Thoughts on economics and liberty

Quotes and extracts from Sagarika Ghose’s “Why I Am a Liberal: A Manifesto for Indians Who Believe in Individual Freedom”

I’m making notes here, which will inform my book review:


“The argument of this essay is in favour of social and economic liberalism in the belief that the two cannot be segregated”

“The liberal, as we have been emphasizing, argues for a limited government—a limited role for the state—for the primacy of individual freedom and individual enterprise to create welfare, uphold justice and to awaken society’s moral sense.”

“The market works precisely because no economic actor can claim omniscience or claim to know exactly what all consumers want. Therefore, the entrepreneur seeks to find incremental improvements to a product here or a service there.” [She is willing to have both the government and private sector compete in education and health. She does not agree to the state setting the school or university curriculum. However, she is not for full privatisation of these sectors.]

She rejects all identity politics and collectivism. “In the end, justice and liberty for all is the only possible sustainable politics that provides a permanent dividend.” One can agree with her fully on this.

“Youth today are hungry for inspiring idealism. If liberals can’t provide it, power-brokers will fill young minds and use them as cannon fodder for their own narrow political games.”  This is where liberalism should come in.

“If the government and politicians remain determinants of our cultural and moral values, individual morality will disappear down the drain,” One can fully agree with this

Following the tradition of Gandhianism and Trusteeship

“For the purpose of this essay I have chosen to emphasize the Gandhian definition of the term ‘liberal’. Mohandas Karamchand Gandhi was, in many ways, the most successful liberal politician of all time”. [Sanjeev: I have shown how Gandhi, in his deep disregard and ignorance for economics – he refused to read Adam Smith but criticised his work vehemently. He wanted to impose his personal opposition to technology on others. He wanted business to do things that may not be in its interest, such as “trusteeship]

“Not only the growth of the cake but also the equitable distribution of the cake is also what Rajaji meant when he spoke of the ‘trusteeship of the rich”

“The Big State, always in the hands of some political party or another with its own motives and ideologies, should not run all activities that are needed for peoples’ welfare as amonopolistic charity paid for by taxes. This is where Rajagopalachari’s notion of trusteeship of the rich [Sanjeev: this is originally Gandhi’s notion, not Rajaji’s] comes in which means the wealthy must set up institutions out of a sense of social conscience.”


“Parties see the state or the government as a source of power, and seek to bribe or coerce citizens as a way only to retain power. When vote banks are the only prisms, individual citizens disappear from view. Only vote banks are visible, individual citizens are invisible.” [She has a good grasp on the idea of collectivism vs. individualism]

“The High Command structure of parties is reflexively resistant to talent because talent is a disruptive force and implies a threat to the illiberal Supreme Leader.”

Where I don’t agree with her

“The ‘sab neta chor hai’ is a highly anti-democratic sentiment.”  [I can understand where she is coming from, that everyone in government must be assumed to be innocent till proven guilty but Sagarika is wrong on this in the case of socialist India. I was within the IAS and I KNOW that all political leaders are crooks, even though some may not directly take bribes. The system MAKES THEM crooks (see Chapter 5 of my book, BFN). It is not anti-democratic to speak the truth]


She definitely does not take the side of any party. She has criticised all parties without pulling punches. Whether it is Indira Gandhi, Mamata Bannerjee, Dev Kant Barooah, Jayalalitha, Kejriwal – no one is spared.

Obviously, and for good reason, she focuses on the enormous failures and aggressions against liberty of the Modi government. One agrees with her on her entire political approach.

On the role of government

“the benefits of yoga are undeniable, but should the taxpayer’s money be spent on yoga events on a national scale?” [One can fully agree on such matters with her]

She hits out very vigorously against Big Government, e.g. “The drive across the world is how to make governments more transparent and accountable to citizens. In sharp contrast today the reverse is true in India. It is citizens who are forced to be more and more transparent and accountable to government.” [This is really good]

On the defence of property rights

“Think of the hundreds and millions of cattle in India, including cows and buffaloes. Should farmers not be free to sell them once they have reached the end of their productive period?Are these rules not an assault on the property rights of farmers?”

On governance

She has only a limited discussion on governance. Nothing on electoral reforms, nothing on administrative system reforms. But there is a discussion on shutting down some Ministries.

  • She argues for shutting down HRD and I&B Ministries [But she seems to support making AIR/Doordarshan independent like BBC but that’s a really bad idea. They should be shut down. Period.]


“A free mind is a necessary precondition for a free market.”  “Respect for dissent is the hallmark of the liberal.” “The crackdown on humour and satire has taken place across political lines, and ‘secular’ governments have been as repressive as ‘nationalist’ ones.”  She laments India’s extremely low levels of press freedom. The book has an extensive discussion regarding censorship/ banks and such restrictions on individual choice (except in schools and health). She is obviously against any internet shut downs. (“In 2017, the Internet was shut down sixty-nine times, the maximum number of shutdowns taking place in Jammu and Kashmir”).

“the question arises of whether governments exist to ‘protect sentiments’. If the state can ban goat slaughter for mutton, is this one step away from hypothetically banning the azaan inmosques because ‘sentiments of Hindus’ are being hurt, or hypothetically banning Durga Puja celebrations because ‘sentiments of iconoclasts’ are being hurt, or banning the sale ofalcohol because ‘sentiments of teetotallers’ are being hurt? Is the Big State, a guardian of sentiments?”

I also agree with her view that: “The anti-defection law is another instance of ‘illiberal secularism’—how secular governments have often taken illiberal actions.”


Where I agree with her

“The Modi years have seen the growth of a massive government whose every new initiative is bringing ever more layers of officialdom, inspectors, permits and rules. It has been called ‘saffron socialism’ in full bloom, a Big State unwilling to let go of, say, the banking sector or even properly set Air India free from control even as it offers it for sale.”

“Modi promised ‘minimum government, maximum governance’ but suddenly the Hindutva nationalist state seems to be a monster state, its finger in every pie from education to culture to yoga to food choices. This is an even larger government structure than the one created by Indira Gandhi.”

She is strongly critical of the slow disinvestment process.

Where I differ with her

“The journey to prosperity through the market may need to be balanced with government responsibilities in education and public health, in the form of the democratic welfare state.The liberal is open-minded on the need for the government to shoulder its responsibilities. Pure market economics, as pragmatic liberals understand, could in some instances drastically widen inequality without, as Amartya Sen points out, accompanying public investment in health and education.”… “the struggle against injustice has to be connected with constructive demands for basic entitlements.’ The delivery of these basic entitlements do need to be addressed by governments.”

These are pretty loose statements. There are no entitlements. There can be a social insurance program. Further, I object to citing socialist Amartya Sen on matters (such as education) where his ignorance is colossal. She needs to read James Tooley at the minimum, if not Friedman and my work.

“what is needed is to dismantle the entire system of controls which is creating and sustaining these disastrous shortages in the supply of quality higher education. When the supply of higher education is left entirely to the government, how can there be equality of opportunity given that demand far outstrips supply?” This is good.

But she is happy for AIIMS type institutes to be set up by government: “education is a sector from which the government cannot and should not escape responsibility.” “Both the UPA and NDA governments committed to creating more AIIMS-like institutions, but the promises have not been met.” ][This is entirely wrong. The government should not be involved in setting up or managing any educational institution.]

But I do note that she’s at least asking the question: “Yet the liberal must also raise the question: isn’t first nationalizing education and then expecting that the autonomy of those nationalized (or government-controlled) educational institutions will be respected a bit of a pipe dream?”

She then identifies the gurukul system of India: “Premodern India didn’t really have any institutions of higher learning beyond the gurukul,”


Sagarika cites Yascha Mounk and in fact recommended (when I met her in October 2018) that I read him. I have commented briefly here on Mounk.



Taken from here.

Throughout India’s post-Independence history, the Big State or Big Government has constantly sought to increase and centralize its powers at the expense of citizens’ individual freedoms. Jawaharlal Nehru, even though he was an idealistic constitutional democrat, created the policy and intellectual space for the Big State because of his belief in a socialistic centrally planned economy. Indira Gandhi used agencies of state power, such as ministries and parliamentary institutions to push her ‘Indira revolution’. The Narendra Modi-led BJP has taken state power to new maximalist heights to create a government that pushes its own socioeconomic ideological priorities, through many government agencies. The administrative prowess of the Big State inevitably tends to weaken due to gross government overreach.

As Mahatma Gandhi warned, the danger with the expansion of the powers of the state is that it comes with the expansion of the government’s capacity to use coercion. Coercion takes various forms such as denial of various permissions and harassment of citizens by officials. The government is the only entity in a democracy that is legally empowered to use force and carry weapons. Thus, when the power of this legally armed entity increases exponentially, citizens have reasons to worry. Those of us enamoured of the ‘danda’ to rule India only need to wait until the blow of the danda falls on our own heads to really understand what it feels like. The Big State’s capacity for violence needs to be powerfully checked by the rule of law and solid constitutional safeguards on the limits of power. If it is not, then violence tends to become normalized, even legitimized, with the continuous expansion of the state because the state or government begins to coerce citizens to impose its own priorities.

Also, once it has expanded, since the state still can’t satisfy everybody, some groups are inevitably left out, leading to disaffection – as we have seen in the Jat, Patidar and Maratha protests. This sense of injustice and frustration begins to grow when some groups get state benefits and some don’t.

The Big State is invariably in the grip of the ruling party, and when the government or state becomes too powerful, politicians who control this Big State gain enormous powers over citizens’ lives. As Gandhi believed, the more power is centralized in the government, the more is the government’s potential for unleashing violence and coercion on its own citizens.

Government powers can be used to arrest cartoonists, imprison dissenters, harass citizens through government agencies, deny the cause of justice when ruling party politicians are involved in illegalities (as we have seen in riot cases), give government agencies the power to stage armed ‘encounter’ killings or killings outside the judicial process, deny passports, cancel FCRA licences for NGOs, slap sedition charges on students, writers and intellectuals and come up with policies that take a severe toll on citizens’ well- being.

Censorship can be imposed, hate-speak can be deployed from the bully pulpit and public places can be summarily shut down. Amartya Sen has called the demonetization drive of the Modi government a ‘despotic act…an act that undermines notes, undermines bank accounts, undermines the entire economy of trust.’

Why does a big government tend to cause alienation? This is because a Big Government creates a feeling of loss of individual agency and that one is being controlled by vested interests, elites, power brokers, et al. Citizens feel powerless. Citizens also experience a growing sense of frustration that even though theoretically in a democracy they are told they are the masters of the government, yet in reality, they are not able to get the government to deliver for them or meet their expectations or make politicians fulfil their promises.

This leads to even greater support for populist leaders to rise, on the plank of the disaffection created by the Big Government, which in the end only benefits those in power. Populists seize on the inability of the state to deliver, but when they come to power they put in place their own set of controls. The end result is that the scope and arbitrariness of state power or government power only keeps expanding.

What’s the answer? What’s the right combination in the role of the government? The liberal, like the thinkers in Hindu traditions, believes it is the quest for answers which is more important than the answer itself. When we seek answers, we don’t deny that knowledge is not possible but that it is contextual, so even if we hold strongly to our beliefs, we cannot become blind or dogmatic; we should be willing to test our ideas, respect the right to dissent and not forcibly impose ideas. This is why liberals, as a first principle, seek a limited government, not a Big Government which curtails individual freedoms in personal, social, economic and political choices. Often, absolute certainty among central planners or despots inevitably leads to disruption of individual freedom and economic markets. Choice becomes redundant and citizens are deemed nothing more than sheep to be guided and deployed for whatever reason the planner or supreme leader thinks appropriate.

The answer is not in Big Government or statist solutions or in asking for government protection but in ourselves and the power of what we can do together. This means realizing the importance of liberal, democratic citizenship. The idea of India as we have seen is neither nationalist nor political, instead it is civilizational. It’s an idea that harks to the pluralist ancient genius of a subcontinent where freedom, iconoclasm and rebellion have always been celebrated, an idea that tries to be a beacon in the world. The subcontinent’s long tryst with individual liberty and autonomy was a tradition that Gandhi and our liberal ancestors reignited for the modern era.

Brilliant minds down the years – scientists, doctors, engineers, social scientists-have often believed they had the ultimate answers and should refashion society according to their ideas. A belief in certainty led to many ways of ordering society – along communist or fascist lines. Yet, in subcontinental Hindu, Bhakti and Sufi thought, it has always been the search that was primary, the quest for knowledge; the humility that we do not have knowledge and must constantly seek it was the core belief. Hinduism doesn’t provide answers, it provides only ways to seek answers; the quest for answers prevents us from being trapped in blind certainty. Similarly, liberal democracy is a way of dialogue and argument and counter-argument to create possible answers.

The expansion of the Big State triggers authoritarian impulses among people and a political player soon turns up, willing to ride that authoritarian horse and gallop to power. In many ways, Congress-led dispensations have been ‘soft’ Big States that failed to adequately devolve power. These ‘soft’ Big States laid the ground for the rise of an even greater statist force like the Modi-led BJP or the Hindutva-led ‘hard’ Big State.



Are we aware of who some of the most liberal sections of Indian society are? Those who have been campaigning long and hard for their individual freedom? No, these are not feminists or JNU students, writers, journalists or activists, The are instead certain

communities of fanners, the humble kisana. In March 2018, the Kisan Coordination Committee released in eight-point charter of demands calling for open markers and just prices.

The charter was released by followers of the late farm sector leader and liberal Sharad Anantrao Joshi. Joshi spent most of his lift exposing the injustices heaped on farmers by caging them in all manner of laws and restrictions. The charter calls for the liberalization of agriculture, the end of government intervention in the farm economy, scrapping of the National Food Security Act, direct benefit transfers to the poor, free trade in farm products and the removal of restrictions in creating rural land markets.

Joshi was one of India’s pioneering liberals. He was an urbane, brilliant Syndenham College and Switzerland-educated United Nations diplomat, returned to India to become the most vocal economic liberal of the farm sector. He founded the farmers’ union, the Shetkari Sangathana, in 1979. Joshi had always advocated free enterprise in the rural economy and while in Parliament famously tabled a private member legislation demanding that the ideology [SOME TYPO HERE] Don’t the people of India have a right to choose whether they want to be ruled by a socialist party, capitalist party or liberal party? Joshi believed this clause effectively bars liberal parties from contesting elections. Interestingly, the Janata Party was Indira Gandhi’s sworn enemy but was ideologically almost exactly on the same page as her uber-socialism. While Indira’s Congress had moved to dilute property rights to actively intervene in the private sector. the Janata Party in 1976 deleted the fundamental right to property altogether. The socialism clause in the Representation of the People Act is yet another illiberal aberration inserted by the Rajiv Gandhi government and needs to be debated. It effectively bars all those who do not want to swear allegiance to socialism, from contesting elections.

Joshi set up the Shetkari Sangathana to oppose farm subsidies, demand remunerative prices for farm produce and gain access to markets and technology. Why is it, Joshi asked, that while finance and industry were deemed worthy of liberalization, agriculture was not? Agriculture is the largest private sector in India. Yet, it is completely ignored when it comes to economic liberalization and ease of doing business!

For too long, the kisan has been trapped in a time warp of the statist politicians’ imagination, He is seen as a figure seated calmly and wisely next to fields of waving paddy, wearing colourful clothes and uttering profound and simple phrases—the constant ‘Other’ of city folk. The ‘kisan’ is seen as a representative of an unchanging rural idyll which must be cossetted and protected by successive governments, preserved in a glass case like a museum piece. The ideal underlying ‘Jai jawan, jai kisan’ has degenerated in the hands of successive generations of politicians who pay lip-service to both groups, only to keep them dependent on state handouts, robbing them of their basic dignity.

Liberals, on the other Hand, argue that the farmer must be set free. The farmer must be freed from land ceiling laws and land conversion laws. The absence of clear titles and deeds means that there can be no free buying and selling of land and there is still no proper market for land. Thus, a farmer cannot maximise his holdings or farm his fields productively as he cannot freely buy and sell. If he builds his own ponds and check dams he could violate drainage laws as per the Northern India Canal and Drainage Art of 1873. If he takes his produce across state boundaries he could be in violation of the Agriculture Produce Marketing Committee Act (APMC) or Mandl Act enacted almost fifty years ago, which states the requirement of separate trading licences for every mandi. Farmers can therefore sell to traders only with a licence for a particular market.

While the fruits of liberalizing industry are clear, no thought is given to liberalizing agriculture. An arsenal or legislation prevents farmers from realizing their productive potential because statist policymakers cannot set them free and instead only make them the target of populist hand-outs.

Why is it crucial to recognize farmers’ individual rights? Joshi campaigned for politicians to respect the farmers’ right to trade, sell and make a profit. Joshi wanted FTI in the farm sector, along with the latest seeds and technology. He also wanted to give farmers the option of exiting the farm sector if they want to. Joshi’s key realization was that the woes of fanners were the result of a gross misperception that farming was an ancient lifestyle rather than a

serious modern profession. This mindset has led to the desire on the park of the Big State to ‘protect’ farmers. Endless red tape has been offered as a lifeline, but it has only bound their hands and legs.

Instead of individual freedom, farmers have been trapped in government policy and are always subservient to the government. The Modi government promised to double farm income in five years by 2022. Yet there have been a spate of farmer suicicles. In April 2017, fanners from Tamil Nadu stripped naked in front of Prime Minister Modi’s office and even consumed their own faeces. A mammoth protest march poured into Mumbai in March 2018, in which 35,000 farmers across Maharashtra covered 180 kin on foot over five days.

A range of controls bears down on the Indian farmer. Not only is he unable to freely buy and sell land, but the prices of his crops are fixed by the government. His wherewithal to farm (such as water, fertilizers and seeds) is either unavailable or of poor quality, and he is thus perpetually tethered to poverty. Writes columnist Swaminathan Aiyar, ‘Farmers should be treated as producers with internationally competitive potential, not as objects of charity… a national strategy on agriculture should include, creating good land records, financial infrastructure and moves to give cash grants per acre per year”

Joshi’s cry was always to set the farmer free from all the controls he labours under, as if to argue, don’t keep us trapped in a home like a bride. Let us come into the world and see what we can do. He said: ‘We don’t want alms, we want the price of our sweat and toil.’ To reiterate a quote from a policy paper written for a Round Table Conference held by a group of Indian liberals in Deolali in lune 2018:

“The economic reforms. which began in the 1990s focused only on non-farm sectors. Indian agriculture was overlooked once more. Indian agriculture is the largest private sector in the country. Yet nearly three decades after the initiation of economic reforms, almost every aspect of agriculture, from land, to crops, inputs, credit, prices, access to market, logistics, value addition, to domestic and international trade, remain captive in a regulatory maze. Consequently, the largest sections of people have experienced little benefit from so-called reform policies, and not surprisingly there is little popular appreciation or support for economic liberalization. Therefore, each small step can only be taken stealthily or surreptitiously, often by sugar coating through subsidies and handouts, which ends up opening new doors for corruption and cronyism, deepening the popular disenchantment with the political process. The farmer is.chained to poverty and then offered charity from the government.”

Sanjeev Sabhlok

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