22nd August 2010
In 1998-99 I started a handful of articles/ academic papers which I never got to progress, having come down with the most acute case of RSI. I accidentally came across some of these old writings a moment ago. Some of these papers are over 14000 words long and not suitable for a blog post. But a few short ones might be OK for a blog.
This one, on good governance, is a preliminary paper of 1999. Some of this material has flowed into BFN. The rest remains unexplored/unpublished.
=== DRAFT ARTICLE WRITTEN IN MAY 1999 ====
The demand for good governance is voiced across the country, but few have stated explicitly the fundamental changes it will take to arrive at this objective. We have dug our head into the sand regarding the analysis of the fundamental deficiencies in our democracy, and this is now beginning to take a heavy toll on our daily lives. I will touch upon four issues here which I believe are fundamental problems of our system needing to be addressed urgently.
1. Democracy costs a lot of money
Democracy does not come for free. Enormous expenses are incurred both in the organisation of elections by the Election Commission and in contesting elections by candidates. Whereas the first of these easily runs to many hundreds of crores per general election, and has our sanction as a citizenry, we seem to balk at considering the likelihood of candidates spending similar sums of money. We have not only imposed limits on electoral expenses, which are flouted blatantly by candidates, but we have also kept no relationship between the expenses incurred in election by candidates and the remuneration received after elections by the successful ones. The limit of expenditure in a Parliamentary Election is now Rs. 15 lakhs, a number of reports — informal as well as formal — prove that candidates spend on average well over Rs. 1 crore (for example, see pp. 272-278, pp.296-298 of The Black Economy of India by Arun Kumar, Penguin, 1999). At the end of this process in which one out of many are elected, the take-home pay of the successful representative, a Member of Parliament, is Rs.4,000 per month (details in Annexure I, including why other expenses are not part of this take-home pay). Clearly in this process there would be some who wish to provide charity to us citizens by spending their own money with no thought of returns, but on the whole, the main category of persons who enter this absurd process are those who have no compunction about misusing their elected office to capture rents from the Government machinery to recover their heavy investment . In not-so-polite language, we can say without fear of being rebutted that a vast majority have come into public office with the primary objective of looting the system. The N.N. Vohra Committee report on the nexus between politicians, bureaucrats and criminals including the Mafia is as explicit a statement of fact as any one can get from within the system. “In certain states … these gangs enjoy the patronage of local level politicians, cutting across party lines and the protection of government functionaries.” Democracies do not run on charity and we should not be depend as citizens on the good will of a few charitable souls who spend their own money in order to ‘serve’ us. Our representatives must not have to depend on loot and black money for their sustenance.
To make matters worse, the Election Commission of India prevents debate on whatever expenses have been declared to it by political parties. The mystification of the basic processes of democracy is causing large scale corruption in
In brief, the solution here is (a) to remove limits on electoral expenses but to insist on transparency, and (b) to drastically increase the take-home remuneration of MPs while completely eliminating their ‘perquisites’ except those that are necessary in the interest of security.
The Official Secrets Act of 1923 talks about not disclosing secret official information which is likely to assist, directly or indirectly, an enemy or which relates to a matter the disclosure of which is likely to affect the sovereignty and integrity of
3. Supervision of Government Machinery
We can skirt the micro- issue of supervision of the government machinery at our own peril. In order to be truly representative, a democracy has to be designed to leave the control over, and superintendence of, governance, with the citizens at all times.
Under the current dispensation, we have a system of representing ourselves democratically at the highest level of governance. We give to ourselves a government every few years in order to carry out functions that we cannot perform ourselves as individuals. This representation is very thin, though. As a ratio, at the national level, one out of every twenty lakh people represents us. At the state level, this is slightly better, but still very thin. The actual structure of government is many tens of thousands of times larger than the number of representatives.
Our representatives are authorised to create laws and statutes by which we are to be governed. Some of these representatives are then empowered to execute these laws. We also expect the representatives to supervise — through the use of mechanisms such as government auditors and committees of the legislature — the actual implementation of these laws and the thousands of rules framed thereunder. Unfortunately, due to the way the system of supervision has been designed, most of the laws are violated fearlessly by the very same gargantuan governmental machinery which was designed to assist our representatives execute them. I believe that a vast majority of these violations are never even brought up to the notice of various committees of the Assembly or Parliament, and therefore, functionaries continue to violate laws with impunity.
Once the contentious process of framing laws is resolved democratically, each of us should resume to ourselves the power to verify that these laws and rules are being followed strictly. The Local Board that I envision would be attached to each local office of the government, such as each district library, each post office, each branch office of each public sector undertaking. Without having any power to legislate or to execute, its sole function would be to supervise the procedural aspects of functioning of the governmental organisation to which it is assigned. Voters of the city or village in which the office is located would be eligible to apply for membership of such Boards. A public drawing from among the eligible applicants would take place. Members of the Board would be authorised to inspect all records with due advance notice. Members would be responsible for pointing out errors of omission and commission in procedure to the concerned elected representatives and to the people directly through the press. They would, in addition, be invited to all statutory meetings, where they would act as observers, such as at the time of opening of sealed tenders.
Local Boards will ensure that the fundamental control of our country’s governance vests with citizens at all times. As part of the process of deepening and strengthening democracy in
4. Using the best technology
This does not necessarily mean that the use of latest technology is optimal for each situation. In the case of private goods, the most labour-saving technology chosen — and the availability of this choice is of the essence — by a self-interested individual facing a personal budget constraint can be defined as optimal. If all technology, of all vintages, is freely available, then all individual decisions made in the marketplace of technology are optimal and thus appropriate, making the term appropriate technology tautological, merely representing free choice. It then does not possess meaningful content for a policy maker, leaving no scope to interfere with the forces of the market.
For public goods, the choice of appropriate technology is not quite as obvious. It is difficult to choose between hand-made roads (labour-intensive) and machine-made roads, for example. Since social cost-benefit analyses have serious shortcomings, I suggest that human dignity, safety and standardisation of quality be considered in making these decisions.
Using manual labour for tasks such as collection of garbage in cities, cleaning public drains, breaking large stones into gravel and carrying bricks up bamboo scaffolds, is inhumane. These activities are almost always carried out without concern for the safety of the citizens involved. Since labour is cheap, the life of these temporary workers, often hired newly each day by contractors, is itself felt to be cheap, and little is heard of their injury, disease, and consequent lay-offs in government sponsored projects, except when a major accident takes place and tens of them are crushed to death here or there.
Machines provide dignity and also standardise quality. The construction of roads by machines leads to durable roads, permitting the use of larger trucks of higher quality to operate, reducing the cost of maintenance of roads as well as the cost of transportation of goods across the country.
As a very important spin-off, machines demand and indeed compel, the development of indigenous skills, both to handle them properly and to build and manage them. Vocationalisation of education will become meaningful if government insists that contractors employed by it should employ only licensed technicians empowered with the best tools.
Paradoxical though it may appear, societies which set incentives for the best technology generally enjoy a low rate of unemployment. The compulsion to use the best technology forces an entire society to become intellectually competitive over time. Competitive societies in turn overwhelm other countries with their exports and ability to lower costs internally.
Thus as a nation, only the world’s best technology is appropriate for us. We have to put an end to the annual sacrifice of thousands of citizens at the alter of our
I have touched briefly upon some of what I thought were the more important issues relating to the strategy for improved governance. These are of course many more areas which deserve our urgent attention, and we must try to set aside time in our daily lives to look into these matters. For example, improved governance needs vast improvements in economic and social policy at the same time. These are vast topics in themselves and need further debate. As a matter of principle, a free democracy needs much more open debate and interaction in order that its citizens understand the issues involved and to collectively act in order to bring about significant change in the lives of the common man. Bureaucrats are citizens first. They should come out and talk about what they have learned from their experience.
STATEMENT SHOWING THE SALARY, ALLOWANCE AND OTHER
FACILITIES ADMISSIBLE TO MEMBERS OF PARLIAMENT
S. NO. & ITEM
TAKE HOME VALUE
Rs. 4,000/- per month
Rs. 4,000/- per month
Rs.400/- the MP have to sign the register except on holidays.
Zero. Given in lieu of expenditure on being out of their place of residence. Similar DA given to all government servants.
Constituency Allowance @ Rs. 8000/- per month and Office Expense Allowance @ Rs.8,500/- per month, Out of which Rs.2,500/- should be for expenses on stationery etc. and Lok Sabha/Rajya Sabha Secretariat may pay upto Rs. 6000/- per month to the person (s) engaged by the MP for obtaining secretarial assistance.
Zero. MPs are expected to incur miscellaneous expenses for their constitutency. In fact they probably spend more than this per month. The others are in lieu of actual expenses on PA/ stationary.
1,00,000 free local calls per annum on both the telephones Delhi and Constituency residence pooled together. Trunk call bills adjusted within the monetary equivalent of the ceiling of 1,00,000 local calls per annum. Excess calls made over and above the quota allowed to be adjusted in the next years quota.
Zero. A necessity for MPs, just like similar entitlements to senior government functionaries.
Rent free flats only (including hostel accommodation). If a Member is allotted bungalow at his request, he shall pay (a) Full normal rent if he is entitled to such accommodation; and (b) Full normal rent and a non-entitlement charge of Rs.500/- per month, if he is not so entitled.
Rent free furniture upto the monetary celling of Rs.24,000/- for durable furniture
and Rs.5,000/- for non-durable furniture.
Free Washing of sofa covers and curtains every 3 months.
Tiles in bathroom, kitchen wherever demanded by MP.
Zero. MP has to maintain his original establishment elsewhere. This is more like free hostel accommodation and you do not get to take it in cash, home.
Water & Electricity
25,000 units of electricity per annum 12500 units each on Light/Power meters or pooled together Members who have no power meters installed are allowed 25000 units per annum on light meter and 2,000 kl. of water per annum beginning January every year.
Zero. Addition to above accommodation.
As available to Grade-I Officers of the Central Government under CGHS.
Zero. Govt. servants get similar facilities.
Rs.1,00,000/- on interest as applicable to the Central Government Employees recoverable within a maximum period of 5 years not extending beyond the tenure of MP.
Zero. Govt. servants get better facilities.
Pension to ex-MPs
(i) Minimum pension of Rs.2,500/- per month for membership of 4 years and Rs.500/- per month for every year in excess of five without any maximum celling.
(ii) Pension to Members with two terms of Lok Sabha and to all the Members of Provisional Parliament (Constituent Assembly). Minimum Rs.2,500/- per month.
(iii) (a) In case where the elections are not held due to unforseen circumstances like weather conditions etc., such as in Ladakh in J&K and Mandi in Himachal Pradesh, such period should be counted towards their eligibility period for grant of pension.
(b) Where in any General Elections held for the purpose of constituting of a new Lok Sabha, polls were delayed in any Parliamentary Constituency of any part thereof on account of terrorism, Insurgency or public order problem, the delayed period will count for pension purpose at the rate admissible under the law for the time being in force and from the date on whcih the dissolution of such House took place.
(iv) Ex-MPs pension allowed irrespective of any other pension without any upper limit on the aggregate.
This has a positive Net Present Value to be determined separately in each case.
Pension to the spouse/ dependent of an MP dying in harness.
Rs. 1000/- per month for a period of 5 years from the date of death of MP, to the spouse, if any, or dependent.
Very small, almost like that given to Jawans. Best ignored.
RAIL One 1st Class + One II Class fare
AIR One and one fourth air fare. Also air fare for one companion in case of a blind/physically incapacitated MP.
STEAMER One and 3/5th of the fare for highest class (without diet).
ROAD (i) Rs 6/- per km (ii) Minimum Rs.120/- to/fro from
Zero. No take home cash component. Govt. officers get similar facilities for official duty.
(1) Railway pass for MP for travel in AC 1st Class or Executive Class of any Indian Railway. Spouse can also travel with MP in the same Class. If such journey or part thereof is undertaken by air from place other than usual place of residence of the Member to Delhi and back, to an amount equal to the fare by air for such journey or part thereof or the amount equal to the Journey performed by air from usual place of residence of the Member to Delhi and back whichever is less.(ii) Companion can also travel with MP in AC II tier. (iii) To and fro air travel for the MP from Ladakh for Member and Spouse/companion. (iv) To and fro air travel facility for Member and spouse/companion between the
This has some value (only as far as spouse is concerned. MP is supposed to be doing official duties) depending on how much the spouse uses this. If spouse flies 10 times at an average of Rs. 5,000 each, it is worth Rs. 50,000 per year.
Travelling facility to ex-MPs
Ex-MPs alongwith a companion are entitled to free AC two tier rail travel facility from any place to any other place in India, on the basis of an authorisation issued for this purpose by either Secretariat of Parliament as the case may be.
Part of pension benefit. Has “take home” value in some cases. Should be added to pension and included in NPV of pension.
22nd August 2010
In the nine years (2000-2008) when I was mostly off the internet, nursing my RSI and trying to write a book or two, the internet world changed. I was a creature of Web 1.0, but now we have Web 2.0. Indeed, prior to June 2010 I was stuck in paper-based communication (books, articles) with a little internet use and blogging on the side (I did own and maintain a few websites, but my knowledge about the internet was getting rapidly dated.)
And so, one fine day in June 2010 I realised that I've not been using even a fraction of the potential that blogs have to reach out to my target audience: Indians. It finally dawned upon me that blogs are a powerful medium to reach out to others – particularly after I figured out how to use RSS Graffiti to link up to my blog to Facebook. One can now rapidly multiply one's "subscribers". That was quite a discovery.
And so in June this year I moved from blogspot to this blog, and significantly intensified my blogging efforts. In this post I will summarise my thoughts on the use of blogs as a medium of communication and share some learnings as I move from the "blog newbie" I was to a lower end "intermediate" blogger. The fact that I'm providing some guidance here doesn't mean that my blog is particularly good or that I'm an expert. All I hope through this post is to provide some useful insights to those who haven't yet thought about using blogs, or to those who want to use their existing blogs more strategically.
This post aims for a two-way exchange. I'm keen to learn from you so I'll be very happy to receive your comments/ thoughts on this post. But first let me make my pitch to the Indian liberals. This post is not a random blog. It is strategic. It has a purpose.
The Indian liberals must take over the internet!
The internet represents a great revolution in information-sharing and freedom. It represents the essence of freedom of expression and the freedom to communicate, allowing people to choose between competing ideas. Moreover, its marginal cost is zero. What better way than this to get out one's message? Indian liberals should use the blogsphere actively as a marketing and educational tool. Blogs have become both sophisticated and easy to manage, so now there is no excuse for liberals to not use them.
Like everything else in life, there are trade-offs. Is it worthwhile educating the current generation or is it better to write good books that can inform future generations? It it worthwhile reaching out to a few extra people given they might not join FTI and contest elections? Of course they could become Freedom Partners. There are also other spinoffs: some blog material could be converted into FTI flyers, some could flow into TAGI editorials. Some could even inform a further book. Either way, a good blog must form a necessary strategic complement to the communication toolkit of a liberal.
Tips for running a good blog
These are early suggestions. I'll keep adding thoughts and links to this post in the coming months/years. Your comments will be appreciated, as they will provide me with food for thought. This lists below are in no particular order.
1. Establish a neat and tidy blog
1. Buy your own domain. I think owning one's domain is a fundamental requirement. I had operated a blogspot blog for a few years, but blogspot has very poor text editing features. Also, once you get your own domain, you gain greater control over its features. Of course, you can start on blogspot, for your posts and comments can be transnferred to your domain once you are ready. Note, though, that it is quite a challenge to transfer blogspot posts to your own domain, but if you search around on the internet you'll find instructions on how to do it.
2. Use WordPress themes and plugins. I use WordPress on this domain. Do make sure your theme is not cluttered and that the published text reads easily. I like the Whitehouse theme that I'm currently using because it allows me to use a customised image as a header, and its published text reads nicely without hazy "fancy" colours that strain one's eye. The text should be simple: just plain black against a white background.
3. Provide Feedburner feeds. Feedburner offers email subscriptions – a great boon to novices who find RSS daunting. For an internet novice, understanding "feeds" can take quite some time (I didn't understand them till recently), but many internet users now actively use Feed readers like the Google reader. They don't need the email option. A good number of my readers have chosen the direct feed option (https://www.sabhlokcity.com/feed/). They are RSS experts and that's fine. But I'd like to be able to reach out to internet novices, as well. As a result of the combination of options I now offer, I'm able to reach out to quite a few people with each post. I'm also going to hook up the IndiaPolicy Yahoo group to my blog posts.
4. Use multiple languages. I'm still struggling with this, but I'd like to publish both in Hindi and English. I've tried to use a few plugins, but they don't seem to work. I'll keep trying. Publishing in multiple languages is particularly important for a political blog like mine. My audience largely speaks Hindi. I should therefore write for them directly in their own language.
5. Provide good navigation to your posts. Categorise systematically and provide archives. I don't like tag clouds, though.
6. Use videos liberally. But don't use the autoplay option!
7. Don't clutter. Avoid all kinds of clutter. I'm trying out Google Adsense advertisements, but these should be used in moderation I'd suggest. Plus it is crucial control your Adsense settings to avoid rubbish showing up on your blog.
2. Let the world know your blog exists
There's not much point in having a blog without letting others know of its existence. A blog is a communication tool. It must aim to reach out as widely as possible. So do the following:
1. Write to your friends. Send them an email requesting them to subscribe to your blog.
2. Comment on related blogs. When you do so, provide a link to your blog. Comment on Facebook sites (e.g. Economist) and provide links to your relevant posts. I don't do this – commenting on other's posts/Facebook sites – as much as I should. I must do more. There's NO POINT in my writing if people for whom my posts are intended aren't reading what I write!
3. Get your blog registered in relevant directories. As you'll note I've registered my blog in a few directories. That apparently helps get some more visitors, particularly if the listing is well-targeted. This is a matter of searching on Google and finding such directories, then writing to them.
4. Hook up to Web 2.0. Hook up your blog to Facebook, Twitter, Friend Feed, BlogFrog, etc.
5. Do a few SEO [search engine optimisation] things (like 'meta'). On WordPress there are "widgets" (ready-made computer programs) that help you set up meta tags. Use them, particularly the title of your blog. Also check around on the internet to learn more about SEO. I'm still learning.
6. Download and install Alexa toolbar. This is important since for some reason Alexa is now the default method to determine a website's rank. Putting your Alexa code (widget) on your blog is good. Note that Alexa counts your entire domain's rank, so if you set up subdomains with useful mini-blogs/ information sites on them, your overall rank will rise. It is crucial to always remember that most of us will remain on the 'long tail' end of global traffic. My blog (actually my combined domain) receives only 0.00026% of global traffic – only one out of every 384,000 website visits on the internet comes to my blog. So remember that there will be a lot of variation in your blog's rank.
6A. Keep posting. If you don't post sufficiently regularly, your blog rank will fall off. Keep posting! Traffic is king. In my case I want millions of Indians to read my blog. That can't be achieved if I keep quiet.
7. Go to Stumbleupon and 'like' your blog. This requires setting up a Stumbleupon account and downloading the Stumbleupon 'bar'. One of the pages I 'liked' received over 100 hits suddenly. I don't know the long-term benefits of this strategy, but there is no harm in spreading the word around. Who knows where you find your readers.
8. Monitor your pagerank: There are websites that let you monitor your pagerank. Apparently the more links your have on higher ranked sites the higher your own pagerank. What does this do? Don't know. You can't do much about your pagerank, though. Much depends on how others choose to link your blog.
9. Follow Google's advice! Here's excellent piece of advice from Google.
3. Write well and respect your readers
1. Use the save option and revise before publishing: In June I started pumping out blog posts in one hit, without revision. Then I found my posts had a lot of typos. I soon realised that one should try to avoid typos, as a courtesy to ones readers. Good content must be smooth and easy to read. So I have now started drafting and saving my posts. I then try to check them at least once before publishing. Of course, if something is urgent one can't be so choosy. And a blog does not aim to be the same as a book (which I'd revise at least 7-8 times before publication). One first draft plus one revision (ideally two) is good enough for a blog. There are always going to be trade-offs between quantity and quality.
2. Be yourself. Most of use will naturally disclose our thoughts and preferences on our blog. But definitely don't try to be an expert in something you are not!
21st August 2010
We teach children hygiene to protect them against bacteria. But we don't teach them economics to protect them against mankind's worst mental disease: socialism.
In a democracy, voters choose amongst various policies on offer. In order to make good judgments, they must be enabled to understand the basics of economics. Else they'll fail to distinguish between good and bad policies, and thus between good and bad political parties. It is therefore not sufficient for children in India to be taught Engish, mathematics, science, geography, history and one Indian language. It is essential that they are taught basic economics, by which I mean non-mathematical micro-economics (not macro-economics – they don't need to know anything about GDP and such things). Such basic education should be imparted in year 7 and 8 when the child is able to sense his or her needs and make generalisations.
Unfortunately, today even our smartest children – e.g. doctors, engineers, and lawyers, are economic illiterates. Their thinking on policy is absolutely confused, as confused as the actual illiterate (indeed often worse). Economics is the most counter-intuitive discipline, and requires some amazing mental gymnastics in order to understand its principles. Indeed, I would argue that most professional economists (particularly macro-economists) don't understand economics, either).
If we try to apply our illiterate intuition to matters of economic policy, we will be quickly led astray – to socialism! Socialism is thus the disease of ignorance. Unfortunately, since almost no one in India understands economics (perhaps 1 out of 100,000?), Indians tend to vote with their 'instinct', not through their head. Therefore they vote for socialists, thus unwittingly destroying their own nation.
Given the abysmal level of basic economics education in India, finding good political leaders is virtually impossible. Even if such leaders are somehow found, persuading the economics illiterate electorate (both illiterate and educated) is next to impossible. And so India will continue its precipitous slide towards anarchy. I do remain an optimist, though, given that the internet now permits the liberals to radiate their message to India.
Once every child in India understands how the price system operates, India will be saved. Our children will then also understand how international trade works and how centralised planning (a crucial part of socialism) is the greatest folly. They will then readily appreciate how mercantalism (e.g. swadeshi) is self-destructive. Once our children understand such basic things, India will become immune to the more dangerous forms of socialism. There may still remain some fuzzy welfare socialists – as there are in the West – but at least the main disease, of socialism, would have been eradicated.
Such education, to be imparted in years 7 and 8 in school, should make use of Hayek's foundational logic of information being local. I have tried to explain this in chapter 3 of BFN, which could well form the basis of the school coursework.
But our educationists themselves don't have a clue about economics, so they don't see its value, and hence won't implement this proposal. Our leaders like Sonia Gandhi are semi-literates who are blind to all logic including fundamental economics. And the BJP types are so confused that it is not worth mentioning their name. In other words, we face the classic chicken-egg problem: HOW can we educate children in economics without first forming a liberal government? And WHY will the voters want a liberal government if they don't understand economics? I'm hoping that FTI will find sufficient leaders in the coming years to break this vicious cycle.
20th August 2010
Here are extracts from BFN about the dangerous aspiration for equality. This is a quick cut and paste without footnotes and referencing. The actual text can be readily accessed. But first a short (one and half minute) video from Youtube by Milton Friedman:
* * *
The real choice before us today is between the two western models of governance – socialism or capitalism; between the life-denying concept of equality and the life-sustaining concept of freedom. Even if we don’t care about the philosophy of freedom, pragmatism would lead us to the more successful model. Capitalism is dramatically successful, just as socialism is dramatically unsuccessful.
But there are far more important and compelling reasons to follow the path of freedom. Of these, delivering a society based on ethics and morality ranks the highest. Despite the noble intentions of its practitioners, socialism is immoral and destroys the moral fabric of entire societies. Freedom, on the other hand, delivers the highest ethical values and creates for each individual a level playing field by providing equality of opportunity through which the individual is enabled to discover his or her talents and achieve his or her highest potential. While the individual is the moral centre of a free society, the society is the immoral centre of a socialist one. Freedom is about far more important things than economic success, although a poor country like India should welcome its merits on that ground alone.
The Problem with Equality
- We note that the very process of generation of inequality through ethical trades is beneficial. We, the consumers, benefit through the products made by hard working innovative people. Most of us will find purposeful employment through jobs that such people create.
- Second, if left to their own devices, many wealthy people promote the arts and sciences as well as other forms of philanthropy. They don’t have to do so, though, since they have contributed enough if their wealth was acquired through ethical trades.