Thoughts on economics and liberty

Not one reason to be honest – Part 4

Filter 2: Low Salaries Keep Out the Competent 

This filter gets rid of any potentially competent candidate.
Let us now tweak our story’s plot a little bit. A week before the Election Commission notifies the elections, our friend Mr Harishchandra’s dear old aunt dies leaving him with Rs. 20 lakhs with a condition that it must be used by him only to contest elections. As a result, he becomes a part of the group of rich people potentially eligible to contest elections provided they are prepared to write off significant losses. While extremely sorry to hear of his beloved aunt’s passing away, Mr Harishchandra is now able to contest the elections, which he promptly does. As good luck would have it, he also gets elected despite competing against hugely corrupt political parties which invested massive amounts of black money and also threatened to maim him permanently.

Upon being elected, as luck would have it, his vote becomes crucial to a group of parties struggling to form a coalition government. The nefarious local goondas with big moustaches and swarthy faces therefore decide to pause for a few days before they break his legs. Emboldened, he joins the coalition and is made a Minister.

But while representing India in his first international conference, Mr. Harishchandra learns that the world’s political arena is studded with amazingly brilliant minds, people with enormous intelligence and knowledge, quick wit and humour, literary feints and flourishes, and exceptional persuasive skills. All across the free world, some of the most exceptional human minds succeed in politics – except, of course, in India. In conversations that Mr Harishchandra has with his First World counterparts, he feels completely out of his depth; outclassed, out of his league, the proverbial fish out of water. He just can’t negotiate confidently with brilliant ex-Professors like Henry Kissinger
 whose strategic capacity and knowledge of world affairs is in a dimension infinitely higher than his own. He therefore realizes that the levels of knowledge, skills and competence he possesses simply won’t take India to the levels of development and freedom he was aspiring for. The last I heard was his mumblings under his breath during his return flight to India: ‘Why is this so? Why do I get to face such brilliant people? Where are India’s brilliant people hiding? Why do they not contest elections?’
Well, here’s why. Even if the actual costs of contesting elections were managed through state funding of elections, as should be the case, and even if the limits on electoral expenditures were abolished, as they should be, India will still not attract Level 4 and 5 leaders into politics with the measly salaries we pay our MPs and MLAs. Only those who can expect to earn equal to or less than what an MP earns, namely, Rs. 33,000 per month, will think of joining politics. That is the standard of prudent logic we should expect from an ordinarily competent person. For someone with a more profitable ‘opportunity set’, it makes no economic sense to aspire to electoral politics in India. No one of the calibre of Mr. Azim Premji (of Wipro), when considering career options at the beginning of his career, would think of running for electoral office in return for this trifling amount. Sure, an average Minister does receive a bit more, say Rs.50,000 per month, but even at this level, the vast majority of the truly competent people are filtered out.

By ensuring that salaries of our MPs and Ministers are well below what an educated young person even of slightly above average ability can comfortably command in India at the commencement of his or her career, our democratic system can only attract people of very meagre ability. Of course, we can still hope to get some Level 3
 leaders like Mr. Harishchandra, for whom Rs.33,000 a month is a great deal of money, provided their rich aunts die at the right time. But even if Mr. Premji’s hypothetical rich aunt had died just at the ‘right’ time when he was young, he would surely have forfeited his aunt’s conditional money and not contested elections. It would have been way better for him to generate wealth in business than attempt the impossible task of reforming policy as the only competent person in a totally corrupt and incompetent system.
At this stage, a reader might well ask why India needs super-competent leaders in politics. Aren’t we better off if our best people become doctors, engineers, lawyers and businessmen? While a general response to such a question has been provided earlier, it may be worth considering this issue a little bit further. I should begin by asking you, first: would you consider flying an airline that pays its pilots poorly? No. We value our lives too much to take such a risk. And therefore an average Indian pilot is paid in excess of Rs.20 lakhs per year in recognition of the skill and responsibility needed for that job. Experienced pilots get even more.
However, a pilot is responsible merely for a few hundred lives. On the other hand, a PM is responsible for a billion lives.The risk to our lives from corrupt and incompetent politicians is infinitely more than the risk from flying a plane operated by a poorly paid pilot. Many more people die from socialist corruption and incompetence than from potential plane crashes. In fact, millions of lives are regularly lost in India due to our corrupt and incompetent political leaders – children who die before the age of five from preventable disease; elderly who die from lack of medical treatment; people bombed by terrorists; people whose murderers are never found; people murdered by the police itself; people run over by chaotic traffic; people run over by the convoys of politicians; people electrocuted; people who have died unnecessarily from heat and cold waves; people who die needlessly in earthquakes, noting that virtually nobody dies in Japan even with much worse earthquakes; people who die when buses fall off narrow hill roads; people who die when running trains plunge into rivers or collide; people who die of starvation; people who are burnt, hung and quartered in communal riots; people who sink without trace inside the deep holes found in our city footpaths; and so on. We don’t usually attribute these deaths to our leaders, but we should. These deaths are directly caused by failures in governance. This loss of life is entirely preventable if we get good leaders.
With so much at stake, why do we foolishly insist on paying our political representatives – people at the helm or the ‘steering wheel’ of this mammoth country – extremely meagrely? We insist on hiring the cheapest PM and Ministers. I agree with fellow misers that stinginess has its great merits. I am very stingy. I even take my own sandwich to work instead of buying one from the deli (notingthat home-made sandwiches are also healthier). But we must draw a line somewhere when our lives and the lives of our children are involved.
And strangely, after hiring PMs very cheaply, we don’t hesitate to give them thousands of crores of our tax rupeesto manage! We elect pure thieves to office and then complain if our infrastructure and justice are in shambles! Amazing country! One of the unintended consequences of our extreme foolishness is that our bureaucrats, who are, on average, much sharper than our political representatives, manipulate political representatives or fool them sufficiently so that nothing ever gets done.
And so we never get Level 4 and Level 5 leaders. I want to remind us that while Level 4 and 5 leaders are humble and very dedicated to the success of India, they are not saints who will work for free. They are honest, competent and care a lot about getting paid the high salary they deserve. There is no silly posturing about Gandhi dhotis and not one iota of sacrifice in them. Humble but proud, they will not slave for us for free. They are determined to make India succeed, but they will never compromise their personal lifestyles in the bargain. We will never find such truly competent people of this sort contesting our elections until we become sensible enough and unclench our tight fists. You get what you pay for. That general rule applies to everything in a free market.
I hear loud objections at this stage! I hear readers pointing out to me the names of Indian leaders whom they believe to be high calibre people. They ask me that if what I say is true then how could such leaders have arisen? In reply, I note that Level 4 and Level 5 leaders are not merely exceptionally competent, but they are exceptionally honest. None of our leaders today qualifies on both these counts. The problem with the commonly cited example of Manmohan Singh (MMS), who is somewhat competent (not exceptionally so by any yardstick), is that he is an integral part of an extremely corrupt organization called the Congress (I). MMS is hopefully aware of the extreme corruption which is the hallmark of his party. Whether he supports it or not, he lives off it. I am also almost certain that he has perjured, i.e. signed on a false document, when he stood for elections from a Delhi parliamentary constituency, an election which he lost a few years ago. I’ll come to the electoral accounts shortly. If MMS is really honest, let him quit Congress (I) right now and form or join a political group founded on ethics and classical liberalism. If he is really a good person, then let him join the Freedom Team of India.[i]
I suggest that we ‘admire’ people like MMS only because our benchmarks are so low, not because they are the best people India has to offer. I would rate MMS at most as a Level 2 leader by the Jim Collins benchmark. Level 4 and 5 leaders are not prepared to trade their integrity or the trust we place in them for the mere lure or perks of office. We do not have Level 4 and 5 leaders today in India’s Parliament, and haven’t had any since Masani left politics in 1978.

[This is an extract from my book, Breaking Free of Nehru]

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