The current world fiscal scene clearly shows that our economic thinking and our models of planning and development are out-of-touch with reality and are estranged from ethics.
Take, for example, the recent event of recession and also the event of fall in the exchange rate of currencies of some of the developed countries. A little deep thinking as to the factors that led to these two events would lead us to the conclusion that these events occurred because some of the developed and affluent countries, had been spending much beyond their means.
This means that they had been importing more than they could export or more than their foreign exchange reserves could afford. The result has been that such countries became major debtors to some exporting countries and these massive debts greatly eroded the strength of their economy and their currency.
Further, the creditor countries, went on investing heavily in such countries under the illusion that they are economically healthy and strong, with the consequence that, while the economy of these countries became over-burdened, and the economy of creditor countries came under grave risk.
In simple terms, these facts show that most nations of the world have forgotten or conveniently overlooked, the age-old moral lesson that ‘one should live according to one’s means and should avoid taking debts’ because, by being a debtor, one loses one’s peace and honour, and one’s liabilities and debts give one only worry or artificial happiness. If we now turn our attention to the developing countries, we find that the higher and higher tax rates in these countries have become counter-productive because they have led to more and more tax-evasion and have generated black or unaccounted money.
This factor has had a very bad effect on the moral standards of the people and on the currency value of the country as well. The result of borrowings and deficit financing has been that almost all nations, today, are debtor nations with weak economies and almost all industrialists and rich men are, directly or indirectly, dependent on the borrowings, from banks or through bonds or fixed deposits, the savings of the middle class and the poor people.
The best thing, therefore is to observe moral norms and to base our economy on ethics, for without that, there cannot be peace and happiness in the world.
(The writer is a spiritual educator and popular columnist for publications across India, Nepal and UK. You can write to him at firstname.lastname@example.org)
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