Reconciliatory Economics

Conventional Economics is primarily pre-occupied with optimization of the use of limited resources. Optimisation is actually the outcome of both maximization and minimization. For instance, produce as much as possible with available resources is the motto of the conventional economics. To achieve this, producers, on the one hand, maximizes their revenue or profit for which they, on the other hand, minimizes cost of production. However, today it appears that economics as a branch of knowledge must revisit it’s this approach especially in the face of issues like environmental implications of such optimizing approach.  In other words, environmental implications of the hither to followed economics with its obvious inclination to production spree has already started ringing the alarm bell to the world. Simply put, this beautiful planet said to be billions of years old is now being pushed to the brinks of its own extinction due to the erroneous economic approach driven by rapid industrialization since the beginning of industrial revolution about three hundred years ago. International bodies like UNO have already warned the world that if carbon emission goes on unabated, then by 2060 this planet will have encounter debilitating catastrophe.

Given such a background, the obvious question is what should be done? The simple answer is to change the economic approach. In other words, from the traditional optimization approach, economics must embark on reconciliatory approach. Optimization approach is developed at a time when there were no factors or forces which must be taken care of in this process of optimization. When the motto was expand the production, it was not a matter of concern then how this expansionist approach will affect, for instance, ecology simply because we were just beginning to produce and therefore, its detrimental effect were not felt. But today picture is entirely different. We have already enough evidences in front of us indicating that matters are going to be worst.  In other words, our expansionist economics approach has given birth to forces which have already begun to work against the same system responsible for its emergence. Therefore, today’s economics can no longer afford to continue with production spree disregarding such noises. In other words, economics has to assume a balancing approach in its endeavor, what so ever be.

Consider ‘make in India’ initiative. Certainly, if such an initiative is truly pursued and made a true experience will be of great use for the people as it will ensure jobs to them. But there is flip side to this. Where to find the resources such as energy for such a massive expansion of production in India? There are two obvious ways to find energy resources. One is to exploit available resources in the country like coal and minerals. However, this solution is half-baked as it will either displace people from areas where these resources are deposited or the very mining of such resources is not sans with its environmental implications like deforestation. Second, country can import fossil fuel like oil to meet its energy requirements.  But, can we economically afford it and even if it is affordable, can we afford to bear its environmental impact? Thus, authorities must think twice when they come with such policies and initiatives which are essentially driven by the traditional economic approach. That is, this ‘make in India’ approach, for instance, fundamentally belongs to traditional economic approach as it envisages massive production expansion in India disregarding its environmental or social implications.

Having said all these it is imperative to put in perspective what is this ‘reconciliatory economics’ all about? This is all about adopting a reconciliatory economic approach to accommodate conflicting interests which involves primarily two things. First, go back to agriculture by way of giving primary consideration to fostering agriculture. Expansion of agriculture will ensure that people have food security, jobs and after all thriving agriculture will foster environment. This does not mean to side-line industrial sector or service sector.  Instead, shape up and promote agro based industries instead of focusing on such industries dictated by forces of greed in the market. For, it is spreading havoc both for the health of the society and environment. For example, instead of promoting products like junk food, promote value added products produced from agriculture outputs which will guarantee jobs at the same time products will be health friendly.  For this state must play a key and proactive role with a stated mission of promoting industries for the benefit of the society like providing jobs instead of aligning with greedy market players. Second important component of the so called ‘reconciliatory economics’ is to encourage development of environment friendly technology. For this also government must encourage rigorous innovative researches and overhaul the current system of education as a whole and higher education in particular in India. Thus, this new approach calls for a new attitude from all walks of life such as education, government, industrialists etc. Or earth will be a proverbial planet for those who will be in Mars by 2060.