The Many Cultural Disguises of Bad Economics – Truth and Transformation Preface and Chapter 1

Someone asked me to review and evaluate the book Truth and Transformation by Vishal Mangalwadi. (You can order it from amazom.com here if you’d like to read it for yourself: Truth and Transformation: A Manifesto for Ailing Nations) Iwill try to do that in a short series of essays. Please keep in mind that this is about the validity of the arguments and possible actions presented. It is not about the author’s character. I have no reason to doubt his good intentions, just his conclusions about economics and politics. I will do this by sections of the book until it seems redundant. I expect to learn things along the way. I hope you do to.

If someone busted down your door, threatened you with a gun, and proceeded to take all your food and clothing, you might be tempted to say, “Stop! This is wrong!” And he might answer, “I don’t believe in God. I make up my own rules.”

Or, it might be a different person, and when you yell, “Hey, this is wrong!” the answer might be: “No, it’s okay. My religion says I am better than you and I can take your things and do with them what I think is best.” It matters not what excuse is made, the economic action is the same. You are plundered by someone in a position to bully you.

If you have no way to keep this from happening, you are robbed of important resources. Had you retained them, that would have meant you could use your energies for other productive activities that might make your situation better. However, if these people, or others like them, show up regularly, it becomes hard to make yourself work for it all again. It makes the most sense, economically, to just secure what you need for the exact moment and use it right away. No saving or planning because there is no hope of freedom to build on what you have earned.

Add to that sorry scenario, that these people are getting together and telling you what work you must do and how much you are allowed to be paid for it. Possibly someone in the “power group” argues that “we are all one with the universe” and nothing really belongs to us. Another of the cohorts might insist that “since all resources belong to a greater being, we must insist that it is shared equally.” The irony is that the power group is acting like it is all really theirs and they will certainly find reasons to “share” more among themselves. But fundamentally, their political decisions to take economic actions are all variations of theft. Whatever their propaganda and why they say they do it, you are deprived of the rewards of work. It is slavery with a label slapped on it that says “This Is Right.” The overseers could be dressed as belly dancers or in black suits. Whatever they wear, whoever or whatever they pray to (read about how to figure out what religion you belong to here), they are just Central Planners and Central Planning (socialism, communism, government run redistribution of funds) always leads to corruption and poverty. How deep the corruption and poverty depends on the degree to which Central Planning has taken hold of the economy.

If you happen to be able to preempt such a takeover of your household, by defending what you have worked for, it “keeps people honest.” Sure, a few people choose to be honest, but many, many people spend their days trying to get away with what they can. Even if they think they should be honest or go through phases of wanting to be honest, it is not the default setting for human character. If people were generally “good at heart” the world would be a much nicer place than it is.

Lest you think I am being harsh, consider the tales of history. It is full of records of conflict on every level of human interaction. It cannot all just be blamed on leaders. The problems are just magnified when an individual or select group gains power. Also consider the current state of things and the locks on all of your own doors. If most people could be trusted, all this security effort would be a waste of money. The fact is, that if you have the freedom to deter or fight off those who would harm you, it matters not which supernatural being or space alien you give the credit to. The result is that people are encouraged to be honest because it is a less painful way to get what they want. It is self-interest at work in the best of ways, bringing peace and prosperity.

Americans and other “western nations” have no better human nature that people in other cultures. Some of us, in the comfort of our own trusted network, might be tempted to think so. But step outside of this and you learn you don’t and can’t really trust other people. You have to get to know people to trust them. Be honest. If you won’t give them unfettered access to your bank account, you don’t trust them. If someone, like the bank personal, do have access, it is only with their reputations seriously at stake.

People in every culture have their more closely knit groups (families, smaller towns, social clubs), more or less. Those people are the ones that you give a copy of your house key to, or leave the money can out trusting they will pay when they pick something up. Even if you don’t trust each person to the same degree, there is some social pressure exerted by the group relationships that make it less likely deception will be tolerated. It is true that not all families or circles of friends are equal, but unless a person is held against their will by physical bonds or there are oppressive government regulations and threats, he or she will search for those to trust. I say “government regulations” because, again, it doesn’t matter how the regulations are justified or the religious beliefs of the perpetrators, laws to regulate others are a governmental action. (To read an interesting comparison of culture versus prosperity for Hong Kong and India click here.)

If, in the course of time, a new group rises to power, it does not matter if they had “good motives” or make lovely promises. If they insist on staying in power, as opposed to making individual power available for free decision making, they become a the latest Central Planners. They tell the underlings how they should think, why they can’t be trusted to think and act on their own, and why the government has a moral right to plunder. Meanwhile, the more Central Planning is put in place, the more underlings are at risk because no one is encouraged to be truly productive. Positive creativity and problem solving are punished for not being “how it is done.” Creativity is then channeled into ways to deal with the system. Sometimes it is a matter of survival, but it is also just the path of least resistance. (For another good article comparing economic freedom in different cultures read here.)

Because people are … people, this sort of thing has been going on for ages. People now are not smarter or meaner. They aren’t more or less religious. The one factor that can be shown to create prosperity is freedom. The one factor that can be shown to destroy it is Central Planning. Governments exist on a “freedom continuum,” somehow always moving toward less freedom. They may kick off at any point on the graph, but “they” grow in power, sucking the life force out of all in their path.

No one can force prosperity to happen to others. Just like you can’t force an individual to truly learn or embrace a world view. People might go through the motions and remember just enough head knowledge to avoid consequences, but there is a spark that must come from the individual to make things his own. The spark might be lit by guilt or competition. Possibly there is just a joy in the projects. Maybe a person believes they must do things to gain favor. Many people are just seeking to make themselves more comfortable. (Most people prefer a roof over their heads, reliable heating, lights in the dark, etc.) In the realm of economic action, the only thing that matters is that there is the freedom to act on the compulsions. With freedom, enough people will act toward their own care that they will see it makes sense to cooperate. Those who are untrustworthy will be shunned because they put the well-being of others at risk.

So, in summary, my response to the preface and first chapter (“Morality”) of this book is that his premise is historically and factually wrong. Morality does not depend on and cannot be created by the government taking over education. (Instead, bad things happen when the government takes over education) Neither can it be forced by religious institutions. Economic prosperity does not depend on morality, but rather the freedom of individuals to pursue interactions and transactions in their own best interests encourages mutual trust. Honesty is fostered when each person has equal access to means of defense. People in general have always been selfish, and to some extent need to be. They need to take responsibility for themselves.

The Bible makes it pretty clear that the governments of this world will be troublesome until Jesus Christ comes back. We, in this time period for the church, are in no way encouraged to set up systems wherein we control how others act out their lives. We appeal and explain. If they choose to not to heed, we are never to beat them into subjection. When we can, we step in and help others with our own resources. Sometimes we try protect others. However, Central planning with the label “Christian” is still just Central Planning that leads to economic hardship and corruption. And it’s not really Christian.

The true message of Christianity has been going out for about 2000 years now. It is no more or less urgent than it was originally. People hear, they choose, and sooner or later they die and meet their Maker. Only once He takes over will there be Someone who can really handle Central Planning – but that will be a whole new world.

About Laura Blodgett

I am just an ordinary 53 year old woman having extraordinary fun!  My fun right now includes barefoot running, swimming, triathlon training, gardening, discovering how to be a grandma (going by the grandma name of "Lulu"), sewing, studying Mandarin Chinese, learning about the stock market, non-institutional Christian fellowship, cooking, and occasional traveling. Read more about me here!

  • Ben

    That seems pretty cut and dry. Now to *accidentally* post this on a few major media sites.

  • Rich Breton

    it would be helpful for us with no exposure to the book to start with a brief synopsis of the point he is making that you are refuting. While I pretty much agree with most everything you say here, I found myself a little lost.

  • lauraimprovises

    Okay, I will try to do that soon.