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BUDDHISM AND MARKET ECONOMY -PART 1
Wednesday, 28 February 2007 - 8:35 AM SL Time | | |
In the following article, Mr. W. A. Wijewardena, Deputy Governor, Central Bank of Sri Lanka as well as one of the key free market advocates in the island (He was heavily criticised by JVP) sees a parallel between the market economy and Buddhism.
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MARKET ECONOMY SYSTEM, DISCOURSE ON HEART WISDOM AND THE VISION BEYOND THE EYE-SIGHT
W.A.WIJEWARDENA
Deputy Governor, Central Bank of Sri Lanka
A remarkable feature attributable to the free market economy system has been the appropriate co-ordination of an infinite number of independent and unrelated decisions to produce and supply the products desired by people. This co-ordination is being done costlessly and effortlessly without the intervention of any superior authority.
Adam Smith called this force `invisible hand`, a mechanism which actually delivers a final product but functions without being seen by anyone. The latter qualification ? the unseen part ? is not necessarily true if people are capable of seeing beyond their eyesight. Viewed from the opposite angle, it would be difficult for a person to grasp the whole process, if his vision is just restricted to what he can see within the eye-sight.
The vision needed to understand the whole process is known as the stratospheric vision, if one borrows a term from philosophers.
We could judge for ourselves whether we have acquired this vision. All that is necessary is to ask a simple question from ourselves.
When we travel along any road, we would have often seen sideway fast food joints that sell rice flour string hoppers. What would be our answer if one of the string hoppers challenges us with the following question?
`Tell me if you know how to make me.
During the last 15 years or so, I have, from time to time, asked this question from many, numbering even thousands. On all those occasions, the answer I got was very similar to the following:
`Mill rice into flour, add water and salt, mix into a dough,
pour into a string hopper holder by using a mould and
steam-cook`
This answer is not incorrect; it is not completely correct either.
If our knowledge is limited to what we see within our eyesight, then the above answer is not wrong. But, if, on the other hand, we could see beyond our eyesight, it is not accurate.
How could a person with a stratospheric vision see this whole process? We could build the story of the rice flour string-hopper by adhering to the following holistic path.
Let`s first look at the process behind rice flour.
? Rice flour is produced by grinding raw rice.
? Flour is delivered to the fast food joint in a delivery van manufactured in Japan.
? The delivery van has been transported to Colombo from Japan in a ship built in South Korea.
? Iron, steel and other metals to build the ship and manufacture the van have been produced in China.
? Iron-ore for producing iron and steel has been mined from a mine in South China.
? The clothes worn by miners whilst mining iron-ore had been produced by a garment factory in Vietnam.
? The tobacco that had been used to produce the cigarettes smoked by the miners had come from Cambodia.
Let`s now examine the work relating to the grinding of rice into rice flour.
? The grinding mill to grind raw rice had been produced in India and shipped to Sri Lanka.
? The metal used to produce the grinding mill had been imported from Japan.
? The electric power used to operate the mill had been transmitted to the mill by using the medium of an aluminum cable produced in Malaysia.
? The power had been generated in the power station at Polgolla.
? The power station was funded by the World Bank.
? The World Bank raised the funds by issuing debentures in the New York capital market.
? It was US citizens who invested in the debentures by saving money through the curtailment of consumption.
Now let`s turn to the history of raw rice that was ground into flour.
? Rice had been produced by farmers at Embilipitiya.
? Those farmers bought their seed paddy from farmers at Anuradhapura.
? Fertilizer for paddy cultivation had been obtained from Iran and such fertilizer had been transported in ships built in France.
? The trucks that transported the fertilizer to Embilipitiya had been manufactured in India.
? The tractors that were used to prepare the paddy fields had been manufactured in Japan.
? The betel that had been chewed by the farmers whilst working in paddy fields had come from Ratnapura, tobacco from Galewela, areca nut from Avissawella and lime from Matale.
It is only a very short history of the rice flour string hopper that we have presented above. If we go into the very minute details of all the processes involved in this tiny string hopper, we would observe that it would encompass the entire globe. It involves an infinite number of independent decisions that could not have been made if they were planned by a single or a number of authorities.
What are the lessons which the free market economy system would teach us from the above holistic approach? There are several such lessons.
First: Even though the string hopper is a single commodity, there are millions and millions of other independent decisions that have contributed to the production of that single commodity. If these decisions were not made, we would not have got this string hopper at the specific time we need it.
Second: Hence, the string hopper is not independent of all those other processes. Its existence has depended on all others.
Third: None of those who took these independent decisions were aware that, as a result of their decisions, a string hopper would be finally produced. There was no necessity for them to be aware of it either. For instance, those Chinese miners who mined iron-ore did not know that one day their labor would contribute to the production of a string hopper in Sri Lanka. They would have any way done their job whether they knew it or not.
Fourth: Therefore, each person at that appropriate time made their decisions not with the objective of producing a string hopper in the future. They did so purely for their self interest. Because of their intention of satisfying the self interest, we were able to get a string hopper eventually from the market.
Fifth: These individual decisions were coordinated by a single motive, viz., the profit motive. There, only one force acted to direct them to work for their goal. That force was the `market price` and the `profit` that was represented by that price.
A similar example has been presented by Milton Friedman in his (authored with his wife) Free to Choose with respect to a pencil. Irrespective of the commodity, the same analysis can be made and the same conclusions can be reached with any good or a service of one`s choice.
It is clear that millions and millions of such decisions have been made spontaneously in the market. If we tried to do the same through human processes by using human energy, the difficulty which we would face need not be emphasized. For that, we would have to use millions and millions of people. Even after using such a large number, there is no guarantee that we would get the product that we want in time, in the required quality and in the required quantity.
What is clear from the above? That is `there is no any thing which is not useful` in this world. The wisdom of our elders as expressed in such proverbs as `even the chicken drops are useful for medicine` amply demonstrates the knowledge gained by observing what is beyond the eye-sight. One may consider smoking an evil act. Yet, if the miners in China did not get themselves relaxed by smoking, we would not have been able to get our desired string hopper. Hence, every thing in this world is inter-dependent. They are also inter-connected. As such, for us to get one thing, the other thing should exist. If the second thing does not exist, the first thing also goes out of existence. In other words, it creates the situation known as emptiness.
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Source(s)
Article from Daily Mirror Pics by Shakti |
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