Professor S. Indrakant

As a dedicated student, researcher, and teacher of economics, I find it imperative to trace the journey of economics from its nascent stages to the emergence of Needonomics—a school of thought that offers solutions for contemporary challenges. This journey was marked by many ups and downs with sharp turnings and crossroads at several points. To complicate the matter, different Groups Economists took path which they considered as the right path paving the way for diverse schools of thought, each responding to the dynamics of the global economy.

The early stages of economic thought were dominated by the Physiocrats in France, who emphasized the significance of land as the primary source of surplus production. This was followed by the Mercantilists, who championed trade as the engine of growth, advocating for countries to prioritize exports over imports.

However, it was Adam Smith who provided a more comprehensive understanding of the economy in his seminal work, “An Inquiry into the Nature and Causes of the Wealth of Nations” (1776). Subsequently, David Ricardo delved into the laws of distribution, focusing on the dynamics between workers, capitalists, and renters. The classical economists, including Smith and Ricardo, laid the groundwork for economic thought, albeit with a somewhat pessimistic view of the economy’s long-term prospects. Ricardo argued that due to the increase in population, the cultivation of food grains is extended to less fertile land and the rent on the intra-marginal land will increase. As a result renter class benefits while entrepreneurs suffer due to decline in land productivity. Wage rate cannot be reduced below the subsistence level. With passage of time, the rate of profit will tend to zero and there will be decline in investment. He concluded that due to scarcity of fertile land, the economy will reach Stationary State. The Technical Progress at the best will postpone the attainment of Stationary State. That is why economics was referred as Dismal Science. T. R. Malthus, comparing the growth rate of food grains with that of population arrived at similar conclusion. He believed that food grains will grow in arithmetic progression while population grows in geomagnetic progression. In literature, these Economists are generally referred to as Classical Economists.

Thanks to the fruits of Technical Progress, no serious economic crisis was encountered by the advanced countries. So the Mainstream Economists shifted their attention from the working of the whole economy to the rational behaviour of individual economic agents like consumers, producers, workers and interaction among them. Implicit belief was that interaction among the economic agents will lead to a equilibrium situation which is optimal and beneficial to all the stake-holders. Jevons, Menger and Walras made important contribution in this Area. Marshall tried to syntheses the differences which existed among the Mainstream Economists..

However, a good number of economists had a different view about the dynamics of the World Economy. Marx visualized that the economy is composed of Classes having conflicting interest in which one Class ( Capitalists) benefits at the expense of another Class ( Workers). In other words, the economy is composed of Classes having conflicting interest. Structralists argued that countries at the core developed at the cost of countries at the periphery. Others focused on institutional factors in the process of Development. At the same time, some Economists like Lewis, Nurkse, Rostow, Hirschman took interest in issues relating to Growth and Development.

The honeymoon period of the Mainstream Economists came to an end in 1929 when the World Economy encountered Great Depression. Keynes looking from macro perspective diagnosed that a lack of Effective Demand was the cause for the Depression and advocated for Government Intervention to boost effective demand and the capability of markets was questioned.

In due course of time the focus shifted to examination of the determinants of Long-run and Steady Growth. The works of Harrod, Domar, Kaldor, Solow and Von Neumann are worth-noting.. Building big macro-level , multi-sectoral and long-run plan models became the order of the day on account of availability of Computer Facilities. In this regard, the contributions of Leontief, Timberland, Mahalanobis, Gautam Mathur and Chakravarty were some of the important works . However, in the Era of Liberalization, Privatization and Globalization, the role of these models seems to have reduced.

In the recent years, a new branch of Economics called Behavioural Economics has emerged. It is argued that people make decision based on perceived gains and losses, often valuing losses more than gains. In this respect, the contribution of Psychologists is substantial. In fact, Kahneman, a Psychologist, was awarded Nobel Prize in Economics in 2002 for his work in the field of Behavioural Economics.

Interestingly money as a medium of exchange was introduced into the Economy to overcome the difficulties like double-coincidence of Wants faced under Barter System, a system in which goods were exchanged for goods. Under Barter System, if a farmer wants to sell Milk to buy fodder for his cattle then he has to look for a person who is willing to buy milk and sell fodder. It is very difficult task. Money as a medium of exchange has simplified the operation. The farmer first sells the milk to a person Interested in buying milk for cash and with that cash buys fodder from a person selling fodder. This has smoothened the process of transaction. However, cash transaction becomes risky when the volume of transaction is large and the number of transaction is large. So on-line payment are becoming popular. Further, financial inclusion of so far unreached segments of the population is taking place at a rapid pace. Economy is getting digitalized. No doubt, it is not an unmixed blessing. Innocent persons are becoming victims of cybercrimes. In addition, old institutions like Planning Commission are being replaced by new institutions like NITI Aayog. Simultaneously financial and Fiscal Reforms having far reaching implications have been introduced. All these items have entered into agenda of economists.

Not only the areas of Research changed with time, even the tools of analysis have undergone a radical change. The use of Mathematical and Statistical tools has become very common. Sophisticated Econometric Techniques are being used to estimate the parameters of Policy- oriented models. Availability of packages and computer facilities has enabled the economists to carry out a large number of simulation exercises.

Amidst these changes, the concept of Needonomics has gained traction. Coined by Professor Madan Mohan Goel, Needonomics prioritizes collective well-being, ethical principles, and sustainability. It advocates for a balanced distribution of wealth and resources, promoting the concept of “needo-insurance” to ensure societal happiness and prosperity within planetary limits justifying Needonomics Research Lab in India and elsewhere in the world to search solutions of the problems faced.

Needonomics is based on sloka no 22 of chapter 9 of Gita and used in the logo of LIC of India ‘Yogakshemam Vahamyaham’(Your welfare is our responsibility) as common sense approach which is ethical, nonviolent, environmental friendly and spiritual in nature. Needonomics prioritize the collective well-being of society and the planet over relentless growth. It proposes a shift towards a more balanced and equitable distribution of wealth and resources Our country which is blessed with economists like Professor Madan Mohan Goel promoting Needonomics School of Thought will definitely become Viksit Bharat by 2047.