From the archives: Unconstrained Government

Any serious analysis of the structural causes of India’s dysfunction has to refer to the institutional deficiencies. One major causal factor is that the government has practically no constraints on it. An unconstrained government has the power to effect radical change if it so desired, or to impose the status quo by not allowing any innovation or dissent. The content of the actions of an unconstrained government, therefore, matters immensely.

Unconstrained government power is wonderful provided good and wise people govern. But good and wise people, by their very nature, are the exception in the population, and even rarer in government. Given that an unconstrained government has the power to extract and exploit riches from the economy, the most avaricious and the most corrupt can be expected to compete for the power to govern. The outcome is predictable: a kakistocracy — the government of the least capable and the most corrupt.

Where the Worst can do the Least Harm

A government that has severely limited powers avoids that fate. If being in government does not provide opportunities to enrich oneself (and one’s extended family in a foreign country which gave pizza to the world, for example), then it is possible that the power-hungry will rationally stay away. That does not guarantee anything other than that it allows space for the good and the wise to at least have a shot at governing. It’s up to the collective wisdom of the people to elevate the good and the wise.

But instead of having a powerful government where the best kind of leaders can do great things, it is better to design a government where the worst kind of leaders can do the least harm. That means curtailing the powers of the government.

Non-discrimination and Non-interference

It is easy to specify necessary constraints on the government. First, the government must be forbidden to discriminate among citizens in any way — religion, socio-economic status or any other group identity. All citizens must be equal not just before the law but also before the government.

Second, the government must not interfere in the economy. The economy needs to have an agency that will punish with force any instance of fraud and enforce contracts. The economy is a game among competitors who are people and firms. To ensure fairness of the game, the government has to be the impartial referee. Prohibiting the government from interfering the economy means that government cannot itself become a player in the game. Allowing the government to play in the game is idiotic and those who allowed the Indian government to do so were insane or stupid, or more likely both.

A Systemic Problem

Indians have been on an unending quest — to find good leaders who will govern wisely. It’s unfortunately futile. The search for the good and the wise is OK in other domains but not in the matter of government because even if they do find the good person, the power that comes with being in government always corrupts. Once a person (good or bad) reaches the pinnacle of power, it’s human nature to seek to retain and enlarge that power. And that ensures that continued expansion of governmental power, which attracts the dregs of humanity to governance.

It’s not Modi’s fault. It’s not even the fault of any particular political party. It’s systemic, not idiosyncratic. It’s in the DNA of the organism. You cannot grow a dwarf into a normal sized person by changing the diet or replacing the cook; the dwarf’s constitution dictates how he will grow. The DNA of the Indian government is written in the constitution. The names and other particulars of the leaders that the system selects change but their fundamental core characteristics don’t change because that’s what the system selects.

Author: Atanu Dey

Economist.

4 thoughts on “From the archives: Unconstrained Government”

  1. How much of what you said here applies to China?

    China is challenging us to rethink our assumptions

    At first glance, leading Chinese internet players like Baidu, Tencent Holdings and Didi Chuxing can look like copies of established U.S. counterparts like Google or Uber. But there is a crucial difference.

    The American companies are products of Silicon Valley’s cut-and-thrust markets, one of the planet’s purest forms of capitalism. By contrast, while the Chinese companies are all privately owned, their rapid growth at home and abroad owes much to the firm hand of the Chinese state.

    Indeed, we will have to get used to associating tech innovation not just with spontaneous bursts of creativity and injections of private capital, but also with technocrats in Beijing drafting long-term technological development plans. It was meant as a wake-up call when former Google CEO Eric Schmidt recently predicted that China could overtake the U.S. in the field of artificial intelligence within a decade. Chinese telecom equipment maker Huawei Technologies is about to roll out 5G mobile broadband networks around the globe.

    The conventional wisdom suggests that the constraints of China’s system — from a rigid education system to the lack of the rule of law — bode ill for this next transformation. But in 2018, China’s leaders are no more willing than in 1978 to act according to Western textbooks on economic or political theory. Rather than relaxing control, Xi has recentralized power and reinforced the Communist Party’s grip over the economy and society.

    China censors the internet, intervenes frequently with market mechanisms and demands that even private companies pledge ideological loyalty. Unlike its former counterparts in Eastern Europe, the Chinese Communist Party has managed to maintain its grip on power while leaving room for policy experimentation at the local level, from market liberalization to administrative modernization and technological innovation.

    Like

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