Thoughts on economics and liberty

Tag: Lokpal Bill

Katju may be injudicious in the way he speaks, but he has a point

This speaks for itself:

during the recent Anna Hazare agitation in Delhi, the media hyped the event as a solution to the problem of corruption. 
The Jan Lokpal Bill 2011 defines an act of corruption as punishable under Chapter IX of the Indian Penal Code or under the Prevention of Corruption Act vide Section 2(e). Section 6(a) of the bill says the Lokpal will exercise superintendence over investigation of acts of corruption, and section 6(c) empowers the Lokpal to punish acts of corruption after giving a hearing. Section 6(e) authorises the Lokpal to initiate prosecution, and section 6(f) authorises him to ensure proper prosecution. Section 6(i)(j) authorises him to receive complaints.
Section 2(c) of the Prevention of Corruption Act defines a public servant very widely. It includes not only government servants but also a host of other categories, such as employees of a local body, judges, certain office-bearers of some cooperative societies, officials of Service Commission or Board, and vice chancellors and teachers in universities.
As pointed out in ‘Recreating Frankenstein’s monster’, there are about 55 lakh government employees (13 lakh in the Railways alone). There will be several lakhs more in other categories coming under the definition of public servant according to the Prevention of Corruption Act. Obviously, one person cannot supervise and decide on presumably millions of complaints pouring in against them. Hence, thousands of Lokpals, maybe 50,000 or more, will have to be appointed. They will have to be given salaries, offices, staff, etc. Considering the low level of morality prevailing in India, we can be fairly certain that most of them will become blackmailers. It will create a parallel bureaucracy, which in one stroke will double the corruption in the country. And who will guard these Praetorian Guards? A body of Super Lokpals?
All this was not rationally analysed. Instead, the hysterical mob that gathered in Jantar Mantar and Ramlila grounds in Delhi thought that corruption would be ended by shouting “Bharat Mata ki Jai” and “Inquilab Zindabad”.
It is time Indians woke up to all this. [Source]
I may disagree with some of the injudicious comments of former Supreme Court Justice Mr. Katju, but he does not mince words about the fact the Lokpal is NO WAY TO REMOVE CORRUPTION.
Hats off to him for daring to speak the truth in the environment of demagoguery led by Anna Hazare and his group of half-baked thinkers.
Once again, a link to FTI's position on the Lokpal bill. Please circulate it widely, including to Mr. Katju who might be (I'm not sure) fit to become an FTI member.
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The laws of economics NEVER bend. So if a Lokpal comes in, without changing policies, guess what will happen?

I've repeatedly explained that the Lokpal Bill does NOT address the causes of corruption. It merely tries to catch those who are corrupt. That would be fine if 1 per cent were corrupt. But the SOCIALIST POLICIES in India GENERATE CORRUPT people in the MILLIONS (including  ALL Ministers). So the task being given to the LP is TOTALLY futile.

Without policy change the disease of corruption CANNOT be cured. It is NECESSARY to build a system where the incentives are designed to ensure that only the honest enter, and policies do not generate corruption.

But, of course, that requires POLICY thinking – which is clearly well beyond the ken of people like Anna Hazare or even "smart" people Arvind Kejriwal, and Kiran Bedi – it would appear.

ONLY well-thought out policies, based on a sound understanding of ECONOMIC incentives, work in real life. Everything else is a waste. But such deep thinking is so rare as to be almost totally absent in India. (Hence the socialist nightmare that India is still going through – its SHODDY thinking has cost it millions of lost lives and created unbelievably bad governance.) 

Yesterday I put out this parody by Jaspal Bhatti about how India could come to a standstill if the LP Bill is introduced. His was an extreme take (comedians must exaggerate), but Sharad Bailur has said it VERY WELL and succinctly on FB. Here's his comment, below.

Sharad Bailur  on Facebook

He (Jaspal Bhatti) is right. The country WILL come to a standstill. Here is my take from my article due to be published in Freedom First (October issue):

'Put yourself in the shoes of a government servant. You have been (reluctantly or inefficiently) doing the work assigned to you lubricated by bribes up to now. Tomorrow a Lokpal (pristine and uncorrupt and a firm devotee of Anna) ensures that your bribe gravy train comes to a dead halt.

Will you still do the work? Or will you stop doing the work? Remember there is no clear way to punish a government servant for not doing his work. You cannot get rid of him. His job is secure under a government mandated law.


So the pressure will mount on the Lokpal to the extent that it will become impossible for the Lokpal to continue to do any useful work – or if ‘Economic Determinism’ works, as it must, the Lokpal himself will become the fount of corruption.

There will therefore be an additional layer of bribing to be done to get your work done.'

My further comments

In economic theory there is a thing called UNINTENDED consequences. Bad policy has LOTS of unintended consequences.

Poor Anna and his team are so innocent about the LAWS of economics that their actions are likely to – in the worst case – significantly put a brake on the economic growth of India. In the best case, these actions will have NO impact on corruption, which will merely be driven underground.

Only when "educated" Indians begin to learn to think carefully, when they realise that the laws of economics NEVER bend (for these are based on human nature) will the BASIC commonsense ideas I have been preaching start to resonate in India.

Currently the PEOPLE of India in their collective wisdom have elected these thugs (who are naturally very bad policy makers) for the past 60 years. They are clearly very frustrated but they don't realise that the system is now designed to ONLY allow thugs to enter. 

In their state of utter confusion they fail to understand that they need people like me – both honest and competent – to take charge of India's governance. For I CAN fix India's problems – through good policy. But they would much rather elect the same incompetents they've always done (I gather that BJP – yet another socialist party, a mere branch of Congress – is now the favourite!)

But of course there is no one to advise them about good policy. Our journalists have almost no understanding of economics, except a couple of notable exceptions. Indians take policy advice from economic ILLITERATES. What can be done?

They used to say in the past: यथा राजा तथा प्रजा. For a democracy this has become: यथा प्रजा तथा राजा. It is therefore crucial for the public to become educated, else thugs will rise to the top.


कृपया अर्थशास्त्र के नियम समझने की कोशिश कीजिये

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Sandeep Dongre’s thoughtful analysis of the LP bill and Anna’s movement

I've received this very thoughtful and detailed comment from Sandeep Dongre. I think it deserves its own blog post. Sandeep does hint at but fails to (at least in his comment) miss out on providing a viable analysis of the causes of corruption, hence his solutions are weak, and indeed not necessarily in the right direction (even state funding proposed is not the simple reimbursement for each valid vote but some kind of "equal funding").

Despite that, many of his points are worth consideration by a wider audience. I'd like to invite Sandeep to read BFN, consider the overall causes of corruption, and if persuaded, join FTI to offer new leadership to India.

The comment

Why I cannot support the Jan Lokpal – a detailed analysis.

I wanted to deal with this issue in two parts:
A) The means adopted by Anna Hazare and team to drive their point of view
B) The Actual merit of “Jan Lokpal Bill”- its ability in itself to effectively deal with corruption

A) The means adopted by Anna Hazare and team to drive their point of view:

Law making is the primary function of any legislature. With the formation of the Republic of India on 26 January 1950, things changed profoundly. All Indians have a say in how laws are made and how they are implemented. We can amend or repeal laws that we do not like. There is, of course, a method to do this, which must be followed. These are the constitutional methods that Dr. Ambedkar referred to in his ‘Grammar of Anarchy’ speech. 

When constitutional methods are available, there is no case for non-constitutional methods like Satyagraha, hunger strikes or the more extreme ‘Fast unto death’. No matter how good the intention is, Fasts unto the death ultimately undermines the due process. Anna Hazare is a genuine person but he should not adopt undemocratic means to drive home his point. Emotional Blackmail has no place in a parliamentary form of democracy. If two really genuine persons go on fasts until death for two opposing reasons, how are we ever going to resolve? A good example of this came to light when both the two opposing factions of the ‘Separate Telangana State Movement went on fast unto death and as is evident, the whole process came to a standstill.

India has experienced a very effective form of parliamentary democracy and it is best left to it to resolve complex matters like this. Though a very scary picture is getting portrayed, very few will disagree that India is well on its path to the top and a true parliamentary democracy has ensured it smoothly. One cannot invite the death of democracy by allowing such protests.

I will devote next few paragraphs in understanding Anna and his ‘My Way or the Highway’ style of working.

Ralegaon Siddhi has prospered under the leadership of Anna Hazare and it really looks green and fresh in an otherwise dry area. Everybody is aware of the immense hard work put in by Anna and his team and the results are there for everyone to see. Noted Journalist Mukul Sharma who has studied Anna's village community in Ralegaon Siddhi since 1919 [Sanjeev: this date is clearly a typo!] says that Anna is a strong follower of a belief system where the people following him consider it their natural duty to obey, and the exercising person thinks it a natural right to rule. No matter what the issue, there is an absolute recognition of authority. 

Let me clearly state that the END is absolutely not in question, the MEANS are. Though the intentions might not be doubted, but Anna has been exercising a set of self-made rules which everyone in the village has compulsorily followed. These rules are far removed from what a true democracy means. 

(Image made by simple cut and paste by Sanjeev Sabhlok)
a) Getting things done by way of severe punishment is the accepted way in the village to achieve the set goals. So it was decided that anybody who consumes alcohol has to be physically punished. There are instances of drunken people tied to pole outside village’s temple and beaten. Even the villagers now agree that anybody found drunken should be brought in the centre of the village and beaten. A group of 25 youth in the village has been formed who are authorized to give punishment to drunkards (could you strike the resemblance to Jan Lokpal??). They have been dutifully tying drunkards to the pole and beating overnight.

b) Several instances of using force in implementing Family planning measures.

c) Anna’s authority even peeps into making rules for ‘Eating habits’ and trust this is a severe breach of people’s freedom. We can respect people who actively propagate ‘Vegetarianism’ but definitely not by force. There are hardly any people eating non-vegetarian food in the village. Dalits in his village were categorically told that main reason other people stay away from them is because their living is dirty, thinking is dirty and even food habits are dirty. By continuously putting pressure, the Dalits were forcefully turned into vegetarians

d) Anna strongly criticizes electoral and party politics – no wonder that there have been no elections of gram panchayat in the village since the last 24 years. Even for National/State level elections, posters and pamphlets are not allowed in the village

e) Entertainment in the form of film songs or cinema is a strict NO in the village. However, religious films like Sant Tukaram, Sant Gyaneshwar can be played. Even during marriages, only religious songs are allowed. Last year, A villager Installed a dish antenna at his home and he was severely criticized by Anna himself.

Kailash Pote, a landless Chamar, gives a different meaning to village, family and Hindu religion. “We do not call Ralegan Siddhi a village. We call it a family in which Annajee is the headman and we are the people who provide service to the family. Here Hindus mean Marathas only. We Chamars and Mahars are never called Hindus. How can we claim that everybody is equal here?” 

The above explain the use of extreme means by Anna to get things done which he believes is Right.
Lastly, As BG Varghese rightly points out, Due process can be trying at times; but banishing it for quick-fix populist methods is dangerous and could lead to anarchy and counter-violence. It is legitimate to criticize venal politicians but unfair to denigrate all politicians. Without politicians there can be no politics or political process, only dictatorship. We need to secure political and electoral reforms and reform of the police and criminal justice systems to put in place an interlocking mechanism that ensures purity in public life. There is much work to be done and hopefully the government has seen the writing on the wall.

B) The merit of ‘Jan Lokpal Bill’ – its actual ability to effectively deal with corruption:

The Lokpal Bill does not tackle any of the root causes of corruption. The bill amounts to an unparalleled concentration of power in one institution that will literally be able to summon any institution and command any kind of police, judicial and investigative power. In other words, in a situation where the problem is power, we create an entity that has even more power. It has even appointed officials instead of elected ones.
There are many loopholes in the Bill which I have discussed below:

a) The three Pillars of Indian Democracy – namely the Legislature, Executive and Judiciary – keep checks and balances on the other, and so they must remain separate, because that’s the only way to ensure that there is no abuse of power. The Jan Lokpal intends to disturb this fine balance by virtually creating a fourth pillar. It intends to create an Executive outside the constitutional framework, answerable to nobody. Chances of such an organization getting corrupted by the sheer lust for power are much greater than the Executive functioning within a constitutional framework, where checks and balances ensure accountability

b) The appointment of the Lokpal will be done by a – Bharat Ratna awardees, Nobel prize winners of Indian origin, Magsaysay award winners, Senior Judges of Supreme and High Courts, the Chairperson of the National Human Rights Commission, the Comptroller and Auditor General of India, the Chief Election Commissioner, and members of the outgoing Lokpal board and the Chairpersons of both houses of Parliament. Only one person, the chairperson of the Lok Sabha, is a democratically elected person. The idea of a Jan Lokpal is modeled on an Ombudsman but there is no example where a country decided that Nobel Prize winners and those awarded with state conferred honors can be given the task of selecting those entrusted with the power to punish people

c) The autonomy and independence of the Judiciary is protected under the Constitution, which allows a member of the higher Judiciary to be removed only through the cumbersome impeachment process. The intent was to ensure that justice is administered without fear or favor. The Jan Lokpal proposal of putting higher judiciary under Lokpal is absurd. The consequences are even worse, when you consider that under it the Jan Lokpal Bill will have independent investigating and prosecuting agencies. Will any judge ever dare differ with the views of a prosecutor of the Jan Lokpal since he might face prosecution himself if his orders are misunderstood? Is it logical that Investigation and Prosecution be done by the same agency?

d) Since this country understands the language of cricket well, just try to imagine Indian captain Dhoni on field. During the course of play, several critical decisions need to be taken and it should be best left to the captain on the field to do that. If we start with the premise that Dhoni is likely to falter and should be under strict scrutiny for each and every decision he takes on field, it will be completely impossible for him to take out-of-box decisions. Most of the audience might not agree with his decision to let the last over of the match bowled by a new bowler but we cannot raise a suspicion every time he does so. If we don’t want the whole functioning of the government come to standstill on petty issues, the Prime Minister may be best kept out of Jan Lokpal.

e) We have to understand, there are enough strong laws available in this country to address literally every issue under the Sun. Implementation of a new bill will require a strong will and huge additional resources and that is where the whole problem lies. Consumer courts were created to give speedy justice but today a large number of cases are pending before it just because of lack of resources. The law was always there to arrest the likes of Mr. Kalmadi or Mr. Raja but it could happen only when it was backed by a strong will to do it. State Lokayukta is there in India in as many as 18 states today but only a Santosh Hegde could make a difference in Karnataka. There are strong laws against illegal construction, land grabbing and even mining, the need of the hour is to implement it and not spend time into making additional laws.

f) The resource crunch will destabilize the Jan Lokpal. If both the Central govt. and State govt. employees are to be brought under its scanner, the number of people it will have to cover will be around 10-12million. Obviously, huge machinery will be needed to deal with this. Also, the same system of corrupted civil servants, politicians, anti-corruption agencies, judges, media, civil society groups and ordinary citizens will work under the Lokpal to deal with corruption and just because they will work for Lokpal, will they become incorruptible? Won’t it mean adding another bunch of bribes to the long list of existing ones? 

g) There is NO right to appeal – The right to at least one appeal against an order, which affects someone adversely, is inherent in the Constitution. There is no specific clause regarding appeals in the Jan Lok Pal Bill, and that is unconstitutional, to say the least.

Noted political analyst Pratap Bhanu Mehta has nicely summed up the addition of Jan Lokpal as one more law. He says, “To many of us, this proposal seems like the way we approached educational reform: if BA is not good quality, introduce MA; since MA does not work, have MPhil; since we can’t trust our PhDs, have a further NET exam, endlessly deferring to new institutions at the top of the food chain without attending to basics.”

I sincerely feel that Jan Lokpal is a Medicine which has severe side-effects. While there are many ways which can help us effectively fight corruption arising out of political nexus, there is only one way to fight social corruption:

The RTI legislation can be the most effective tool in eradicating corruption. The many government decisions taken on critical issues have to be brought under public scrutiny and it is how the government can be made accountable for its decisions. Another effective way of dealing with corruption arising out of political nexus is with the help of electoral reforms like proportional representation, state funding of elections which will lead to uniform spending of candidates and most importantly the right to recall of elected representatives. 
Corruption in day to day life is more of a social issue. It is a value system where when I benefit its desirable, when I am the victim, it’s not. Only a true introspection can get us to its roots. It has to be tackled from inside and only then a Lokpal can be effective. 

Warm regards
Sandeep Dongre

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