Thoughts on economics and liberty

Our politicians have no option but to be corrupt

Sanjeev Sabhlok

This article was published in the June 2009 issue of Freedom First.

No other well-established democracy generates the super-corrupt, even criminal political leaders that ours does. This month I outline why we necessarily end up with corrupt politicians.

Black money – the fuel of our democracy

India is a mega-democracy. Our average constituency has more people than many countries do. Therefore, if a candidate wants to reach out to the 15 lakh voters of the average Indian constituency, many of them living in remote villages, he has to spend quite a bit of money. Most major candidates spend a few crore rupees in each election, and someone who spends only within the official limit of Rs. 25 lakhs per constituency is almost certain to lose.

Further, we Indians are somewhat peculiar. We contribute a lot of our time and money to NGOs, schools, and temples, but refuse to pay a single paisa to political parties. So how are our parties to find the crores of rupees they need to contest elections? The answer is self-evident: By entering India’s underworld and tapping into its huge rivers of corrupt black money. Criminal ‘businessmen’ who want to take undue advantage of corrupt politicians are the major financiers of political parties. But far more money is collected by incumbent governments directly – through ‘cuts’ from government contracts, under-the-table charges for admission to government medical colleges, and auction of ‘lucrative’ government jobs to the highest bidder. A huge mafia is busy at work, running our country round the clock.

Laws designed to keep out the honest

In addition, our electoral laws weed out all competent and honest persons. This is how:

Filter 1: Monetary losses keep the prudent out Consider Mr. Harishchandra’s case. He is an honest (and modestly competent) middle class person who wants to be our political representative and is determined to spend only up to the prescribed limit. He manages to raise 5 lakhs in ‘white’ money from his supporters, and then needs to borrow the remaining Rs. 20 lakhs. But because we do not reimburse candidates the costs of contesting elections, a simple calculation shows him that even if he wins, he will lose a fortune (this wouldn’t happen in Australia where they reimburse candidates a small amount for each valid vote polled – see my book, Breaking Free of Nehru, for details.) Being prudent, he (wisely!) pulls out. Thus, our laws filter out 99 per cent of our population at the first step. The entire poor and middle class, and all the prudent rich are ‘legally’ deemed to be ineligible to contest.

Filter 2: Low salaries keep out the competent Now, there may well be some really competent people out of the remaining one per cent (imprudent rich). But they will be compensated very poorly for their time if they get elected – only Rs. 33,000 per month (about 20 paisa per year per voter). Therefore only those who are capable of earning equal to or less than an MP’s salary will join politics – mainly the incompetent children of the imprudent rich.

Filter 3: Perjury keeps out the honest Since winning elections requires spending at least a multiple of the official limit, and that can only be done by spending black money, almost all our successful candidates must necessarily lodge fraudulent electoral accounts. Perjury is therefore a basic requirement for becoming an MP. But of course, that completely rules out all honest people.

The socialist intervention of electoral expenditure limits

Some of us remember that banning the import of gold in the 1960s and 1970s merely created gangs of smugglers. Similarly, forcing political parties to restrict their spending is guaranteed to make politics a den of crime. But we must also object to this restriction on philosophical grounds.

A free society must never restrict any activity unless it has been conclusively proven to harm others. So on what basis can a free society impose such limits on electoral expenses, since contesting elections is a perfectly legal activity – indeed, a sign of good citizenship? Everyone must therefore remain free to preach their political views without any ad hoc restrictions. Let’s say the supporters of a popular leader want to fund his campaign heavily. On what basis do we restrict the freedom of citizens of a free country to fund their preferred leader? (That also rules out limits on donations to political parties.) Why do we care about how clean money is used – if its purpose is honest? The problem, surely, is only with black money. So let us have policies that deal with that problem, and not randomly block freedoms by imposing arbitrary restrictions.

But apparently, some socialists feel that imposing limits helps us to level the playing field and reduce any undue advantage that candidates who spend more apparently enjoy. But contesting elections is about our freedom to persuade others, not about equal opportunity. And if we are really so keen about equal opportunity, why not simply ‘elect’ our representatives through a random lottery among all citizens?

Finally, we all know that merely throwing wads of money at voters never got anyone elected. Our slum dwellers are sharp enough to take bribes from everyone but then vote, inside the secrecy of the polling booth, only for the candidate of their choice. There is thus not one sensible argument in favour of imposing socialist limits on electoral expenses.

Worst of all, these limits are never enforced, anyway. There is no requirement to independently audit and publish all political receipts and expenditures. Only those without ethics (the hypocrites) can therefore mingle with such a political system. And thus, so while the Westminster model we follow is able to generate competent and honest leaders in Australia, our version only generates the most dishonest. And after (thus) hiring the most dishonest, we hand over the keys of the public exchequer to them! We elect thieves and then act surprised when they loot the nation.

The reforms we need

If we really want honest politicians, we must demand the abolition of socialist election expenditure limits, and build audit systems to enforce the use of white money in elections. We can begin this task right now, by getting a copy of our local candidates’ electoral accounts from our Returning Officer for Rs. 1, auditing these accounts, and publishing our findings.

In addition, the state must partially reimburse candidates (say, Rs. 15 for each valid vote cast). That will make it easier for honest people to contest elections. Finally, we must increase the wages of MPs and MLAs at least by a factor of ten, while getting rid of their hidden perks. That will encourage competent people to enter politics. While our citizens will still need to start contributing to political parties and get more actively involved, at least we will then be on the way towards an honest government.

Freedom Team of India (FTI)

Let me assure you that these reforms won’t happen by themselves. Liberals will have to implement them by first forming government. The FTI ( is working towards that objective for 2014 and beyond. It has released its first draft policy (on religious freedom) and has invited comments on its website. I look forward to your active participation and support.

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