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Distributions of Wealth and People's EconomyBy Dharma DevaThe question of wealth distribution requires a fundamental look at whatforms a holistic economy. Sarkar states that a developed economy shouldconsist of four parts: people's economy, psycho-economy, commercialeconomy and general economy. It is the people's economy that offerseconomic liberation and security for all. Its scope, implementation andinvigoration of economic and human rights needs to be brought to theforefront as conventional economists are unable to come to grips withthe failures in economies around the world.Guaranteed minimum necessitiesPeople's economy deals with the essential needs of the people ingeneral and with aspects such as production, distribution andmarketing. In particular, it is directly concerned with the guaranteedprovision of minimum requirements like food, clothes, housing, medicalcare, education, transportation, energy supply and supply of irrigational waters. The objective is continuous improvement and readyavailability of these essentials. In order for minimum requirements tobe assured there must be guaranteed purchasing power. The time has cometo recognise that the right to guaranteed purchasing power is auniversal and fundamental human right and as such requiresconstitutional protection, ie there must be constitutional recognitionof the benefits of economic prosperity for all people.Grossly unjust wealth distributionsCurrent laws emphasize property rights and give compensation for expropriation and misappropriation of property whether by governmentsor other individuals. However, in doing so there is disregard as towhether the distribution of such property rights can be or is justified, particularly in the case of over-accumulation. A highlyskewed distributions of wealth ranging from some individuals amassingbillions in assets while others struggle on a few cents a dayrepresents an inefficient production, distribution and marketing systemthat does not serve the needs of a people's economy. Despite capitalismbeing a relatively somewhat better system than communism in terms of the production of goods and the incentive to innovate, the large scalewealth inequalities evident in capitalism does, of itself, mean thatthere are many pernicious loopholes in such a free market system.In terms of a comparison with investment theory, it is certainlyarguable that if a particular investor can derive an abnormal returnconsistently distinct from what may be considered as being within arange of an average or normal return in the market, then the investor is probably privy to certain information that enables them to exploitarbitrage or speculative opportunities. Indeed the situation may beworse and involve, for example, favouritism, collusion, cronyism,bribery or other biased distribution mechanisms. Abnormal opportunitiessuch as these represent inefficiency and unfairness in the economy if such loopholes are readily available and allowed to persist. A trulyefficient economy would continuously marginalise and virtuallyeliminate the opportunity to make such abnormal gains or profits. This
 
also includes the ability to amass unprecedented or abnormal levels of wealth.Minimizing the gap - a sign of an efficient and rational economy Anefficient economy would, instead, minimize the gap between the minimumrequirements needed generally by all people and the maximum amenitiesrequired by particular persons or groups so that they are capable of rendering more service and useful outputs for the benefit of society.For instance, ordinary people may be provided with motorcycles insteadof bicycles. Here, there is some difference between a motorcycle and acar, but the gap that existed between a car and a bicycle has beenpartially reduced. In an economy that is efficient in what itdistributes (ie marginalises and seeks to eliminate the ability to makeabnormal gains in wealth accumulation), or in another sense is arational distributor; the economic gap between ordinary people andmeritorious people is constantly reduced as much as possible, but thegap will never vanish altogether. That is, the difference between theminimum requirements of all and the maximum or special amenities of themeritorious is never entirely eliminated. Even though the gap exists,there must nevertheless be efforts to continuously reduce the gap. Animportant reason for that is because if the gap increasesdisproportionally there is every likelihood of economic loopholes againarising to abnormally skew the distribution of wealth to irrationalproportions. This affects the economic welfare of all members of society and the common people, such that the value of their labour andparticipation in the economy is not properly recognised, thereby givingscope for a large segment of society to become deprived - andexploitation will again re-emerge in society in the guise of specialamenities. Accordingly, the provision of special or maximum amenitiesshould not go against the common interest. This is the relationshipbetween minimum requirements and maximum amenities.It also, however, means the ordinary public will not and should not bedeprived of maximum amenities - efforts must be there to give them asmuch of the maximum amenities as possible and available to society atthe time, but without destroying the incentive of the more meritoriousto produce better outputs and contributions for society in all spheresof endeavour. A close analysis reveals that such a system of productionis based on consumption for the benefit of all members of society,rather than profit being the underlying motive in the field of production.Naturally, with the marginalisation of profits and the elimination of the ability to make excess or abnormal profits, eg with the continuallessening of opportunities to make speculative gains, the economy isthen in a better position to truly serve consumption needs rather thanprofiteering objectives.Rational distribution of rational profitsProfits, must of course be made, but these have to be rational or normal profits. What should be eliminated in an economy that rationallydistributes resources and makes maximum utilization of resources is theability to make abnormal or irrational profits. There is no scope for speculative gains in a people's economy.
 
For example, in the market place the market price may be the cost of production plus a rational profit (Price = C + Y) where a rationalprofit is about 15%. To further the increased purchasing capacity of workers this amount or part of it will be rationally distributedamongst them and act as an incentive. As they get more incentive,workers will produce more goods and services. Incentives shouldencourage greater work and better quality work, and so they should bedirectly linked to production. This approach in a people's economyincreases purchasing capacity and, therefore, the per capita income andstandard of living of workers increases. In such a system there is noeconomic exploitation involving the unrestricted plunder of physicaland psychic labour of a particular community (or its natural resourcesin the local area). The surplus value created by labour and taking theform of profits is rationally distributed to labourers and/or shareholders in a co-operative manner and through co-operative businessenterprises.The object of production is then based on the consumption motive.Profits having been marginalised or minimised to normal or rationalprofits in an economy that is truly efficient and which rationallydistributes resources, means also that speculative or profiteeringopportunities or motives decline and, as there is little or no scopefor them, the focus of production shifts to satisfying the minimumnecessities and maximum amenities of the ordinary and also themeritorious people. It is the rational profits (including equitableremuneration in the form of salary or wages) derived that are used toguarantee and increase the purchasing capacity of labourers and/or shareholders (where labour includes all manner of utilization of physical, psychic or spiritual capability). Only a system that revolvesaround the consumption motive can increase the standard of living of all people. In such a system the value of wealth is measured in termsof its capacity to purchase commodities. It is the purchasing capacityof one's wealth that is the real value of that wealth and thatpurchasing capacity is, of course, the real wealth. Accordingly, it isimproper to define wealth as meaning only riches - that amounts tohoarding of wealth.Hoarding of wealth leads to economic crisisGiven that wealth must be measured in terms of purchasing capacity, if there is hoarding of wealth then capital becomes concentrated in thehands of a few individuals (including corporations) or the State andits purchasing capacity is undermined. This concentration in the valueof wealth (or what could be purchasing capacity and therefore whatcould be money rolling through the economy) is a fundamental cause of economic depressions. The second and related cause is when money in thepossession of a few individuals, corporations or State capitalistsstops rolling. The Asian crisis is symptomatic of this second cause.When large amounts of money were withdrawn from economies such asIndonesia and Thailand, that money could no longer roll through thoseAsian economies.Instead the money found its way into USA stock markets for theacquisition of corporate stocks, creating an unusual and unprecedenteddemand for shares traded through US stock exchanges (the prices of 
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