Blame it all on socialism
The Economic Times, Apr 02, 2002
In a classic case of deflecting blame for their own shortcomings, politicians in India have identified the size of the population as the country's biggest problem. It is hard to imagine a more cynical or despicable lie. If left unfettered by the extensive interferences of government, the Indian people could soon be among the richest on earth.
The truth is that India's greatest problems arise from a political culture guided by socialist instincts. Diehard socialists proclaim that their dogma reinforces certain civic virtues. A presumed merit of socialism is that it aims to nurture a greater sense of collective identity by suppressing the narrow self-interest of individuals. However, this aspect of socialism lies at the heart of its failure both as a political tool as well as the basis for economic policy.
This is because socialism provides the political mechanism for and legitimacy by which people identify themselves as members of groups. While it may suit the socialist agenda to create 'them-and-us' scenarios relating to workers and capitalists or peasants and urban dwellers, this logic is readily converted to other types of divisions. Asserting group rights over individual rights can lead to various injustices.
In the case of India's socialist state, competition for power has increasingly become identified with religiosity or ethnicity. Political parties based upon religion are inevitably exclusionary. These narrow concepts of identity work against nation building since such political arrangement cannot accommodate universalist values.
Socialism also sets the stage for populist promises of taking from one group to support another. And so it is that socialist ideology provided the beginnings of a political culture that has evolved into a sectarian populism that have wrought cycles of communal violence. Populism with its solicitations of political patronage, whether based upon nationalism or some other ploy, is also open to corruption.
Like its evil twin populism, socialism creates false expectations among the poor that cannot be fulfilled. Suggestions that poverty can be decreased or that social justice served by taking away from the rich or by passing laws to raise wages misleads the poor into believing that their condition can and should be legislated away. In response, the poor demand to be given ever more as a right arising from group identity.
By promoting the misleading idea that income and wealth redistribution can reduce poverty, socialism ignores the fact that poverty arises from low economic growth and insufficient capital formation. As in most emerging market economies, India has too many policies that hinder private investments.
One of the lessons of the global economy is that only private initiatives can create sustainable economic growth and employment. Long-term investments by entrepreneurs are stunted by capricious actions of governments. Instead of listening to socialist denunciations of globalisation, poverty-stricken citizens around the world should realise that their economies suffer from failures of governance. Poor policy decisions are being made within a defective 'institutional infrastructure'.
At issue is nothing less than the role of the state. Should the Indian state be used as a mechanism to protect the freedoms and rights of individuals living under a general law with shared allegiance to a secular state? Or should the state be a vehicle for groups to gain power who use it to further their own narrow ends? It should be clear the latter approach would lead to the destruction of India's democracy while the former will allow it to survive.
It is undeniable that public policy based upon socialism has promoted divisions that contributed to social instability and economic destruction. This dangerous game has only served the narrow interests of those who seek to capture or preserve political power.
Socialism has wrought slower economic growth that harmed the poor and unskilled who lost access to economic opportunities. It also introduced forces that are destroying India's hard-earned democracy. A paradigm shift in the nature of Indian politics is needed whereby the state ceases serving as a mechanism for groups to gain power and becomes an instrument to secure rights and freedoms for individuals.
(The author is Global Strategist for eConoLytics.com and author of The Rise and Decline of the Asian Century)