Thoughts on economics and liberty

Category: India

Eliminating poverty – a liberal solution

(This article was published in the August 2009 issue of Freedom First.)

Sanjeev Sabhlok

The number of people living below the poverty line declines dramatically when even a few policies of freedom are introduced in a society. This has also been India's experience, post-liberalisation. The number is reduced considerably but there will still be some who continue to be below the poverty line. Such cases, some people argue, can be taken care of by private charities because of their belief that there can be no role for a government in directly doing anything about poverty. However, such is not the liberal view.

The liberal understands that poverty will continue to arise through random bad luck, bad decision-making, and a combination of both. The liberal realises that markets treats those who can't contribute economic value as outcasts, and charities have no capacity to reach out to the remotest corners of a vast country like India. Therefore, the liberal calls for an ongoing role for government in this area as part of equal opportunity. We need a social insurance program to identify the poor protect them from starvation.

It is important to emphasise that this 'social minimum', the product of the social insurance scheme, does not amount to coercive charity or redistribution of wealth, but is a safety net available to everyone should things go wrong. There are many other good reasons for having the social minimum which I have discussed in my draft manuscript of The Discovery of Freedom[1] (I invite your thoughts on this manuscript). Suffice it to note that while the liberal society vigorously protects us from coercive socialist redistribution, it also leads us to a humane society with its commitment to reasonable equal opportunity.

Need to top up the incomes of the poor

Milton Friedman proposed a solution to poverty through a negative income tax (NIT) model This is a direct solution where incomes of those living below the poverty line are topped up to reach the poverty line. (It is worth noting here that the poverty line must include an amount for private health insurance: l will outline in a separate article how free markets can provide health in the free society). The NIT must, of course, be linked to a requirement to work condition so that able-bodied persons do not get paid if they avoid work. The best way to ensure that no frauds take place is to keep the poverty line extremely low, barely sufficient to ensure extremely frugal dignity; no more.

But instead of this simple system, for decades our socialist model has churned out one poverty 'alleviation' programme after the other, purportedly to reduce poverty but, taken together with a range of subsidies, intended to steal taxpayer wealth and transfer it to corrupt politicians, bureaucrats, and even the middle classes and rich farmers. Very little of that money has ever gone to the poor.

While exploring the NIT idea in the year 2000, I made many rounds of the Finance Ministry and Planning Commission to collect data and talk to senior people there about it. My preliminary calculations suggested that if the money spent on subsidies and poverty alleviation programmes was directly transferred to the poor, there would be no poverty left in India. (Here I may add that even if, upon further analysis, it is found that NIT is not cost-neutral, relevant funds must still be found since banishing poverty is vital for a free society.)

Thus there has never been a shortage of funds for poverty elimination in India. What has prevented that from happening is the keen desire of Indian socialists to line their pockets and pay off particular constituents such as rich farmers. Socialism has thus sustained (and at least partially created) poverty in India for six decades.

How the NIT would work

The NIT would be implemented in seven simple steps:

1. Identify those who may need assistance during a given year, preferably in advance of the actual requirement, such as on estimated income based on previous year's income tax returns (all families would need to lodge returns).

2. Find how much is needed to meet the gap between expected income of those identified in step 1, and the poverty line. This gap should be small, for even the poor earn above acute starvation.

3. Impose a tax (insurance premium) on the community sufficient to meet this gap. In early stages, money can be borrowed against future revenues since poverty will d rop significantly after policies of freedom are introduced. This way, the tax burden can be evenly distributed over a number of years.

4. Transfer the precise amount identified in step 2 directly to those identified in step 1 through an automated, fortnightly payment into their bank account (with women in a family getting half the amount).

5. At the end of the year, use the income tax return to automatically adjust what was paid out. For overpayments a refund could be obtained or future payments reduced.

6. Audit those receiving NIT funds to ensure they have been participating in the market to the best of their ability.

7. Once implemented, stop all poverty alleviation programmes and abolish all policies that try to equalise people's incomes or subsidise anyone.

I have provided more details on this system in my book, Breaking Free of Nehru and elsewhere. Many of the above steps can be outsourced to the private sector, with checks and balances ensured through independent government regulators who would be responsible directly to Parliament for the integrity of this process. Basically, we'll need to use independent systems and not our existing bureaucracy. Also, for every one per cent permanent reduction in poverty, MPs and MLAs should get a permanent one per cent increase in their base salary. That would get them involved in this process and also link their pay with performance. Similar programmes have been working in the USA (earned income tax credit) and Australia (family benefits scheme) for decades. We can use the lessons learnt in these countries to avoid their excesses and pitfalls.

When I discussed this idea with Swaminathan S Anklesaria Aiyar and others in 2000, I found myself facing numerous objections in response to which I wrote a 14-page paper (available on the internet[2]). I'll just touch upon one issue here, related to the difficulty of delivering steps 1 and 2. During 1986-88 I created a fully computerised and validated survey of household income of all registered voters in selected villages in Assam. I believe that by using the technology available today (e.g. photographs of villagers' houses), it should be possible to identify the poor and estimate their incomes with far greater accuracy today. Therefore I am convinced that it is feasible to determine incomes for each poor household in India with a fair degree of accuracy (particularly since the concerned person would, be personally liable for the veracity of their income declarations).

Freedom Team of India

Finally, a quick update on the Freedom Team (FTI, On 1 July 2009 FTI became a legal entity, as a Trust created in Indore. An outreach effort was thereafter launched with a number of talks and discussion. These received extensive media coverage.[3] FTI is thus now well established as a forum for liberal leaders. I invite you to consider joining or otherwise supporting the team.




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Educating our children: A free market in schools

(This article of mine was published in the July 2009 issue of Freedom First.)

In the May 2009 issue of Freedom First I suggested that in addition to ensuring defence, internal security and justice, the free society must commit to equality of opportunity (EO). Delivering EO requires removing discriminatory obstacles to achieving public office, ensuring a good universal school education system, and guaranteeing a social minimum.

School education as a key element of equal opportunity

No child’s future should be jeopardized because its parents happen to be poor. We must guarantee good school education (including vocational training, where appropriate) to all children who want to study to year 12 (or age 18). Twelve years of education has now become a minimum given the complexity of technology that must be mastered in order to become a productive member of society. Such education will generate an enormous economic dividend for India through positive externalities including social capital formation.

In this article I outline how we can successfully deliver high quality school education at a relatively modest cost to the taxpayer (details are available in my book, Breaking Free of Nehru, Anthem Press, 2008).

A fully privatised school system

Children from rural areas or slums cannot even dream of equal opportunity today. These luckless children are destined for a lifetime of failure by the inefficiencies and corruption entrenched in our government school sector. The best these children can hope for is to get some patchy education in government schools where such schools exist (many government schools are found only on paper, or teachers are paid without attending school).

But why does a government need to operate schools? Managing a school is a hands-on exercise, much like managing a business, and governments are terrible at managing anything that must deliver value. Government officials and teachers have little or no incentive to deliver world-class education at the lowest possible cost. In comparison, the private sector can only survive if it delivers value for money. Therefore, parents who can afford it, prefer to send their children to private schools.

Governments are also unusually soft on their own failures. A Director of School Education in a state government will demand stringent standards from private schools even as he ignores the shoddy education provided by the government’s own schools. Governments should therefore not directly manage schools. However, they could regulate school standards, noting that self-regulation by a body of experts is the preferred way for such a task.

As a first step, our governments should stop building, owning, and maintaining schools. That would include an end to the appointment of lakhs of school teachers, an activity that is a source of great corruption and favouritism. School assets (bundled with a long-term lease on the school’s land) should be auctioned to educational consortiums that are at least partially owned by local teachers and residents. I have suggested a transitional mechanism for this in my book that will protect existing teachers.

This will immediately ensure that the incentives of school managers are better aligned to the needs of the local community. Further, the lands and buildings belonging to schools will also be much better maintained and utilised.

Customised vouchers for each child

Privatisation is only the first part of this model. Parental choice is the other part. School education vouchers would be issued by the government for each child and mailed out to parents. Children of poor parents would be issued high-value vouchers. Rich parents will not get any vouchers. The lower economic classes may get vouchers, depending on how much it costs to deliver good education. All parents would thus be empowered to send their children to almost any school they want to. All they would need to do is to pay a top-up amount over and above the value of the voucher.

Under the current model, government schools receive funds unrelated to the size or nature of their enrolment(s) or educational outcome(s). In the new model, they would get money based on a reimbursement of vouchers. They would therefore need to enrol as many children as they can. They will have to go out and literally beg the poorer parents – such as the parents of child labourers – to send their children to school. Where necessary, schools would provide a breakfast for these children: anything to ensure that parents agree to send their children to school. Enrolment rates would therefore shoot through the roof.

Second, schools would need to ensure that the children they have enrolled achieve the required educational standards. Only then will they be able to invoice the government against these vouchers. The more the number of children these schools enrol and pass out at an agreed, independently tested standard, the more the money they will receive.

Note that through high-value vouchers for poor parents, schools in economically backward areas will be able to afford high salaries for teachers and potentially attract even better teachers than schools in wealthy urban areas. Good schools would thus emerge in rural areas and slums for the first time in India’s history. This would dramatically increase both the quality of education and competition in the school market. Very little central planning or quality control will be needed as the market will sort out good schools from the bad. (A self-regulating body of school experts would help.)

Above all, the preferences of parents in selecting the right school for their children will be honoured, and who can be a greater well wisher of a child than its parents?

Raising money for the vouchers

It is true that defence, police, and justice must take first priority for any government. However, universal high quality school education must receive a high priority as well. The system outlined above will not cost too much because the current funds allocated to tertiary education would be shifted entirely to school education. In the tertiary education sector, students would be asked to pay their fees through loans issued by the government (I’ll talk more about this topic in a separate article).

Second, funds needed beyond that could be raised through capital markets as a long-term investment loan. This should be easy, given that there is nothing in any society that yields higher returns on investment than good school education. Third, schools will be permitted to use their land and buildings for commercial purposes after school hours, thus using their assets more productively and keeping the fees in check.

A free market in schools of the sort described above is guaranteed to deliver high quality education – as guaranteed to succeed as India’s current socialist method is guaranteed to fail. There is an open and shut case for change.

Freedom Team of India

Sadly, this simple and effective model will remain a pipedream since ruling politicians in India currently use the school education system almost purely to ‘mint money’ for themselves. Education is simply not their goal. Money making is. To implement such a system liberals will need a mandate from the people of India to form an ethical, liberal government. The Freedom Team of India ( is pushing ahead in that direction. I would encourage you to find out more about the Team.


A new RCT look at educational vouchers From Matthew M. Chingos and Paul E. Peterson (pdf):

In the first study using a randomized experiment to measure the impact of school vouchers on college enrollment, we examine the college-going behavior through 2011 of students who participated in a voucher experiment as elementary school students in the late 1990s. We find no overall impacts on college enrollments but we do find large, statistically significant positive impacts on the college going of African American students who participated in the study. Our estimates indicate that using a voucher to attend private school increased the overall college enrollment rate among African Americans by 24 percent.

Private Schooling In India: Results from a Randomized Trial
by Alex Tabarrok on February 5, 2014


"private schools achieved equal or better outcomes at one-third the cost"


More evidence that all schools should be free schools

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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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How justified are India’s beliefs about Australian racism?

[I've also got two other blog posts on this subject: here and here]

[Addendum, 6 June 2009: This blog post has received a lot of visits and many comments. Going by some of the comments posted by readers, I suspect that some of them have only read parts of this post. But most importantly, probably none will spend the time to read my draft manuscript 'The Discovery of Freedom' – which is over 500 book-pages long – that I have cited as reference, and which contains extensive discussion on 'racism'. There is therefore great potential for readers to misunderstand what I am saying. Therefore, let me make a few comments upfront:

(1) Biological fact: Genetically speaking, we are ALL – each and EVERY human on earth – essentially BLACK North African brothers and sisters. The white skin emerged as recently as 5500 years ago. We ALL have one COMMON great-great–grand mother, with some of us having a few harmless mutations of skin colour that arose to help us adapt better to low sunlight and snow in the higher latitudes. So welcome to this post, brother, sister. (If you don't agree with this biological fact, you may be a part of the problem. Read up biology and become a part of the solution!). And consider this simple fact: I have donated blood in India, USA and Australia. My blood has therefore gone into the veins of people with all skin colours and helped them live, or even saved their lives. So please, before considering this issue further, let us be clear that we are a single species which is surprisingly homogenous given its vast spread across the world.

‘It is impossible to look at people’s genetic code and deduce whether they are Black, Caucasian or Asian.’[1] ‘Modern human genetics … deliver[s] the salutary message that human populations share most of their genetic variation and that there is no scientific support for the concept that human populations are discrete, non-overlapping entities.’[2]

[1] Henderson, Mark, ‘Gene tests prove that we are all the same under the skin’, Times Online, October 27, 2004, []

[2] Lynn Jorde and Stephen Wooding of the University of Utah, cited in Henderson, Mark, ‘Gene tests prove that we are all the same under the skin’, Times Online, October 27, 2004. []

(2) Racism violates equal freedom. Racism is not merely discrimination against others on grounds of their skin colour, but also on the basis of nationality, state of origin, caste, and tribe. I condemn all forms of racism as these are both false in their underlying logic and violative of equal freedom for all. Everyone should be treated on merit, not on a prejudicial basis.

(3) Individual justice, not paint-brushing entire collectives. Freedom demands individual accountability. (My comment of 4 June says it thus : It is individuals who must be accountable for their actions, not entire communities. There is a serious error of analysis in jumping to collectivist conclusions and generalising beyond the particular incidents. Such errors of analysis, if uncorrected, can themselves become the cause of future problems.)

(4) The challenge of explaining the causes of crime. A hypothetical multivariate equation explaining the incidence of crime would look like:

Incidence of crime = f (availability, opportunity, motive) + Delta, where 

availability = f (availability of victim, availability of criminal), being in turn, a function of (place of residence and work, time of the day, level of drugs use and unemployment in society )

opportunity = f (level of isolation, level of police or other surveillance, level of use of knives and guns in society)

motive = f (greed, hatred – including racism, fear, revenge, etc.)

It is very hard to distinguish the racist element from the ordinary statistics of crime.

5) Why do Indians have to leave India in the first place?

This is a vital issue. It must be noted that the Indian education system is broken, its governance, its police etc. are broken. Its residents continue to flee India because discrimination is rampant, corruption is perhaps the only way to prosper, and because life and property are in constant danger. Its rich live in walled houses and cities, with guards and dogs to protect them from chronic crime. A major part of the solution is to fix India. India needs leaders who can take it out of its mess. I encourage you (if you are from India) to look at the Freedom Team of India and consider whether you are willing to lead India to greatness, so that others will come to India, and Indians not have to leave India for simple things like good education.

6) India own crime rates are sky-high but no frenzy seems to emerge:

At least 6,000 (and up to 25,000) women are killed (not just injured) each year for bringing inadequate dowry. These are called dowry deaths. But there is stunned silence in the media and TV about it. Thousands of murders and thefts, of which very few get reported because the police will not lodge a report without a bribe. Why is the Indian media silent about it? Not to diminish the attacks against Indian students outside India, but to ask: why this frenzy? Why is there no balance in the Indian media reports?

7) Read the report on Overseas Student Education Experience Taskforce (Victoria) chaired by Marsha Thomson:

Addendum 22 July 2009. Complexities involved, including data: Visa crackdown will hit numbers (Australian 22 July

Now Read On!

An Indian student was recently attacked in Melbourne. This is not the first such time. S M Krishna, India’s Foreign Minister said he was appalled by the racist attack (SIFY headline: "SM Krishna condemns 'racist' attacks on Indian students in Australia" or Economic Times: "India on Wednesday expressed shock over the racist attack on four Indian students in Melbourne and asked Australia to take steps to prevent such incidents on Indian students.")

NOTE added on 31 May 2009: I now gather that there has been serious misreporting in the media on this issue, and that SM Krishna's written statement does not allege racism as the motive. See statement of SMK As a result of the new information, I'm deleting the paragraph of this blog posted yesterday that read: "I agree that more can be done to ensure the safety of Indian students. But I am personally outraged at the unsolicited allegation being made about Australian racism by the Indian Foreign Minister (and India’s High Commissioner as well). This amounts to the pot calling the kettle black. Look into the skeletons in your own cupboard, SMK, I would ask!" I should have done due diligence and checked original sources. However, I continue to have the strong impression from many sources that many Indians see Australia as a particularly racist country. And so the rest of this post is still relevant and will remain broadly 'as is' except for minor editorial tweaking {1 June 2009: I've taken part of a comment I posted below into the main text now, and reshuffled the order of the post to make the flow of logic more evident. In addition, I've brought part of the text of my other 'sister' post on this subject here as well, to better substantiate a statement made earlier} The rest of the post should now read thus.

I agree that more can be done to ensure the safety of Indian students. (Addendum 4 June: Here's a write up by Miranda Devine in today's Age that points to the need to beef up Police more generally in Victoria, a matter on which I have no expertise.) (Addendum 5 June: There is plenty of violence going around in Melbourne on an average night.) Let the criminals who perpetrated these crimes be brought to book, and let various steps be taken to improve security of all citizens in Australia/Melbourne. I have nothing to say on that.

But if India tries to use the
'race card' in this debate, it enters deep waters. The allegation of the Indian High Commissioner that there may be "a racist element in some of the attacks" is perhaps unexceptionable although unsubstantiated. But unsolicited allegations in parts of the Indian media about Australian racism are quite excessive. Yes, there is some racism in Australia (and I'll touch upon it below), but we have to be very cautious either about claiming that racism was a causal factor in these attacks or, worse, generalising about a society that has done so much about this issue over the past 30 years.

Indeed, beliefs that attacks on Indians in Australia are racist raise many significant issues.

1) Proof needed that this (or these) attacks are driven primarily by racism

Addendum, 9 June 2009. It now appears from the police chief that there is proof that at least some of the attacks are racially driven. See here. "Some of these crimes are racially motivated; however I also believe that many of the robberies and other crimes of violence are simply opportunistic." Except for white supremacists, other crimes can be easily muddled with racism. The loafers and louts of a society will obviously use foul language that can be construed as racist. But I would suggest these crimes are still largely (not entirely!) opportunistic because of the vulnerability of Indian students who live in crime-infested places.

Crime happens. Others too get attacked. Melbourne is not crime free! It is broadly safe, but not crime free. (Addendum: The violent street culture in Melbourne is significantly on the rise – The Age 16 July 2009). India must prove (apart from getting its own house in order first) that racism is either rife or increasing in Australia; AND that racism was involved in the recent cases. If not, it should treat this as a regular criminal matter and stick to non-inflammatory language. Particularly the Indian media.

Mixing crime with racism is bad statistical analysis. The vast bulk of crime in Australia is 'white against white' crime. Drug related crime, robbery, etc., happens to everyone. All kinds of weirdos exist in all societies. The local Police investigated this particular matter and I recall reading somewhere that they believe that the current incident was not race based. [Addendum 3 June: a news report confirming my hypothesis: "police believed that Indian students had suffered disproportionately because they were more vulnerable. Many needed to take jobs, often at late hours, to support themselves, and they used public transport heavily, often at times when few other passengers were travelling." Addendum 8 June 2009: Came across this article from The Age today ("Indians an easy target for cowards lurking in shadows" by Anson Cameron) which tells a different story to what the Police have been publicly saying, and seems to confirm that Indians are being disproportionately attacked. Apparently the local Police told the author of this article informally that "it's usually Indians or Asians who are targeted because they're small and non-aggressive."If true, and if the Police at senior levels are aware of this, then this is a matter of great concern: a) First, because the reported incident was from Port Melbourne, an otherwise wealthy area with presumably low crime [which means the earlier argument doesn’t apply]. b) Second, the informal argument of the local Police doesn't make sense because there are small and non-aggressive people from all nationalities and 'races'. Are all of them equally vulnerable? Why are small and non-aggressive people of Asian and Indian origin being singled out for attacks? If evidence of this sort is confirmed, I may need to partially change my views and agree that 'race' – if not racism – is perhaps a factor underlying some of these attacks. Addendum 25 June 2009: Indians safer in Australia: Rudd, The Hindu, 25 June 2009. Addendum 4 July, 2009. Some issues with death data Age 1 July, Age 4 July. ]

Although louts and ruffians will always use foul language which can be construed to be racist, ordinary crime should be treated as crime. Period. Except for white supremacists who are genuine racist criminals (and these are seriously curbed by the Police), the rest of the criminals are just that – plain louts. Melbourne has had a spate of stabbings of all kinds of people: not just Indian students. It therefore doesn't behove the Indian media to characterise one of the most multicultural societies in the world as racist. Racism (to the extent it does exist in Australia and in the West) operates more at the economic level. Racists are not, as a rule, criminals who will use violence. Criminals who use violence are usually a totally different category altogether.

The only proof of these incidents being caused by an increase in racism (or being motivated purely by racism) as claimed in the Indian media will be to demonstrate statistically that the crime rate experienced by people of Indian origin in Australia is HIGHER than that experienced by the rest of the Australian population, after controlling for place of residence and work.

It is important to understand that out of the roughly 90,000 Indian students in Australia, some will inevitably get caught in crime. Indian students are particularly vulnerable to crime because they tend to live in high risk and high crime areas and work late night and return back by public transport, walking on empty streets, or driving taxis that collect all kinds of weirdos, drunkards, and drug addicts at late night. For someone with that residence and work profile, I don't think Indian students are experiencing a particularly higher crime rate, ie. they are not necessarily being discriminated by the louts and criminals of Melbourne on the ground of their 'race' . But I'm not the expert on this and will leave it to the Police to investigate and tell the people what is going on.

Addendum 10 June: "According to Victoria police officials, in 2007-08, there were 36,765 victims of crimes such as robberies and assaults in the state, of which 24,260 were Caucasian victims and 1,447 victims were people of Indian origin" (here). This is disproportionately high in relation to the population of peole of Indian orgin. But this data could do with some further analysis. I recall reading somewhere that the Police cluster all kinds of Indian-looking people as people of Indian origin, including Philipinos, so the robustness of this classification needs to be confirmed. Second, the relevant control variables which need to be factored in are: place of residence and work, time of attack, kind of attack (ie. group bashing or simple robbery), nature of occupation, whether around public transport, whether around taxi, etc. Addendum 1 July 2009. Here's some more data [The Age 1 July 2009] that shows possibly higher rates of death of Indian students, but it could well be from higher accidental drownings or suicide – ie. analysis is incomplete. Addendum 14 July 2009. The Australian, today outlined the possibility of high rates of suicide in this group given the complex interaction of corruption in India and expectations of parents.]

2) Pot calling the kettle black

But far more problematically, using a blanket 'race' card for all of Australia amounts to the pot calling the kettle black. Yes, there are racists in Australia. No doubt about it. But look into the skeletons in your own cupboard is what I would ask those who make wild statements about Australia or allege racial motives to what does not appear to be (as reported by the Police) race-based crime. And even if it were, the whole context would need to be seen: history, comparisons over time, and so on and on…

India is currently, in my view, one of the world's most racist countries. A fair skin not only gets you a better spouse (higher status husband, higher dowry from the wife, etc.) but a better job. Even in elections the fairer candidate generally receives higher votes; hence posters of candidates paint them almost pink no matter what their real complexion! Fair and Lovely creams do brisk business. But that is only the cosmetic element, no matter how deep rooted in the Indian psyche. [Addendum 25 June 2009: There is only one test of racism (or its lack of): How many Indians will marry a pitch black African from Somalia or allow their son/daughter to marry such a person? My guess is less than 1 per cent. Accordingly I deduce that 99 per cent of Indians are racists. On the other hand there are a good number of such marriages in the West now. Indeed, Obama is a product of one such marriage. Addendum 29 June 2009: Similarly, Indians have imported 1000 totally untalented British actresses to work in Hindi movies, whereas none from dark Africa. – See this article in The Age.]

The worst form of racism relates to the caste system which is in many ways based on historical differences in skin colour. Tens, if not hundreds, of people are brutally beaten/killed in inter-caste violence each year in UP and Bihar. Roughly half the population in India (if the rural people are included) deny merit a chance and give preference to someone based on caste in jobs. Tribal racism in the North East is rife. If you are a non-Khasi in Meghalaya your risk of physically being attacked by Khasi ruffians increases quite substantially, and so on across almost all parts of India. If you are a Bihari you can be beaten up in Assam, and vice versa (horrendous incidents of this nature have occurred not so long ago). And if you are a Bihari in Mumbai, then expect to be beaten up at whim (at least that is what they were threatened with not so long ago).

The media in India of course loves to highlight residual Western racism (which, as I said, is real). But it fails to point out how small it is in comparison to Indian racism. Yet India remains a horribly racist society. [Addendum 21 June: Here's an article that shows just one aspect of it – Diepiriye Kuku: 'India Is Racist, And Happy About It'. Addendum 29 June: Our True Colours, Outlook, 29 June 2009]. Racism is embedded in its Constitution through the recognition of the caste system. Why would caste matter to a government? India needs its governments to crack down on all kinds of racism including casteism and parochial xenophobia within India and stop worrying about the residual racism in the West.


I have discussed racism at great length in The Discovery of Freedom (draft available here)

a) Race is biologically a non-existent concept hence those who believe in it are totally ignorant. That is our role as the educated people: to eliminate this myth of ‘race’.

b) Modern racism started around 300-400 years ago. Before that, where it did exist, the ‘whites’ were looked down upon (except in India, of course). Ie. modern racism has an economic basis.

c) Most of the famous liberal philosophers were racist. They couldn't see the contradiction in their views. Even Lincoln should be considered racist if his comments are read carefully.

d) Racism was very strong in the West till about 50 years ago.

e) Gandhi played the most pivotal role in reducing racism in the West (through his actions in South Africa and further actions in India, plus his influence on Martin Luther King and Nelson Mandela).

f) Racism has declined dramatically in the West over the past generation (30 years) and is extremely low today (not non-existent). With Obama's election, even US could be potentially declared racism-free in the next few decades. My estimate in DOF, based on analysis of various studies, is that roughly 7% of the Western population is currently racist – in terms of actually acting on their racist beliefs. This is a serious blemish on western liberal societies that they need to get over, the sooner the better.

g) Racism has NOT declined in India during this period, making India the last bastion of racism in the world. It was the world's oldest racist society (with its caste system) and remains so even today.

Exploring the journey of Australian racism

Australia has changed very rapidly in the last generation. A very significant percentage (perhaps a quarter) of Australians today comprise new migrants who have come to Australia in the last 50 years from predominantly non-British countries: South Europe, Middle-East, South Asia, South East Asia, etc. Immigration has speeded up even further in the last ten years. Melbourne citizens come from over 144 countries. Australia doesn’t really care much if they get Indians, Chinese, or Vietnamese. Not the policy makers anyway. Anyone with skills who meets the point system can get in.

The Indian media is therefore completely wrong on this one, about calling Australia racist. In my experience, the most racist people I have met in Australia (and I've now been here for 9 1/2 years if you count my earlier stint of 1 year in '92-93) are many of the Indians who live here, not the old Australians. I have close friends among all so-called racial groups, but I have been badly shocked to find Indians speak to me in Hindi in front of their fellow workers about these 'Goras' in a derogative manner, or about 'Chinis', etc. Similarly, in USA I was shocked to find PhD students from India talk derogatively about 'Kallus' (American blacks). Indians who live abroad have this huge chip on their shoulder – racism.

How racist are Australians in giving jobs?

Most Indians who leave India are treated on merit and become successful and well-settled. That is why Indians are among the wealthiest single group in USA and Australia, among other places. On the other hand, in India they face caste and region discrimination their whole life. Or they must bribe their way to "success". So many have left that mess, happy to work in junior roles in the West where at least merit is recognised.

But there does remain a strong tendency among Indian migrants who don't get jobs in the West to classify their new home country as racist in conversations with fellow Indians and with Indians in India. I agree, there may well be a bit of it (7% or so, as I’ve pointed out above). But the work requirements here and work relations are so dramatically different to those found in India that very few new migrants who have worked in the past in India can demonstrate that they understand how to work in teams and demonstrate the relevant language skills. The poor language skills of many Indians show up in the resumes itself, and yet they complain that they were discriminated against due to race. Merit cuts both ways. You are good: you get in. You are not so good then you do other things. The huge number of Indians and Asian graduates from Australia recruited into public service and other jobs shows that employers are looking for skills-match, and are not bothered about ‘race’.

In Breaking Free of Nehru I have written thus:

"The best people among those who apply are recruited, irrespective of their age or where they come from. Yes, there are periodic reports in the press in Australia about stereotyping of new immigrants based on misconceptions or generalizations about their language skills. It is said that some highly qualified candidates do not always get a foothold. Another problem is when potential employers do not care to contact referees from other countries. But in the same vein, elderly Australians and women also find it harder to get jobs in this system. Making detailed applications for tens of positions, including addressing selection criteria in great detail, can also be a very painful process for migrants and older candidates. But if one prepares well for a well-selected role, there is a good chance of being successful.

“Let me give my own example. Had I migrated to India as an Australian citizen at age 41 (the age at which I came to Australia), I could never have entered government service at all for two reasons:
• no open recruitment is undertaken in India at that age; and
• non-citizens are not allowed to work in government in India anyway (in Australia, non-citizens are able to work in state government departments).
However, not only did I get a research job based on my technical statistical skills (nobody would consider me at the management level at that point!), but I was able to move into a management role after about three years."

[Addendum 19 June 2009: Andrew Leigh's research shows there is some racial stereotyping at the entry level jobs in Australia. This is consistent with similar studies in USA and elsewhere in the West, and confirms that a certain amount of economic racism is definitely prevalent in these societies as noted earlier. The Australian, June 18, and actual research here. Similar stereotyping is also experienced by women and the elderly. In other words, being a person of a non-Anglo background acts as a slight disadvantage in terms of job entry and earnings. Despite this, at the end of their career, people of Indian origin generally figure in the top income brackets in USA and Australia due to their ability to rapidly progress once they get an initial foothold. It is quite possible that reverse racism, against 'Anglos' takes place where Indians are owners of a business. ]

[Addendum 8 January 2010 I know of Indian friends who have lived here for many years, even decades. These are no
t new immigrants. They have much local experience. But they are almost without exception convinced that many (not all!) Australians are racist. These views are made on the basis of (claims of) being discriminated against in relation to jobs and promotions. I have personally seen and experienced this at work in a (very few) cases. I know that MOST people here will literally salivate when they come across someone has relatively junior experience in the UK but will ignore even the most highly experienced person from India. I also know that it is, however, not in the interest of good managers to discriminate racially since then their own performance suffers. Those who discriminate will under-perform and will therefore (ultimately) be removed from the marketplace. In any event, this irritating type of racism is ’soft’ racism. Such racists don't (generally) behave badly or offensively, leave alone injure others or kill.]

Yes, racism is not defensible. All racism must be criticised and addressed though equal opportunity laws and through better education. Let Indians claim, by all means, that a few racists do exist in Australia. But please do also acknowledge that there are 5-8 times (proportionately) that many racists in India. Let there be a balanced and truthful coverage of racism, no matter how fictitious this concept.

THE TASK OF OUR GENERATION: to demolish the concepts of race and caste

It is up to our generation to demolish these shameful concepts. I speak forthrightly thus not to condemn India or Indians generally but to set the facts straight and to ask what gives the Indian government the right to its arrogant belief that it can preach to Australia and others about racism. Express concerns about the safety of Indian students, sure! But to preach to Australia about racism. That's a total joke! Fix your own house first is what I'd recommend to India. Don't make a fool of yourself on the world stage given the huge amount of racism practiced in daily life in India today.

If hearing the truth about Indian racism hurts people who are racist or casteist, so be it. Being told the truth might make them reflect. In any event, I'm not here to pander to wrong ideas, no matter whose these may be, even of my fellow Indians. The politics I stand for (yes, I will be entering Indian politics in the coming years if various things that are currently under way make headway) is not related to power and begging for votes. I'm not into power. I'm into freedom and truth. Let us crush this evil of racism entirely across the entire world. Join me in condemning all racism everywhere.

Addendum 28 June 2009: One of Australia's greatest journalists, Philip Adams, wrote in passing in The Australian yesterday (weekly magazine) about his teenage daughter Rory: "She and her friends can't understand all the fuss about homosexuality and are mystified by racism". The world is lucky to have this new generation of kids: the MTV generation, where blacks and whites sing together, where blacks are now the world champions, heroes in song and movies, world best in many sports including golf, where they have now have produced a black president of the world's most powerful nation. These kids today (and I see my kids mingle daily with all 'races' here in Australia) have simply outgrown the concepts of race. They can't understand it. Therefore there are many 'mixed race' (noting that race is not a biologically viable concept) couples on Melbourne's streets.

I hope that the internet, media, and honest self-reflection among the current jaded Indian generation of 'elders' will bring about the revolution of heart that is needed to abolish racism (including casteism) from the face of the earth.

FREEDOM TEAM. Join the Freedom Team of India if you wish to change India.


Don't believe the media hype: racism is often a two-way street, by Akash Arora, Age, 2 June 2009

The views of the Dalai Lama on this issue, Times of India, 10 June 2009

No, we are not racists, by Neil Mitchell, Herald Sun, 11 June 2009

‘After 17 years of living here, I am made to feel like an outsider’Hindustan Times, 10 June 2009 regarding the racism and prejudices in New Delhi.

'Street violence to blame, not racism' – the view of former Australian Medical Association president Mukesh Haikerwal, The Age, 14 June 2009

See no evil by JOSH GORDON in The Age, 17 January 2010. [this one has some interesting and releavant statistics – don’t know the source of these stats – needs to be pursued]

Other related issues:

Indians high-risk violators of visas, The Australian, 20 June 2009.

Indian students violate their visa conditions: Hours late and long danger to students, The Age, 23 June 2009.

Australia has the highest proportion of foreign born people: Paul Sheehan Migration: the true story, The Age 2 November 2009.

Follow up comments (based on the issues I have raised in this post) raised in Facebook:

Some research papers on the subject of prevalence of racism in Australia

Police Chief's analysis of data in The Age, 6 Feb 2010.

The regular crime scene of Melbourn:

ADDENDUM: CASTE DISCRIMINATION IN INDIA (BLOCKED BY CASTE, ECONOMIC DISCRIMINATION IN MODERN INDIA: Edited by Sukhadeo Thorat, Katherine S. Newman; Oxford University Press, YMCA Library Building, Jai Singh Road, New Delhi-110001. Rs. 750)

Racism is reproduced through children, who show colour bias

Country 'drifting back to racism The Age June 16 2010

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