Four Schools of Fundamental Political Economic Thoughts--An Institutional analysis of differences -Mohammad Ahsanul Karim
রবিবার, 23 এপ্রিল 2017 04:23
রবিবার, ২৩ এপ্রিল ২০১৭
[This paper analyses the concept and institutional differences of four schools of fundamental political economic thoughts. Capitalistic Economic Thoughts emerged from Catholic economic institutions based on private property, quasi-freedom rights, monopolistic inheritance laws, oligopolistic markets and state taxes; Socialistic Economic Thoughts emerged from rebellion against the curse of Roman-Catholic Feudal-Capitalist economic institutions based on public property, public policy and monopoly authority; Market Economic Thoughts arebased on private property, existing institutions, freedom rights, free markets,state taxes and prevailing institutions; and Democratic Economic Thoughts are based on democratic (freedom and equal/equitable) rights, private property, democratic inheritance laws, democratic SAI institution, democratic public policy, competitive markets and state taxes.]
In ancient and medieval eras, global economies of small kingdoms/states were agrarian, local and less diversified. Capital and technologies were less important in relation to labor and land/natural resources. Natural resources were abundance for less population. Those economies basically run by religious ethics, statues and monarch’s regulations. Roman institutions took universal shape in Europe as Roman imperial authority was sovereign almost all over the Europe about a half millennium; and Roman, Catholic or Protestant religion was State-religion about two millennium with same inheritance institutions during and after the liquidation of Roman Empire.
Roman-Catholic Political Economywas based on private property, monopolistic inheritance laws, quasi-freeom, oligopolistic markets and state taxes institutions.Consequently, production, marketing and trading of Roman kingdoms’ economies were also free and competitive under tax-tariff structures. Mercantile and colonial economic thoughts were also based on same economic institutions. With the expansion of economic horizons of larger kingdoms/states and development of the non-agricultural sectors, capitalistic economic thoughts of Roman-Catholic Economics also developed side by side of the Feudal one based on same economic institutions.
Market competition depends on various non-law based structures and institutions. After forming Union in 1707 with Wales, Scotland and England, the character of its State Area Infrastructure (SAI) institutionof Great Britain changed into higher democratic which were more or less autocratic when were separate states. (Democratic indicates here the systems, structures, institutions and principles those based on/and ensure equal/equitable rights and privileges as well as ensure mass individuals’ interactions in freedom and equal/equitable rights. As the both words indicate large numbers of buyers and sellers, Competitive or Democratic are also used here as exchangeable as second best in absence of appropriate one.)
The new structural institution, democratic SAI institution, ensured higher human rights, freedom and motion with integrated more counties, districts and divisions of Great Britain in social, economic, cultural and political lives. As a result, urbanization, communication network, non-economic organizations and enterprises, retail and wholesalemarket centers, etc. grew rapidly. All ensured competitive retail and wholesale markets, non-agriculture sectors, etc. Protestant ideology also played role, but the unveiled democratic SAI institutionplayed multiple times role in all respects for higher developing Great Britain including industrial Revolution.It gave situationalandInductive new thoughts ofModern Economics against deductive religious statues and principles as like as other areas of Science.
Adam Smith identified that freedom and competition in production-marketing-trading are the underlying issues of higher growing British economy; and postulated the advantages of “Free Market Economics” (Smith, 1977). As those work on the prevailingBritish situations, Smithian Economicsalso maintains all institutions including Roman-Catholic as given (Adams, 1901, North, 1998, Waters, 1998); and seldom dealt with the issues of structure and institutions other than British. Smithian economic thoughts are further developed as Modern Economics with classical, neo-classical and post-classical theories.
A federal or larger unitary state is not as small as ancient Greek states in area and population. Rather those hierarchical integration of hundreds city-states into sub-counties/districts, counties/districts, regions/provinces/states, and finally into a federal, union or unitary state in ascending way. In descending way, a typical modern state is hierarchically sub-divided into states/provinces/regions, counties/districts, sub-counties/districts, cities/communes, etc. The units structure as a whole that formed from the hierarchical sub-division or integration of the state territory in descending or ascending way is the SAI institution of the state.
The SAI institution is conventionally identified as decentralized administrative structure of a larger state. It not only sub-divides the area, people and decentralizes national-local administrations, but also de-concenters public and private economic, social, cultural and political units, agencies and enterprises of the state. Historically those are by-products of decentralized administrative sub-structures of state but their socio-economic impacts and activities are many times greater than of that. Not only the socio-economic and physical infrastructures, but the local affinities and the nature of national integrity of the peoples are also shaped by that SAI institution. So, it is appropriate to identify it as the SAI institution instead of administrative structure.
Democratic SAI institution developed liberal values and liberated the prevailing feudal-capitalistic institutions in addition to Protestant reformations and ensured more freedom and competitive market in Great Britain as well as ensured better resource mobilization, utilization and growth of the national economy (Karim, 1991 and 2011). However, economy gradually went through the cyclic crises for monopolistic transition of oligarchic capital; and thereby higher income inequalities for prevailing same monopolistic inheritance institution of the Catholic and Protestant.
The scenarios of other kingdoms/states in Europe were worse than Great Britain where less democratic or autocratic SAI institutions were prevailing. With various taxes, those crisis could not be eliminated except reduction. By criticizing private property system, its monopolistic transformation, capitalistic political economy and classical Economics, Karl Marx postulated Socialist Economic Thoughts based on public property, policy and authorities (Marx and Engels, 1980). Marx has further clarified the Roman-Catholic Economic system in his economic literatures, Capital and others. Â
France solved the feudal political economic crisis i.e. the increasing oligopolistic structure of land-capital by democratic land-reforms and by introducing the democratic Christian inheritance statues as state law in place of long prevailing monopolistic Catholic ones. Britain brought many democratic reforms in 1832-33, but oligopolistic economic crisis could not be removed except some reduction. After Socialist Revolution in Russia (1917), Britain introduced the democratic Christian inheritance laws in 1925 in place of monopolistic Catholic-Protestant ones. (Emperor Justinian-I first introduced this laws in the Eastern Roman Empire in 6th century under the name ofÂ Christian Inheritance Laws following the principles of Orthodox Christian Church at Constantinople. British and others also enacted the same laws in modern era in the same name as Christian Inheritance Laws: Encyclopedia Britannica, 1980).
After World War I and II, most European countries have introduced democratic Christian inheritance laws following Great Britain; and those feudal-capitalistic i.e. oligopolistic economic structures gradually have transformed into democratic i.e. competitive ones by generations. Now European economies are running under democratic market economy based on democratic inheritance laws and democratic laws and governance with or without democratic SAI institutions. Â
In ancient and medieval eras, kings or king-lords were owner of lands in Asian states. However, subjects enjoyed tenure-ship by semi-democratic or democratic inheritance institutions of Hindu-Buddha, Confucian, Muslim or others (New Encyclopedia Britannica, 1980, Goyal & others, 2009; Carroll, 1991). Non-agricultural property/capital in feudal system was also conventionally private. So, a type of quasi-private ownership and quasi-competitive market economy were prevailed in different states or regions in Asia; and corresponding economics were prevailing as depicted by Kautilya and others.
Though original Hindu-Buddha or others major religions in Asia have their own distinctiveness, but has less uniqueness than theChristian-Muslim Democratic Institutions. In agrarian economy, the differential SAI institutions also made them less differential.The character of those economies, therefore, were in between Roman-Catholic oligopolistic and Christian-Muslim democratic Economies. During European colonial rules, land-system was introduced as like as private and feudal in Europe. Asian economies gradually have become democratic for democratic land-reforms and Christian-Muslim inheritance institutions after Independence.
Basic inheritance statute of Roman-Catholic religion transfers and distributes the property only to the eldest male off-spring of the deceased (Smith, 1904). This inheritance statute is monopolistic institution for the family; and oligopolistic institution for the society/state in distributing property/capital; and generates increasing oligopolistic economic and market institution as well as increasing income inequalities, property-less individuals, antagonistic economic classes, relation and crises in the family, society and state.
Basic inheritance statute of Hindu-Buddha transfers and distributes the property equally only to all male off-springs of the deceased (Carroll, 1991 and Goyal, 2009). As female off-springs are deprived, this statute is half-democratic for the family and quasi-democratic for the society/state. Hindu-Buddha inheritance statutes generate semi-democratic or lower competitive economic and market institutions. Though generates lower inequalities, but it does not generate economic classes. Rather it generates social (kinship) classes and division of profession as like as sub-castes those emerged in Asiatic states or regions.
Basic inheritance statute of Christian or Islam religion transfers and distributes property to all male and female off-springs of the deceased (Britannica, 2002 and Kimber, 1998). Both inheritance statues are democratic institutions in distributing property in the family and the society/state. Both statues generate democratic economic institutions, competitive markets and equitable income distribution among the factors of production. Both statues neither generate economic or social classes nor antagonistic economic relation, crisis or conflict in the society/state. Â
Many scholars confuse Roman-Catholic’s oligopolistic or Capitalistic Economics as part of “SmithianorModern Economics. The former is deductive and emerged from Roman-Catholic’s statues and institutions; while the later are scientific thoughts based on situational and inductive process. Modern Economicsisneither monopolistic, oligopolistic nor competitive qualification.It is simply analysis of different theories and policies based on assumptions and situations. Â
Roman-Catholic Economics and Marxian Economics are nearlyopposite. The former is based on private property, quasi-freedom rights, monopolistic inheritance laws, oligopolistic markets and state taxes; while the later is based on public ownership, non-freedom, non-market and public authorities-policies-regulations. However, both Roman Economics is Marxian Economics is based on non-equal/equitable economic rights-institutions. Smithian Economics is also based on private ownership, competition and markets (Samuelson &, 2004); but it has no self-controlling structures and institutions for social, economic, cultural and political destinations (North, 1998).
Democratic Economics, this author postulates, is also based on private property, freedom rights, competitive markets and state taxes; but it has democratic structures and institutions for self-maintaining democratic political, economic social and cultural destinations (Karim, 1991, 2011)). Smithian Economics is based on freedom and competition without maintaining of any quality of economic rights except freedom. While the Democratic Economics is based on freedom, equal/equitable rights andcompetition. DemocraticEconomics and Smithian Market Economics are not contradictory, but complementary as it towards freedom and completion. Both Roman Economics and Marxian Economics are structurally and institutionally different from Democratic Economics.
Oligopolistic or Capitalistic economic thoughts emerged primarily from private property and monopoly inheritance laws of Roman-Catholic. Monopolistic dynamics of the oligopolistic economy and cries gave birth the Marxian rebellion economic thought i.e. Socialistic Economic Thoughts based on public property, policies and authorities by abolition of private properties. Primarily the democratic SAI institution of Great Britain liberated the oligopolistic economy towards more freedom and competition; and gave birth the situational Market Economic Thoughts. While democratic inheritance laws of Christian-Islam and democratic SAI institution are basic foundations of Democratic Economic Thoughts. Economic Democracy is consistent to emerging political democracy, cultural democracy and social democracy.
Fundamental limitation of Modern Economics is that it has still no capital distribution theory (Karim, 1991). Still today the inheritance statutes of various religions are used for the distribution of property/capital over generations. Marx was also aware of the inheritance institution and set a major demand for abolition of itin order to transfer property from private to public. He never raised the nature of inheritance statutes in distributing private property.Â Last two thousand five hundred years, property inheritance institutions of different religion played major role in determining economic system and it evolution. Now Economist have responsibly to develop capital distribution theories and policies.
*Mohammad Ahsanul Karim is conceptual initiator of the incomplete basic democratic structural and institutional reforms in Bangladesh since 1982. He is author of the books, Progressive Democracy (1991) and Points of Constitution Amendment (2011) and few articles on democratic reforms. (contact: