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     Dec 22, 2006
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It's the money, honey
By Chan Akya

Mark Twain quipped that the lack of money is the root of all evil. Humans are irrational, but societies are rarely so, until they choose to become extinct. Understanding the economic factors underpinning society helps us to appreciate the process of change better than an independent evaluation of all else.

In past articles, I have shown the impact of economic incentives in addressing terrorism, [1, 2] as a determinant of foreign policy [3] and as a guide to reconstruction [4]. An over-reliance on other



factors, such as religion, human emotions, politics, nationalism, makes for interesting debate but usually ends up as an exercise in romanticism.

The success and decline of religions, as well as the failure of political systems such as communism, all hark back to economic factors. The ability to feed and care for adherents has too often been mistaken for spiritual success, in much the same way that religion can be blamed for entrenched inequality and poverty - for example, by its role in maintaining social strictures that in essence allowed vested interests to flourish in various countries. Communism collapsed not because it is a bad idea per se, but because the idea is inconsistent with cold economic realities.

Oldest profession
Even in the most basic of human activities, economic rationale rules. Women choose men based on their ability to provide economic security for their offspring and themselves. Men in turn choose women based on their own status in society, getting the women that best represent their position. This is why some old, rich men are with nubile members of the opposite sex. At the social level, this translates into a definition of success that allows many humans to make rational choices. In this environment, both men and women may choose alternative lifestyles when they fail to make the grade in their own societies.

Thus it is that the brothels of Manila are sustained by middle-class Westerners, most of whom are in effect frozen out of acceptable choices back home. Similarly, as evidenced during the rapid decline of the Soviet Union, a number of women failed to secure mates with adequate prospects for providing security. They were thus forced to accept alternative sources of sustenance, more popularly referred to as the world's oldest profession, although other types of the same business - mail-order brides, for example - also became common.

In turn, the observation that a society has failed when it exports its women as whores stands true, albeit for economic rather than any patently nationalist reasons. Whores get all the attention; a wider failure of Russia and the Eastern European countries is apparent from the number of maids, nurses and other menial laborers who have become available for the world economy.

What then can we make of the armies of people who are willing to sacrifice their lives in the name of religion? While an initial explanation can be found in the habitual irrationality of human behavior, one can also discern variations on the theme. American philosopher Abraham Maslow's hierarchy of needs explains much about what human beings hanker after, and suggests that more prosperous humans are likely to turn to more irrational pursuits. Perhaps this explains why most religious leaders I have encountered are corpulent - and this is an easy test for most of you. Think of your religious leaders, irrespective of which cloth they adhere to, and compare that mental picture with the social average.

That is not the full answer, though - as I observed elsewhere, many people turn to extremist political organizations such as the Maoists and al-Qaeda simply because of an absence of any economic opportunities. It is a proven fact that poor people are more easily radicalized than rich ones, for the simple reason that convincing people with nothing to lose that there is a potential upside to even the most hare-brained ideas is easier.

Extremist organizations are thought to compensate the families of suicide bombers, while Hezbollah even compensates its support base for material losses such as property in a bid to retain its popularity.

Social is economic
The relative prosperity of some against the deprivation of others has always provided grounds for human introspection. Social structures that evolved from such introspection have allowed the maintenance of vested economic interests. In ancient China, the Confucian ethic of subjecting one to a greater good reigned supreme.

It forced individuals to accept the jobs thrust upon them by society and, by denying opportunities for self-maximization, allowed the maintenance of the status quo. Even so, a number of regime changes effected through the history of China were at the behest of economic interest groups, in particular the trading community. Any emperor who could not guarantee safety and security for traders, or who dared to collect excessive taxes, found himself at the sharp end of a sword soon enough.

In India, introspection on the economic gaps gave rise to the much-reviled caste system. As a way of imposing fatalism on right-thinking individuals, the caste system is without parallel. It subjugated millions in the name of sins committed in a vague past life, with promises for advancement in the next. In effect, it served to keep the peasants quiet and acquiescent, and rarely changed in form until modern India became independent in the 20th century. Conquerors from other religions, including Islam and Christianity, simply failed to end the excesses of the caste system despite ruling India. The only reason for their reticence was economic, not religious.

Overestimating religion
Perhaps the greatest failure for the young and the romantic is to overestimate the power of religion in shaping society. Throughout history, religions have depended on the economic success of their societies, and indeed often claimed credit for prosperity as a way to expand the numbers of the faithful. Some of the first religious regime changes in the world came about in India, when Buddhism supplanted Hinduism as the religion of state, after its adoption by the Emperor Ashok.

It spread to the rest of Asia by trade rather than theological means, as traders paying taxes to Indian emperors slowly converted to Buddhism. In turn, they spread the religion for a purely selfish reason, as a way of enhancing the common interests that could help to avoid a trader cheating another. As you couldn't Google your prospective counterpart to check his reliability, the alternative "club membership" became religion. For 

Continued 1 2 


Scarcity economics and overcapacity (Jul 28, '05)

 
 



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