The Marketplace

by Ashok Khosla

Western civilisation, with its emphasis on rational thought, has made remarkable
contributions to knowledge and human will-being. Its two most striking innovations lie in
the realm of social institutions and technology, and both arise from a new deep
commitment to logic and consistency of thought that had been unknown in earlier times.
Although earlier societies had occasionally experimented with democratic systems of
government, few had as systematically introduced the principles of universality,
distributive justice and fairness. Today, even the most powerful would find it difficult in
public to deny the validity of these principles.
Over the past two centuries, science-based technology and private sector initiative have
brought a vast range of improvements in the health, mobility and comfort of billions of
people. At the heart of much of this improvement lies an institutional innovation, the
modern market place. The market, with all its logical trappings such as entrepreneurship,
monetisation and free trade, is indeed, one of the ultimate inventions of human ingenuity:

By taking advantage of the opportunities offered by the market, business has

demonstrated the extraordinary power it has to bring about change.
Yet, for more than half of the population on this planet, some three billion people, the
promise of science and the opportunities of the market place remain unfulfilled dreams.
There are, today, more hungry, illiterate and unhealthy people in the world than there
were at any time in history. And the numbers are still growing.
They will continue to grow as long as individual benefit counts for more than societal
good, a mindset that, ironically, also comes from the same basic principles that led to
technological progress and the marketplace. Further, they will continue to grow ever
faster as the quality of the resource base and our environment deteriorate, producing less
and less material well-being for more and more people. Certainly, business has
extraordinary power. But with extraordinary power should come extraordinary
responsibility. Unfortunately, so far, such responsibility has not been much in evidence.
Neither poverty nor environment is considered by the private sector to be issues of
concern - except as cheap resources for their production units, or as voiceless victims
from which to make more profits.
Free trade is meaningful only under the conditions of a free market. Unfortunately, most
markets do not met these conditions. Where do we have perfect competition? Who is
playing on a level field? How can the poor be said to have equal access to the factors of
production: land, labour, capital or technology?
While economists sacrifice all to the god of efficiency, business leaders justify their
monopolies by referring to the laws of supply and demand. No other profession has
learned to deceive itself with high sounding but specious arguments better than these
two. In the name of efficiency, the global economy now introduces total homogenisation
in our foods, clothes, habitats, transport systems and everything else. All cultural
diversity is at risk because if is ‘inefficient’, and all our values must be materialised to
keep the engine of our economy, industry, busy. No, efficiency is not an abstract quantity
determined by the laws of nature. It is largely a matter of definition, usually defined to suit
the short term convenience of the definer. As our knowledge, perceptions and values
evolve, the definition and assessment of efficiency must necessarily change.
Business leaders often say that they believe in the “infinite wisdom of the consumer”.
Then why do they spend billions on advertising to convince him or her otherwise? Like
efficiency, demand is not one of nature’s givens. It is created, and the businessperson
cannot pretend to be a passive bystander in the process.
Business, more than any other sector, could help to stem and even turn around both the
swelling flood of poverty and the continuing destruction of the environment. But is can do
so only if it adopts some fundamental changes in its thinking: longer time horizons,
sustainability of inputs, new sources of demand. This in turn will require new attitude
towards technology choice, relative value of the factors of production, intellectual property
and the calculation of profits.
Despite universal commitment to reciprocity and fair play, such fundamental changes are
not likely to come from within the business community. They will need policy changes
and economic measures that in turn will require a totally new kind of pressure from the
public. Our job now is to design viable alternatives and help bring them about.