The Yin and Yang Of Economic Systems in Modern World
Yin and Yang depict equilibrium. They are complementary forces balancing each other. Like the sun and the moon. Like male and female. Like life and death. Though completely opposite in nature, these elements individually have their own uniqueness. And they need each other as their balancing element to stop their power from going out of control.
Similar are our economic systems, they are all-powerful, all capable of running a country for ages but they need a balance to stop their power from going out of control. We are in an era where we are witnessing all economic systems happening parallelly in various countries. We see America as the flag bearer of capitalism and China as the flag bearer of Communism or recently claimed socialism. On one hand, India claims to be the largest democracy in the world, on the other, the Soviet Union has sustained for more than a century, a history of propagating socialism.
These economies have all grown in terms of GDP and social growth over the years. Let us look back at the world growth in the pre-covid era. The size of the U.S. economy was at $20.58 trillion in 2018 in nominal terms and was expected to reach $22.32 trillion by end of 2020. When we look at GDP in PPP, China is the largest economy, with a GDP (PPP) of $25.27 trillion. By 2023, China’s GDP (PPP) was expected to be $36.99 trillion. We all know that India is the fastest-growing trillion-dollar economy in the world and the fifth-largest overall, with a nominal GDP of $2.94 trillion. India has become the fifth-largest economy in 2019, overtaking the United Kingdom and France.
Such strong economies and yet we know that their sustenance is generating GDP but not creating wealth in the real sense. Our economies are creating numbers but not increasing the happiness quotient. Somewhere in between these shiny, rosy facts and figures; we have lost a beautiful garden that can be created with community and interdependence, and mutual respect of each other.
These fast-growing strong economies are also countries that are fighting with the highest rate of depression. According to WHO, India, China, and the U.S. are the countries most affected by anxiety, schizophrenia, and bipolar disorder. If our economic system is leading us to progress, why aren’t we all happier? If we are growing richer every day, why aren’t we becoming happier every day? Why do all facts of health point towards a serious downturn in the mental health of people?
Let me take you a little back into a dated story. An ancient Indian mythology story called Ramayan depicts a scene where its central characters Ram, Laxman, Bharat, Shatrughan, and their guru (teacher) are debating on ways on how to run the economy. The economic system is driven by a king in those times with princely states and individual authorities within states to run a government under the influence of the king. Some follow the suryavanshi system translating into the sun economy, the male way of working where power & hierarchy dominates the societal functions and some follow chandravanshi system translating into a moon economy, the female way of working where talent, literature, and creativity are allowed to liberate the societal functions.
In this debate between the central characters, they are evaluating various states under their governance which follow these 2 traditional systems and both have failed over the years. In further arguments, they are trying to find out how to restore balance in these systems and Ram is enlightened with the thought that if an economy is run too long on a singular system, it loses its effectiveness.
This brings me to the topic I want to put before the world today. My dear enlightened souls and friends of freedom. We have seen all kinds of systems. We have heard Karl Marx & Milton Friedman and the benefits of socialism/ communism vs capitalism. We have also heard the respective fallacies for both systems. The reason due to which the disparity between these two systems cannot be resolved is because both systems have their own importance and need to stay for the betterment of people.
All we need to now talk about is the balance between these two systems. We need to find how and when can one system interfere to make the other system better and more competent when required so that economies end up benefiting from the advantages of both systems. Time has come when our new-age economists understands the yin and yang of modern economic systems and devise a way to incorporate both systems into a country’s economy. Time has come to broaden our approach from just capitalist or just socialist. Time has come to forego these old rudiments and develop an approach to “socio-capitalism”.
And I, as a believer in the power of preaching from our past, an avid reader, and a student of economics, suggest we use the ancient “Ram approach” to this problem. It’s simple. It’s out there. “If an economy is run too long on a singular system, it loses its effectiveness.” So to keep it effective, every few decades, the country needs to upgrade its system. Do not wait for an internal war or an acquisition to do that. Because if you do not change and upgrade, you become obsolete.
A communist country might respond well to capitalism or democracy after a couple of decades. Or probably a century, when the economic development has already taken place and the people need to be returned their right to speech and freedom. Similarly, a capitalist country could respond well to socialism to re-inculcate the sense of equality in real terms and not just monetary terms.
There are many powerful economists around the world today. If they start combining these 2 systems and work on a new theory of “socio-capitalism”, maybe we can soon increase the true wealth of our countries and restore their people their happiness.