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Economics, Governance, Sciences

Toward a Spiritual Economics – Amit Goswami

***This is not a recent article. It was written I believe in 2008 or earlier, yet I have just come across it. Anyway, for anyone interested. This is a good read.


Many people think that capitalism and market economics grew out of materialist philosophy that classical physics has given us. But this is myopic thinking of people who have missed the evolution of consciousness in the affairs of the manifest world.

First notice that during the period that capitalism developed in the hands of such luminaries as Adam Smith, it was Cartesian dualism under the modernist umbrella that was the influential metaphysic, not materialism. In modernism, mind and meaning are valued.

Second, notice that capitalism replaced feudalism and the mercantile economy (Adam Smith’s term for the economy prevalent in England in his time), in which the pursuit of meaning is highly limited and vast numbers of people are denied it. Compared to feudalism in which wealth or capital remains in the hands of a fortunate few, capitalism and the market economy have certainly brought capital in the hands of many more. This has given a large number of people the economic freedom and flexibility needed to pursue meaning in their lives.

Third, notice that the only serious challenge to capitalism after the demise of feudalism/mercantile economy has been Marxist economics. And it was a failure! Instead of Adam Smith’s “invisible hand” to drive the market and distribute capital, Marx envisioned that such a distribution could be done more effectively under the power of the proletariat; labor would directly take over the distribution and equalize wealth. But Marxist economics so far has been installed only under the politics of communism (in which the dictatorship of the proletariat become more like a dictatorship of a bureaucracy) and it failed miserably. And the failure is primarily due to the fact that most people just cannot work hard when it is not for the benefit of their own private property and private wealth.

Unfortunately, it does not take a genius to see that capitalist economics as it is practiced today is also at a crisis point.

First, present-day capitalism is based on continuous growth and expansion that require unlimited resources; this cannot be sustained on a finite planet. The finitude of resources may already have caught up with us. The finitude of the environment is an additional constraint on unlimited growth.

Second, the free market does not seem to be free any more. Why? And what is the remedy?

Third, capitalism and its continuing economic expansion produce higher and higher standards of living, and wages do not keep up with them without producing inflation. To meet the demands of higher standards and their higher cost, people are forced to give up their higher needs such as the need for quality time at home with the family or for leisure time to pursue meaning. Thus invariably some of the basic promises of capitalism are shortchanged by the nature of the beast itself.

Fourth and most importantly, no thanks to the development of multinational corporations, the management-labor equilibrium that feeds the equalization of the movement of meaning between the classes is stalled. What is the remedy for this?

Actually, capitalism is better than Marxism because it recognizes one basic need for people: the survival and security of their physical bodies. This basic ego need requires private property and any economics that ignores this basic need of people is bound to fail.

But as the psychologist Abraham Maslow pointed out, beside this basic need, we have an entire hierarchy of needs. One major defect of the capitalist economics is the ignoring of the people’s higher needs. Following Maslow, but modifying his theory according to the insights of my general approach to spirituality, science within consciousness, we can easily see what these higher needs are.

Our Redefined Higher Needs and the Rudiments of a Spiritual Economics

The basic elements of the developing science within the primacy of consciousness are as follows:

  • Consciousness is the ground of all being.
  • The possibilities of consciousness are fourfold: material (which we sense); vital energy (which we feel, primarily through the chakras and secondarily through the brain); mental meaning (which we think); and supramental discriminating contexts such as physical laws, contexts of meaning and feeling such as ethics and love and aesthetics (which we intuit). The material is called gross and the others make up the subtle domain of our experience.
  • When consciousness chooses from the possibilities the actual event of its experience (with physical, vital, mental, and supramental components), the physical has the opportunity of making representations of the subtle. The physical is like computer hardware; the subtle is represented as software.
  • Our capacity for making physical representation of the subtle evolves. First, the capacity for making representations of the vital evolved through the evolution of life via more and more sophisticated organs to represent the living functions such as maintenance and reproduction. Next the capacity of making more and more sophisticated representations of the mental evolved. This is the stage of evolution we are in right now.
  • Our capacity to represent the supramental has not evolved yet. However, there is evolutionary pressure on us in this direction; it is the primary reason some of us are attracted to spirituality.

In this way, there must be urge to satisfy not only physical needs but also needs in all the other dimensions of our experience. In addition to the satisfaction of physical needs, a spiritual economics must address:

  • Satisfaction of emotional needs (positive emotions such as love, compassion, and satisfaction itself), both conditioned and unconditioned
  • Pursuit of meaning, including the pursuit of new mental meaning that requires creativity
  • Pursuit of spiritual and supramental (soul) needs such as altruism, love, and happiness

And in truth, this ladder of needs is not entirely hierarchical. If one satisfies higher needs, the urge to satisfy lower needs actually decreases. The opposite is also true. If a lower need is satisfied, the demand for satisfying a higher need increases. In this way, strategy for a more suited idealist economics than capitalism is to address all the needs simultaneously.

Whereas capitalism is an economics of physical well-being based on the satisfaction of our conditioned physical ego-needs, idealist or spiritual economics must be an economics of holistic well-being based on the satisfaction of both our (physical) ego needs and higher needs (pertaining to the exploration of the vital, mental, soul, and spirit).

Microeconomics of the Subtle

Economics is about production and consumption, supply and demand, prices and all that. How does that kind of stuff work for our subtle needs? Let’s talk about these micro details.

Production of positive vital energy can be accomplished in many ways: forestation-plants and trees have abundant vital energy; cultivating positive health in society-people of positive health radiate vital energy (see my bookThe Quantum Doctor); and so forth. But the best way to ensure production of vital energy is to encourage the workplaces for ordinary people to have facilities so that their employees can practice positive health: practices such as yoga, Tai chi, and meditation.

As for production of mental meaning, we already have some of the ways in place in the arts and entertainment industry. Both of these industries have the capacity of producing positive vital energy (positive emotions) as well. However, much of the arts and entertainment industry has bogged down into the negativity of a materialist culture. But we can shift the emphasis from negativity to meaningfulness and positivity.

The production of supramental and spiritual energy requires more effort right now. In the olden days, spiritual organizations like churches, temples, synagogues, mosques, and the like cultivated and produced supramental and spiritual intelligence in their leaders and practitioners. Nowadays, these organizations are more interested in influencing mundane politics than in investing in the supramental. But make no mistake about it; it can be done although we may have to develop new spiritual organizations to do it. In the olden days, perhaps the most effective means of production (and dissemination) of supramental energy were travelling monks (calledsadhus in India; troubadours are an example in the west). This we can revive; to some extent the many new age conferences on spirituality are already serving this purpose. Also effective are group meditations through which, as some of parapsychologist Dean Radin’s experiments show, people can experience nonlocal consciousness and hence can take creative leaps to the supramental domain. This can be done even in workplaces.

Now to the question of consumption. Because the vital and mental are mappable in us, they can be consumed both by local and nonlocal means. For example, if we see good theater, it cultivates the processing of meaning in us, even new meaning. When we partake in good meaningful entertainment, we also feel positive emotions; we are consuming them. As we consume, we ourselves have the potential to become producers.

Supramental energy consumption is nonlocal, but it requires local triggers. There are scientists who subscribe to the so-called Maharishi effect, according to which the spiritual and supramental energy generated by a group meditation is consumed automatically in the local vicinity. Data is cited with claims of crime reduction in big cities where TM groups perform such meditation. However, this is controversial and I am not advocating it. A purely quantum mechanical consumption of your spiritual energy requires that I be correlated with you by some means or other. For example, experiments by Mexican neurophysiologist Jacobo Grinberg suggest that if two people intend together, they become so correlated, but it should be simpler than that. There are many anecdotes of how people feel peace in the presence of a sage (I myself have experienced this). So just being locally present may trigger consumption.

The best part of the story of subtle energy products is that it is mostly free. The subtle dimensions have no limits; we can consume a sage’s love all we wish, the supply is not going to diminish. There is no zero-sum game in the subtle. There may be a bit of material cost of production. So one may put a material price tag on subtle products to offset this and that may not be such a bad idea because it enables people to be more serious about their intentions when they consume subtle products. Here is also an opportunity for the government to subsidize the subtle industry.

Does Spiritual Economics Solve the Problems of Capitalism?

But how can spiritual economics address the particular problems of capitalism? First, the problem of limited resources. Capitalistic growth economics depends crucially on keeping consumer demands going; this is often accomplished by creating artificial physical needs. An example is new annual fashions for women’s garments. It is very wasteful, very detrimental to finite resources.

In idealist economics, as people’s higher needs are met even partially, their physical needs reduce, reducing the demand for consumption and thus reducing the wastage of limited material resources. The economy still expands, but in the higher planes where the resources are unlimited (there is no limit on love and satisfaction).

There is also another related problem with capitalism and material expansion economics-environmental pollution. This is a tricky one. In the short term, production of pollution helps expand the economy by creating pollution cleanup sectors of the economy. Believe it or not, the Exxon Valdez oil spill disaster actually produced an economic boom in Alaska. But in the long run, environmental pollution in a finite planet environment is bound to end up with a doomsday of reckoning. Many environmentalists think that global warming has already reached doomsday criticality. In spiritual economics, material consumption is reduced, thus automatically reducing environmental pollution.

Next, let us consider the free market. Why isn’t it free in the way Adam Smith envisioned? The truth is, a really free market has large ups and downs-the business cycles with which no democratic government can live without doing something about it (people, the voters, wouldn’t allow it). So today, we allow government intervention either through the Keynesian approach (tax the rich and increase government programs to increase jobs and economic movements) or the supply-side approach (reduce tax for the rich; the rich will invest, the investment will produce economic activity that will trickle down to the poor). If these steps require deficit financing, so be it. Now nothing is wrong with government intervention per se. Adam Smith himself was quite aware of this. He suggested government intervention to reduce unjust income distribution, to ensure that the entry to the free market is really free even for the small entrepreneur (regulation against monopoly, for example), and to a provide liberal education to everyone participating in the market. Governments today tinker with the free market in a few other ways than mentioned above that Adam Smith may not have approved: they make bureaucratic regulations, bail out big companies from bankruptcy, give tax incentives to segments of the economy counter to the spirit of capitalism, etc. But who says Adam Smith’s is the final word on how the free market should operate? The world has changed. The real problem with this kind of tinkering, though, is the indefinite growth economics that we seem to have got stuck on. I have already commented on how spiritual economics solves this problem.

More recently, the freedom of the market is affected by more than this traditional way. This has been the result of the wounding that materialism has produced in our collective psyche. The wounding has released the powerful among us from the search for mental meaning to the slavery of our instinctual greed, avarice, and competitiveness. One of the effects of this is the gross corruption of the practices that keep the stock market free. The current practice is to legalize corruption away, but this has very limited success. The other effect is subtle.

There is now an active counter-evolutionary movement for taking away meaning processing from large segments of people. Right now, this is more of an American phenomenon, but it may soon spread to other developed economies with strong currencies. Americans have been in a unique situation since the gold standard shifted to the dollar standard. Americans can borrow money to buy resources and goods from other countries almost indefinitely because those countries have not much option but to reinvest their money in the American dollar and the American economy. The American government has then the ability for large amounts of deficit financing and it is using this deficit financing to cut taxes for the rich. This is not immediately detrimental to the economy because the rich are the biggest consumers and they are also big investors. But the practice makes the gap between rich and poor larger and tends to eliminate the middle class. In this way, market share is becoming more concentrated in the hands of the rich and a new class system is being created. Can traditional capitalism function when the capital becomes concentrated again as in feudalism/mercantile economy?

In the spiritual economics that would be a part of a universal revival of idealist values, we do not deal with the symptoms of the materialist wound such as corruption, but rather heal the wound so that the symptoms disappear.

For example, take the case of deficit financing; right now it is being used to increase the wealth gap between rich and poor, contrary to the spirit of capitalism. Even worse, deficit financing removes the very important economic constraint against nations with aggressive ideas. George Bush’s Iraq war would not have been possible if deficit financing was not permitted. So should we be against deficit financing in idealist economics? Not necessarily. How does spiritual economics deal with government creating income disparity between rich and poor or aggressive war? In an idealist society, the root cause for the government actively creating income disparity or war-negative emotion-would be addressed and attempts would be made to eliminate them by creating an oversupply of positive emotions.

Instead, in idealist economics we can use deficit financing to eliminate income disparity (as Adam Smith envisioned) as far as practicable without affecting the proper functioning of the economy — national and international (that is, so long as the deficit remains only a few percentages of the GNP).

Let’s now take up the subject of the other counter-evolutionary tendency of capitalistic expansion economy-loss of the worker’s leisure time. Spiritual economics has a built-in constraint on expansion, as already noted. So the standard of living does not have to move up and up at rates faster than wage increases. Even more importantly, spiritual economics values other needs and their satisfaction that require leisure time. So in this economics, standard of living is defined differently and increases not in the material dimension but in the higher dimensions and without compromising the worker’s leisure time.

Finally, let’s take up the subject of multinational corporations. Multinational corporations have access to cheap labor in underdeveloped economies employed by shifting manufacturing to underdeveloped countries, outsourcing, etc. The labor thus loses the leverage of wage increase through negotiations with management, since the labor laws are very different in underdeveloped countries because of economic necessities. The labor of developed countries lose leverage, too, because of increasing fear of outsourcing of jobs.

In order to subject multinationals to uniform management labor practices, obviously we need to move from nation state economies to more and more enlarged international economic unions. In other words, the tendency of spiritual economics would be to move toward one international economic union within which the individual democracies will function with political and cultural uniqueness and sovereignty but with increased cooperation.

How Idealist Economics Solves the Problem of the Business Cycle

I mentioned the business cycle before which is commonly referred to a boom-and-bust cycle. After some years of growth, in the nineteenth century capitalist economies seemed to fall into a recession and there was always the possibility of an even deeper stagnation (called depression) that eventually happened in the early twentieth century. It is to prevent this kind of fluctuation that the Keynesian and supply-side government intervention cures were proposed. With these cures, recessions still happen, but they are milder. But these cures have created a perpetual expansion economy. Because recovery depends almost entirely on consumerism, a perpetual drain of the planetary resources has been created.

In a spiritual economy, since production of subtle products is cheap, in recession times we could soften the blow by increasing production in the subtle sector so that consumption in that sector would also increase. This would reduce demand in the material sector, giving businesses time to regroup and increase material productivity. In the same way, in “boom” times the production of the material goods would increase, material consumerism would increase, and there would be less subtle stuff produced and consumed. But as the economy recovered, people’s material needs would be satisfied again, and they would once again become hungry for the satisfaction of their subtle needs, whose production then increase. And this would have the effect of putting a damper on the inflationary tendencies of “boom” times in a capitalist economy. The important thing is that there would be no subtle price for the subtle stuff; there would be no inflationary pressure in the subtle dimensions. Paying attention to the subtle would just enable the entire economy to soften the blow of both recessions and boom time inflationary pressure. In other words, cyclical variations of the economy would be much less severe, so mild that little or no government intervention could keep the economy in a steady state. In this way, I am convinced that spiritualizing the economy is the way to accomplish a stable economy, the very thing that many economists have wondered if it is ever possible to achieve.

The million dollar question is, How do we go about replacing capitalist economics with this spiritual economics? And furthermore, Can we even quantify holistic well-being? For the basic needs, the GNP is a fairly good indicator. But can we generalize the concept of GNP for spiritual economics?

Implementation: When and How?

How will spiritual economics replace capitalism? When? You may think,spiritual economics sounds good; it brings together spiritual values and what is best in capitalism. But how is it going to be implemented? By the government? By social revolution, as in the case of the Marxist economics? By a paradigm shift in the academic practices of economics?

How did capitalism come to replace feudalism/mercantile economy? On one hand, it was the brainchild of Adam Smith, no doubt. And indeed it helped that academics welcomed Smith’s research as it opened a new paradigm in academia, economics itself. But today’s academic situation is quite different from the days of Adam Smith. Some time ago, academic economists chose to pursue not a real-world economics but an economics of certain ideal situations, so that mathematical models could be used for economic prediction and control. For example, a very recent economic theory was heralded as a breakthrough because it applied a new innovation of game theory mathematics to economics. Previously, economists were handicapped in their application of game theory because they had to assume “perfect rationality,” that every economic player could figure out the best money-maximizing strategy combination used by the competition. But obviously perfect rationality is impossible in practice because there are so many possibilities. What we have is “bounded rationality”-rational decisions made on the basis of incomplete information about the money-maximizing strategies of the competition. The new breakthrough is considered a breakthrough because it uses information theory formulas to figure out approximate description of a set of strategies even with the assumption of bounded rationality. But this still is not the real world. Materialism has so eroded our pursuit of rationalism, and today we are so subject to negative emotions in our decision making, that any theory that ignores the emotion component of the economic decisions of the competitor is not going to be of much use.

Actually, the implementation of capitalism happened not because academics welcomed the idea but because capitalism served the purpose of a modernist, adventurous people. It was during a time when people were exploring new adventures of mind and meaning, which feudalism lacked the manpower to do. Meaning exploration had to be opened up as science broke free from religious authorities. As meaning exploration opened up, scope had to be prepared for the implementation of the fallout of this exploration by making capital available to innovative people and keeping it available. Hence capitalism was inevitable.

And now modernism has given way to postmodernism and transmodernism. The old-fashioned exploration and expansion in the material world are practically over. The old frontier is gone. However many times you see reruns of Star Trek, outer space is not going to emerge as mankind’s final frontier to play out one final episode of defunct modernism.

Now the society has to deal with the shortcomings of capitalism with little opportunity to expand in the face of finite resources and challenges of environmental pollution. In addition, it has to heal the wounds created by materialism. There is a new frontier; the new frontiers belong to the subtle dimensions of the human being and we need a subtler economics to ride in order to explore it. So spiritual economics is inevitable for implementation because our society needs it. As our society moves beyond our competitive ego needs, as we begin to explore the benefits of cooperation en masse, the old competitive capitalist economics has to give way to the new economics where competition exists simultaneously with cooperation, each in its own sphere of influence.

To understand this, we need to look at how any economics is really implemented: What are the elements that implement it? These elements are the businesses of course. It is how business is done that provides the drive for the change in economics. And vice versa. The change in economics helps businesses along. Each is essential to the other.

So what will enable spiritual economics to replace capitalism? Ultimately, it is the need of the workplace, the businesses. And there, if you look, you will find ample evidence already that business is changing its ways. Yes, competition will continue to exist; without it there is no market economy. But in the workplace, inside how a business is run, there are increasingly a different philosophy and a different aspect of the human being at work. In our businesses, we have discovered the value of creativity, leisure, love, cooperation, and happiness.

Redefining the GNP

To most materialists, science has to do only with the material world, because only the material can be quantified, can be measured reliably. We have to eradicate this prejudice.

We cannot measure vital energy, prana, or chi in the same sense that we can measure a quantity of rice, but it is not true that we cannot measure it at all. For example, when vital energy moves out of you, your feeling at the particular chakra will tell you the story and the same is true of vital energy excesses. When vital energy moves out of the navel chakra, you feel insecurity, butterflies in the stomach. When vital energy moves into the same chakra, the feeling is quite different, that of self-confidence or pride. Similarly, meaning processing gives you a feeling of satisfaction in the crown chakra because vital energy moves in there. So we can quantify meaning to some extent by the “amount” of satisfaction we derive from processing it.

Even the supramental can be measured. If we perform a good deed for someone, an example of altruism, we are happy or blissful. Not because there is any particular influx of vitality in any of the chakras, but because our separateness is momentarily gone. With love, it is even easier, because we not only feel the bliss of not being separate from the whole, but we also feel vital energy in the heart chakra. And both can be used as a measure.

Of course, this kind of measurement is not accurate; they are indeed subjective and always a little vague. But if we remove the prejudice that only accurate and objective measurements count, what then? Then we can certainly establish criteria to judge a nation’s net gain or loss of currency (feeling, meaning, and godliness) in the subtle domain. We must note that quantum physics has already replaced complete objectivity (strong objectivity) with weak objectivity in which subjectivity is permitted so long as we make sure that our conclusions do not depend upon particular subjects.

For example, we can send questionnaires to people to keep an ongoing tab on their feelings, meanings, and supramental experiences or lack thereof. When we tally all this for the entire year, we can calculate easily an index of vital, mental, and supramental well-being. This index then will complement the GNP, which is the index for our material well-being. In the same way, we can estimate the contribution to the vital, mental, and supramental energies from a particular production organization.

Some examples will show that well-being in the subtle dimensions really does count, and we are missing something in our economics because we do not count it. In Hindu India (before the tenth century), the country and culture were fundamentally spiritual. The economy was feudal, of course, but according to all accounts (not only indigenous but also of foreign visitors) people were satisfied and happy albeit the prevalence of caste system. What gives? Hindu India certainly had wealth, but no more than today’s America. In a spiritual culture, lot of good vital energy, mental meaning, and spiritual wholeness is generated-that is the reason. The subtle wealth reduced the need for material wealth and more than made up for the lack of it. The same is true for Tibet until the recent takeover by China.

Of course, the Indian and Tibetan cultures are not perfect, because they did limit meaning processing of the lower classes; so evolution of consciousness eventually caught up with them. But so much energy was generated in the subtle domains in the Indian culture that even today when there is real poverty in the material domain, the Indian poor are quite happy because they continue to inherit and maintain their subtle wealth. If Karl Marx had seen that, it might make him rethink whether the exploited classes are always unhappy!

Another example is the Native American culture of the old. There was so much of subtle wealth there that nobody even cared to own material wealth. They treated material wealth in the same way as subtle wealth, globally, collectively, and without playing a zero-sum game.



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