The Problem of Economic Growth – Part 3

Most of the Founding Fathers of the American republic were seriously wary of “factions”—their term for what we call political parties—which they viewed as dangerous to the public interest.

Politics to them was a joint enterprise that the citizens undertook to seek out what was in the general interest, and after the appropriate deliberations of the various individuals were concluded and a consensus was arrived at, there was no room for different factions to pull in different directions.

For them, the political process was not about deciding winners and losers but about determining what served the common interests of all. If something is acknowledged to be in the common interest, there is no point in not pursuing it or opposing it.

With that, let’s continue on from the previous part of this essay —

Political parties are an evident feature of any majoritarian democracy. There is no law of nature that dictates that a democratic political system be organized as competing political parties. But because political parties are the norm, it somehow seems that they are normative—that that’s how things ought to be.

People normally suffer illnesses; but that does not mean that they ought to suffer. The norm does not imply the normative. Like many other popularly accepted ideas, the routine acceptance of political parties is a mistake.

Why are political parties a mistake? Primarily because politicians belong to them. The identity of politicians is tightly bound with their parties. Therefore politicians’ loyalty is foremost to their parties, not to their constituencies.

What is good for the party—which is invariably how the party could get and retain power—is what the politicians promote, regardless of how it affects the interests of the public or the country. Good governance, if it enters the calculus at all, is a secondary matter.

In India, the structure and functioning of political parties further exacerbates that problem. This factor is illustrated by contrasting the Indian system with its American counterpart.

In the US, political parties function in what can be said to be “bottom up.” Politicians are certainly affiliated with political parties no doubt (or run are independents) but the candidates contesting elections are not chosen by a party leader or an elite group of party members. Candidates self-select for the party’s nomination in “primary elections” or primaries.

The function of the primaries is to select those candidates who will represent the party in the main election. Voters registered as members of a political party are eligible to vote in that party’s primaries. (This is the general rule although some states’ primaries allow even non-affiliated voters to vote in primaries.)

Therefore the candidates for the main elections are chosen not by the party high command but by the voters. The process is not “top down.” Therefore even if the party command dislikes a particular candidate, he or she can win the party nomination regardless. It’s the people’s will, not the command from high, that prevails.

The best example of this “bottom up” selection of party nomination is the case of Donald Trump. The Republican party leaders would never have nominated him as the Republican presidential candidate but they could do very little to override the people’s choice.

In India, the party high command chooses the candidates. The voting public has no say in that matter; they simply have to accept the dictates of those who control the party. This has a major implication about the loyalty of the candidate and (if successful) the political office bearer.

The successful politician in India owes his loyalty, first and foremost, to the party high officials because they selected him for the party ticket without which he could not have won. Moreover since the people he is supposed to represent had no say in his nomination, he does not owe them anything at all.

There is another pernicious effect of this top-down control of political office bearers by the party officials. Consider the members of the Indian parliament, the Lok Sabha MPs. Since they are chosen by the party concerned, they cannot exercise independent judgment on matters; they have to follow what the party leaders dictate.

In effect, the MPs are mere figureheads or rubber stamps that the party leaders control at will. We should note that this is not new and is not restricted to any particular political party. All parties in India function that way, and have done so from the start.

To summarize the argument so far, here are the main points:

1. 1. Good public policies—economic and social—are necessary (but not sufficient) for the prosperity of a nation. Bad public policies are sufficient (though not necessary) for the poverty of nations.
   2. It is not in the interest of the policy-makers (politicians and bureaucrats) to implement good policies if those policies reduce their political prospects or hurt their financial interests.
   3. The structure of Indian political parties and their top-down process of selecting candidates leads to a dysfunctional system of misplaced loyalty. The voters are denied the freedom to choose their own representatives.

Indian democracy, for whatever it is worth, has become a sad caricature of Lincoln’s ideal government as one which is “of the people, by the people, for the people” and is now a government “of the political parties, by the political parties, for the political parties.” The people have been effectively disenfranchised and only the facade of universal suffrage remains.

With that analysis of the nature of the problem, it is appropriate to briefly outline the solution. The guiding principle is that to change the outcome of a dysfunctional system, we have to dismantle it and reconstruct it so that it functions properly.

The reconstruction has to be robust to the reality that people are self-interested mortals, not other-regarding angels. We have to work within the world of ordinary people and not harbor any illusions that people can be reformed. The system has to be reformed, not the people.

We first recognize that the current system suits the interests of the political parties, and therefore they have no incentive to change it. If change has to happen, it has to be forced by the people. For the people to force this change, they have to understand that their suffering is needless and due to political parties and their politicians.

Practically every problem that the average person faces can be traced to bad governance and bad policies. The government is too big, it is unresponsive to the needs of the people, it is top-down command and control, it attempts to do too many things that could be better done by non-governmental agencies, it is wasteful and destroys public wealth in mismanaged commercial enterprises, it interferes too much in the lives of people, it restricts freedoms (personal, civic and economic), it discriminates, it fails to protect the natural rights of citizens, … This list of government ineptitude and malfeasance can be extended at will.

The people know from everyday experience the problems that they face — in jobs, education, housing, transportation, public utilities, and so forth. Over the decades they have become used to these and some have come to fatalistic resignation and accept this as an unalterable state of nature like the seasons. What they don’t realize is that there’s not natural or unalterable about bad government and poor governance.

[The concluding part of this essay coming up in a bit.]