Civilizational conflicts and intra-civilization priorities

The Great Recession and the accompanying economic problems have pushed to the background certain arguments that were being bandied about in intellectual circles about clashes between civilizations. These arguments, vague at best as to why such a clash is necessary in the first place, and also vague as to how alliances along the lines of civilization are to be formed for this purpose, were dangerous in so far as they imparted a confrontational tinge to the globalizing world. The basic split suggested was one between democratic and non-democratic countries despite the fact that ideological divides and civilizational divides do not always coincide ( a case in point being the rabid anti-Christian, in addition to anti-Muslim, tilt of Hindu nationalists in India ). In a world where specious propaganda often trumps the truth, this ostensible split should be taken with a huge grain of salt by any serious thinker. Many so-called democratic countries have been found woefully lacking along dimensions of social and economic justice. Not only that, wanton and unwarranted projection of power and use of power with the ostensible aim of establishing democratic rule in countries with dictatorial governments have led to untold destruction of lives and property. Moreover, the key goal of human welfare is often sacrificed at the altar of abstract principles. Greed has more often been the underlying aim than any higher principle. In all ages and in all times, greed finds specious moral covers through which to advance its agenda using conflicts. This process is an old one. Engaging in wars that have little moral justification is an old habit of Western powers.

Intra-civilization failures have had profound effects on the well-being of people inside Western countries. On the economic front, the depression of the late nineteenth century, the Great Depression, the stagflation of the 1970s and the current Great Recession, have had persistent negative effects on the well-being of the masses in these countries. While liberal forces have tried their best to mitigate the worst effects of these failures, other forces have pushed vehemently for “ Social Darwinist “ principles in the West. And the entire process has been extremely costly in terms of human welfare. Currently, America has a poverty rate of 15%, one that is the highest since the 1960s. The United Kingdom has also come under the bludgeon of “ Darwinism “ advocates in the form of Thatcherism. Continental Europe has also gone through this kind of tussle.

As far as wars are concerned, the First World War and the Second World War were to a large extent intra-civilization conflicts, but for the involvement of Japan, which was an erstwhile imperialist power. Other eastern countries were only peripherally involved, mostly because they were under colonial occupation at that time.

Constantly harping about inter-civilization conflicts is stupid when western intra-civilization conflicts have had deeply damaging effects on the welfare of the western masses. It is sometimes a ploy by extremist right-wing groups to distract attention from the internal problems of the west. Also, it is a way to ensure conformity inside the western world and to hide deep fissures along moral and economic lines inside western civilization itself.

There is a constant attempt to disallow alternative routes to social transformation in other societies. People who are bad managers of democracies in their own countries and who understand little about the social ethos and the complications of other countries are often at the forefront of unilateral use of force in the service of some abstract and ill-understood aims. Not only that, they have a habit of bypassing consensus in institutions like the United Nations and to stifle debate. And the United States has a habit of propping up regimes that serve its narrow needs, ignore excesses committed by these regimes when they are allies of the US and then somehow muster great moral outrage when these former allies have outlived their purpose. It is a line of thinking that cares more about conflict as a way to establish control than about democracy. Sometimes, democracy serves as a good public relations excuse to achieve the real aims of neo-colonialist control and sabotage.

And it is not as if East-West inter-civilization conflict has not happened before. The Vietnam war was a kind of inter-civilization conflict where Western powers sided with an unpopular government and caused untold damage to the population of Vietnam.

More subtle forms of inter-civilization conflicts have also become rife. The Washington Consensus has been used as a tool to advance the agenda of conformity and as a tool to disallow alternative models of economic development from taking effect in the non-western world. Often, corrupt and inept political elites serve as willing lackeys to the proponents of such lines of thinking and try to push for institutional change that renders social and economic progress impossible except for a very narrow elite at the top. This kind of inter-civilization control and regimentation have pernicious effects on these countries, all due to inept or corrupt leaderships that compromise the interests of their countries and their groups.

The abstract aim of democracy becomes a ridiculous excuse for wars and even more so for all-out inter-civilization wars because many formal democracies have serious problems of their own. For example, the United States, and the most populous democracy, India, have failed in several areas of national well-being. Recurring unemployment in the United States, a deeply worrisome poverty rate in the United States, mind-boggling poverty in India, a huge illiteracy rate in India, a health system in the United States that has deep problems when it comes to providing for the masses at large, an inadequate public health system in India are all examples where democracies have enough to worry about in their own backyard to justify frequent interventions in the name of democracy in other countries. Rather, pushing for human rights in the areas of poverty and health using the United Nations is likely to yield better results. The fact that the United Nations encounters constant problems when it tries to solve basic problems like the one of food security around the world is an indication that the emphasis on using military means for establishing democratic systems is a misplaced one. Similarly, the Millennium Development Project constantly lags behind in its goals to provide basic necessities to hundreds of millions, if not billions, is an indication of misplaced priorities. The fact that the political elite in countries like the United States is able to sweep the more pressing issues of global food security and global health under the carpet, and is able to use the loopholes in the democratic framework to launch ad-hoc and arbitrary wars in the name of abstract goals shows that the democratic process is often short-circuited precisely in those countries that make the loudest noises about democracy in the international arena. Thankfully, these scattered efforts backed by the military-industrial complex have not led to all-out inter-civilization or all-out global conflict. Rather, now, there is greater danger that big economic and military powers, irrespective of affiliations of civilization or ideological affiliations, may use these precedents as an excuse to control resources and even man-power inside countries and regions and groups that do not possess equivalent military or economic power.

It was never clear what the contours of a possible conflict along the lines of civilization would be. And in a complex world such as ours, the justifications for going to war along lines of civilizational differences are not clear. Nor does there seem to be a justification for going to war along ideological lines since the most pressing problems of human welfare transcend both civilizational and ideological boundaries in the world we live in today. A lot of self-congratulation goes on in areas like freedom of expression even though in countries like India with formal freedom of expression, rights of minorities and rights of poor people are often trampled upon with impunity. Further, the formal right of freedom of expression in the form of media freedom almost never translates to solid gains in the fields of poverty eradication or women’s rights. Furthermore, there are cases where the democratic process is hijacked by entrenched economic interests and even by criminal elements who attack social workers. A country that harps too much on the right to freedom of expression and neglects human economic welfare looks ridiculous when it espouses the cause of democracy in other countries. Also, the ability to change governments through democratic elections is of limited use for furthering the cause of human welfare when the political process loses touch with reality and is hijacked by power-hungry elites, as is sometimes the case. The disconnect between the dire needs of poor people and the political discourse in formal democracies like India and the United States is proof that both the abstract principles and the ground realities matter. Also, when any kind of majority is apathetic towards the interests of any kind of minority, the mere exercise of going to elections is unlikely to redress the accompanying social and economic injustices. While the right of freedom of expression and the right to criticize and change governments are desirable, critical issues like poverty and health should not be allowed to be submerged in a huge sea of commentary, and sadly, that is often the case in formal democracies like India. We do not live in an ideal world. Obsessing about freedom of expression before ensuring economic justice is difficult to justify, but such obsessions often underlie the foreign policies of countries like the United States. Poverty, inequality, health, women’s rights and humane laws are some of the dimensions along which efforts should be made to make international institutions like the United Nations work better. The stress should be on establishing real democracy and a solid democratic ethos, with economic security and avenues of progress for all, and not just on advertising the formal aspects of democracy.

by C. Jayant Praharaj

Examining the implications of a wealth tax - a perilous idea that may become necessary

Desperate times call for desperate measures. The American public debt is around 14 trillion dollars. This debt is likely to increase to around 24 trillion dollars in another decade according to some projections. How long will it take to bring this debt level down to, say, 10 trillion dollars. If the federal budget runs an annual surplus of 100 billion dollars, it will take about 140 years to reduce the debt from 24 trillion dollars to 10 trillion dollars. At an annual surplus of 200 billion dollars, it will take about 70 years to reduce the debt by that amount. Sustaining such surpluses is going to be difficult given American political and economic realities. New kinds of taxes may well become necessary. Is it time, then, to examine a tax on wealth and not just on income, to help pay down a part of the debt ? It is a difficult question, and accurate quantification is of the essence if one wants meaningful answers to this question.

Let us make a simple calculation. According to some reports, 5% of Americans own about 95% of America's wealth. Once again, we are distinguishing wealth from income. In a low upward and downward mobility environment, income and wealth should track each other over long periods of time. In a high upward and downward mobility environment, wealth may not track income. 5% of the American population is about 20 million people. Let us assume 50 trillion dollars as the total wealth of America. This number may not be very accurate. It may be 75 trillion dollars or it may even be 100 trillion dollars. The reader can find out the accurate number. The exact number is not that important for our examination. 95% of 50 trillion dollars is about 48 trillion dollars. If 20 million Americans at the top of the economic ladder own 48 trillion dollars of wealth, then on an average, they own about 2.4 million dollars per person. There are people like Bill Gates who own several billion dollars. For our argument, let us take the average number. If one were to try to repay 14 trillion dollars worth of public debt by taxing the wealth ( not just income ) of these 20 million Americans at the top, one would need about 0.7 million dollars from each of them. In an actual scheme, billionaires would pay more than millionaires, and so on and so forth. We will ignore these details here. Taking 0.7 million dollars from a person who owns 2.4 million dollars means taking about a quarter of his wealth.

Several questions need to be answered. Will such a tax lead to negative effects on the economy to an extent that makes it difficult to justify ? And if such a tax were to be imposed, over what period of time should the very rich Americans be required to pay this kind of tax ? Since wealth exists in many different forms like real estate, luxury yachts, private jets, gold, stocks, bonds and cash, it becomes a difficult question to answer. One cannot sell one quarter of a house to pay a wealth tax. Such logistical difficulties may well have to be considered if one were to tax wealth and not just income. For sure, this tax cannot be extracted over only a few years. How about 10 years ? That would be just enough to make sure that the projected 24 trillion dollars projected figure for the public debt at the end of another decade will be brought down to a decent and manageable 10 trillion dollars. The rich will get enough time to convert their non-liquid assets to liquid form. They will also get the opportunity to expiate for the fact that they did not pay enough taxes while the public debt ballooned to a whopping 14 trillion dollars, and is now going towards 24 trillion dollars over the next ten years. The US national annual GDP is about 14 trillion dollars. Over 10 years, it adds to 140 trillion dollars. Since the rich will have to unload 14 trillion dollars of assets over 10 years to pay this kind of wealth tax, it will lead to a 10% extra supply pressure, for lack of a better term, in the economy. That is likely to be excessive in that it can lead to severe downward pressure on prices. It can prolong recessions and there is a danger that it can induce recessions during normal times. How about 20 years ? This will lead to a 5% extra supply kind of situation, and can also lead to severe downward effect on prices. Spreading such a tax over 40 years is likely to have negligible effects on the economy. But, that is to long a time period to have any meaningful impact on America's ability to deal with the debt situation.

America's ability to speedily pay down its debt may well depend on devising a workable scheme for taxing wealth instead of income. The discussions above indicate that balancing the need to pay down debt and the need to maintain a stable economy may well become a difficult one if one tries to use such a wealth tax.

by C. Jayant Praharaj