Integral Economy. Just like every other field in the world, our economic structure is on the verge of a phenomenal change. Though many economists predict the fall of the Mechanistic system of economics and the emergence of an Integral economics, no one has clearly defined how and what would be the elements of a Turquoise/Teal economy. This article aims to define Integral economy, its purpose, scope and future along with what is required for the evolution of such an economy and the benefits of the same. Inspired from Henry Augustine’s â€œIntegral Politics: An Introduction to Integral Economyâ€ on the Integralworld.net, this article will discuss the topic in parts and arrive at the conclusion of what an optimal economy is/should be.
The Purpose of Economy: Before we arrive at what an optimal economy is, we need to be definite about terms or ideas or theories about economy like â€“ What is economy, what is its purpose, why does it exist, what influences it and what are the constituents of an ideal economy. Confusing as it may seem to discuss as wide and diverse a subject like economy, Augustine gives as a clue â€“ start with defining â€œeconomyâ€ and its purpose. Considered from a simplistic point of view, the purpose of economy has to do with â€œtradeâ€ and trade involves nothing but exchange of things in a fair means. The purpose, as Augustine terms it, is to â€œbenefit the two individuals involved in tradeâ€.
Trading commodities: Trading can be said to have begun with the development of rationality â€“ that is when the consciousness started to recognize the â€œIâ€ and â€œWeâ€ aspects of human nature. Mostly, economy began with the exchange of the basic necessities â€“ what is practical, useful and necessary. But later, as consciousness developed, people’s needs increased and trading grew up as big as the economy that we experience now. In the general sense, trading happens when two individuals place a value on the item they plan to exchange, that is, â€œtradeâ€ and engage in the act of trading. When such values are placed, there is very good chance of one commodity’s value to be â€œunfairâ€ in exchange for another commodity’s value. This means, that one item’s value may exceed or not be proportional or inappropriate to the value of item received in exchange. This brings us to the vital question of economy â€“ how is an item valued?
Question of â€œvalueâ€ in an economy: Value is basically determined in two ways â€“ 1. Depending on the labor involved in creating/producing the commodity, 2. Depending on the usefulness or necessity of the item. For instance, the work involved in the production of an outfit is more than the one involved in catching fish. So, the former will be of higher value than the latter. But in the same way, if the latter is of greater importance or rarity (say, you are in some arid place where fish is precious and rare), then there is chance of the latter gaining more value.
Another dimension to value â€“ apart from the one measured by industry and the one measured by usefulness â€“ is specialization. Yes, economy is dependent on the significance of specialization too. Economic dynamism is possible only if there are people who specialize in the production of commodity that is in need. In other words, as Augustine puts it, â€œEvery commodic need has a corresponding economic need. Meaning, a particular vocational specialization is imperative for some individual or group to fulfill. If there is a mutual need for masonry, then there is an economic need for someone to specialize in masonry and to serve as such.â€ To be more specific, economy allows people to specialize in various forms of production and thereby, contribute their craft to the society.
The ultimate purpose of economy: Deciphering from the above statement, it can be said that economy exists to help people grow, evolve as a species as they specialize in various forms of production, being its participants. But considered from a practical, generalized view, the ultimate purpose of economy to â€œallow people to possess or experience things that they need or desire.â€ This brings us to the question of the relation between â€œneedâ€ and â€œdesireâ€ and their role in economy. Here, Augustine refers to Maslow’s hierarchy of being â€“ he opines that â€œneedsâ€ and â€œdesiresâ€ vary depending upon the level in which a human being is. While a tribal man maybe satisfied by his need for safety and shelter, a materialistic American may desire for more. The question of what is a need and what is a desire is subject for greater analysis as what may seem to be a desire may be a need to some.
Similarly, need and desire have psychological, apart from physiological dimensions. We can consider the examples of alcohol and cinema. Why is alcohol and cinema considered as needs? The reasons take as to the psychological depths of a human being. Plato posits that economic specialization is induced by a variety of â€œperceived needsâ€. But perceived needs are relative to the individual, the society and the level of consciousness of the society.
If â€œperceived needâ€ is equal to production or specialization, it means that everything including need, profession, production etc. are inter-related with each other. If needs/demands exceed, leading up to excessive production, economy would escalate the need for professionals too. A simple need for food, can develop into a need for horticulture, need for processing industry, need for marketing, need for variety in food, so on and so forth. Augustine thinks that the true purpose of economy is to keep a balance between the two extremes â€“ need and production. â€œA golden meanâ€ between â€œeconomic minimalismâ€ and â€œeconomic excessivismâ€ (as is evident today). Both economic minimalism and excessivism have their drawbacks which can damage the entire system human system and the natural environment (internally and externally) owing to which, we need to draw a golden mean between the two to achieve an â€œoptimal economyâ€.
Why should there be a golden mean? Because neither economic minimalism nor excessivism are good for the society. While economic minimalism would lead to lack of intelligence, amusement and diversity, economic excessivism would cause havoc to the environment, burden us with a competitive mindset and consume a significant amount of beauty around the world.
More on what is an optimal economy and why a Turquoise economy can help us achieve the true purpose of economy in our next post.
1. Henry Augustine’s â€œIntegral Politics: An Introduction to Integral Economyâ€
2. Michael Holliday’s â€œThe Terrain: The Integral Economyâ€ -
3. Timothy J Melody’s â€œIntegral Economy Emerging?â€