Summary
"How free are you?‟ Six decades since independence, the relevance of this question is on an all time high. India has one of the worst human development indicators in the world and it is sobering to learn that we are behind Pakistan, Bangladesh, as well as most other comparable Asian countries such as SriLanka, Vietnam and China on indicators such as life expectancy at birth and mean years of schooling. The cheer leaders of Indian economic growth have been boasting over the steady growth of 8-9% in real gross domestic product since 2003-04. But in this elite-consumption-cum-private corporate investment-led growth process, the question of whether this GDP growth is reflecting on all sections of the society is deliberately left unanswered. As the historian-philosopher Donald Sassoon has noted, “the ideology of growth for growth‟s sake is the ideology of the cancer cells”. In fact our economy is infected by this cancer. As a result of policy making which promotes „corporate socialism‟ pushing „social spending‟ to back seat, the chasm between different strata of the society is widening day by day. Corruption is on a all time high with around 240 crore rupees flowing out of the nation every day on an average through illicit means. Coincidentally the same amount of money is written off in terms of corporate income tax by the Government every single day. This plunder of public wealth is happening when the estimated rural poverty in India is 41.8%, when 77% of the population lives on a per-capita consumption expenditure of Rs.20 a day and 93% of Indian workforce live without food security, livelihood security and social security. When even the right of an individual to enjoy the fruits of economic growth of the nation is denied, how free are we? Is it possible to achieve human freedom in a capitalist economy, where human beings are objectified? Could mere patchwork reforms bring about a solution to these complex issues? This paper discuss these issues from the perspective of economic freedom, to which all other freedoms are inextricably linked.
------------------------------------------------------------------------------------
Democracy, Economic Freedom and Liberty are some of the commonly repeated words in the political arena, though most often used in a consciously dishonest way. Not to mention the fact that meaning of these words are forgotten long back. The quest for an answer to the question “How free are you?”, should begin from finding the word ‘freedom’. Quoting American author P.J. O'Rourke "Freedom is not empowerment. Empowerment is what the Serbs have in Bosnia. Anybody can grab a gun and be empowered. It's not entitlement. An entitlement is what people on welfare get, and how free are they? It's not an endlessly expanding list of rights -- the "right" to education, the "right" to food and housing. That's not freedom, that's dependency. Those aren't rights; those are the rations of slavery -- hay and a barn for human cattle”. Then what is freedom? It is a scenario where the society provides all individuals equal opportunity for growth and personal development, where the ‘right to have the rights’ is guaranteed along with a duty to take up the responsibility of its consequences. In a free society, individuals are free to work, produce, consume, and invest in any way they please, governments allow labour, capital and goods to move freely, and refrain from coercion or constraint of liberty beyond the extent necessary to protect and maintain liberty itself.₁
Heritage Foundation and the Wall Street Journal recently conducted a study to rank the countries of the world on the basis of their economic freedom. The index ranking was based on the sum total of various parameters such as business freedom, trade freedom, fiscal freedom, freedom from corruption, financial freedom, investment freedom, monetary freedom etc in a country. India was ranked as 124th freest country in the world and was categorized under ‘mostly un-free nations’.₂ In one of the ranking parameters,’ freedom from corruption’, the country scores so low that it is categorized under ‘repressed nations’ Even worse is the seemingly unbridgeable chasm between the different strata of the Indian society. Last October, when India celebrated the purchase of 150 Mercedes Benz in one go by a businessman in Aurangabad projecting it as a sign of rural resurgence, the latest report released by Crime Records bureau shows that over 17,368 farmers killed themselves out of debt in this year of rural resurgence.₃ The Tendulkar committee report of 2004-05 estimates the rural poverty in India as 41.8%. 77% of the population lives on a per-capita consumption expenditure of Rs.20 a day. 93% of Indian workforce does not have food security, livelihood security and social security. Clearly we are far from a position to qualify ourselves to the status of being called a ‘free-society’.
The Misleading GDP Calculus
The cheer leaders of Indian economic growth have been boasting over the steady growth of 8-9% in real gross domestic product since 2003-04. But in this elite-consumption-cum-private corporate investment-led growth process, the question of whether this GDP growth is reflecting on all sections of the society is deliberately left unanswered. Many a times, the overall progress of a nation is measured in the terms of GDP rates. But the plight of the lower strata of the Indian society over the years in which Indian economy proudly boasted its steady GDP growth proves that concept that ‘benefits of GDP growth will trickle-down to the poor’ is intellectually untenable and morally questionable₄.
The accelerating growth and accumulation of capital is associated with a phenomenal increase in share surplus. The hope that this surplus of shares could be taxed and be utilized for the welfare of the poor never gets realized. Instead what happens is the illicit flow of wealth from our country to abroad. And this becomes much easier under liberalised economy. According to a recent paper of Global Financial Integrity program of the Centre for International Policy titled “The Drivers and Dynamics of Illicit Financial Flows from India: 1948-2008”, the money that had flown out of India illicitly to accounts abroad over its post-Independence history stretching from 1948 through 2008 was around $213 billion. The adjusted present value of those historical flows has been placed at $462 billion or around 36 per cent of India's GDP in 2008. This paper also states: “68 per cent of India's aggregate illicit capital loss occurred after India's economic reforms in 1991, indicating that deregulation and trade liberalisation actually contributed to/accelerated the transfer of illicit money abroad.”₅.
Corporate Socialism and Maoism
The word freedom does not confine within the limits of economic freedom. But all other freedoms are inextricably linked with Economic freedom. This is a country which calls itself a democracy and at same time is forced to openly declare war within its borders. The government calls Maoism as the gravest internal security threat our country is facing. But in reality it is not. Poverty, non-governance, and corruption are. Maoist rebels are merely mirrors of our own failings as a nation₆. If we analyse the root cause of this sort of extremism, it ultimately points to abdication of governance by the state, extreme poverty, social discrimination and expropriation land from the poor.
It is the policy making that is ultimately responsible for all these extremist outbreaks. In India, every plunder of public money for private profit is projected as a pro-poor measure. The Indian union budget writes off corporate income tax worth Rs.240 crore every single day on average. In six years from 2005-06, the Government of India wrote off corporate income tax worth Rs.3,74,937 crore — more than twice the 2G fraud ₇. While promoting this legal plunder of money at one end, the expenditure on PDS and food subsidies is heartlessly slashed. As per the budget estimates for 2010-11, the spending on education was only 2.98 per cent of GDP and that on health was an even megre 1.27 per cent. As a result of these policy makings which are meant exclusively to safeguard the interests of private investors, what that is expropriated for the sake of economic development went out of the reach of the proletarians. So instead of trickling down, the benefits ended up being siphoned away to the privileged sections of the society. This ‘corporate socialism’ has been a major cause of rise of left wing extremism in India, When policy makers deny the right of an individual to enjoy the fruits of economic growth through legislation, how free are we?
Multidimensional Poverty
In order to initiate an inclusive growth process where the fruits of our economic growth reach all sections of the society, it is essential to bring about reforms targeting benefits to the underprivileged sections of the society. Now another question that arises is whether while targeting benefits, is income of a person a good enough criterion for determining his deprivation or level of poverty? The Oxford Poverty & Human Development Initiative (OPHI) has now come up with a new criterion for determining this called Multidimensional Poverty Index (MPI). According to OPHI "Multidimensional poverty encompasses a range of deprivations that a household may suffer. Most countries of the world define poverty by income. Yet poor people themselves define their poverty much more broadly, to include lack of education, health, housing, empowerment, humiliation, employment, personal security and more”.₈ No one indicator, such as income or caste, is uniquely able to capture the multiple aspects that contribute to backwardness or poverty. Alkire Foster Method identifies who is poor by considering the intensity of deprivations they suffer. Undoubtedly, a more accurate measure of well-being.
Extreme diversity in all walks of life is a key feature of Indian social set up. The OPHI studies in fact shows that India is made up of different nations stretching from middle income Asian nations to starving sub-Saharan nations. A comparison of state-level and country-level data from the newly released multi-dimensional poverty index shows that the conditions of the states Kerala and Goa are close to that of Paraguay and the Philippines. At the same time Somalia, where 300,000 people died in a famine in the early 1990s, performs slightly worse than Bihar while Sierra Leone, the world's third worst performer on the Human Development Index, is at roughly the same level. When such a diversity in MPI exist in this country, is it not nonsensical to have a common criterion for the implementation of upliftment programs? This is an issue which need to be discussed and debated with seriousness.
Achieving Freedom from Corruption
In our country there are institutions to fight corruption. First one is the judiciary. For example the Supreme Court, through public interest litigation [PIL], has been able to strike a blow for citizens' rights. In 2004, a Supreme Court judgment that every candidate [contesting an election] has to declare the number of criminal cases filed against him, his educational qualification and his wealth brought about a great element of transparency in the electoral system. Second one is the Election commission. The third is the CAG [Comptroller and Auditor General].The fourth agency is the Central Vigilance Commission, though it has very limited powers. The fifth, is the Central Bureau of Investigation.
Accoding to R.K Raghavan, former Director of the Central Bureau of Investigation, the clause that makes it necessary the approval of government for CBI for even preliminary enquiry against officers above the rank of Joint Secretary, considerably whittles down the power of CBI to bring the wrongdoers to light. He says that the provision in the Code of Criminal Procedure in this regard, which vests authority on the government [whether or not to appeal] needs to be deleted as it is heavily misused by governments.₉ By strengthening these agencies, by giving them powers that will enable them take actions even against people of high social and political status, the problem with corruption can be tackled up to a great extend.
The sensitisation challenge in Education
Greed of the privileged class is undoubtedly the underlying force that promotes an environment that denies all sorts of freedom for the underprivileged. We live in a society, where a sudden increase in wealth of an individual is looked upon as an indicator of business acumen. Here profit-making and the accumulation of wealth are celebrated and rewarded, an increase in the wealth is normally seen as a virtue and a reflection of “entrepreneurship” and “innovation”. The source of wealth or whether corruption or violation of laws is involved in the process of accumulation of this wealth is never put under scanner. In a society which promotes an environment which breeds such attitudes in individuals from their very young age, instances of corruption will be high. Unfortunately, in our society, to a very great extent, education is associated with common sense and intelligence and sharpness which need not always be the case. It is finally the mind that plays a role in defining attitudes. One is either are open, sensitive, creative, concerned and are adaptable to change - or not. Education itself does not necessarily bring about drastic change. Education, instead of breeding a competitive, profit-motive generation, should sensitise individuals about the real issues in our society and develop values of philanthropy in them.
High quality teaching staff is an essential pre-requisite for achieving all these. But the latest reports show that there is a shortage of 1.2 million teachers in our country.₁₀ It is high time to make teaching profession attractive by introducing incentives and making facilities of schools better. Many solutions have been proposed to successfully tackle all these challenges, including emulating the decentralization model followed in Kerala and Tamil Nadu and giving greater power to gram panchayats to oversee teacher recruitment and training in rural areas. Along with this, a reform in the education system, with a stress on creating an environment that help develop a generation of individuals who uphold the right values can be created in schools must be also looked into.
Transcendence of Capitalism – An essential requisite for Human Freedom
Amartya Sen in his seminal work ‘Development as Freedom’ states that the well being of humans should be considered both the goal and the means for development, not simply as a spurious side effect. “Freedoms,” he argues, “are not only the primary ends of development, they are also among its principal means.” Development should be seen as a process of expanding freedoms.₁₁ But the means-based development approach that the Indian government projects, is rather exploitative in nature, giving rise to growth of wealth at one pole and of misery at another. This capitalistic approach is inimical to human freedom precisely because within it mankind is trapped in a self-acting and self-driven order where individuals become coercive forces. Human beings under this system this system is ‘objectified’, in a sense that immanent tendencies of capital are mediated through human beings, who therefore cease to be subjects and are reduced to a mere status of objects.₁₂ This objectification is denial of human freedom: capitalism is incompatible with human freedom because it objectifies human beings.
According to Adam Smith, any restriction placed on the functioning of the self-acting, self-driven economic order of the bourgeois society by meddlesome sovereigns or governments is at the best futile and at worst pernicious since it destroys the coherence of its functioning. As human freedom is denied under this economic system and as precisely because government intervention cannot mend this issue, it is evident that to achieve such a freedom, it requires transcendence of this order.
Exclusion of one section of the society from the benefits of Economic growth, by all means is violation of human rights. Welfare of people should be the primary aim of any legislation. It should be understood that welfare is not a gift given to the people by the state, but a basic right of a citizen. The pseudo rights that the bourgeois government in India projects that it is giving to the people like a Right to Education Act, with no access to proper quality state- run schools in rural areas and a Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) without a guarantee of minimum wages is not enough. What we need is a system which has humans is placed at centre stage and development process mended around it, where the right to have rights is guaranteed through legislation, a policy-making that has the capacity to initiate the trickle-down and not just a mere effort to maximize the value of the equation ‘GDP= C+ Inv +G +(eX-i)’ *.
Need for Individual transformation
If we want to change the existing conditions, we must first transform ourselves, which means that we need to become more aware of our own actions, thoughts and feelings in everyday lives. If we avoid the responsibility of acting individually and wait for some new system to bring about the change, we shall merely become slaves of that system. Now, what that is happening over the world is that we, who are citizens and educators, who are responsible for the existing government, do not fundamentally care whether there is freedom or misery for man. We want a little reform here and there, but most of us are afraid to tear down the present society and build a new structure, for this world requires a radical transformation of ourselves.₁₃It is high time for us to understand that we are confronted, not with a political or economic crisis, but with a crisis of human deterioration which no political party or economic system can avert. Everyone want to make the change, but most of us are doing nothing about it. We go on day after day exactly as before; we do not want to strip away all our false values and start anew. We want to do patchwork reform, which only leads to problems of still further reform. But the building is crumbling, the walls are giving away, and the fire is destroying it. We must have the guts to leave the building, start on new ground, with different foundations, different values.
Notes
* GDP = private consumption + gross investment + government spending + (exports − imports)
References
1. Terry Miller and Anthony B. Kim, “Defining Economic Freedom,” Chapter 5 in Terry Miller and Kim R. Holmes, Ph.D., 2010 Index of Economic Freedom (Washington: The Heritage Foundation and Dow Jones & Company, Inc., 2010), p. 58.
2. 2009 Index of Economic Freedom - Heritage Foundation and the Wall Street Journal - Ambassador Terry Miller and Kim R. Holmes, Ph.D.
3. P.Sainath , Of luxury cars and lowly tractors – THE HINDU, December 27,2010.
4. Prabhat Patnaik, A left Approach to Development – Economic and Political Weekly, July 24,2010.
5. “The Drivers and Dynamics of Illicit Financial Flows from India: 1948-2008” - http://www.gfip.org/storage/gfip/documents/reports/india/gfi_india.pdf
6. Sudeep Chakravarti, ‘Red Sun: Travels in Naxalite Country’
7. P.Sainath, Corporate Socialism’s 2G Orgy, THE HINDU
8. Alkire, Sabina & Maria Emma Santos. 2010. India Country Briefing. Oxford Poverty & Human Development Initiative (OPHI) Multidimensional Poverty Index Country Briefing Series. ww.ophi.org.uk/policy/multidimensional-poverty-index/mpi-country-briefings/
9. Optimism on speedy 2G spectrum scam trial – Interview with R.K. Raghavan , the distinguished former Director of the Central Bureau of Investigation (CBI), published in THE HINDU
10. Krishna Kumar ,Reading is basic to democracy – THE HINDU, January 20, 2011.
11. Development as Freedom – Amartya Sen, Oxford University Press, 1999.
12. Prabhat Patnaik, Re-Envisioning Socialism – Economic and Political Weekly, Novembr 3, 2007.
13. J.Krishnamurthi, Education and significance of Life.
Other References
i. A Modest Man Named Smith - By Leo Rosten
ii. Government failure versus Market Failure – Robert Anderson. Just get out of the way : ‘How Government help business in poor countries’.
iii. J.Krishnamurthi, On Politics,The Collected Works, Vol. VI.
iv. Make Poverty History: Tackle Corruption -Wolfgang Kasper
v. Vishnu Venugopal, A trickle down that Never happened
vi. Vishnu Venugopal, Is Caste a commensurate criterion for Reservations?
vii. Interview given by N.Vittal, former Chief Vigilance Commissioner (CVC) to Frontline, December 2010.
viii. Global multidimensional poverty - OPHI’s interactive world map
http://www.ophi.org.uk/policy/multidimensional-poverty-index
