Democracy is about debate, discussion and governance by consent of the people. In that view, arguing over policy or what is the right way to develop or how best to utilise government revenue is a good sign that this is still a democracy. But then the debate should not be about proving my side right and the other wrong, but understanding what the other side has to say, taking the right points from it and then coming up with a policy. I do not see such a step in the recent debate between Jagdish Bhagwati and his supporters and the supporters of Amartya Sen.
Before getting into what each side has to say, there are a few points which we must understand. India is not an equal country and this is not about everyone having the same amount of assets or income, leave that aside. But it is about availability of opportunity- women, lower castes and tribals suffer from severe social disabilities. If they attempt to own a motorbike or show signs of prosperity, they are attacked and assets destroyed (a), if landless farmers try to seek more rent, they are met with militias of landlords (b).
Imagine living in your home, going to your office on your car/bike, working on a computer. What if the government decides one fine day that your home, your bike, the road you travel on and the computer belongs to the state? What gives the state the power to take away my livelihood? Well, this has been the reality for ALL of India's tribals for over a century, a grievous injustice that was never rectified on independence but was only exacerbated. Earlier, it was only contractors, forest department and multi-purpose projects going after forests. Now, mining and steel plants seek the areas too. The people in these areas have little or no access to health, education and their livelihoods are being threatened.
Perhaps the situation of women in this country require a little less explanation since the nation has awakened post the protests in Delhi in Dec2012. Rightly so, but there are women in other lesser known parts of the country who still continue to suffer in silence and sometimes, not so silently but not loud enough for most of us to hear (c)
There are more MPI poor people in eight Indian states than in the 26 poorest African countries combined. 421 million people in the Indian States of Bihar, Chhattisgarh, Jharkhand, Madhya Pradesh, Orissa, Rajasthan, Uttar Pradesh, and West Bengal, the 26 poorest African countries are home to 410 million MPI poor people. India has experienced strong economic growth in recent
years, yet the MPI reveals that extensive acute multidimensional poverty persists. (Oxford Poverty and Human Development Initiative, Multi-Dimensional Poverty Index, 2010, Sabina Elkire & Maria Emma Santos). Add to this how the recent poverty figures from the government is just a gimmick (d) and you get a picture of how the state has failed.
Even if this inequality or discrimination did not exist, let us assume the poor are poor because of their own fault (that it most definitely is not so has been proved). What of their children? By what fault of theirs are they denied what we take for granted- education, health and three meals a day. How can we forget the fact that we were born lucky and that is why we can know of Sen and Bhagwati let alone discuss who is right? There are definitely individuals who have overcome their hurdles and gone on to a better life. But in a nation where opportunities are limited, the number of people fighting for IIT, IIM, Medical seats and government jobs alone will tell you that it is a struggle every step of the way. There are many who miss out on it narrowly in spite of the average or above average facilities, then how can we expect the poor to completely overcome their state without any external intervention?
This brings me to the most debated and pointless intervention of all- reservation. Yes it is necessary to rectify past disabilities. But right now reservation benefits the same person twice or thrice- to get into an engineering college, to get into B-School and then to get a job. Is that fair? Their children too will continue to get reservation, is it fair? Right now the benefits of reservation are accessed by those relatively well-off among OBC,SCs and STs. It does not benefit the community and the well off have a stake in keeping the community backward since they have benefited most from it and will continue to benefit.
What this proves is that-
1) There is widespread poverty and this in spite of massive economic development over the last twenty years.
2) There is social inequality that prevent individuals from being able to take control of their own lives and grow out of poverty
3) There have been massive failures from the government side in eliminating economic and social inequalities
I am not saying that the Food Security Ordinance or NREGA will change their plight. Relegating the entire Sen-Bhagwati debate to that is ridiculous though. It is more like who is for what- Bhagwati is for no state interference and free run of capital and markets and Sen is purported to be for government control. Amartya Sen has not been debating, he simply expressed his opinions on why we need a food security bill, but he has regularly spoken about how the state has failed its people and what development should mean. His welfare economics does not mean government taxing the rich to satisfy the never ending needs of the infinite number of poor as is being suggested by many who debate on Bhagwati's side. His idea is that due to widespread inequalities, we require state intervention to set things right and that too mostly in the arena of health, education and infrastructure.
Why these three sectors?
1)These are absolutely essential for the people
2) long gestation period which means there are no immediate returns and immediate returns are the ONLY concern of private capital (anyone who thinks who private capital or market mechanisms reward long-term view need only to look at Global Financial Crisis of 2008 and how a small bunch of speculators held the world economy to ransom and threatened US government with dire consequence if the government does not cover its losses)
3) Huge need of capital
Government or state intervention is also required in ensuring environmental laws are implemented, public interest is protected, to ensure fair competition and to prevent swindling like that of 2008. This means independent regulatory set-up for different sectors to determines ground rules and to ensure the players abide by them. This definitely should not be a method of control for the government which it can milk to obtain benefits and disburse favours.
Sen also said that pure economic growth is not an indicator of well-being of the people and obsession with that number is purely a trick to make us blind to reality. He never says that there should be no economic growth and he never asks for state control of the economy, all Sen says is that growth in economy should be used for well-being of the people or 'growth-mediated' development. What is so wrong or offensive about this?
A similar debate happened between Keynes and Hayek almost 60 years ago. Although not on the same scale, there certainly are lessons for us to learn. A free reign to market mechanisms will not address the issues since it is always on the look out for short term profits alone and people and environment do not figure in their list of priorities unless they are a good source of publicity through catchy slogans or glamorous Corporate Social Responsibility initiatives. We know this from experience. But private enterprise and market mechanisms do have a role- in producing goods and services and ensuring economic growth. It is the job of the government to ensure this goes on subject to some conditions and it would be prudent for the government to stay away from these activities as past experience has taught us this can only lead to stagnation. This is where Mr.Bhagwati is right, allow market mechanisms to run its course to a large extent, reduce red tape and eliminate government discretion over allocation of resources and reduce the size of government which interferes every step of the way. Here too past experience teaches us that the elimination of the License-Permit raj freed our entrepreneurs from being lost in the corridors of power and made the playing field level since until now those who could manipulate the bureaucracy could do what they pleased and got exceedingly good at it. They still exist and use their old contacts to win favours, contracts, resources- this is what we must eliminate.
Therefore, a large section of the population still requires government intervention- since they cannot possibly do it own their own and private capital has little interest in aiding them- to climb out of poverty and social inequality and in spite of various attempts by the government over the last 60 years, nothing has happened and this is due to state failure. We need the state or its regulators to make sure the environment is protected and there is fair competition. This is where we must unite and debate how this state failure can be addressed and rectified.
Then who is right? I would begin with an opinion that I have read -'why should my hard-earned money be used to feed the poor?'. This is the wrong question to ask since they are not poor by choice and most of them are poor due to historical inequalities and forces beyond their control and we are well-off due to the fact that we did not suffer from these inequalities every step of the way. We are also perhaps one step away from their situation- disease, accident, natural disaster or war can erase all our wealth and then what? We have already decided and put in stone that state intervention is unnecessary and hard earned tax payers money should not be spend on the poor. The discourse in the debate and what Mr.Sen and Mr.Bhagwati has important points for us to learn and implement.
The question we should ask then is 'why should my hard-earned money be used to garner votes by implementing a scheme full of holes and brings no benefit to my fellow citizens?'. Of course this requires more than just clamouring for attention on the internet and debating on the internet over RG-NaMo, it requires serious thinking and action rather than just listening to opinions of experts and vomiting it out. All this debate does is to give fuel for political eye-wash and distract us from the real issues.
Before getting into what each side has to say, there are a few points which we must understand. India is not an equal country and this is not about everyone having the same amount of assets or income, leave that aside. But it is about availability of opportunity- women, lower castes and tribals suffer from severe social disabilities. If they attempt to own a motorbike or show signs of prosperity, they are attacked and assets destroyed (a), if landless farmers try to seek more rent, they are met with militias of landlords (b).
Imagine living in your home, going to your office on your car/bike, working on a computer. What if the government decides one fine day that your home, your bike, the road you travel on and the computer belongs to the state? What gives the state the power to take away my livelihood? Well, this has been the reality for ALL of India's tribals for over a century, a grievous injustice that was never rectified on independence but was only exacerbated. Earlier, it was only contractors, forest department and multi-purpose projects going after forests. Now, mining and steel plants seek the areas too. The people in these areas have little or no access to health, education and their livelihoods are being threatened.
Perhaps the situation of women in this country require a little less explanation since the nation has awakened post the protests in Delhi in Dec2012. Rightly so, but there are women in other lesser known parts of the country who still continue to suffer in silence and sometimes, not so silently but not loud enough for most of us to hear (c)
There are more MPI poor people in eight Indian states than in the 26 poorest African countries combined. 421 million people in the Indian States of Bihar, Chhattisgarh, Jharkhand, Madhya Pradesh, Orissa, Rajasthan, Uttar Pradesh, and West Bengal, the 26 poorest African countries are home to 410 million MPI poor people. India has experienced strong economic growth in recent
years, yet the MPI reveals that extensive acute multidimensional poverty persists. (Oxford Poverty and Human Development Initiative, Multi-Dimensional Poverty Index, 2010, Sabina Elkire & Maria Emma Santos). Add to this how the recent poverty figures from the government is just a gimmick (d) and you get a picture of how the state has failed.
Even if this inequality or discrimination did not exist, let us assume the poor are poor because of their own fault (that it most definitely is not so has been proved). What of their children? By what fault of theirs are they denied what we take for granted- education, health and three meals a day. How can we forget the fact that we were born lucky and that is why we can know of Sen and Bhagwati let alone discuss who is right? There are definitely individuals who have overcome their hurdles and gone on to a better life. But in a nation where opportunities are limited, the number of people fighting for IIT, IIM, Medical seats and government jobs alone will tell you that it is a struggle every step of the way. There are many who miss out on it narrowly in spite of the average or above average facilities, then how can we expect the poor to completely overcome their state without any external intervention?
This brings me to the most debated and pointless intervention of all- reservation. Yes it is necessary to rectify past disabilities. But right now reservation benefits the same person twice or thrice- to get into an engineering college, to get into B-School and then to get a job. Is that fair? Their children too will continue to get reservation, is it fair? Right now the benefits of reservation are accessed by those relatively well-off among OBC,SCs and STs. It does not benefit the community and the well off have a stake in keeping the community backward since they have benefited most from it and will continue to benefit.
What this proves is that-
1) There is widespread poverty and this in spite of massive economic development over the last twenty years.
2) There is social inequality that prevent individuals from being able to take control of their own lives and grow out of poverty
3) There have been massive failures from the government side in eliminating economic and social inequalities
I am not saying that the Food Security Ordinance or NREGA will change their plight. Relegating the entire Sen-Bhagwati debate to that is ridiculous though. It is more like who is for what- Bhagwati is for no state interference and free run of capital and markets and Sen is purported to be for government control. Amartya Sen has not been debating, he simply expressed his opinions on why we need a food security bill, but he has regularly spoken about how the state has failed its people and what development should mean. His welfare economics does not mean government taxing the rich to satisfy the never ending needs of the infinite number of poor as is being suggested by many who debate on Bhagwati's side. His idea is that due to widespread inequalities, we require state intervention to set things right and that too mostly in the arena of health, education and infrastructure.
Why these three sectors?
1)These are absolutely essential for the people
2) long gestation period which means there are no immediate returns and immediate returns are the ONLY concern of private capital (anyone who thinks who private capital or market mechanisms reward long-term view need only to look at Global Financial Crisis of 2008 and how a small bunch of speculators held the world economy to ransom and threatened US government with dire consequence if the government does not cover its losses)
3) Huge need of capital
Government or state intervention is also required in ensuring environmental laws are implemented, public interest is protected, to ensure fair competition and to prevent swindling like that of 2008. This means independent regulatory set-up for different sectors to determines ground rules and to ensure the players abide by them. This definitely should not be a method of control for the government which it can milk to obtain benefits and disburse favours.
Sen also said that pure economic growth is not an indicator of well-being of the people and obsession with that number is purely a trick to make us blind to reality. He never says that there should be no economic growth and he never asks for state control of the economy, all Sen says is that growth in economy should be used for well-being of the people or 'growth-mediated' development. What is so wrong or offensive about this?
A similar debate happened between Keynes and Hayek almost 60 years ago. Although not on the same scale, there certainly are lessons for us to learn. A free reign to market mechanisms will not address the issues since it is always on the look out for short term profits alone and people and environment do not figure in their list of priorities unless they are a good source of publicity through catchy slogans or glamorous Corporate Social Responsibility initiatives. We know this from experience. But private enterprise and market mechanisms do have a role- in producing goods and services and ensuring economic growth. It is the job of the government to ensure this goes on subject to some conditions and it would be prudent for the government to stay away from these activities as past experience has taught us this can only lead to stagnation. This is where Mr.Bhagwati is right, allow market mechanisms to run its course to a large extent, reduce red tape and eliminate government discretion over allocation of resources and reduce the size of government which interferes every step of the way. Here too past experience teaches us that the elimination of the License-Permit raj freed our entrepreneurs from being lost in the corridors of power and made the playing field level since until now those who could manipulate the bureaucracy could do what they pleased and got exceedingly good at it. They still exist and use their old contacts to win favours, contracts, resources- this is what we must eliminate.
Therefore, a large section of the population still requires government intervention- since they cannot possibly do it own their own and private capital has little interest in aiding them- to climb out of poverty and social inequality and in spite of various attempts by the government over the last 60 years, nothing has happened and this is due to state failure. We need the state or its regulators to make sure the environment is protected and there is fair competition. This is where we must unite and debate how this state failure can be addressed and rectified.
Then who is right? I would begin with an opinion that I have read -'why should my hard-earned money be used to feed the poor?'. This is the wrong question to ask since they are not poor by choice and most of them are poor due to historical inequalities and forces beyond their control and we are well-off due to the fact that we did not suffer from these inequalities every step of the way. We are also perhaps one step away from their situation- disease, accident, natural disaster or war can erase all our wealth and then what? We have already decided and put in stone that state intervention is unnecessary and hard earned tax payers money should not be spend on the poor. The discourse in the debate and what Mr.Sen and Mr.Bhagwati has important points for us to learn and implement.
The question we should ask then is 'why should my hard-earned money be used to garner votes by implementing a scheme full of holes and brings no benefit to my fellow citizens?'. Of course this requires more than just clamouring for attention on the internet and debating on the internet over RG-NaMo, it requires serious thinking and action rather than just listening to opinions of experts and vomiting it out. All this debate does is to give fuel for political eye-wash and distract us from the real issues.
2 comments:
Slightly longer than the norm. Could sense an anger at the state of things, throughout the post. Yea, the kind of insensitive governance that is going on around us will make any sensible person angry.
Govt is happily washing its hands off all the important fields and giving it away to If all were to be left to the interests of markets, why bother having a govt at all? Looks like they're here only to revel in power and make as much money out of it as much as is possible.
This is from the Report of the Parliamentary Standing Committee on Agriculture:
"In their tearing hurry to open the economy to private prospectors, the government should not make the same fate befall the agriculture sector as has happened to the communications, pharma, mineral wealth and several other sectors in which the government’s facilitative benevolence preceded the setting up of sufficient checks and balances and regulatory mechanisms, thereby leading to colossal, unfettered loot and plunder of national wealth in some form or the other, incalculable damage to the environment, biodiversity, flora and fauna, and unimaginable suffering to the common man.”
http://www.thehindu.com/news/national/nutritional-planning-could-have-been-better-in-food-security-bill/article4946882.ece?homepage=true#
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