Rajeev Chandrasekhar, member Rajya Sabha, the Upper House of the Indian Parliament, proposed a bold initiative on his blog on Oct 8th last week. In the blog post titled “Special Parliament Session to debate the path to a poverty free India,” he calls for “Special sessions of Parliaments of 3-5 days, which will only discuss National Priority issues – with no disruptions’, No partisanship. Such a session will also serve to get the attention of ‘heavily distracted media’ to focus the nation on the REAL challenges facing us.” Kudos to Shri Chandrasekhar for that proposal. I applaud his efforts in
provoking asking for a discussion on real issues in the Parliament and in the media. What I attempt to do here is suggest a few specifics about what the discussions could be about.
He prefaces his proposal with references to India’s economic woes: that even 63 years after independence, India is ranked 134 in the UN Development Index (and that it has remained there since 1994); that the number of those living in acute poverty in poorest eight states of India exceed that of the poor in the poorest 26 sub-Saharan Africa; that Gandhi called poverty the worst form of violence, etc.
Even today, apart from the occasional blue sky claim from the Planning commission, the country has no clue about a predictable and definite timetable to eradicate poverty! Given that we seem to be a nation where geniuses abound as Economists, Media and Business visionaries – why are we not able to plan a clear Timebound path to a Poverty free India? A decade or 2 decades – whatever the case may be, but we should be able to have a national Plan.
His urgent call for figuring out a definite timetable to eradicate poverty is unexceptionable. Poverty is the most ubiquitously and evidently inescapable feature of India. We have to figure a way out of poverty.
But to get to the answer to “how to get out of poverty” we have to begin with a more fundamental question: “Why is India poor?” Only if we can honestly seek an answer to that, and only if we admit the causes of the persistent poverty, do we have a hope of emerging out of poverty. We have to know the “why” before we can get to the “how.”
Indeed I would frame it even more strongly and say that if we genuinely understood the causes of India’s desperate poverty, we would have little trouble hauling India out of poverty in a couple of decades. If you know the why well enough, the how will be trivially obvious.
Conversely, I maintain that if we refuse to explore, understand and admit the causes of India’s poverty, there is no hope in hell that we will be able to get India out of its present dire circumstances. If you don’t know the why, you can forget about figuring out the how.
I think it stands to reason that diagnoses of causation precede any remedial action — be it poor health in an individual or in an economy. The rub is that diagnosis is often hard to do and at the very least it is more than a little embarrassing to all parties concerned, both the doctor and the patient. Uncomfortable questions have to be asked, indignities suffered, and painful admissions have to be made.
Let’s continue with the medical analogy for a bit to illuminate the case I wish to argue. The patient has been suffering for a while with obvious distress due to some disease. As dispassionate but interested observers we can legitimately ask if he has been under any medical intervention? If so, which medical regimen exactly was he following? Who was the doctor and what were his qualifications? What did he advise the patient? Did the patient follow the regimen proposed? Did the doctor’s recommendation help to any extent? If not, was an attempt made to get a second opinion from another physician? If not, why not?
Did the disease worsen under this doctor? Should the patient continue under the same regimen or even under the same doctor? Should the patient actually move to a different doctor altogether? To what extent is the current problem of the patient due to the incompetency of the doctor who’s been treating the patient? Have the doctor’s recommendations been contrary to accepted medical consensus?
Now if you were to ask the doctor to investigate and answer all those above questions, it would not be very wise. The doctor has an obvious conflict of interest in not furthering that sort of investigation. Indeed, even if the doctor were not malicious, sheer incompetency could explain that the doctor under whose care the patient’s condition worsened would be unable to admit that there were alternative treatments that could help the patient. The admission that he made major mistakes cannot be expected from any doctor who is less than an enlightened selfless being, a buddha; all lesser beings will insist that the fault lies in circumstances outside their control.
So here we are. India is desperately poor and India’s economic health has actually deteriorated over the decades since its independence in many important — but not all — indicators. Some of the symptoms are acute and others chronic. It is time for the parliament to discuss and debate the question of why this is so, before it addresses Rajeev Chandrasekhar’s question of figuring out a timetable for eradicating poverty.
Allow me to lay out my analysis of the situation. Mine is just one of the many opinions and I don’t claim to any privileged position as a dispassionate but interested observer (except that I am a student of development economics trained in the neoclassical tradition and therefore have the natural biases associated with that.)
I think that one of the primary causes of India’s economic troubles is that of needless government control and interference in economic affairs that it has no competency in. By that I mean that the government interferes in businesses that it has no business to be in. It has no business in the production of goods and services that a competitive private sector can efficiently, effectively and adequately provide.
It does not have to run railways, airlines, commercial banking and finance corporations, hotels, schools, educational institutions, steel firms, automobile companies, power generation, telecommunications, bakeries, grain warehousing, TV and radio stations, petroleum corporations . . . the list goes on.
To be sure, it is not a matter of cosmic tragedy that the government of India nationalized an airline and ran it into the ground while raking up losses of billions of dollars. That is not a big thing at all, considering that India is a very large economy. But as the man said, a few billion here and a few billion there, and soon we will be talking real money.
It is the accumulated losses of few billion every year, in each of the hundreds of activities the government needlessly involves itself in, aggregated over decades that eventually add up to vast numbers that show up in the bottom line as hundreds of millions of abjectly poor people.
But note that all these businesses that the government involves itself in and loses money over, they are all undertaken with the expressly stated purpose of protecting the poor. Not a single politician, leave alone a political party, has ever done anything in India without justifying it on the grounds that it will help the poor. All policies ever proposed and implemented have always been pro-poor.
Labor laws? Pro-poor. Agricultural policy? Pro-poor. Industrial policy? Pro-poor. Education policy? Pro-poor. Show me any budget that any Indian government has ever proposed and I will show you a pro-poor budget.
The cynic in me says that indeed India’s governments have all been pro-poor — they have increased the number of the poor, haven’t they? Starting with about 200 million abjectly poor people in 1947, Indian governments have succeeded in increasing the number to around 800 million today.
It is not my case that around 200 million Indians do not enjoy a modest degree of prosperity equivalent to what the around 50 million or so at the top of the heap at the time of independence. I am merely stating the oft stated number that for the vast majority of Indians — whose numbers have quadrupled — life is as hard now as it was before and that too after decades of ostentatiously strenuous government effort to fix the problem.
My conjecture is that most, if not all, of India’s problems are created by the government of India. This claim of mine would of course be not welcome by many who have been brought up on a belief in the benevolence of the government. This is unavoidable since it is the government which controls what is taught in the schools, and what is broadcast over the airwaves. They are the unwilling prisoners of what is called “contextual constraints” — the inability to imagine alternatives to the context that they are embedded in.
Large segments of the society have internalized the myth that the government is capable — and willing — to solve to problem of poverty. This is one of the greatest binding assumptions that imprisons the population. This is an absurd notion, and as long as a large segment of the population believes in this absurdity, poverty will continue to be a reality. To escape this predicament is hard because it is in the interest of those in government to perpetuate this myth.
That a large segment of the population believes in the benevolence and competency of the government to solve economic problem is extremely unfortunate. What is worse is that the government has no incentive to disabuse that segment of this illusion. Those in government derive their livelihood — and what a splendid livelihood it is indeed — by making sure that the people don’t get educated out of this mistaken notion.
Take literacy, as another example of India’s primary failures. India had around 250 million illiterates in 1950. Now it has 650 million illiterates. It does not take much to make someone literate and numerate. Yet, the dismal statistics are an unavoidable reality. Why? My conjecture is that if the population were indeed fully literate, then it would be very hard to keep them from the realization that much of their misery is engineered by those who control the levers of the government.
The demand from a large segment of the population that the government solve their problems is mirrored on the supply side by unscrupulous governments. The people in the government get to tax the productive segment of the population, and then spend the revenues on the give-me-more segment of the population, all the time handling the money with very sticky fingers. They buy the allegiance of the vast number of the poor by robbing the productive and ostensibly the rich. This of course is a way of assuring the support of the poor at the polls, but it also has the unfortunate and predictable side-effect of impoverishing the economy as a whole. India, as it is so loudly and repeatedly proclaimed, the largest democracy in the world. It is also, not coincidentally, the largest poor country in the world.
In the above I say “ostensibly the rich” because even the rich in India are by world standards demonstrably quite poor.
I have written previously here on what the basic problem of poverty is: the engineering of shortages by the government as a method of extracting monopoly rents from the economy. (See for example, “Power, Shortage, and Corruption.” Sept 2007.) So I will not repeat those arguments here. But the summary conclusion is worth repeating. The source of Indian backwardness is the government of India.
Which brings me to Rajeev Chandrasekhar’s proposal. Yes, the Parliament should convene a special session to discuss the matter of figuring out a timetable for eradicating poverty. But will the Parliament ever convene a special session to inquire into the matter of why India is poor?
Will the Parliament seek expert opinion outside of the Parliament to tell it whether the Parliament is at fault? Will the government be willing to discuss government failures? Will the government be willing to try out solutions that do not involve the government? Will the government be open to the proposition that since it has been in the driving seat for so many decades and has driven the country to perdition, that it should give up the steering wheel to those outside the government?
The answer to that question in my mind is no. The government cannot afford to seek an alternative to the present state of affairs. Yes, things are bad for the country now. But if fixing the problems of the country requires those who currently hold power to relinquish their control, they would be damned to do so. They would rather see hundreds of millions in dire poverty just so that they can continue to rake in their billions that they can stash away in off shore bank accounts.
I can see exceptional optimism and profound faith in the goodness of people in Rajeev Chandrasekhar’s proposal. The belief that a set of people who have the power to bring about radical change will do so at their own expense is faith in the essential goodness of powerful people.
I would like to see that essential goodness tested. I would like them to investigate the proposition that they — the government — are the root of all the evils that plague India. I would ask them to debate how is it that after 63 years of governance by a government that is of the people, by the people, for the people, that India has not made much progress.
I would like them to call in experts to discuss the proposition that “The government of India has prevented India from achieving its full potential.” I would like them to hear arguments for and against that proposition. I would like that proposition being debated and broadcast for all to follow, to discuss it among themselves in schools, colleges and neighborhoods.
I would like them to call in experts to discuss the proposition that “The extreme corruption among the politicians in India is due to the excessive control that the government has on the Indian economy.”
I would like them to discuss in the Parliament of India the proposition that “The dismantling of government control over the education sector is the best alternative to make India educated.”
But I am afraid that that is not likely to happen. That would expose us to what Indians need to understand — understand how much is the state implicated in the creation of poverty that it aims to always address.
For now, we will continue to do insist that only the government has the will and the resources to fix our problems. We just don’t understand that the problems India suffers are largely created by the government, and that depending on the government to solve our problems is the equivalent of drinking sea-water to quench our thirst. It only makes the problem a whole lot worse.
Yes the Parliament may meet to discuss a timetable for India’s path out of poverty. Yes, it may even make major plans. Yes, it may even create another large bureaucracy to eradicate poverty, much like all the others it has created since independence, and fund it with a few tens of billions of tax payer money, and name it after the Gandhi-Nehru family.
It is useful to remember Finagle’s Law, a corollary to Murphy’s Law. It says that when a job is fouled up by someone, anything they do to make it better only makes things worse. The government is the last agency to figure out what went wrong and why. And in the end, when they try to fix the problem, even if well-intentioned, they just make it a great deal worse.
Special Parliament session or just ordinary session, I am afraid of what that old rascal Mark Twain had warned: No man’s life, liberty, or property is safe while the legislature is in session.
1. “A billion here, a billion there, pretty soon, you’re talking real money.” Misattributed to Everett Dirksen.
Related Post: Of Kakistocracies, Principals, and Agents. Feb 2008.