NEEDS OR WANTS?

A WIDE CANVAS

NEEDS OR WANTS?

Modern civilisation is economic in substance. Everything is organised around it- our politics and public discourse, arts and literature, science and technology, agriculture and industry, education and entertainment- everything is valued for its economic contribution , measured by that ubiquitous modern barometer-GDP.

One may wonder, what is so strange in this. Life has always hinged on the economic factor. Food had always been grown and marketed; products made and exchanged. So what is new?

Why is food grown? Why are products made? And what sort of products?  That is what is new.

In traditional India, India before the planning era, the India I knew as a student, food grains were grown not with an exclusive commercial motive. Sure, the farmer needed money, but money was not the main motive for agriculture. He was in farming, not because it was a source of income, but it was his way of life. He was born a farmer, and farming was his dharma. The farmer felt that it was his dharma to grow food and feed the people with surplus. The Veda says:Annam bahu kurvita= Grow abundant food. He raised crops according to the nature of his land, the season and his tradition. He would not switch crops because something fetched more money.  My grandfather always raised sorghum (Cholam) even though we did not consume it, and it commanded a lower price than paddy. He used to say that the grain from the fields in his village were consumed in the nearby villages and he should not default in the supply! Part of his fields raised Til, and paddy which carried better price, but his quota of sorghum he would not fail to raise. The farmer then looked at food grains essentially as food, not as a source of making money. We had always enough food grains, but hard cash was hardly seen!

This was also the reason why food in India was never sold for money. Food was sacred. And it was cheap.

This changed with the planning era. Extension workers came and taught  our people how to make money through crops, how to make more money through different crops. In the US, the govt. pays  farmers not to grow food! Where irrigation facilities were extended, food crops gave place to "cash "

crops like sugarcane. It is money economy now,fully.

The matter does not stop there. Industry, technology, chemical companies, marketing outfits, etc have taken over. Food is now 'processed', minerals, colouring and flavouring agents  (ie chemical additives) are added, packaged and marketed- each successive step adding more 'value' to the product, thus spinning more money for more people than the farmers, on the way. Where food does not undergo change in form, it undergoes chemical treatment or irradiation. Now GM crops are taking over. In the US, most of the corn and soybean now grown and consumed are GM.One hardly gets to eat any food item in natural form.

By Sally Fallon. 
Taken from: www.foodmatters.tv/articles 7 June 2015.
On one hand, scientists and nutritionists are warning about the risks of processed foods. On the other, govts are actively encouraging it! Yes, it promotes GDP, both when the food is processed, and when unhealthy consumers  need medical treatment.

 In the meantime, the cost of inputs has increased so  much the farmer is compelled to borrow, is often unable to repay, leading to distress. 60 years ago, 'rural indebtedness' was a big issue in the circles of our economic punditry. The money lender was blamed then. Now markets have taken over, and the banks. There is speculation and forward trading. And the govt fully supports them! Today distress leads to suicides of farmers, but it is not even a flea bite for the development, free-economy mandarins at Delhi. What does it matter if farmers die? GDP should not fall! Sensex should grow, even if our sensitivity declines.

By Yann (Own Work) [GFDL(http://www.gnu.org/copyleft/fdl.html
CC BY-SA 4.0 via Wikimedia commons

This development represents a big transformation in our very basic economic philosophy- one of the main differences between the pre-modern and modern economy. The pre-modern system was based on fulfilling human 'NEEDS'. Modern economy is focused on 'WANTS'. An old standard textbook like that of Sir Frederic Benham stated:

the rationale of economic activity is to satisfy human wants by producing consumers' goods.

Nothing has changed in the five and a half decades since the above was  written. But what are 'wants'?

Adam Smith, considered the father of modern economics , said in his famous 'Wealth of  Nations', published in 1776:

After food, clothing and lodging are the two great wants of mankind.

Book I,chapter xi,part II p.266. Penguin,1999.

It is important to note this usage of the word 'want'. For Smith, food, clothing and shelter constitute the three great wants of man. Smith also said that wants get extended, based on the supply of things. We would rather say that they are 'needs', not just wants. Need is something which indicates necessity; want indicates desire. This is the crux of the problem in modern  economics. Survival requires fulfilment of needs; style seeks satisfaction of desires.

Economists define economics as the science based on the existence of human wants. Wants are defined as insatiable, unlimited, repetitive, competitive, complementary, etc. Their satisfaction depends on the production of goods and services.This depends on resources. Resources have alternative uses. Compared to the nature and number of wants, resources will always be scarce. So economics ultimately boils down to "efficient allocation of scarce resources." Ironically, a 'science' which set out to  pursue satisfying human wants, ended up with a preoccupation with resources, forgetting man! Further down the line, it ends in fascination with some magic numbers!

In modern societies, needs have been turned into wants. We need 'food'. But what is food? It is what we are used to, in the society where we are born and brought up. But in a modern economy, this won't do. It is not enough if you have breakfast with alu-poha or idli. That is old fashioned. That way, the economy won't grow. If your mother or wife cooks your food, that won't add to the GDP. You must have a 'breakfast cereal', with a bowl of milk; you must have noodles, you must have bread, jam, butter, cheese, etc. All these are packaged, value added products of modern industry. Your need for food has been transformed into  wants for so many specific products, preferred brands with so many additions on the way. The same process is repeated in respect of other necessities too. It is not enough to have a shirt or trouser-any shirt or trouser. There is always a brand. And what you wore last year or last season won't do. Fashions change every season. You must change too. Thus the act of fulfilling needs has become the process of satisfying a never-ending procession of wants, most of them created artificially if also artfully.

All this would be very fine, provided the resources were as endless as our wants. But we live in a finite world, with serious limitations on what we may have and also on what we may do. Everything we consume in modern economy generates waste, harmful byproducts, and ends up as pollution of air, water and soil, destruction of forests, decimation of species of life and vegetation. There is simply no way most of these effects can be  got rid of or taken care of. There is simply no way known to science to deal  with carbon monoxide or nuclear waste from a power plant. There is simply no way to dispose of plastic except by causing more pollution. Modern industry hides these issues from our view, and transports some of the dangerous material around the world to other countries.

70 years ago, the pollution causing aspects of modern economic organisation  and the damage they caused to external nature were not much known. But thinkers knew the damage they caused to human nature. Mahatma Gandhi was one of those thinkers who warned us that 'earth  provides enough to meet everybody's need, but not to meet everyone's greed'.

Sadly, even today, mainstream economists behave as if they are enjoying a free lunch, and can continue to enjoy so for ever.

The first step in stopping this rot is to recognise the difference between genuine needs, which are limited and manageable, and the 'wants' which can only grow like Frankenstein's monster. 

Thomas Carlyle  called economics "dismal" science. Nay, today it is downright dangerous. It is not a science but a fabrication of freaky minds.#

NOTE:

In one of his  essays titled "Needs", Prof.Thomas Sowell uses the word "want" in the original sense in which Adam Smith used it, and condemns the way people use the word 'need'. (See the collection entitled "Is Reality Optional?",Hoover Institution Press,1993.)

But I am using it in the sense the pre-moderns or we Orientals have always used it. Need is based on necessity, want is based on desire. Behind the word is the sense. When we stick to the sense, word does not matter. We must use our resources to meet our genuine necessities, not the manufactured wants. This is what Prof. Sowell also says. There are trade-offs in economics. This cannot be ignored.

But I go a step further. Many of the choices which necessitate such trade-offs in a modern economy are based on manipulation by the market (the forces controlling it) of our minds and psychology, lifestyle. The market is not free,nor perfect, even as the resources are not unlimited, and the processes of industry are not 'clean'.  Somehow  these have to be reconciled. Which tobacco manufacturer gave up making cigarettes because they cause cancer? They only changed the name of the company! Which manufacturer of fried chicken stopped making it when it was shown it was not good for the heart? They only changed the name! 

A KFC outlet in a Chennai suburb.
CC BY-SA 3.0 Creative commons via Wikimedia commons.

Originally known as "Kentucky Fried Chicken", it changed to simply KFC  (so that the words 'fried chicken' would not be shown) when there were protests in the US by the younger generation against the harmful effects  of the fried chicken, in the 70s/80s. It was a case study in management courses.
Same is the case with ITC in India. Originally Imperial Tobacco Company, it became "Indian" but as the voices rose against tobacco, it simply became ITC, because they do not want the word tobacco to be seen!

# Adam Smith was more of a moral philosopher than a formal economist. There have been great individual economists who have tried to solve the basic problems. But economics as a discipline has never been an "exact" science. Efforts by over-intelligent people to make it so have only resulted in obscuring the real issues and making it more abstractly mathematical, dealing with theoretical issues not addressing real human needs. Economics has always been a generalisation of tendencies, more like psychology than physics. An exact science is based on precise measurements and repeatable experiments. This is just not possible in economics, because we are primarily dealing with human beings who are not amenable to precise measurements or predictions.. Nor can there be any objective statement of any issue. The joke is that  where there are six economists, there will be seven opinions.Sixes and sevens! (The leftist economists talk with one voice, because what they talk is political dogma, not economics.)