The Swiss Referendum on Sovereign Money

Source: www.kris.talkplus.org

Everyone of us is interested to know more about money. We want to explore how it is perceived by public, how it is taken care of by the government and also how the economists think of it and its role in the economic system. The question of money knowledge becomes even more interesting when it comes about the fiat or paper money that is printed and issued by the government or the state decree. If you are interested to widen your understanding in this respect, you are on the right page. Dr. Asad Zaman has written the article to enhance the public awareness on the subject that is for you to understand in the subsequent lines.

While money and banking plays an extremely important role in the economy, economics textbooks teach the opposite. According to the quantity theory of money (QTM), money plays no role in the economy at all; it is a veil which covers the workings of the real economy. An increase or decrease in the money supply will cause an increase or decrease in the prices, and will have no long run real effects on the economy. According to QTM money is neutral: we must look beyond the veil of money to understand how the economy functions.  

The truth is that the standard theories of money and banking are themselves a veil which covers the reality of how the system works. This veil was penetrated briefly following the Great Depression of 1929, which was completely incomprehensible according to standard economic theories of the time. To explain the Great Depression, Keynes invented a new economics, in which money was not neutral. He argued that shortages of money would lead to unemployment and recessions, while excess would lead to inflation. At the same time, leading economists such as Irving Fisher, Frank Knight, Simon Schultz and many others realized the crucial role played by excessive credit creation by banks in precipitating the Great Depression. In 1933, they came up with the Chicago Plan which takes away the power to create money from the banks and gives it back to the government. The Banking Act of 1935 created deposit insurance and many other regulatory measures to control banking, but did not implement the Chicago Plan. Keynesian insights about money and Chicago insights about banking were gradually forgotten. The eerie resemblance of the Global Financial Crisis of 2007 to the Great Depression led two IMF economists to dust off the bookshelves of history and re-visit the Chicago Plan. Since then, it has been gathering momentum in terms of public awareness, but has been mostly invisible in the dominant media and politics which are controlled by big finance. However, the Iceland Government recently published a report which proposed a variant of the Chicago Plan. Most recently, on 1st December 2015, the Swiss public created a successful petition with 112,000 signatures to ensure parliamentary hearing on the proposal for Sovereign Money, which is a core element of the revised Chicago Plan. Since powerful interests have been blocking and opposing the Chicago Plan, it is up to the public to learn about the issues and create a movement for change. In this connection, interested readers may look up “Corrupt Banking System explained by twelve year old” on internet for an entertaining and informative detailed video of explanation. We provide a very brief explanation of the central issues below.

In the fractional reserve banking system, banks are only required to keep a small fraction of cash against the demand deposits outstanding against them. For example, in order to create grant a loan of 10,000,000 to Mr X, Mozoon bank only needs 5% of the amount, only 500,000 in the form of cash deposits. The bank grants the loan simply by creating an electronic entry in its accounts. In advanced economies, money travels electronically between financial institutions, and cash reserves are little needed. When necessary, they can be borrowed from many sources; especially the Central Bank is under obligation to cover cash shortfalls of banks. At 10% interest on the loan, Mozoon Bank will make a cool profit of 1,000,000 based on its meagre cash reserves of only 500,000. Where did this profit come from? It came from the money created out of thin air by Mozoon Bank and then lent out to the borrower at 10% interest. Because Pakistan is financially primitive, banks keep larger reserves (nearly 30%) and cannot leverage their cash deposits to the extent possible in more advanced economies.

The conventional wisdom, taught in textbooks of monetary economics, is that the government creates money, not banks. Furthermore, banks are financial intermediaries: they lend money which they gather as deposits. The reality is that the banks invent the money that they lend. This means that the banks, and not the government, are in control of the money supply in the economy. Bank creation of money acts in ways that are opposite to Keynesian prescriptions, and de-stabilize the economy. According to Keynes, when the economy is in a recession, the government should expand the money supply. In a booming economy with full employment, the government should cut back on money supply to prevent inflation. However, banks lend less in recessions, reducing the money supply. They lend more in a booming economy, adding to inflationary forces. Following the Global Financial Crisis, theories of Hyman Minsky called the Financial Fragility Hypothesis have become very popular. Minsky adds details to this crude picture, and show that banks systematically de-stabilize economies, leading to crises and crashes. The empirical record showing more than 200 banking crises over the past thirty years bears out the theories of Minsky. The Global Financial Crisis, like most others, was caused by excess money creation by banks, which fueled the fires of speculation, leading to a crash.

The solution to this problem is the proposal for Sovereign Money which has been detailed in the Iceland Plan, and will now be up for discussion in the Swiss Parliament. Instead of fractional reserve, banks must keep 100% reserves, preventing them from creating money. Instead the Central Banks will create money in the right quantity designed to stabilize the economy according to the Keynesian prescriptions. IMF economists Benes and Kumhoff have shown that this radical reform of money and banking will bring multiple benefits. It will eliminate banking crises, increase growth, eliminate debt, and create more fiscal space for development projects. It will also decrease the massive inequality which allows a tiny minority to control the political and economic system. The present system enslaves the majority in chains of debt only because a large number of deceptive claims about its benefits are widely believed. If we learn the truth, it can set us free.

Published in The Express Tribune, December 7th, 2015 by Dr. Asad Zaman: author page on LinkedIn. Links to Other Works: Index. More material on Power/Knowledge.

The Swiss Referendum on Sovereign Money

Blaming the victims

This blog is based on Dr. Asad Zaman’s work “Is Development Accumulation of Wealth? Islamic Views” published in “Afro Eurasian Studies” in 2013.  This work challenges the existing development paradigm and highlights the superiority of the Islamic concept of development in which the moral and spiritual development takes the center stage.

It is widely believed that development is synonymous with the accumulation of wealth. The Islamic concept of development is antithetical to the prevailing concept of development. Islam focuses on the spiritual and moral development with a view to creating a society with distinctive institutions and ideology. Islam seeks to actualize this worldview through the inner revolution. Western concept of development is more mundane. Western development trajectory is inextricably linked with their colonization of Asia, Africa, and Latin America. The colonization agenda was fulfilled at the cost of uncountable human lives, the destruction of major civilizations, loot and plunder of the resources of the local people. A range of myths was meticulously made up to justify Western colonization. Myth 9 relates to blaming the victim.

MYTH 9. BLAMING THE VICTIM.

Suppose a person hits another person’s skull with a hammer and crushes it. A team of renowned doctors does the post-mortem and concludes that there was some serious manufacturing issue because of which the deceased could not withstand the hammer blow and his skull cracked. Ridiculous as this story may look like, the fact is that even more ridiculous myths of this nature have been made up and perpetuated to justify the colonization by the Western powers.

In his book “The Wealth and Poverty of Nations,” Professor David S. Landes (1999) contrasts the characteristics of successfully industrialized nations–work, thrift, honesty, patience, and tenacity–with those of nonindustrial countries. Thus the failure of the East to develop is attributed to the fact that the people in the East are lazy, dishonest, extravagant spendthrifts, and lack the strength of character to persevere in face of difficulties. The matter of the fact is that the successfully industrialized nations have created such conditions (political and economic instability and wars, to name a few)  in large parts of the world which have systematically blocked the process of industrialization in these regions. When the culture of violence necessary for global domination led an unstable youngster, Adam Lanza, to murder 20 children in a USA school in cold blood, the nation mourned. No compassion or sympathy was expressed in the press for the death of over a million civilians, and damage to the life, limb, and property of over 40 million people in Iraq.

Hernando de Soto (2003) propounds the influential thesis that secure property rights in the west led to the development, and lack of them in the East led to its failure to develop. The fact is that property rights were largely secure in India before the onslaught of colonization. Secure and accurate systems for demarcating and settling property rights had functioned for centuries in India. In a land grab typical of imperialists everywhere, “Resumption” officers demanded documents of ownership, and declared them invalid at the slightest pretext, seizing all undocumented property for the British. This led to closure of schools, hospitals, and indigenous social welfare organizations funded by trusts, throughout India.

Different authors have attributed our current poverty to our lack of creativity, inability to think rationally, authoritarian traditions, which led to our failure to have an industrial revolution. Kennedy (1989) provides evidence for the strong industrial manufacturing sectors of India on the eve of colonization. In textiles, shipbuilding, steel industry, and glass blowing, among others, India was second to none. The Indian manufacturing sector was creative and efficient, and many technologies flowed from India to England. However, the adoption of power looms in India posed a threat to British textiles and was banned. When muslin weavers shifted to hand production, their thumbs were cut off to prevent the production of competitive muslins.

In a confidential note, William Bentinck, Viceroy of India stated that “the bones of the cotton weavers are bleaching the plains of India. The misery hardly finds a parallel in the history of commerce” (see Ghosh & Ghosh, 2011, p 26). It was not that we failed to industrialize – rather, we were de-industrialized in the process of colonization.

Slavery remained a thorny issue for a very long time in the United States, which led to a bloody Civil War between the white-dominated United States of America and black dominated the Confederate States of America from 1861 to 1865. Negroes were not taught how to read and write since they were not considered capable of learning these skills. At the same time, their general inability to read and write was cited as proof of their poor learning skills and as a justification for their continued enslavement.

TRUTH 9: OPPOSITE SIDES OF THE SAME COIN

More baffling than what is being said about the cause of the development is what is NOT being said. In early twentieth century, European powers had direct or indirect economic control of about 90% of global resources, which they ruthlessly exploited to the hilt, not being constrained by moral considerations. The imperialists became rich, and the colonies became poor in the process. Is this such a mystery? None of the authors listed above mentioned this as a possible explanation of why rich countries are rich and why the poor countries are poor.  This is such a simple explanation that it is a mystery why no one refers to it, and the solitary text which provides detailed documentation validating this thesis has been out of print for decades. We quote from Stavrianos (1981):

The “backwardness” of colonial peoples was taken for granted. The “natives” were viewed as inherently different from and inferior to, their European rulers. … Colonial rule generally was considered to be not the cause, but the only feasible solution for the prevailing backwardness.

…it is beginning to be realized that the underdevelopment of the Third World and the development of the First World are not isolated and discrete phenomena. Rather they are organically and functionally interrelated.

LESSON 9: POWER AND KNOWLEDGE

The truth is very damaging to the colonizing powers, who are still very much in control of the world. This truth has been ignored or suppressed, and myths have been developed to distract attention. It is thus that structures of knowledge support existing structures of power. Dangerous knowledge, of the type being discussed here, is a threat to the status quo.

POSTSCRIPT:

Development: Myths and Truths describes 12 myths about development.  Materialism Versus Idealism –  covers the first 3 myths: Central Myths of Eurocentric History: Covers myths 4,5,6 regarding the Rise of the West. The seventh myth is covered in Myth 7: Racial Superiority of Whites.  Myth 8 states that governance systems in Europe in infinitely superior to those of the East – this is discussed in The Myth of Oriental Despotism.

Zaman, Asad (2013) “Is Development Accumulation of Wealth? Islamic Views,” Afro Eurasian Studies, Vol. 2, Issues 1&2, Spring & Fall 2013, 144-203.

GOING BEYOND BHUTAN’S HAPPINESS INDEX?

This article is published today in Express tribune. 4-12-19. This is actually a simplification of Dr. Asad Zaman’s article. 

It is really shocking to know that your lifetime effort was truly futile. Paradigm shifts are not easy to accept. Being a student of Economics, it was even harder to understand why we were constantly being lied to and are stilled being fed with distorted ideas which have actually nothing to do with reality. May be that is why even after absolute failure of popular Economic ideas like ‘Human development via Economic Growth’ and ‘Trickle-down effect’ etc., large number of economists internationally fail to accept counter arguments which are more realistic and closer depiction of human nature.

Prosperity or development is the core problem of Economics. Alternate routes are discussed to solve this problem. Today we live in a commercialized world where maximization of material wealth is supposed to be the apex of development. Humans have succeeded in raising living standards many folds. Today an average person is living a way more comfortable life than even kings and queens of the past. The type of material facilities available to all and sundry today like electricity, internet, ACs, transportations facilities, health and education facilities are far more advanced than before. If material wealth and standard of living improvement were the ways to real human satisfaction, then two phenomena should have been observed; first, an average person today should be happier and more content as compared to royals of the past and second, the rich people should always be happier and content as compared to the poor ones. Evidence is actually contraindicating to both these accounts.

This failure of increase in material wealth and comfort to produce human satisfaction and contentment can be explained in stepwise approach. First of all when someone gets an upward boast in his/her standard of living it brings a surge of happiness. With the passage of time this change becomes normality. Thus that sudden happiness no more exists. According to the set point theory every time we get accustomed to a new level of satisfaction, drop in this level makes us unhappy, while remaining on the same new set point, after some time we become indifferent.

Secondly even when we are on the same set point, but someone else achieves a higher set point as compared to us we become sad. This is because of the concept of comparative utility. We see ourselves in comparison to others living around us. If a person earns 50,000 pm and lives in a locality with others earning less than him he feels rich. But if he earns the same 50,000 pm but lives in a locality with others earning more than him, he feels poor and is discontented. This means that if one in a community gets to a higher set point many others will become sad. This rat race of winning in materialism creates a persistent dissatisfaction in the society, because one constantly compares oneself to others and secondly very strenuous effort and sacrifice of leisure is needed to get to higher set points.

In 1970s Richard Easterlin found that the wealthier nations of the world were actually facing increased suicide rates, depressions, alcoholism, crime and drop in life-satisfaction indicators. The only way to get out of this vicious cycle of competitive materialism is to admit the fact that ‘money does not buy happiness’ therefore it should be rejected as the yard stick of measuring success. Countries like Bhutan have therefore shifted from GNP per capita to GHI (Gross happiness index). However, this is also a mistake because happiness is not something that can be achieved by striving for it. True happiness for humans exists in family and friends. Maintaining good relationships comes with compassion and consideration for each other. Contentment is only going to be achieved with the sharing and caring humane principles instead of fostering competition.

 

Looking through the veil of Money

According to Quantity Theory of Money (QTM), the money is “veil” as – it only affects prices, and has no real effect on the economy. To understand the working of the real economy, one must look through this veil. The QTM itself is a veil which hides the real and important functions of money in an economy. The key role that money plays in the real economy was realized after the Great Depression. The Keynesian theories emerged and shed light on real role of money.

On the one hand, the Quantity Theory of Money (QTM) asserts that money doesn’t matter, and also that the free market automatically eliminates unemployment. On the other hand, Keynes explain the crucial role that money  plays in creating full employment and also that free markets cannot remove unemployment. He argued that the government should expand the money supply, create employment opportunities, undertake expansionary fiscal policy, and run large budget deficits if necessary.

The free market economists believe that when left alone, markets work best, and any kind of government intervention to help the economy can only have harmful effects. They continued to argue that the government intervention would only cause further harm, and the free market would automatically resolve the problems. However after the Great Depression, QTM was discredited and mainstream economists accepted Keynesian ideas and rejected free market beliefs.

Free market economists believe that markets work best when left alone, and any type of government intervention to help the economy can only have harmful effects. Even after the Great Depression, they continued to argue that the government intervention would only cause further harm, and the free market would automatically resolve the problems. However, it was obvious to all that the massive amount of misery called for urgent action. QTM was discredited and mainstream economists accepted Keynesian ideas, rejecting free market ideologies.

Until 1970, Keynesians ideas has been widely accepted. However, rising unemployment and inflation in response to the collapse of the Bretton Woods system in 1972 and the oil shocks of 1973, the monetarists counter-attacked Keynesian economic theories. They started arguing that economic problems were due to Keynesian economic theories, and could be resolved by switching to free market policies. As a result, free market ideology became popular and its rising influence reflected in political circles. Free market ideologues like Friedman re-stated QTM and the QTM went from being a discredited eccentric view to the dominant orthodoxy.

Throughout the world, including Pakistan, monetary policy had been based on the Keynesian idea that the money supply should be large enough to create full employment, but not so large as to create inflation. However, monetarists succeeded in persuading many academics and policy makers of the pre-Keynesian ideas that money only affects prices, and has no long run effects on the real economy. Central Bankers were persuaded to abandon the Keynesian idea of using expansionary monetary policy to fight unemployment. Instead, they started to focus on inflation targets. Now a days, even in Pakistan, Central Banks follows the inflation targeting regime as a monetary policy regime. They are conducting tightening monetary policy to cope with recessionary tendencies and inflationary pressures.

Forgetting the hard learned lessons of the Great Depression led to The Global Financial Crisis. Excess money creation for speculation led to a boom in housing and stock markets, followed by a crash very much like that of the Great Depression. A deeper understanding of money could have prevented the Great Recession which followed. The truth is exactly opposite of the QTM idea that money does not affect the real economy. In fact, money plays a central role in the real economy.

Published in The Express Tribune April 25, 2016

Original Article: Looking through the veil of Money

Employment for all

Global experience shows that market economies create massive inequalities, enriching the top one per cent, while leaving the bottom of the population far behind. One key to prosperity is to provide productive jobs for all who would like to participate in the production process. Unfortunately, contemporary macroeconomics, which was blind to the possibility of the global financial crisis, is not equipped with the ideas and tools required to create full employment.

Conventional macro blames the poor for their poverty, and suggests education and training to fit them into existing jobs. However, the private sector does not naturally create enough jobs to employ everyone. Experience with Keynesian remedies shows that expansionary monetary policy starts to create inflation a long time before full employment is achieved. Modern Monetary Theory provides a genuine alternative, a job guarantee (JG) programme.

Instead of preparing people to fit them into existing or potential private sector jobs by providing them with education and training, we must create jobs tailored to the people. Jobs should be provided to take people as and where they are. Skills should be provided via on-the-job training. There are a huge number of jobs which require low levels of skill and education, and provide enormous benefits to society, but are not profit-making for the private sector.

Planting trees, building roads, cleaning dams, infrastructure projects, a range of social services, all provide benefits to society, and make a measurable impact on appropriate measures of GNP, but may not be privately profitable. Engaging the entire working population in productive jobs is a win-win solution since it will add enormously to the economy’s productive capacity of the economy, while providing a living wage for all members of society. We must solve a complex set of structural problems to make this work.

The first problem is institutional. Just as the private sector cannot provide enough jobs, the government too lacks the capacity or capability to productively employ millions of people. Since neither the government nor the private sector has sufficient capacity, we must turn to communities for provision of jobs. Fortunately, community-driven development was pioneered by Akhtar Hameed Khan in the Comilla Project, and has been replicated across Pakistan. Both the Pakistan Poverty Alleviation Fund and National Rural Support Programmes have created thousands of living communities across Pakistan. These communities can be given the responsibility of providing productive jobs, for which funding can be provided by the government.

Next, we must examine the consequences of pumping billions into the economy by providing millions of jobs to all who wish to work, taking them as they are, where they are. A huge amount of additional demand for goods and services will be created by this additional money being paid to the formerly unemployed. Using household income and expenditure surveys which describe consumption patterns of the poor, we can come up with first-round estimates of the nature of the additional demand generated. To prevent inflation, we need to ensure that employment is provided to produce the goods for which we anticipate excess demand will be generated, eg if we forecast additional demand for a million tonnes of food, we must employ the labourers to produce the additional million.

Careful sectoral planning is needed to ensure a match between additional demands generated and the additional production that will be created. However, even if we fail in matching supply to demand, excess demand which leads to inflation is not necessarily harmful. Rising prices signal high demand and set off private mechanisms to create additional capacity to meet new demands. Large amounts of labour made available by the JG programme would facilitate expansion of supply in response to increased prices and profits.

A surfeit of money would create excess demand for imports. With an overvalued rupee, we subsidise all imports and can’t afford to increase demand, since that drains our forex reserves. However, an undervalued rupee acts as a tax on imports which creates forex reserves for the State Bank. Many economies like Japan, China, and East Asia have used undervaluation to promote domestic industries and accumulate dollars. It is true that essential imports with inelastic demands will become more expensive. However, we can use the surplus generated by undervaluation to subsidise essential imports. This dual exchange rate policy is far more efficient than a general across-the-board subsidy to all imports, which is created by overvaluation.

Many aspects of the JG programme require careful planning and adaptation to local social and institutional structure. But the payoff of prosperity for all makes it worthwhile to invest in the required efforts.

Written by Dr Asad Zaman and published in Dawn, April 24, 2019.

To read further on similar content see: https://weapedagogy.wordpress.com/2016/06/01/creating-full-employment/ and

https://sites.google.com/site/eeauasadzaman/unlearning-economics/kalecki

Rupee Overvaluation

Popular demand to control the value of domestic currency is highly contradicting with fundamental economic facts.

Equilibrium exchange rate is the one that comes in market without any intervention. It indicates the rate at which price of currencies is justified given that demand for and supply of the currency is equal. In this situation if we demand to keep the rupee overvalued, government would have to artificially increase the supply of dollars in the market.

The policy of overvaluation of the Pakistani rupee is equivalent to an across-the-board subsidy on all imports. Anyone who purchases $100 receives $90 of it from private sources seeking to buy Pakistani rupees, while $10 comes from the government, that borrows dollars and sells them cheaply to keep the price of dollars low. Naturally, this makes imports cheaper, because the government pays part of the bill.

While occasionally it might make sense to subsidise strategic imports, it can never be sensible to provide across-the-board subsidies for all imports. Yet, in Pakistan, this is what has been happening for several decades. Governments have maintained significantly overvalued rupees, effectively borrowing dollars to subsidise all imports.

This is the simple explanation for our need to repeatedly borrow from the IMF, even though pundits pontificating on this matter have incorrectly blamed many other factors. We will examine why this has happened, what the consequences have been, and how the problem can be remedied.

One of the deadly effects of overvaluation is the establishment of negative value-added industries, which make profits only due to the existence of government subsidy on imports.

For example, our oil czars import oilseeds from Brazil and Malaysia, since it costs more to grow our own sunflowers! Worse, overvaluation prevents valuable industries from coming into existence.

Attempts at producing export-oriented silk, olive oil, palm oil, small electronics, and other light industrial products, have all faltered because overvaluation makes it extremely difficult to produce competitive products. India is able to produce domestic cars and mobiles because the Indian rupee is undervalued, making imports expensive.

Pakistani efforts have failed because overvaluation makes imports cheap. China, Japan and East Asian countries followed the opposite policy of undervaluation to industrialise.

When dollar imports are expensive, due to undervaluation, then it becomes profitable to set up domestic industries which can successfully compete with imports. Creating domestic industries which can manufacture substitutes for imports made expensive by undervaluation is a key step towards industrialization.

Undervaluation occurs when the government purchases $10 for every $100 imports purchased by the public, bumping up the price of the dollar by adding to the demand. This allows the government to transparently collect money, avoiding corruption at customs, and creating desperately needed foreign exchange reserves for national benefit.

The question is why, when it is so harmful for local development, have we pursued a policy of mass subsidy for all imports over decades. Billions of dollars in subsidies goes to select industries which profit immensely from cheaper-than-market-value imports. These industries would collapse if the subsidy was withdrawn, and the value of the Pakistani rupee were set by market forces (not the IMF!).

More generally, the wealthy classes enjoy subsidies on luxury imports. But overvaluation is defended on the ground that the poor will have to pay more, even though the subsidy benefits the rich far more.

The imaginative beneficiaries of the billion-dollar sub­­sidies promote an­­other half-truth to sup­port this disast­rous policy.

They acknowledge that additional demand will be created by lower prices for Pakistani goods, but argue that our export industries are working at full capacity and will not be able to expand production to meet the additional demand.

What they say is true in the short run — we may not see an immediate response in terms of increased exports.

In the long run, export-oriented industries could come into existence to satisfy additional global demand created by the cheaper Pakistani rupee.

However, it is costly and risky to set up industries. Putting in the required large investments in production capacity requires confidence that the government will maintain its exchange rate policies. Given the power of the overvaluation lobby, it would be hard for anyone to have such confidence, in order to set up the industry.

The domestic economy will never learn to produce if it is cheaper to import goods at prices subsidised by government borrowing.

The long-term health and prosperity of the economy requires either fair or undervaluation. The present policy of overvaluation works by borrowing dollars to subsidize imports, and cannot be sustained in the long run.

Article is written by Dr. Asad Zaman and published in Dawn News on May 19, 2019.

To read more related materials see https://www.dawn.com/news/1472155/fear-of-floating and https://www.dawn.com/authors/8201/asad-zaman

So What do we need to realize?

This article was published in The Daily times on 16th July 2019. All of my articles are actually summaries of the lessons learnt via the teachings of Dr. Asad Zaman.

Once in a training workshop we were given a target to draw a few random geometrical shapes; simple triangles, semicircles and circles. When the time was up to finish our task, trainer showed us a very simple clown we all used to draw as children and asked us how many of us could draw that shape. Obviously none of us were able to do so as we were never clearly told about the objective of the whole exercise. The lesson that I learned that day was; if you are not clear about the purpose of an exercise, no matter how intelligent you are or how capable, you will not be able to achieve the results.

It is very unfortunate that today we are very unclear about the purpose of our lives. We do know the random achievements we want like building a career, earning money, building a house, having a comfortable life etc. This is just being able to draw those random shapes without being able to connect the dots and define a clear purpose of life. We have been deceived into believing ourselves worthless and not more than just resources in production process. Today we are prone to believe in many abnormal and unethical concepts that we never accepted in history. Karl Polanyi writes about this transformation from traditional social setup towards market society. In a market society everything has to come through the market. That means everything is saleable. In almost all religious societies, Muslims, Hindus, Christian or Buddhist etc. children were considered to be collective responsibility and that is why concepts similar to ‘WAQF’ in Islam existed. Where rich and affluent of the society pooled the funds for supporting education of willing students. Today we have come to a point where we are ok with the fact that if a poor person cannot afford to pay for the cure of his disease he may die by the side of the road. This sort of selfish rationalism accelerated in 20th century onwards. It has converted us into aimless material resources with no clear purpose of life.

In order to become human beings again we need to understand and accept two things. First and foremost we need to reject the implicit, hidden poison being fed to us that we are saleable commodities and the sole purpose of our life is to do a job and earn money. This is a very hard first step which will need conscious effort on our parts. Second step will be the search of the true purpose of our lives which raises us above and beyond being a production resource only. When our beliefs will be corrected then and only then we will be able to take effective actions in order to achieve our purpose of life.

Since I first started going to school some three to four decades ago, never once this question about finding the purpose of my life has been discussed or taught to me in my academic life. Is it such a useless question to ask? I don’t think so. This question has been asked since olden days. Philosophers like Aristotle and Plato have discussed it. Modern philosophers have explored it and even existentialists have taken a stance. At least they are trying to answer this very important question. Today we see especially in business world that a mission and vision of a firm is created and then it is coaxed into all the employees. That cannot be in real lives. Vision and mission of life is something that should come from within you. You and only you can decide your vision and mission of your life according to your potential and values. Unfortunately we have been fed too many deception and false purposes of our lives. People who want to harness our energies and potential for their purposes bombard us with too many fake purposes of your lives. Therefore the toughest target is to free ourselves from these random ideas and try and find our own purpose of life.