system consisting of key industries, the cooperative sector and small-scale proprietorships. Also included in its realm are coordination of planning at all levels, infrastructure, taxation, the banking system and any other economic institution at the national level. Extractive industries of natural resources will be under the control of local government, reserved for local entrepreneurial economy. 4

Commercial economy, by contrast, aims at the maximum utilization and the rational distribution of the world's resources. It deals mainly with internal and international trade and investment. This part of the economy is concerned with the development of scientific, efficient methods of production and distribution which will not incur loss and where output will exceed input. Modern economic theories, according to Sarkar, are limited to the analysis of general and commercial economies. Economists have generally ignored people's and psycho-economies. People's economy should ensure the provision of minimum requirements for all. Each and every worker should be able to earn enough to meet his minimum needs of food, clothing, education, housing and medical care. Sarkar goes as far as saying that the guarantee of minimum requirements should be enshrined in the constitution itself. In other words, the provision of employment at a need based minimum real wage is a fundamental human right. Under peoples economy, economic planning will be part of planned economy. Few, if any, countries have done this. Psycho-economy is as yet a totally new concept. Its main purpose is to expose theories and social institutions that exploit the workers and the handicapped. Sarkar says, "The first and foremost duty of psycho-economics is to wage a tireless struggle against the degenerating and dehumanizing economic trends in society. Psycho-economics comprises all the institutions of society that influence the thinking and formulation of policy decisions relating to economy. The struggle will be for all 'education' and all media and all 'politics' to be liberated from the corporate class that is, free from the influence of Capital. That is possible only when they are entirely funded by public money and cooperatively structured to strive for the welfare of all members of the samaj. Further, discovery of new techniques to improve labour productivity and reduce working hours is the main purpose of the psycho-economy. With fewer working hours, people will have more time for intellectual and spiritual activities. The advances in science and technology related to the sectors of peoples economy should be excluded from patent regime, directly rewarding Innovators with life-time Prize money and finest amenities. Seeds and water of food production and lifesaving drugs must be free from inhuman profiteering, in the guise of patents and privatization. (PROUTS Economic pyramid- Annexure-II) 5

Samaj - A state and a movement A socio-economic groupification, popularly known as Samaj in Proutist terminology, is identified based on 1. Similar economic problem 2. Uniform economic potentiality 3.Ethnic similarity 4.Common sentimental legacy 5. Similar geographical features. Based on these criteria, Proutists have identified 44 such socio-economic units in India and 243 in the whole world. (List*) Samaj is both a state of being and a process. As a state of being, it is a self-sufficient and self-reliant community living in a common territory. It is largely an autonomous socio-economic zone. As a process, samaj is a movement to oppose all forms of economic psychic, cultural and psycho-economic exploitation. Samaj monetary system under Cooperatives. Sarkar says to ensure the socio-economic development of each unit, the drainage of money from one region to another must be checked. If the drainage of money is not checked, the per capita income in a socio-economic unit cannot increase. Each samaj will have a Federal Central bank to regulate entire banking industry under cooperatives, only. To end financial capitalism and its network, that is banks and stock markets, at global, national and local levels sucking away wealth from weaker nations and from poor and middle classes to the rich one percent, - monetary system of each Samaj would be autonomous and cooperatively managed. Barter Trade Sarkar says to fulfill the mutual needs between regions, PROUT encourages the barter system in preference to the export system. The export system ultimately becomes commercial and competitive and leads to exploitation." The relief from collapse of financial Capitalism lies in barter trade between regions. Countries under dire circumstances are already switching to barter trade. India is in barter trade arrangements with Iran for supply of Oil. Decentralization of economic power and economic democracy will be realized when consumption directs economy for production, overturning profitmotivation that has resulted in enrichment of the few, and place society and nature at the center of economy. This will be the cause and effect of Proutist revolution ********************************************************************** (With inputs from Dr. Ravi Batra) Email: reddy.gsurender@gmail,com 6

SAMAJ LIST INDIA @ PROUT

SL.NO

Samaj Name
AMRA BENGALI ANGIKA MITHILA MAGAHI BHOJPURI NAGPURIA UTKAL KOSAL BHUTIA BODO ASSAMIA LEPCHA AVADHI BRAJ HARIYANVI GARHWALI KUMAYUM PUNJABI SIRMAURI PAHADI KINNAURI DOGRI

SL.NO

Samaj Name
KASHMIRI LADDAKHI MARWARI HADAUTI MEWARI KUCHII KATHIAWAR GURJAR VIDARBHA SAHYADRI MALWA BUNDELKHAND BAGHELKHAND CHATTISGARHI TELANGANA SARKAR ANDHRA RAYALA SEEMA TAMIL MALAYALAM KANNADA TULU KONKANI

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