10th October 2013

A discussion regarding Save Democracy Front’s manifesto #1

I’m extracting from an email discussion with Surajit Dasgupta of AAP/SDF, and will follow up with a response separately.

MY MESSAGE TO SURAJIT

I had a very rapid glance though http://youth4democracy.webs.com/aboutus.htm.

Although there is merit in some of the points raised (this is far less socialist than some super-socialist party agendas), a vast proportion of the policies outlined will not pass the minimum threshold for good policy. Most are highly interventionist despite the declaration at the outset about decentralisation.

I am pointing out a few of the statements which can't form part of any agenda that I would be willing to work with:

The state is created for those who cannot protect themselves. [No. It is created to protect EVERYONE’S life and liberty]
right to employment
Turn the Directive Principles of State Policy justiciable like the Fundamental Rights;
Re-establishing community ownership of land;
Fixing a ceiling of maximum land ownership by an individual;
Establishment of state-run low-interest, micro-credit facilities in villages; [the problem here is state-run, not micro-credit]
Rejuvenating traditional industrial hubs; [I have studied innovation intensively in my role and there is simply no role for government in ANY industry/innovation. Only wastage of taxpayer money.]
Special focus on small industries in all industrial hubs;
Streamlining the process from procurement of raw materials to packaging of finished goods; [Government is not a businessman. Stay away from all management of business. Just regulate well.]
Setting up of training centres across the country to train people to establish and run units that need less investment and low maintenance costs; [In Victoria we have now a voucher-based vocational education system, and government is steadily getting out of managing any of them. No need for government to do anything: just create the right systems and incentives. Details in my book, Breaking Free of Nehru]
Marking farm products and fast moving consumer durables alike with cost and sales prices so that no person in the chain from production to retail extracts an undue share from the process; [Very highly interventionist! Let markets decide. This paper displays no knowledge of the price system.]
Setting up adequate storage and transportation facilities;
Moving middlemen to newly established agriculture-related professions of stock keeping, sorting, marketing, storage and transportation;

Etc.

There is no point talking about decentralisation and then putting government in charge of micro-managing every single business and agricultural activity.

SURAJIT’S RESPONSE

Where individual liberty is supreme, there is no need for a nation-state; early human beings were doing fine without the earth's total landmass being divided into countries when they were roaming around like nomads as freely as possible.
As for the rest,
I will have to check how "right to employment" sneaked in. Employment as a concept sounds weird as a right. No one comes home to offer any of us a job. People are employed on the basis of merit, drive, struggle, intelligence and a bit of luck. The state must intervene only when the data of the employed shows a skew of caste, religion, sex etc.
Turning the Directive Principles of State Policy justiciable like the Fundamental Rights: The DPSP is a great document that no establish political party is ready to implement. It remains a pipe-dream. India would be a much better governed country if the whole of it were implemented.
Re-establishing community ownership of land: This one has admittedly come from socialism, but not Marxism, mind you. Neither is this a part of the Nehruvian model. Left to industrial exploiters of land, you will be walking on a powder keg as they do in the Dhanbad-Jharia belt of mining. You must trust the intelligence of the local communities, as all individuals want upward mobility in social ranking. Why do you presume they will oppose every proposed project in their respective areas? What community ownership will ensure is adequate compensation as well as future sustenance of the area. Remember, the thrust of Govindacharya's vision is eco-friendly development, a switch from the anthropo-centric developmental model the world has been following especially since the Industrial Revolution to its own peril. We have only one earth. That is the only thing we can leave intact for our future generations.
Fixing a ceiling of maximum land ownership by an individual: This is a philosophical question. Can you own, buy and sell something that you did not create in the first place? Buying no other thing obstructs the use of it by others, but buying land/house means you (and your family including your future generations) are occupying a part of the earth forever, keeping all other inhabitants out of that property! How can you be ethically allowed to do that? Why can't all immobile properties be available only on rent/lease that individuals can occupy turn by turn? People will still have a reason to grow materialistically: Higher the rent, bigger the property!
Establishment of state-run low-interest, micro-credit facilities in villages; [the problem here is state-run, not micro-credit]: Agreed. But private banks and NBFCs, even without a licence raj stopping them, has shown no inclination towards entering this field. The state may, therefore, make this greenfield investment if only to show it can be a sustainable business. It may withdraw after there are several private players in the competition who are of such a nature that they cannot cartelise. As of now, the moneylenders operating in villages are a farmer's worst nightmare.
Rejuvenating traditional industrial hubs; [I have studied innovation intensively in my role and there is simply no role for government in ANY industry/innovation. Only wastage of taxpayer money.]: Could you cite some papers, please? From the US (http://www.todaysengineer.org/2011/aug/history.asp) to India, government-aided and funded institutions are responsible for maximum innovation. The private sector activates itself only after it learns the art and science of it from the government by hiring young people who emerge from state-run universities. And then they try to monopolise the market through intellectual property rights, which the government does not tend to do.
Special focus on small industries in all industrial hubs: In this case, no direct government involvement is needed; it needs to look into the aspect of rate of interest of loans, for one. From village- and small town-based based entrepreneurs to the bigwigs in cities, a high rate of interest is a common rue. Businessmen in India find this to be one of the main factors that makes Chinese goods beat their Indian counterparts in pricing.
Streamlining the process from procurement of raw materials to packaging of finished goods; [Government is not a businessman. Stay away from all management of business. Just regulate well.]: This again is meant as a training programme. Once government sets the right syllabus for industrial training, which all MBA courses have collectively failed to do, institutions can spring up to impart this education to all pockets of industrial activity. In this context, it is relevant to note that the SEZs across the country are manned by city-bred people, while native dwellers of the villages where these factories come up only get to procure menial jobs (loading-unloading, driving trucks, working as labourers at construction sites etc). Further, the high rent that the city-bred people can pay while working for a few years in these SEZs shoots up property prices beyond the reach of the locals. This means that the incoming of modern industries either does not help the villagers or creates a discriminatory, economy-based feudal order in the hinterland. It is only the state that can take a moral call on this rotten system.
Setting up of training centres across the country to train people to establish and run units that need less investment and low maintenance costs; [In Victoria we have now a voucher-based vocational education system, and government is steadily getting out of managing any of them. No need for government to do anything: just create the right systems and incentives. Details in my book, Breaking Free of Nehru]: I will study the Australian model and get back to you.
Marking farm products and fast moving consumer durables alike with cost and sales prices so that no person in the chain from production to retail extracts an undue share from the process; [Very highly interventionist! Let markets decide. This paper displays no knowledge of the price system.]: Till the 1980s, every packaged product used to be marked with "Local taxes extra". Did that independence offered to he market stop arbitrary pricing? I distinctly remember every shop used to sell the same set of goods at different rates decided by the whim and margin of greed of individual shopkeepers. The situation changed for the better only when government forced manufacturers and distributors to mention the MRP on every packet. Now no customer accepts an overpriced call from a whimsical shopkeeper. Why can't this mechanism be extended to the whole chain?
Setting up adequate storage and transportation facilities: I did not mean this to be government's job. I support FDI in retail (except some dubious big players like Wal-Mart) that Govindacharya and many others in the SDF don't. If they had come here all on their own (not through collaborations), they would have set up the infrastructure by now. To keep pace with the competition, the Indian retailers would have put in place their own infra. At the same time, the margin in which small-time grocers operate would secure them from the big fish. Details (in Hindi): http://surajitdasgupta.blogspot.in/2012/09/blog-post.html
Moving middlemen to newly established agriculture-related professions of stock keeping, sorting, marketing, storage and transportation: I didn't mean this to be a government's job either. This will happen naturally the way it happened when the monopoly of LIC in the insurance sector was challenged by the likes of ICICI, Aviva, New York Max Life, AIG, Birla Finance etc. The middlemen are clever enough to move to greener pastures in time.