Abdullahel Bari, Ph D, :
Riches and wealth are at the hands of a few and accumulation of the same is fatting fast. It is unjust, immoral and undesirable but not easy to say illegal. Except only a small core of legal philosophy, which is again rarely looked into, applicable law operates in a political framework. Politics and economics have mingled. Distribution of wealth is the purview of economics.
Democracy encourages market economy and allows capitalism to flourish. With flourishing capitalism, the rich becomes richer and the poor poorer. The fundamental is that the capital helps to steal. An example is the ancient bamboo cane cone maker. Surplus value had been being stolen, accumulation took place and the economic fabric of the world has taken the present shape. Solution is therefore “Not to steal, not to allow to steal”. It is easy to say, very difficult to think, nearly impossible to implement. Indeed it is prudent to define “equitable distribution of wealth and or just income”. The disparity is a persistently growing menace affecting each and every one, of rich and poor alike, understood or ignored.
Economic Policy Space (EPS): The rich and the poor are all people of the country – all her resources, discovered or unexplored, belong to the people. Everybody has the right and must have the opportunity to blossom, develop and excel equally. Lack of this equal opportunity to each citizen initiates disparity which expands in an unjust environment. “Might is right” is the origin of disparity. Only when we are morally elevated, only when we termed us civilized, only when we configure a just society we call for equal opportunity for everyone. This is a collective issue. When a people form a government, knowingly or unknowingly, their prime intention is to answer their collective issues including protection. Therefore, the first and foremost responsibility of the government is to provide this equal opportunity to each of its citizens. This is possible by creating a just socio-economic environment.
An economy which we are habituated to live in is formed by so called market forces. But the market forces do not alone shape the economy. The market forces are only operative in a “Policy Space” created by propagation of policy frameworks, similar to the existence of space only when there is matter. Existence of this “policy Space” is often ignored.
A Policy Space for the economy to be operable in is framed by the political decisions, i.e., by the government as it considers the shape appropriate. This is termed in this presentation as “Economic Policy Space (EPS). Such an EPS has in turn shaped the international one since dawn of civilization or from even beforehand. The evolved form has become usual and universally accepted to go along and live in it without question. In 1921, 1% of the populations held 25% and following 9% held 26%, i.e., top rich 10% Americans held 51% of their country’s wealth. In 2013 the situation became even worse. Half of the world’s wealth was held by top 1% of the richest people. We have & will be living in such an Economic Policy Space because it is according to the laid down rules and nothing in it is apparently illegal.
Inappropriate Economic Policy Space (IEPS):
In cone making, a quantity of wealth was generated by various inputs, such as, of vision, labour, capital and management. Labour, capital and management, all have values determined in the market economy in the existing policy space. Vision may have a premium. However, once visualized, it is paid repeatedly and now without bound. Vision is thus treated very wrongfully. When a vision or a patent is valued, many affecting factors are ignored. A vision or a patent is unique therefore, not subject to market forces. Fixation of a value is nearly arbitrary. A patent, an invention or a vision has no value if there is no user of it. Importance of users and impact of number of users are ignored in fixing the patent value. The “Intellectual Value” of usable goods accounts for more than 70% of the purchase price, even it is reaching upto 80% for some special goods. This is inappropriate and unfair. Also it is one of the root causes of concentration of wealth.
Facebook owner’s wealth of 45 billion has accumulated fast. Generation of money appears to be perpetual. Is there anything wrong somewhere? Mark Elliot Zuckerberg has not been engaging cone makers and therefore apparently not stealing”. Yes, there is nothing illegal. But I am not paid out of these incomes although my portion of electromagnetic field of 0.760X10-10 is being continuously used. We all 7600 million people of the world are being robbed of continuously at present. Had it been so that the population of the world is 76 only in place of 7600 million, Mr. Zuckerberg’s wealth could not be as far as it is now. Once someone’s’ gain has damaged the Ozone layer resulting in global warming up. Bangladesh is now at a bigger risk of losing her land. Cancer, cataracts and other diseases are effecting the living world. These irreparable damages must be paid out. Indeed a correction had been necessary in the prevailing policy space to retard production of Chlorofluorocarbons (CFCs) and halogenated ozone depleting substances (ODS).
Father of the nation Bangabandhu Sheikh Mujibur Rahman had made an individual land holding limit of 60 bighas which improved the distribution of wealth in Bangladesh. It is a correction of inappropriate economic policy space (IEPS). Wealth of Multi Levels Marketing Company Ltd., Bangladesh was growing quite fast and could continue to grow. However, intervention resulted in a correction to IEPS which has curbed the growth. In a procurement process, say, an usual condition is stipulated that to qualify, a bidder to have an experience of 80% of value of work. Someone qualifies for a work of value of Tk 100.00 and secures the order. Next time the value of work is Tk 120.00 and the previous bidder can only qualify as he has the required experience of Tk 100.00. The process continues and a lone bidder participates, qualifies and secures on and on the job. A single qualified bid is accepted because otherwise the bidder’s fundamental right is affected. In such an inappropriate EPS everything is legal and a market economy evolves with a monopoly supplier having an opportunity of accumulating wealth.
There had been unimaginable wealth concentration in the hands of business magnates in the electronic field, such as, in the hands of software developing companies, telephony, internet based products producers etc. Appropriate international Economic Policy Space is called for. On the one hand the electromagnetic field is a universal property of all mankind and living being. This natural facility is being used without compensating the people and on the other hand all facilities, such as, the satellite space or the mobile telephone are being charged at abnormally high rates due to lack of competition. These services should be assessed for effective costs and just rates.
Production of steel in Japan may be examined. Japan nourishes market economy. It buys the raw materials in the international market. National and international sale prices of steel are equitable in Japan. Further, it is observed that Japan goes for automation and uses minimum manpower as an input. The case depicts a fair scenario of production in a market economy. A steel plant however, often operates in a monopolistic business environment, takes the advantage of forming a cartel and utilize benefits of economies of scale. Raw materials are natural and depleting resources. The present cost of raw materials- iron ore, coal and others – for producing one ton normal grade steel is about USD 260.00. Adding other costs of production, primary sale price ex-work stands at US$ 355.00 per ton. Having a sale price of US$ 530.00 per ton ex-work, the producer makes an additional excessive profit of US$ 175.00. This is too high a profit.
Politics, the savior: Excessive concentration of wealth is a demonstration of tyrannic rule. None wishes to be a tyrant in our civilized world. Therefore, along with improving indices indicating improvements of living standard of mankind, it is necessary to attain equitable distribution of wealth in an economy. Stepping up taxation to get more transferable resources at the disposal of the government has failed to bestow equitable distribution.
To achieve better distribution of wealth, the Economic Policy Space is to be appropriately framed. Among others, it is first to define the ‘just income’ and to achieve the same step by step. In case of a simple garment industry, it is possible to derive just salaries & benefits and therefore an export price of a garment item. Often we blame a competing lower survival exporting price in a shaped existing market economy. Here the role of a government and that of all governments which are involved in exporting garments is called for. The end retail prices are ten times more than the ex-work buying prices. The market economy in the existing inappropriate EPS puts buyers probably in the position of extorting the poor, who have formed their government to serve them in way of protecting them against forceful unjust bargains. The concentration of wealth in G8, WIN and OPEC is a fact.
The case of scrapping old ships is an unique example of injustice. Presently a scrapper pays a price for steel, undertakes hazardous work and clears the sea, i.e., the world of dirty old ships which have served society for 30 years making the ship owners fatter and fatter. All old ship scrappers, instead of paying for steel, may claim fees per ton of steel scrapping. For such a turn around, the role and involvement of the governments which are engaged in scrapping is necessary. Scrapping will go on, only a rational way will evolve in an appropriately framed International Economic Policy Space.
The economy of producing “an engineer’s son an engineer and a rickshaw puller’s son a rickshaw puller” must completely be bolted off from the world. Equal opportunities must be provided to all citizens and until then none can be rich in any economy. This is possible by forming appropriate Economic Policy Space (EPS) by political forces.
Bangladesh, an exemplary country: Bangladesh has achieved commendable improvements of various indices affecting living standards including demonstrating herself as a role model for development. She may reduce disparity of wealth among her citizens as well and set an example to the world.?The existing Policy Space in Bangladesh houses market economy but the fundamental national philosophy is to ensure equitable distribution of wealth among citizens. On temporal basis, Bangladesh may correct and adjust the continuing economic policy space (EPS) by adopting short term measures in her national budget. An appropriate budgetary financial planning may help better distribution of wealth in the adjusted EPS.
Indeed the benefits of use of budgetary amount should be equitable among all citizens. In long term, however, Bangladesh is to overhaul the ongoing policy space and to improve step by step the same to achieve the appropriate Economic Policy Space (EPS) which will ensure equitable distribution of wealth among all citizens. Keeping in view that the budget is a formidable instrument at the disposal of the government to achieve equitable distribution of wealth, spending of budget should be equitable per head on some appropriate basis, such as, of voters or people. Even if a large portion, say, 75% of the budget is retained and spent for general purposes benefitting all people, a portion-say 25% may be directly spent in constituencies in proportion to the number of voters. Over time, the weight of division may further shifted to direct spending. Politics will fix these percentages as it considers appropriate but the approach will help better distribution of wealth and better growth, as well set an example.
The author is a Naval Arch & Marine Engg, BUET. Ph D, C Eng, FIEB, FRINA. Chairman, Ananda Group.
Riches and wealth are at the hands of a few and accumulation of the same is fatting fast. It is unjust, immoral and undesirable but not easy to say illegal. Except only a small core of legal philosophy, which is again rarely looked into, applicable law operates in a political framework. Politics and economics have mingled. Distribution of wealth is the purview of economics.
Democracy encourages market economy and allows capitalism to flourish. With flourishing capitalism, the rich becomes richer and the poor poorer. The fundamental is that the capital helps to steal. An example is the ancient bamboo cane cone maker. Surplus value had been being stolen, accumulation took place and the economic fabric of the world has taken the present shape. Solution is therefore “Not to steal, not to allow to steal”. It is easy to say, very difficult to think, nearly impossible to implement. Indeed it is prudent to define “equitable distribution of wealth and or just income”. The disparity is a persistently growing menace affecting each and every one, of rich and poor alike, understood or ignored.
Economic Policy Space (EPS): The rich and the poor are all people of the country – all her resources, discovered or unexplored, belong to the people. Everybody has the right and must have the opportunity to blossom, develop and excel equally. Lack of this equal opportunity to each citizen initiates disparity which expands in an unjust environment. “Might is right” is the origin of disparity. Only when we are morally elevated, only when we termed us civilized, only when we configure a just society we call for equal opportunity for everyone. This is a collective issue. When a people form a government, knowingly or unknowingly, their prime intention is to answer their collective issues including protection. Therefore, the first and foremost responsibility of the government is to provide this equal opportunity to each of its citizens. This is possible by creating a just socio-economic environment.
An economy which we are habituated to live in is formed by so called market forces. But the market forces do not alone shape the economy. The market forces are only operative in a “Policy Space” created by propagation of policy frameworks, similar to the existence of space only when there is matter. Existence of this “policy Space” is often ignored.
A Policy Space for the economy to be operable in is framed by the political decisions, i.e., by the government as it considers the shape appropriate. This is termed in this presentation as “Economic Policy Space (EPS). Such an EPS has in turn shaped the international one since dawn of civilization or from even beforehand. The evolved form has become usual and universally accepted to go along and live in it without question. In 1921, 1% of the populations held 25% and following 9% held 26%, i.e., top rich 10% Americans held 51% of their country’s wealth. In 2013 the situation became even worse. Half of the world’s wealth was held by top 1% of the richest people. We have & will be living in such an Economic Policy Space because it is according to the laid down rules and nothing in it is apparently illegal.
Inappropriate Economic Policy Space (IEPS):
In cone making, a quantity of wealth was generated by various inputs, such as, of vision, labour, capital and management. Labour, capital and management, all have values determined in the market economy in the existing policy space. Vision may have a premium. However, once visualized, it is paid repeatedly and now without bound. Vision is thus treated very wrongfully. When a vision or a patent is valued, many affecting factors are ignored. A vision or a patent is unique therefore, not subject to market forces. Fixation of a value is nearly arbitrary. A patent, an invention or a vision has no value if there is no user of it. Importance of users and impact of number of users are ignored in fixing the patent value. The “Intellectual Value” of usable goods accounts for more than 70% of the purchase price, even it is reaching upto 80% for some special goods. This is inappropriate and unfair. Also it is one of the root causes of concentration of wealth.
Facebook owner’s wealth of 45 billion has accumulated fast. Generation of money appears to be perpetual. Is there anything wrong somewhere? Mark Elliot Zuckerberg has not been engaging cone makers and therefore apparently not stealing”. Yes, there is nothing illegal. But I am not paid out of these incomes although my portion of electromagnetic field of 0.760X10-10 is being continuously used. We all 7600 million people of the world are being robbed of continuously at present. Had it been so that the population of the world is 76 only in place of 7600 million, Mr. Zuckerberg’s wealth could not be as far as it is now. Once someone’s’ gain has damaged the Ozone layer resulting in global warming up. Bangladesh is now at a bigger risk of losing her land. Cancer, cataracts and other diseases are effecting the living world. These irreparable damages must be paid out. Indeed a correction had been necessary in the prevailing policy space to retard production of Chlorofluorocarbons (CFCs) and halogenated ozone depleting substances (ODS).
Father of the nation Bangabandhu Sheikh Mujibur Rahman had made an individual land holding limit of 60 bighas which improved the distribution of wealth in Bangladesh. It is a correction of inappropriate economic policy space (IEPS). Wealth of Multi Levels Marketing Company Ltd., Bangladesh was growing quite fast and could continue to grow. However, intervention resulted in a correction to IEPS which has curbed the growth. In a procurement process, say, an usual condition is stipulated that to qualify, a bidder to have an experience of 80% of value of work. Someone qualifies for a work of value of Tk 100.00 and secures the order. Next time the value of work is Tk 120.00 and the previous bidder can only qualify as he has the required experience of Tk 100.00. The process continues and a lone bidder participates, qualifies and secures on and on the job. A single qualified bid is accepted because otherwise the bidder’s fundamental right is affected. In such an inappropriate EPS everything is legal and a market economy evolves with a monopoly supplier having an opportunity of accumulating wealth.
There had been unimaginable wealth concentration in the hands of business magnates in the electronic field, such as, in the hands of software developing companies, telephony, internet based products producers etc. Appropriate international Economic Policy Space is called for. On the one hand the electromagnetic field is a universal property of all mankind and living being. This natural facility is being used without compensating the people and on the other hand all facilities, such as, the satellite space or the mobile telephone are being charged at abnormally high rates due to lack of competition. These services should be assessed for effective costs and just rates.
Production of steel in Japan may be examined. Japan nourishes market economy. It buys the raw materials in the international market. National and international sale prices of steel are equitable in Japan. Further, it is observed that Japan goes for automation and uses minimum manpower as an input. The case depicts a fair scenario of production in a market economy. A steel plant however, often operates in a monopolistic business environment, takes the advantage of forming a cartel and utilize benefits of economies of scale. Raw materials are natural and depleting resources. The present cost of raw materials- iron ore, coal and others – for producing one ton normal grade steel is about USD 260.00. Adding other costs of production, primary sale price ex-work stands at US$ 355.00 per ton. Having a sale price of US$ 530.00 per ton ex-work, the producer makes an additional excessive profit of US$ 175.00. This is too high a profit.
Politics, the savior: Excessive concentration of wealth is a demonstration of tyrannic rule. None wishes to be a tyrant in our civilized world. Therefore, along with improving indices indicating improvements of living standard of mankind, it is necessary to attain equitable distribution of wealth in an economy. Stepping up taxation to get more transferable resources at the disposal of the government has failed to bestow equitable distribution.
To achieve better distribution of wealth, the Economic Policy Space is to be appropriately framed. Among others, it is first to define the ‘just income’ and to achieve the same step by step. In case of a simple garment industry, it is possible to derive just salaries & benefits and therefore an export price of a garment item. Often we blame a competing lower survival exporting price in a shaped existing market economy. Here the role of a government and that of all governments which are involved in exporting garments is called for. The end retail prices are ten times more than the ex-work buying prices. The market economy in the existing inappropriate EPS puts buyers probably in the position of extorting the poor, who have formed their government to serve them in way of protecting them against forceful unjust bargains. The concentration of wealth in G8, WIN and OPEC is a fact.
The case of scrapping old ships is an unique example of injustice. Presently a scrapper pays a price for steel, undertakes hazardous work and clears the sea, i.e., the world of dirty old ships which have served society for 30 years making the ship owners fatter and fatter. All old ship scrappers, instead of paying for steel, may claim fees per ton of steel scrapping. For such a turn around, the role and involvement of the governments which are engaged in scrapping is necessary. Scrapping will go on, only a rational way will evolve in an appropriately framed International Economic Policy Space.
The economy of producing “an engineer’s son an engineer and a rickshaw puller’s son a rickshaw puller” must completely be bolted off from the world. Equal opportunities must be provided to all citizens and until then none can be rich in any economy. This is possible by forming appropriate Economic Policy Space (EPS) by political forces.
Bangladesh, an exemplary country: Bangladesh has achieved commendable improvements of various indices affecting living standards including demonstrating herself as a role model for development. She may reduce disparity of wealth among her citizens as well and set an example to the world.?The existing Policy Space in Bangladesh houses market economy but the fundamental national philosophy is to ensure equitable distribution of wealth among citizens. On temporal basis, Bangladesh may correct and adjust the continuing economic policy space (EPS) by adopting short term measures in her national budget. An appropriate budgetary financial planning may help better distribution of wealth in the adjusted EPS.
Indeed the benefits of use of budgetary amount should be equitable among all citizens. In long term, however, Bangladesh is to overhaul the ongoing policy space and to improve step by step the same to achieve the appropriate Economic Policy Space (EPS) which will ensure equitable distribution of wealth among all citizens. Keeping in view that the budget is a formidable instrument at the disposal of the government to achieve equitable distribution of wealth, spending of budget should be equitable per head on some appropriate basis, such as, of voters or people. Even if a large portion, say, 75% of the budget is retained and spent for general purposes benefitting all people, a portion-say 25% may be directly spent in constituencies in proportion to the number of voters. Over time, the weight of division may further shifted to direct spending. Politics will fix these percentages as it considers appropriate but the approach will help better distribution of wealth and better growth, as well set an example.
The author is a Naval Arch & Marine Engg, BUET. Ph D, C Eng, FIEB, FRINA. Chairman, Ananda Group.
