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There is no need for signing a new Charter of Economy. Our politicians, belonging to both the government and the Opposition, are already practicing an unwritten and unsigned one since about the early 1980s. Otherwise Shah Mehmood Qureshi would not have felt comfortable in travelling smoothly from PML-N to PPP to PTI without any misgivings. The same goes for Fawad Chaudhry, Khusro Bakhtiar and many others. Even the Adviser to the PM on Finance Dr Abdul Hafeez Shaikh would not have felt any qualms in serving his current bosses after having served both the PML-Q and PPP. And indeed, if such a Charter had not existed all three successive governments, the PPP, the PML-N and the PTI would not have agreed to the same old IMF prescriptions for getting out of similar kinds of equally disastrous economic mess.
What is, however, needed and that too at the earliest is for our politicians across the board and isle is to agree on how best to get out of this Charter and quickly too and save our people from the ever-expanding mountain of debt that has already forced us into a perpetual poverty trap.
It is not Pakistan alone which needs to look for a new alternative economic system. In fact, even the champions of the so-called free world's current economic system suffering from expanding inequality seem to be seeking an alternative because the one in vogue has failed miserably to deliver an equitable economic order.
Joseph Stiglitz, who won the Nobel Prize nearly two decades ago for identifying the inequalities and the imperfections in market economies, has come up with an alternative. He calls it progressive capitalism. Discussing the title of his new book People, Power and Profits: Progressive Capitalism for an Age of Discontent, he recently told Andrew Ross Sorkin during an interview (Socialist! Capitalist! Economic systems as weapons in a war of words--published in New York Times, April 22, 2019) that he had chosen "progressive capitalism" for his new book because he worried about triggering a visceral reaction to the word "socialism". So what he really means by 'progressive capitalism' is 'socialism' actually.
"I'm trying to avoid some of the emotions that are still attached (to socialism)," he said. "I try in my title to use progressive capitalism to try to say I believe in market economy, but I also believe in government regulation.
In the same newspaper on the same date Stiglitz (Progressive capitalism: no oxymoron) said, one can get rich either by adding to the nation's economic pie or by grabbing a larger share of the pie by exploiting others - abusing, for instance, market power or international advantages.
"We confused the hard work of wealth creation with wealth gabbing (or, as economists call it, rent-seeking), and too many of our talented young people followed the siren call of getting rich quickly. Beginning with the Reagan era, economic policy played a key role in this dystopia.
"Politics has played a big role in the increase in corporate rent-seeking and accompanying inequality. Markets don't exist in a vacuum; they have to be structured by rules and regulations, and these rules and regulations must be enforced. Deregulation of the financial sector allowed bankers to engage in both excessively risky activities and more exploitative ones.
"Progressive capitalism is based on a new social contract between voters and elected officials, between workers and corporations, between rich and poor, and between those with jobs and those who are un-or underemployed. Part of this new social contract is an expanded public option for many programs now provided by private entities or not at all.
"The neoliberal fantasy that unfettered markets will deliver prosperity to everyone should be put to rest. It is as fatally flawed as the notion after the fall of iron curtain that we were seeing 'the end of history' and that we would all soon be liberal democracies with capitalist economies."
Capitalism is said to be the mother of all economic ills the world is facing today. And according to Eillie Anzilotto (The End of Capitalism is Already Starting - If You Know Where To Look - published in FastCompany on Sept 18, 2017) this is the beginning of the end of capitalism.
In this article, the author has quoted liberally from Richard Wolff, a New School University teacher and America's most prominent Marxist who has been lecturing on the subject for over 50 years.
"Americans are getting closer and closer to understanding that they live in an economic system that is not working for them, and will not work for their kids. Growing awareness that wages have been unable to keep up with inflated costs of living have left younger generations particularly disillusioned with capitalism's ability to support their livelihoods, and with CEOs out-earning employees by sometimes as much as 800 to 1, it makes sense that public interest should be swinging toward a workplace model that encapsulates shared ownership, consensus-based decision making, and democratized wages."
But the writer says this is not going to happen overnight. It will take time as did capitalism when replacing feudalism. Before capitalism emerged in Europe, there was feudalism, a radically different system in which nothing-neither land nor labor-was for sale, and serfs orbited their feudal lord like ribbons tethered to a maypole. Feudalism's inhumanity was different from capitalism's: Instead of being unable to work and earn money to pay for rent and necessities, serfs were dependent on the lords for their livelihoods and their schedules and for a piece of land upon which to labor. Their stability was contingent on the lord's generosity or lack thereof.
Sometimes, serfs would get squeezed-maybe a serf who was permitted to work his own land three days a week was cut down to two, and had to work on the lord's the rest of the time, struggling to feed his family. Those serfs would run away. They'd jet off into the forests around the manors, where they'd encounter other runaway serfs (this is the origin of Robin Hood). That group of runaways, who'd cut ties with the feudal system, would establish their own villages, called communes. Without the lord controlling how the former serfs used their land and their resources, those free workers set up a system of production and trade in the communes that would eventually evolve into modern capitalism.
The image of the transition from feudalism to capitalism was the French Revolution, and that was part of it, but it wasn't the whole story. The actual transition was much slower, and not cataclysmic, and found in these serfs that ran away and set up something new.
Around 10 cities across the US have, in recent years, launched initiatives specifically to support the development of worker co-ops, which have been especially beneficial in creating job and wage stability in low-income neighborhoods. Because workers are beholden to themselves and each other, rather than a CEO and a board of directors, the model parts ways with the capitalist structure and advances something that more closely resembles a true democratic system.
"This is the beginning of the end of capitalism," Wolff says. "Whether these experiments-which is what we have to call them at this point-will congeal into a massive social transformation, I don't know. But I do know that massive social transformations have never happened without this stage. This stage may not do it, but change won't happen without it," he adds.
These subtle shifts away from capitalism are not just apparent in the development of more co-ops, Wolff says. Over the past year, he's been called in to meet with CEOs at large financial firms, who seemed to Wolff to be steeling themselves for a dethroning. As CEOs continue to disproportionately outearn their employees, the call for a dismantling of the system has become loud enough that they seem to have no choice but to pay attention.

Copyright Business Recorder, 2019

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