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Mainstream, VOL XLIX, No 43, October 15, 2011

64 Years and 32 Rupees


Wednesday 19 October 2011, by Shyam Chand


Poor people are in chains of poverty. And nobody can insult a man in chains. The definition of Rs 32 as the poverty line has submerged the Below Poverty Line into Below Pollution Line. The most valiant act of social reform in perverse! Or removing poverty?

I am not an economist to propound any theory. But I know two things. The first thing is that the strength of the chain lies in the weakest link and so is that of the society. The second thing that I put here relates to the views of some wise men including economists.

‘When you live in awareness, you also remain in control of yourself. Though your windows are open on the world, you are not compelled by it,’ says Zen master Thich Nhat Hank.

In Politike Koinonia (Political Society), Greek philosopher Aristotle distinguishes the just and noble society from the lawless state of nature. He strongly believed that individual happiness depends on three kinds of goods—‘external goods, goods of the body and goods of the soul’—and he strongly favoured a middle class society in the belief ‘that most social evils result from extremes of wealth and poverty’.

Adam Smith, the founder of the modern political economy, laid down Ten Commandments:

1. Use life as the measure.
2. Put cost on the decision-maker.
3. Favour human scale firms.
4. Strive for equity.
5. Favour full disclosure.
6. Share knowledge and technology.
7. Diversity and self-reliance.
8. Pay attention to your borders.
9. Honour the government’s necessary role.
10. Maintain an ethical culture.

Thus Adam Smith was a liberal economist believing in the free market.
Now the world is ruled by neo-liberal economists. A neo-liberal is a person who in the name of the free market advocates downsizing and privatising the government functions, deregulating the market, and removing economic borders to give the forces of capitalism a free rein.

These neo-liberals have either not read or heard of Adams Smith’s The Theory of Moral Sentiments. He says: ‘How selfish so-ever man may be supposed, there are evidently some principles in his nature, which interest him in the fortunes of others, and render their happiness necessary to him, though he derives nothing from it except the pleasure of seeing it.’ He adds: ‘The wisdom of every state or commonwealth endeavours, as well as it can, to employ the force of society to restrain those who are subjects to its authority from hurting or distributing the happiness of one another.’

John Maynard Keynes, whose The General Theory of Employment, Interest and Money prevented financial crises and unemployment during the Great Depressions of the 1930s and checked the spread of communism in the US and Western Europe, writes:

‘I sympathise, therefore, with those who would minimise, rather than maximise, economic entan-glement between nations. Ideas, knowledge,
art, hospitality, travel—these are things which should of their nature be international. But let goods be housespun whenever it is reasonably possible, and above all, let finance be primarily national.’

Those who curse the Nehruvian self-reliance and flaunt neo-liberalism’s ‘Shining India’ forget the difference between liberal politicians and neo-liberal economists.

Political liberals are pro-poor and may not be anti-rich, whereas neo-liberals are pro-rich and anti-poor. Political liberals advocate the egalitarian principle of one person, one vote, neo-liberals defend property rights, market freedom and advocate the elitists’ ideal of one dollar, one vote.

Political liberals believe in the state’s inter-vention, neo-liberals prefer privatisation and globalisation. Political liberals advocate demo-cratic accountability. Neo-liberals distrust state power, protect property rights and enforce contracts. Political liberals give importance to equity, neo-liberals advocate unregulated markets, corporate subsidies at the cost of social welfare, and global extension of the corporate empire.

Political liberals invented the institutions of representative democracy, the neo-liberals’ corporate sector destroys democracy, natural resources and culture.

Neo-liberals, like corporations, have no conscience. It is money which runs through their veins. Both breed corruption and scams.

If political liberals Drive inspiration from Aristotle, neo-liberals aspire to seek pleasure in the Hobbesian philosophy of Hedonism which combines materialism with mechanism.

Walmart has destroyed every entrepreneur-ship in the neighbourhood like a hunter shooting the quail. Now this hunter is trying to enter India under the pretext of helping the farmer. If Grameen Banks, commission agents in the grain markets and FCIs cannot protect the interests of the farmers, Walmart will kill all of them together. Some sections of the print media, that go on harping on the need for FDI in retail, are very much against FDI in the print media!

Neo-liberalism has played havoc on the world economy. Greece, whose thought once brought renaissance and humanism in Europe, has now gone bankrupt forgetting Aristotle and imitating the US. The continent is in deep crises. Great Britain is a ‘broken society’, and there are arrests of those who protest against Wall-Street and corporate fraud and greed on the Brooklyn Bridge.

There is the Arab spring in the East. In the West autumn has cast its ominous shadow stretching into the long freezing winter with no spring coming; and even if it comes it will be ‘far behind’.

The rate of the GDP (or economic) growth is not a sign of a happy society. No country in the world has achieved that rate of economic growth which the German economy had achieved during the Nazi era. Yet Hitler killed millions of Jews in gas chambers and destroyed Germany. And the GDP in India denotes, in the words of Baba Adhav, as Gareeb, Dalit and Peedit.

Liberalisation, privatisation and globalisation (LPG) have turned into liquefied petroleum gas which has started choking the breath of the poor people. Double-digit inflation coupled with scams and corruption is likely to show it light.

Why poverty alleviation? Why not poverty elimination! The definition of Rs 32 as the poverty line can neither alleviate nor eliminate poverty. When 70 per cent people in India subsist on Rs 20 a day, Rs 32 per day would put them in the category of affluent people!

The Planning Commission, instead of inven-ting new schemes for the poor for the benefit of the rich, should invest the entire money wasted on MGNREGA, JRY, PDS, mid-day meals, adult education, and various such wasteful schemes, to create human and material capitals by strengthening the existing public sector units and setting up new industrial units to create more jobs for the vulnerable sections of the society.

Perhaps the Planning Commission knows that the public sector can transform society. It also has a multiplying effect for creating more jobs. Disinvestment will have a negative effect. It is the public sector which has prevented India going the Greek way.

But the trouble with the Planning Commission is that it was set up on April 1, 1950 and anything which happens on first of April, people take it as a joke!

The author is a former Minister, Haryana.

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