Anand Saxena, Beggar thy neighbour, Contractionary monetary policy, Dr Anand Saxena, Dr Anand Swaroop Saxena, Globalization, Great Depression, grow the pie, interdependent co-arising, International Monetary Fund, Joseph Stiglitz, macro-economics, macroeconomics, Prof Harkant Mankad, share the pie well, SP Jain Center of Management, The Buddha
I hae written on Interdependent co-arising (older blogs at the link) earlier. The concept simply means – we are all dependent on each other.
Those who want to know the concept in layman term follow this blog – interdependent co-arising example of a farmer.
Definintion of interdependent co-arising is below with a macro-economics example. In late 90’s the East Asian countries faced a very serious economic challenge of decades. The financial system came down like a house of cards. Dr Joseph Stiglitz – Economics Nobel Prize winner of 2001 – shares the concept of interdependent co-arising (dooming in otherwords) in his book – “Globalization and its discontent“. On Page 106-107 he invariably – and inadvertently perhaps – explains what is interdependent co-arising. Hope economists would understand this lesson, if not from the Buddha then from Dr Stiglitz.
Of all the mistakes the IMF committed as the East Asian crisis spread from one conuntry to another in 1997 and 1998, one of the hardest to fathom was the Fund’s failure to recognize the important interactions amont the policeis pursued in the different countries. Contractionary policies in one country not only deepened that country’s economy but had adverse effects on its neighbors. By continuing to advocate contractionary policies the IMF exacerbated the contagion, the spread of the downturn from one country to the next. As each country weakened, it reduced its imports from its neighbors, thereby pulling its neighbors down.
The beggar-thy-neighbor policies of the 1930s are generally thought to have played an important role in the spread of the Great Depression. Each country hit by a downturn bolster its own economy by cutting back on exports and thus shifting consumer demands to its own products.A country would cut back on export by imposing tariffs and by making competitive devaluation of its currency, which made its own goods cheaper and others countries’ more expensive. Howeer, as each country cut back on imports it suceeded in “exporting” the economic downturn to its neighbors. Hence the term bagger-thy-neighbor.
Solution to all these economic, social, personal, spiritual or other problems?
Its interdependent co-arising itself. We all need to help each other grow – grow the pie and share it well, if not equally!