Society, culture and welfare economics

Keynesian theory of welfare economics calls for movement of money in the market. It recommends that the money should always remain in the system so that the economic multiplier effect can come into being taking the economy on the growth path. One of the radical thoughts of this theory was the role of the state in the economy in order to provide the path for growth. In times like the one we face today, Keynes would recommend the expansion of fiscal deficit, spending by government to make up for the money withdrawn by other entities (banks, corporates, consumers etc). To an extent, most central banks and governments are resorting to this when they see that effects of monetary policy in form of rate cuts are not having the desired effects. In a nutshell, Keynes says spending has to be encouraged so that there is money flow in the system and to re-spiral the economy towards growth.

Religion has always been thought of as something which we practise because our fathers did so or purely on basis of faith and beliefs. For a society or culture to take shape, religion or faith has been thought of as the basis. That religion could be driven by economics seems far-fetched. However a deep thought in to this shows the inherent relation. In fact, economics drives most of our activities, so why should religion be kept out of it.

Most of our festivals prescribe specific activities to be performed. If its colours for Holi, its crackers for Diwali, dandiya for navratri, pandals for Durga Puja, boat races for Onam. These notwithstanding, the custom of new clothes, painting of houses, charity to poor, span across all festivals. The underlying thought is, patronage of these specific industries and skills by stimulating demand of those through these festivals and customs. It provides for jobs for millions which in turn, provides money in the hands of more people which implies even more spending. Crux of the matter being flow of money through the system. Symbolically, Hindu philosophy describes Lakshmi the goddess of wealt and material prosperity as being very fickle. She keeps moving from one place to another, providing prosperity to the multitudes but no one can keep Lakshmi with themselves forever. What this means is, prosperity of a society is possible only when money flows (symbolically referred as fickle mindedness of Lakshmi).

Another thought which closely resembles modern day welfare economics model is using money as an enabler for growth. Keynes says money should be an enabler and used in the right manner to provide for growth in the right. The objective should never be storing and hoarding money / wealth. Because when that happens, money remains outside of the system and retards growth.

An old legend provides a similar lesson. It is said that Vishnu and Lakshmi had an argument as to who is greater amongst them. Vishnu said people follow dharma and are righteous and hence he is superior while Lakshmi's contention was people would do anything to be rich and prosperous and hence she is superior. They descended on earth to test their views.

Vishnu went to a village as a sage and found people welcoming him to their homes and offering him their belongings as per the custom. Vishnu requested the villagers to give him only a house to live and that too one which no one is using. So he was given an old house as per his wishes making Vishnu feel that he was right. But it actually proved to be otherwise. Lakshmi went to the same village as an old lady with a ragged bag and asked for water. When she was offered in a glass she refused to take that saying she has her own golden cup in which she would take the water. To people's amazement she threw away the golden cup saying that she never uses it again. She repeated the act multiple times throwing golden cups here and there. It naturally spread like fire in the village and people assembled in front of the old lady asking her what she needed. She placed the same request as Vishnu did. The villagers in their greed threw the old hermit out of the house and gave it to Lakshmi. Now it was Lakshmi's turn to feel proud that she was superior.

The climax of the story however was, when the sage after being thrown out was wandering, he found people fighting over the golden cups as to who should take it home. And, they called the sage himself to preside over the fight and assist the villagers that what is right and do justice.

The legend points to the fact that even when material prosperity is available, it can only be a medium and even to use it rightly, it needs an objective and the correct path. Philosophy says, that where there is 'dharma' there is Vishnu and where there is Vishnu there is Lakshmi.

So if you use money to pursue a rightful objective, you achieve growth. But if you want achieve money and prosperity it will always slip away in absence of direction.

Its a game of quid pro quo - you give some you take some