A cosmic view of the book and doctrine “Line of Wealth”

By Zulfiqar Shah  

Recently published book, “Line of Wealth” by economist and scholar Roshan Lal Agrawal is a economic treatise in which his theory around “consumables” is one-step forward in comparison with existing theories of economics. Until now, the economic narrative has been around the comedies and production, which set the dictum of market, finance and other sectors of the economy. The ‘consumable’ context and reality of commodities, productions and services is a beginning for a paradigm shift in the trade, commerce, agriculture and industrial economy – both in theory and in practice. If simply seen, his doctrine has following basis:

Fundamentality of “consumables” as bases for casual results in the economic process of production, consumption, monitory circulation, accumulation of wealth, net use of labor as essential factor in the determination of price of production; market; surplus wealth, surplus labor and unsustainability in the pursuits of economic growth; fiscal disparity, injustice, procedures and malpractices.

The Agrawal doctrine if compared with re-distribution of wealth, which politically is one of the responsibilities of state system and policies, is a post-redistribution of wealth theory in his whole doctrine schema, which can be said the re-distribution of wealth based on economic justice with foundations in the Line of Wealth approach. He like Karl Marx, has upside down the theory of redistribution of wealth in the economics, and unlike Marx has focused on surplus wealth, thus a new, simple and expressed in popular academic language doctrine has originally given a theory that can be said Das Wealth, not Das Capital, in the post Soviet collapse world of global economy. Therefore the book, ‘Line of Wealth’ can actually be called Das Wealth, which is a Southasian view of seeing at the economic phenomenon. He focuses wealth as such, not like Marx, the Capital part of the Wealth. Despite focusing classes, he has focused wealthy and wreathless, therefore he doctrines the interweaving the classes together in which he pens agency for wreathless in the wealth of wealthy, and at the same time he also recognize the wealth ownership right of the wealthy. The agency of wealthless in the wealth of a wealthy is the rent payment on the excessive wealth ownership, which has to be paid to the wealthless citizens in a country. In fact, the citizens are real owners of a country’s everything. Agrawal calls it people’s royalty in the wealth that one possesses more that certain limits.

Simplicity of the style and narration of the book is also found in his concepts. Agrwal schema of economic justice is not a complex structure of theories. It is very simple and based on the universal truth as have proven hitherto. He translated one of the foundations of his doctrine schema -- every citizen’s equal right over natural resources -- into the structural part of his schema for establishing economic justice. Thus, he in the context of fiscal aspect of economic justice, calls natural resources right a Citizens’ Tax or people’s royalty on the wealth that exceeds the ceiling of the un-taxable wealth in a country.  This in Agrwal’s word is ‘rent’ or ‘royalty’ ‘payable to the citizen’. 

He professes levying only one tax -- a heavy tax on excessive wealth -- and theorizes the abolishment of all other taxes. Again, he claims that wealthy will not be antagonized by such taxation. Because, according to him if a wealthy pays heavy one tax, he at the same time will not pay the other taxes, and will save the financial costs as well so far the financial management is concerned. 

What Agrawal has not mentioned in the book is the reality that the industrialists and service providers will not collect the General Sales Tax on the production, therefore cost of the financial infrastructure and expenditure for such taxed GST and other duties that are to be sent to the governments will be saved. Meanwhile, the other financial expenditure will also reduce. The reduction in the cost will lower the prices of the commodities. It will serve the consumers, sellers and producers because the productions will include into the purchasing power of the low income group as well, which in turn cause more quantity of production due to increase in the demand and in final result the investor, the market persons and the consumers together will get benefits. Interestingly, this whole again will create new wealthy persons that will come in the ambit of wealth tax and the whole cycle of new taxation will create a new economic, financial, fiscal and market arrangements ecology.  

Agrawal’s book in general talks of one tax however; he also talks of the two other taxes out of which one is regarding the ownership of immoveable property, its sale and sale mechanism. Some new taxation parameters for the stamp duty as well as ownership transfer fees also part of fiscal aspects of materialization of economic justice in Agrawal schema. Agrawal’s approach towards estate property ownership is more focused on market and pens for turning concerned government department to become a market-oriented entity within the government system regarding economic valuation as well as sale mechanism of the immovable property.

At one point, he becomes an idealist and pens something absurd – the determination of cost of a commodity or production on the basis of labor utilized for that. This is the point, where Agrawal does not mention that cost an investor pays to the labor as wage as well as contracts of laboring, which is already included in the cost of the commodities in the market. It is hope Agrawal will write next book to elaborate this aspects of his theory, which is detached attachment of his Schema. Basically it is a notion by him, which he has not elaborated. If he wants higher wages for laborer, it will increase cost of the commodities whether or not the price is determined based on labor utilized. This will cause price hike, and shirk the consumers’ capacity to purchase. Poor will suffer at the end. Let, I think, Agrwal write on the labor-as-such.

I am of the view that an accumulative quantum of the labor used in each process of manufacturing inclusive of labor utilized on the parts as well as raw material for the manufacturing / growth of a production and service may be considered as labor utilized as such, and thereby the price of the commodities / production may be determined. The price determining of a production / commodity despite based on expenditure as such, done on the basis of labor utilized as such will result a complete upside down in the macro and micro economics in the courtiers and the in global economy. This already is practiced in the software industry whose commodities and services are priced on the basis of labor used as such inclusive of non-labor expenditures as well as invocation cost; however excluding expenditure factor from pricing and solely being based on utilized labor as such will also be a new economic aspect. Besides, this will alien the legitimacy of the people’s right on natural resources. Since natural resources and labor together produce commodities, therefore excluding natural resource’s cost instead economically value it through labor consumed, it will make this notion of Agrawal in contradiction with his Schema, therefore, Agrawal himself will be best person to write on this of his notion in the light of economic justice.

In anyway, everything has to have an economic value – labor or love both. Therefore, ultimately again economic value of accumulated labor used will be valued in economic terms, which has monitory face. Therefore, a Das Labor is required if seen in the context of above mentioned Agarwal’s notion which has to be in accordance with his schema, which will be in fact Darwinhood in the world economy. A modern Marxism will in fact get birth.  

Besides, Agrawal should also write on the two aspects of the commodity and its price determination: (a) the import and other similar taxes on the raw materials, parts and semi-manufactured as well as finally manufactured or produced commodities in the context of wealth, and (b) such taxation’s use as cost factor for price determination of a commodity or production.

What Agrawal has not written is the use of cheap labor from developing and underdeveloped world for the manufacturing and services. The industrialists must be taxed at least moderately for acquiring cheap labor, and ensuring distribution of it among those cheap laborers although it is a reality that high population countries like China and India have become beneficiaries for creating the new employment opportunities for their unemployed citizens. Why not a taxe-free import economy should be part of Agrawal’s doctrine to further make agree the wealthy for one-tax on the wealth? This will also lead the protectionist economic approach to an end, and will kick-off a fiscal globalization in the world. This will start the process of globalization for the poor and laborer as well. Besides, achieving the goal of development through tax free imports in a country, the attraction for industrialists to that economy will increase, which will cause new industrial and urban societies in the world – provided that this is done as part of Agrawal’s Line of Wealth doctrine, which ensure surplus financial resources for the governance only through domestic taxes and discuss around the Gross Domestic Production (GDP) of a country.     

Review by Zulfiqar Shah  

  

Shah is a civil rights activist, researcher and analyst. He is M. Phil (coursework) in Development Studies (Development Economics) and is a PG Diploma (online and live) in Fiscal Federalism from World Bank Institute, USA.  He is a member of International Society for Philosophers, Sheffield University, UK and a member of South Asian Studies Society as well as British Society for South Asian Studies, UK. He has been engaged in the major research studies with European Commission; IOM (UN) and Oxfam GB.