Thoughts on economics and liberty

Tag: Equality of opportunity

India’s great shame: SUPPRESSION of a quarter of its population (#1)

J.S. Mill pointed out a very important thing in On Liberty, that social norms can tryannise equally or even more than governments. The advocate of liberty is therefore not merely concerned about misuse of government power, but about misuse of social power. 

India's mistreatment of those it calls "Scheduled" castes and tribes (a term created by the illiberal Indian constitution which gave recognition to religious/social categories) is well known across the world.

Not so well known is that such discrimination is perhaps on the increase – mainly because it has been so strongly institutionalised through affirmative action.

First watch these three videos that were shared by Anil Sharma of FTI. I'll provide comment in a subsequent blog post. (All I'd like to note at this point is an extracts from BFN – that follows these three videos)





Many things are deeply wrong with Part XVI of the Constitution:

  •  Sociologists and anthropologists can use terms like tribes and castes, but not a government. A government only recognizes citizens. Period.
  • As already indicated, Part XVI perpetrates grave injustice by punishing people who have not, as individuals, participated in any crime.
  • By recognizing these castes and tribes in our Constitution, we have effectively frozen them forever. Our culture and society should remain free to evolve and change in any way that its people individually choose to, so long as they remain accountable for their actions. In any event, the time has come for people to move from tribal modes to a modern, individualist mode sooner rather than later.
  • Affirmative action increases caste-based inequality. If the caste system would have disappeared on its own in, say, a hundred years in capitalist India, the socialist intervention of reservations will now sustain it for ever. Thus, our Constitution has made it very hard even for the best social reformers of Hinduism to do anything about the caste system now. There has never been greater awareness of one’s own caste than in today’s India. We don’t know our politicians by their views any longer, but by their caste. Perhaps even primary school children think about their caste now.

These things should be completely out of the reach of a government. A government should entirely focus on the economy, on the education of our children, on teaching them the wonders of science. The way to break the back of the invasive and insulting caste system is the following:

  • abolish reservations;
  • remove all references to any religion, tribe or caste in the Constitution;
  • review, and where possible repeal, any law in India with the words Hindu, Muslim, Christian, Jain or Sikh included in it; and
  • ban the census of India from asking us silly questions about our religion or caste. Let us only be Indians. Period. That should do.
* * *
I am not denying the deplorable practice of caste discrimination. I strongly oppose it, it being one of my reasons for choosing not to be a Hindu (I have, in addition, many other reasons for opting out of the business of religion altogether). Nevertheless, eliminating the caste system is not a matter for a government to get involved in – it is a matter purely for social and religious reformers.
Similar discrimination or stereotyping has occurred in the past in every part of the world. Ending these things needs a different approach. Even as George Washington was taking on the role of American presidency after the 1776 Declaration of Independence, he owned hundreds of slaves. Thomas Jefferson, the man to whom we owe the sentiments of the Declaration, also owned over 180 slaves; even as late as in 1824. Similarly, providing equality and adult franchise to women took a very long time coming in the USA. In other words, there has been massive discrimination in the past even in today’s relatively free societies.
The lesson here is that while a government can set minimum standards and punish people if they violate these standards, the task of preparing a society to accept these standards requires social reformers to spend decades, if not generations, in preaching the message of reform. Yes, governments can set in place non-discretionary outcomestandards, and they should. In the case of caste discrimination, the government can do the following two things:
  • Ensure that poverty is eliminated and all children receive education of decent quality up to their twelfth year. This will involve a total revamp of the school education system, as outlined in Chapter 6.
  • Enact an Equal Opportunity Act in order ‘to enforce everyone’s right to equality of opportunity; to eliminate, as far as possible, discrimination against people by prohibiting discrimination on the basis of various attributes’.[iii] A government can definitely control people’s behaviour, even if can’t change people’s feeling. Such a law will clarify, extend and enforce Articles 15 and 16 of our Constitution. The government would then need to build a very strong capacity to enforce this law.
But to ask a government to do anything beyond these two is not realistic or reasonable. If a government attempts social reform, it faces the following problems:
  • Governments are not credible. Their sincerity is questionable. Members of a government are not qualified to touch our hearts and to make us change. People know that politicians are on the lookout for votes.
  • The opinions of the political class or the bureaucracy merely reflect existing social opinion. They can’t become reformers, anyway.
  • Bureaucracies established to ‘reform’ the society have no interest in eliminating the social problem, for if that problem goes away then they will lose their jobs! 

The diagram below tries to distinguish the role of government from that of social reformers.

It is therefore up to social reformers to initiate community-based action to educate and change people’s minds and hearts. When we feel really bad about the terrible things that continue to happen in Indian society, we can try to do the following few things:

  • We can begin by setting aside, in differently coloured piggy banks – labelled separately as ‘Ending the Caste System’, etc. – all the money that we would have been otherwise willing to let the government take away from us in taxes for the purpose of social reform (say 1 per cent of our income?). Presently, this money would go towards establishing mammoth ineffective bureaucracies which are focused entirely on increasing the problem.
  • Instead of then funding the government through this 1 per cent increase in our taxes, we can get together with others who believe in similar causes and form associations to promote our chosen causes. There may already be many such associations in existence that need volunteers like us. Let us network with other like-minded people and expand India’s social capital. Let us build civil society.
  • Once we are satisfied about the quality of work of these associations, let us then break open our piggy banks and fund these associations.

We will be pleasantly surprised by participating in such associations that social causes are impacted quickly, economically and very effectively. In addition, those of us who belong to a so-called ‘high caste’ should not forget to clarify to our children that we will be equally happy if they marry a person from a social category considered by un-enlightened Indians to be ‘lower’ than ours –as long as the person they choose is of good character. We can also use non-caste titles in our names. Finally, we can place the entire offending religion on notice and publicly declare that we will abandon it if it refuses to reform.



[iii] This is a paraphrase of the objective of the Victorian Government’s Equal Opportunity Act.

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Why are Americans not jealous of the rich?

Here's an extract from a blog post by Richard Posner:

One reason for the lack of envy [in USA] is that the only inequality that is noticed is inequality between middle and upper class people—the poor are invisible—and the middle class is well off by international and historical standards. Another reason is that there is already a good deal of redistribution of income and wealth through the entitlements programs, and further redistribution, involving significantly heavier taxes, is generally opposed, as no one knows whom the burden of the heavier taxes will actually fall on. Still another factor is the domination of campaign financing by the wealthy, which discourages legislators from left as well as right from waging “class warfare.” Also, America is a classless society in the sense that the wealthy do not flaunt a superiority of culture or manners (think of the vulgarity of a Donald Trump); they do not, typically, attend the very best prep schools and colleges; they are not, for the most part, rentiers, living off inherited wealth; they are not considered “better” than other people; they just have more money. And America remains an open society. Children of privilege have advantages, but the talented who start with no advantages face no obstacles to rising

Equality of opportunity, a salient American cultural characteristic, actually guarantees inequality of income, because an opportunity is just a chance. Equality of opportunity is related to individualism and competitiveness, which are also American traits.

Now, I disagree that the redistribution programs have anything to do with this. I would suggest they increase envy, and reduce incentives to work. But overall, these are good points.

And a few good points by Gary Becker as well (both authors always blog on the SAME topic, to provide two perspectives):

The great majority of people in different cultures do not object to someone who has made lots of money when they have superior abilities and talents, and they work hard at producing what are considered useful goods or services. Actors like Tom Hanks or Jennifer Aniston earn millions of dollars per film, yet they are admired as stars rather than condemned for being millionaires because films are a popular form of entertainment. Bill Gates, Steve Jobs, and others who became billionaires by creating innovative companies that provide highly valuable goods and services to millions of individuals are widely admired as the business equivalents of rock stars rather than attacked for their great wealth. Leading transplant and other doctors who become successful and very wealthy through extensive education and superior skills are recognized for their valuable contributions to extending the lives of very sick individuals, and few object to their high earnings.

He also offers a solution which I broadly endorse (subject to a few very minor caveats):

The best way to reduce these inequities is to substitute for the present tax mess an inclusive equal percentage tax on all incomes, where the income base would be greatly widened by eliminating deductions on mortgage interest payments, restraining the tax-deductibility of charitable contributions, and eliminating special subsidies, such as the generous ones to ethanol producers. With a flat broad equal percent tax on all incomes, capital gains and other sources of income that currently have special tax treatment should then be taxed at the same flat rate as earnings and other incomes.



Don't blame the rich for inequality, it's the broken education system

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