Abdu’l-Baha on Economic Policy

According to Abdu’l-Baha, wealth inequality, can be attributed to the “extreme greed and rapacity of the manufacturers and industrialists.” He furthermore  identifies  the root cause of income disparity as the defunct operations of the legislative branch of government:

“The principal cause of these difficulties lies in the laws of the present civilization; for they lead to a small number of individuals accumulating incomparable fortunes, beyond their needs, while the greater number remain destitute, stripped and in the greatest misery.”

Abdu’l-Baha introduces concepts into His discourse that rarely find equivalent parallels in the modern discourse on economic policy. Instead of dominant values such as “economic growth”, He emphasizes “justice”; instead of  “profits” He emphasizes “humanity” and “equity”. His appeal to new concepts is grounded in a metaphysics that transcends the modern foundations of economics, which are outdated. The remedy to economic injustice He specifies lies in legislation designed to ensure that private profits go to meet the needs of the impoverished masses:

“…Rules and laws should be established to regulate the excessive fortunes of certain private individuals and meet the needs of millions of the poor masses; thus a certain moderation would be obtained…”

The exact proportion of workers wages as a function of CEO or owner income that is most conducive to justice, Abdu’l-Baha specifies as 20-25%. Therefore the average laborer should earn 20-25% of the total income earned by an owner or CEO. The majority shareholder of a corporation for example could expect to see approximately 4-5 times as much share in the profits as the average worker would. No more.

“Laws and regulations should be established which would permit the workmen to receive from the factory owner their wages and a share in the fourth or the fifth part of the profits…The body of workmen and the manufacturers should share equitably the profits and advantages…”

Today the average CEO “earns” 360 times as much as his average employee.  According to Abdu’l-Baha’s vision, the ratio of reward for investment vs reward for labor is not as distorted in favor of investment as is today’s market. The power balance between the labor and capital markets today is not tenable in the context of justice. Furthermore, honest labor should come with the guarantee of social security and retirement packages for aging populations. According to Abdu’l-Baha,

“The capital and management come from the owner of the factory, and the work and labor, from the body of the workmen… Either the workmen should receive wages which assure them an adequate support and, when they cease work, becoming feeble or helpless, they should have sufficient benefits from the income of the industry; or the wages should be high enough to satisfy the workmen with the amount they receive so that they may themselves be able to put a little aside for days of want and helplessness.”

The accumulation of excessive wealth is itself a burden and carries with it natural and moral dangers for individuals. Extremes of wealth and poverty engender social unrest between classes. Violence and crime become means of survival for the poor as well as weapons of retribution for their suffering against the rich. Wealth in itself is a transient entity that will not endure beyond its utility in this world. Large sums of wealth carry with them the burden of responsibility and administration for its owner. In the words of Abdu’l-Baha:

“If the fortune is disproportionate, the capitalist succumbs under a formidable burden and gets into the greatest difficulties and troubles…[for] the administration of an excessive fortune is very difficult and exhausts man’s natural strength”

Abdu’l-Baha advises people who control vast means of production that they exercise moderation in the acquisition of profits, instead diverting the majority of their funds to the infrastructure of their company, the needs of employees, or the welfare of society:

“It lies in the capitalists’ being moderate in the acquisition of their profits, and in their having a consideration for the welfare of the poor and needy”

For Abdu’l-Baha, the profits of a corporation do not belong to whoever arbitrarily purchased more of their stock. On the contrary, there is a moral right intrinsic to the workers who created the products to ownership of a fixed and definite proportion of the profits:

“Workmen and artisans receive a fixed and established daily wage—and have a share in the general profits of the factory…” “And it is from the income of the factory itself, to which they have a right, that they will derive a share…”

Moderation in the profits of the owner are linked to the retirement security of the laborers as well as the cost of caring for and rearing the worker’s offspring. The social security net of work covers not only the individuals who work but their family and children until they become old enough to be independently financially responsible:

“It would be well, with regard to the common rights of manufacturers, workmen and artisans, that laws be established, giving moderate profits to manufacturers, and to workmen the necessary means of existence and security for the future. Thus when they become feeble and cease working, get old and helpless, or leave behind children under age, they and their children will not be annihilated by excess of poverty.”

Abdu’l-baha advises congress to legislate on matters of workers rights and the share of profits to be apportioned to owners vs laborers in a just and impartial manner. By this statement He rules out the legitimacy of lobbyists or special interests swaying the partiality of the law-makers. It would be important for them to remain “impartial” in this regard and to legislate laws of profit distribution in accordance with principles of justice.

“But the mutual and reasonable rights of both associated parties will be legally fixed and established according to custom by just and impartial laws.”

If owners oppress laborers by refusing to pay them their share of the profits or treating them poorly or providing abusive working conditions, the judicial branch is responsible for passing a ruling in defense of the laborers, and the president and department of justice would be responsible for penalizing the corporation, procuring the profits due to the unpaid workers and establishing measures for the continuation of a just relationship:

“In case one of the two parties should transgress, the court of justice should condemn the transgressor, and the executive branch should enforce the verdict; thus order will be reestablished…”

Abdu’l-Baha clearly situates the relationship between employers and employees within the public sector, endorsing the validity and importance of state-run workers rights regulations:

“The interference of courts of justice and of the government in difficulties pending between manufacturers and workmen is legal, for the reason that current affairs between workmen and manufacturers cannot be compared with ordinary affairs between private persons, which do not concern the public, and with which the government should not occupy itself.

A coherent conception of society underlies Abdu’l-Baha’s vision of the relationship between the private and state sectors and the role of governance and law in ordering and regulating capital and labor markets:

“If one of these suffers an abuse, the detriment affects the mass. Thus the difficulties between workmen and manufacturers become a cause of general detriment.”

The Baha’i principle of unity is the nexus through which all things are connected. Pain of the part necessitates pain of the whole. Prosperity for the whole implies prosperity for each part. Can any body part maintain the position that only some distant body part is in pain, but that it itself is immune to the feeling? Surely not. The body experiences pain and pleasure as one. Likewise, the body politic experiences prosperity or privation as one. Abdu’l-Baha explains:

“In reality…these difficulties between the two parties produce a detriment to the public; for commerce, industry, agriculture and the general affairs of the country are all intimately linked together.”