Welfare based economy
Welfare economics looks at the allocation and distribution of resources and how it affects an economy's overall sense of well-being creating the highest overall level of social satisfaction among its members. It also works in contrast to capitalist ideals. In the capitalist economy maximization of profit is the main goal of the businessmen. By any means they try to uphold the growth of their profit. Capitalist economy creates a consumer society where people are always self-cantered and remain busy to fulfil their sensual desire at any cost.
Government intervention regarding economic matters is fully rejected in pure capitalism. Focus is instead put in individual choice, accomplishment and development, as well as the pursuit of personal wealth. The theory behind capitalism supports that the society will experience an associated benefit through the pursuit of personal wealth. But such theory is pretty much inhumane and costly.
As a result we find the steadiest expansion of income gap worldwide. According to recent statistics the globe's richest 1 per cent own half the world's wealth, according to a new report highlighting the growing gap between the super-rich and everyone else. According to Credit Suisse's global wealth report published recently, the world's richest people have seen their share of the globe's total wealth increase from 42.5 per cent at the height of the 2008 financial crisis to 50.1 per cent in 2017.
Similarly in our country a recent study, conducted by the Centre for Policy Dialogue, showed that in 2016, the top five per cent of Bangladesh's income-earners earned 121 times more than the bottom five per cent , in a jump from 31.5 times in 2010 which had been quadrupled during the interim period. These findings are a clear indication that despite some better performance in certain development indicators, income and asset inequalities continue to exist and may emerge as a big threat to the overall economy.
On the other hand socialist economy fully abolishes the ownership of wealth individually and all means of production are owned by the state or Government, and no individual can hold private property beyond certain limit. Therefore, it is government who utilizes these resources in the interest of social welfare. But the existence of rich, poor, privileged, underprivileged, upper class, lower class in the society is a natural phenomenon. The matter is here that the people of each of that status must be logical in behaviour, must be rational in attitude, respectful to mutual dignity and must be humane to make life of the poor, underprivileged easy, peaceful and comfortable. Otherwise human being can never be defined as the greatest creature of the universe.
The most reasonable target here should be the equitable distribution of wealth. Because wealth and resources are limited and therefore, should not remain under the control of a very few people and also should not go under full control of the state. In both the cases some human complicity, such as injustice, oppression, arrogance and arbitrary attitude play a vital role which is already a proved matter.
Some analysts assert that famines are crimes of either commission or omission, because human decisions, vices and actions determine whether a crisis deteriorates into a full-blown famine. For many years experts believed that famines were caused by a shortfall in food availability. Then in 1981 economist-cum-philosopher Amartya Sen published "Poverty and Famines: An Essay on Entitlement and Deprivation," which showed that famines actually resulted when food was available but some groups could not access it. According to Sen, famine is caused not due to shortage of food but due to failure of entitlement.
A person suffers from failure of food entitlement when his entitlement set does not contain enough food to enable him to avoid starvation in the absence of non-entitlement transfers, such as charity. Thus famine occurs. Though this view of Professor Sen was based on analysis of the Bengal famine that occurred in the year 1943, he subsequently analysed the contemporary famine of Asia, Africa and generalized his conclusion. Although many people believe today that famines occur mostly in Africa, the deadliest famines of the 20th century were in Europe (Ukraine) and Asia (China).
But current economic system has made this pretty much tougher. Here helping the poor and doing charity is optional. In some cases, it has become a show off and fashion. In this way we are not observing any sustainable change in the fate of the poor. But this is very much true that if poverty is removed, then more demand would be created in the market due to increase in purchasing power. And as a result, the cycle of economy would be faster.
Unlimited consumption and unscrupulous wastage of food and wastage of money in arms races, excessive luxury are the worst enemy of today's economy. The costs of reducing mortality rates by two-thirds, improving maternal health as well as combating Aids, malaria and other major diseases, are estimated to be USD 60 billion a year. Meanwhile, USD 60 billion is approximately the cost of buying and operating two nuclear ballistic missile submarines.
The causes of food waste or loss are numerous and occur at the stages of production, processing, retailing and consumption. According to report presented by the Food and Agricultural Organization (FAO) -- roughly one third of the food produced in the world for human consumption every year -- approximately 1.3 billion tonnes food gets lost or wasted. Food losses and waste amounts to roughly USD 680 billion in industrialized countries and USD 310 billion in developing countries. By reducing wastages significantly food safety could be ensured for millions of more people in the world.
Zakat is the integral part of Islamic economy. Many people consider zakat simply as charity which is absolutely a wrong idea. According to the command of Islam zakat is mandatory for every eligible Muslim. This is the fundamental right of the poor or underprivileged. The beneficiaries of zakat are strictly specified. Lifting up those specified groups would play a leading role to remove hunger, poverty and illiteracy from the world.
An estimation shows that if all the people eligible to give zakat in Bangladesh would give zakat properly there might be a fund of 30 per cent-50 per cent more than the income tax being realized from individual in-come tax payers in Bangladesh.
However, the fund so far being collected might play a significant role in alleviation of poverty, if it is utilized properly. A recent study jointly conducted by the Islamic Research and Training Institute (IRTI) and Thomson Reuters estimates that zakat donations could contribute significantly to alleviate poverty in countries, such as Indonesia, India, Pakistan, Bangladesh, Malaysia, Singapore and Brunei, which together account for 45 per cent of the world's population.
Human nature, behaviour, way of thinking, lifestyle, values, outlook have a huge impact on economic activities and even on economic theories. Therefore, in order to bring transparency in economy there is no alternative other than becoming humane, compassionate, honest and philanthropist. We should keep in mind that principles of economy should not be materialistic but should be based on humanity, honesty and free from corruption. Otherwise we would inevitably witness more famine, more financial meltdown, more collapse in the banking sector.
Above all government's fiscal policy, rules and regulations, political will favouring welfare-oriented economy could play the most effective role in implementing equitable distribution of wealth in the society. Charity begins at home and it has to be practiced at home first. If all the people who are comparatively more fortunate become more compassionate and sympathetic to their family members, relatives, friends, neighbours then total economy would become welfare oriented and there would remain no poverty and deprivation in the society as well as the whole world.
The writer is freelance column writer