Deepak Chopra is a medical doctor from India who has written extensively on spirituality and has done much fine work in body-mind medicine. Through his many popular books and television appearances, he has become one of the most recognizable figures in the modern new-age movement. Like many in that movement, he understands little about economics; and because of that ignorance, he helps to spread beliefs that harm the very things he claims to support.
Listen as Chopra talks in a very soothing voice to a fawning interviewer at CNN Money. A theme throughout his recent interview is that we need to enter an age where the economy is “wisdom-based.” Presumably the wisdom is to be provided by him and those he agrees with.
Early in the interview, Chopra complains, “Of the 2.2 trillion dollars that circulate each day less than 2% go to provide goods and services for humanity, the rest is speculation, money making money for people who have lots of money.”
Chopra’s implication is absolute nonsense. The bulk of transactions that occur in modern financial markets are essential to a healthy and vibrant economy. Chopra’s numbers are about as meaningless as numbers that say that farmers receive only a small percentage of the food dollar. A farmer does receive only a small percentage of the food dollar because the middleman that the farmer sells the food to, the shipping company that transports the food, the manufacturer that processes the food, and the supermarket that sells the food are as essential to feeding the public as is the farmer. Centuries ago, the farmer received 100% of the food dollar as he sold directly the consumer. However, both the farmer and the consumer were much poorer than they are today. And with that poverty, a much higher percentage of the world’s population went hungry.
Specialization is one of the key ingredients of a modern economy and so are modern financial markets. Eliminate specialization and eliminate modern financial markets and I assure you that there would be a very small market for Chopra’s books. We would all be back to subsistence living.
Later in his interview, Chopra claims, “If we use money wisely we can get rid of war, terrorism, social injustice.” This is about as trivial a statement as saying that if we use food wisely, we can get rid of obesity. But Chopra is not talking in such trivial terms—the unspoken premise of his statement is the totalitarian view that “wise” people should direct us in the “wise” use of our money.
Still later in the interview, Chopra describes how he is helping Frito-Lay switch to selling nutritious food. Again, nonsense. Frito-Lay is indeed improving their offerings in the supermarket, but this has everything to do with changing demands on the part the consumer—it has nothing to do with Chopra. If Chopra showed up in 1960 asking Frito-Lay to sell more nutritious food, he wouldn’t get through the front door. But again, his false claim reinforces the belief that “wise” people, such as he, should direct the economy.
Chopra then claims, “The purpose of business has always been to improve value for the shareholder but now the purpose of business is to nurture the needs of society.” However nice the sentiment, again, this is nonsense.
There have always been only two ways to earn profits. One way for a business to earn profits is to satisfy the most urgent needs of the consuming public better than another business does. This is the entrepreneurial way of earning a profit. And the interesting thing about the entrepreneurial way of earning profits is that the interests of the shareholders and the interests of the consumers they must serve are one and the same.
However, this harmony of interests frequently breaks down because of the second way to profits, that is, the political means to profits. Instead of serving the consumer, a firm lobbies government for a subsidy, a tariff, or other measures that prevent competition. In that way, the link between the interests of the shareholders and the interests of the consuming public is broken.
Thus, we really don’t need Chopra pronouncing which firms are “nurturing the needs of society.” We need government to stop protecting businesses from competition. When that happens, all businesses will compete to “nurture the needs of society.” Chopra can stick to what he does best; there are many individuals who benefit from Chopra’s body-mind medicine. Chopra does not need to expand into areas about which he knows nothing.