Forgotten Speeches of GK Sundaram – Part I

                                           GK Sundaram-1914-2009

I have piece on GK Sundaram's forgotten speeches delivered in Indian Parliament when he was leader of Swatantra Party during the socialist era of Indira Gandhi.

Here is a slice from the piece:

In August 1969, Sundaram suggested the following eight measures to the government for framing pragmatic policies towards economic growth and inclusive development:

“(1) First and foremost is payment by result in industrial, agricultural, private, public, Government and other fields. This alone can achieve the goal. You may verify that countries which have devalued have stabilised their economy by sheer work. By hard work only they have come up and not by just planning or by fooling the people. 

(2) A substantial reduction in taxation is absolutely necessary to rebuild the industrial development. 

(3) We do not want an Everest effort. An earnest effort is necessary in agricultural production which we never had all these 15 years. 

(4) We must create confidence and give opportunity for the people to invest in industry. 

(5) Then, industrial development should not be impeded by controls. We must be free from controls. 

(6) Industry must have adequate rupee finance. At least, if you cannot provide with your money, do not stop them from getting it. 

(7) Provide enough incentive for exports wherever it is found absolutely necessary. 

(8) And last of all, reduce your expenditure drastically, whether it is private or public sector, but never attempt deficit financing either openly or secretly. 

The strength of the currency ultimately depends upon the level and growth of production. Economic policies should be made liberal, planning realistic and administration efficient.”

Centenary of Liberal Thinker Nani Palkhivala

This is my token of remembering the great thinker with courage - Nani Palkhivala (1920-2020), a scholar making of his own style and skills... I end with the following paras:

To advance the liberal democracy in India towards a more prosperous country for all citizens, we have to remember and foster the following Five Doctrines of Nani Palkhivala (From February 1971 Issue of Freedom First Magazine):

1. The Constitution believes in the distribution of wealth, and therefore it not only permits but encourages the creation of wealth by enterprising individuals who with their vision and expertise are prepared to take risks and develop their country. That is why our Constitution confers on all citizens the fundamental rights to acquire, hold and dispose of property and to carry on any trade, business, and profession.
2. The right to property is often derided as the “least defensible” right in a socialist democracy. Yet a little reflection should show that this right is of the essence of a sound body politic and of a democracy which aims at marching forward economically….. Countries, where freedom has become a way of life, can do without the luxury of a constitutional right to property. But in India where economic fanaticism has become a way of political life, it is imperative to retain the right to property.
3. There are times in a country’s history when inaction and silence can be a culpable wrong, and we are living in such times. It is not enough that we believe in our national motto that truth with ultimately prevail. We must take active steps to see to it that falsehood does not have a very long inning before the ultimate moment of truth arrives.
4. The survival of our democracy and the unity and integrity of the nation depend upon the realisation that constitutional morality is no less essential than constitutional legality. Dharma (righteousness; a sense of public duty or virtue) lives in the hearts of public men; when it dies there, no constitution, no law, no amendment, can save it.
5. National integration is born in the hearts of the citizens. When it dies there, no army, no government, no Constitution, can save it. States of mind precede States. Inter-faith harmony and consciousness of the essential unity of all religions are at the very heart of our national integration.

Global Water Crisis and Local Community Antidotes

The Kathir Times has published my new article as titled above, the following are the concluding paras of the article:

"Though, India’s Niti Aayog’s Reports on Water Management has been strongly emphasizing the need for local community-led intervention for rejuvenation of bodies and creating a new one wherever feasible. However, it did not spell out the roadmap for financing and enabling the local community-led organizations across the country.

During the last few years, there have been several community-based interventions for rejuvenation of water bodies in Tamil Nadu which have helped to increase access to water for not just drinking but also for irrigation and other utilities. The efforts of Siruthuli, an NGO working last 16 years in reviving several water bodies in the Coimbatore district. Similarly, the efforts of the Olirum Erodu Foundation and Erodai Trust in Erode district, Environmentalist Foundation of India in Chennai, People’s Forum in Salem, Vettri Trust in Tiruppur and more recently the Olirum Krishnagiri Foundation in Krishnagiri have all done tremendous works to improve the groundwater table.

Moreover, the Madurai based Dhan Foundation has been pioneering the water management systems covering 2000 tanks and104 watersheds across all south Indian states in the last two decades. The community-based approaches are more sustainable for improving access to water for all segments by improving the groundwater table. Further, these models of community-led rejuvenation of water bodies were effectively stakeholders driven involving the local community, farmers, philanthropists and close coordination with government officials. We need to scale up these models across the States and country to effectively implement the water conservation intervention to improve the groundwater tables." 

To tackle TN’s water woes, revive local water bodies

I have published a article on water management in Tamil Nadu in Deccan Herald Online Opinion. My article is premises with a real case studies in Erode district which experimented reviving tens of water bodies across 14 blocks in the State, entirely led by a community led model involving farmers and local community.

"Between 2016-2018 one such community-led experiment was done in and around  Erode city in Tamil Nadu, where in a short span of three years, more than 34 water bodies were revived by de-silting, deepening and widening to increase the water storage capacity by five folds on an average. All 34 water bodies put together cover about 134 acres spread across the several blocks in Erode district. The Hindu on October 26, 2018 in Erode City noted that “...while the water storage capacity before before de-silting, widening and deepening was 56 crore litres, the storage improved to 262 crore litres after the work.” Farmers and the general public in and around of the 34 water bodies were all happy that they could witness a substantial rise of the water table in their bore-wells and wells even this summer."

Water Scarcity is caused by Wrong Politics and Policies

This young economist's analysis about scarcity of water in India is completely out of ground-level knowledge. It is a crap to argue for "water rights" and "incentives for farmers" to increase groundwater. It is even worse for "political incentives" and "property rights in water". Do not confuse the property rights with land and water. Its again the mainstream economists folly to do so.

You cannot isolate the role of local community managing the common resources like water bodies conservation, maintenance and making sustainable water bodies management for drinking, irrigation etc. The decades old political system has destroyed the age old reasonably good model of decentralized water management system that were existed for several hundreds years in every villages in India. All these were destroyed in the last thirty years! I have seen at least a 50 of them in the last five years in western part of Tamil Nadu. We have revived more than 30 now!!

New age of Liberalism in India

Two friends have contributed interestingly. Rajeev and Harsh has a piece in the Indian Express here, their other articles are here. Ghanshyam has  a piece on Hinduism and capitalism in India in Centre Right India.

Rajeev and Harsh concludes with the below paras:

• Liberals of all hues should advocate for strengthening the law-and-order machinery so that no violence — irrespective of its antecedents — goes unpunished. State welfare programmes should be targeted to those in economic need, and not bluntly based upon caste or religious identity. The government also shouldn't have discretion on what constitutes offensive speech, to prevent politicians from fuelling competitive intolerance.
• When the state has no discretion to pick certain groups as winners, fraternity is more likely to prevail because socio-economic intercourse, unlike political competition, is not a zero-sum game. India needs more liberalism — rule of law, open markets, separation of identity and state — not its leftist perversion.

Fearing democracy

How many decisions in our day-to-day lives would we like to be made through majority rule or the democratic process?

Ramachandra Guha's musings!!

“They (the supporters) are largely young, almost all of them upper caste, many of them live abroad and virtually without exception they are male. I don’t get hateful mails from women – so we have to understand what is it that young men are angry about.”

Friedman's "Tyranny of the Status Quo"

One of the living legend of liberal economists is Prof Sowell. Some excerpts from his article on Friedman:

• "No one converted Milton Friedman, either in economics or in his views on social policy. His own research, analysis and experience converted him.
• As a professor, he did not attempt to convert students to his political views. I made no secret of the fact that I was a Marxist when I was a student in Professor Friedman's course, but he made no effort to change my views. He once said that anybody who was easily converted was not worth converting.
• I was still a Marxist after taking Professor Friedman's class. Working as an economist in the government converted me."

Blinking links

Anna’s tamasha 

• The first issue is that Baba Ramdev, like Anna Hazare & Company before him, is trying to legitimise the instrument of fast unto death by misappropriating Mohandas Karamchand Gandhi. 

• The right of only Magsaysay awardees to be members of a government-appointed joint committee for deliberating on the Jan Lokpal Bill is most ridiculous. 

A British Ph.D. candidate puts “homicide studies” into practice: 

• One problem of liberal social thought is that it consigns a larger and larger proportion of the human race to the category of people driven into trouble. But there are other difficulties, too. Precisely because it is impossible to think of human life in consistently mechanistic terms, the liberal is soon led into contradictions. Moral evaluations are inseparable from thought about human existence, even if the metaphysical foundations of such judgments remain contentious; so it is not surprising that the article about Griffiths’s victims fairly oozes with morality, albeit of a saccharine and self-regarding kind, while at the same time pretending to avoid judgment.

The Beast G, back Ahead

Some excerpts from a review article by Francis Fukuyama on new edition of F A Hayek's 1960s book The Constitution of Liberty. The current President of Mont Pelerin Society is Prof.Kenneth Minogue. He said to me (during the February's MPS Asia Regional Meeting which I attended) that this book is Prof.Minogue's favourate and the best among Hayek's books!! 

• In an age when many on the right are worried that the Obama administration’s reform of health care is leading us toward socialism, Hayek’s warnings from the mid-20th century about society’s slide toward despotism, and his principled defense of a minimal state, have found strong political resonance. 

• Unlike Beck, Hayek was a very serious thinker, and it would be too bad if the current association between the two led us to dismiss his thought. Hayek always had problems getting the respect he deserved; even when he was awarded the Nobel in economic science in 1974, the awards committee paired him with the left-leaning economist Gunnar Myrdal. With the passage of time, however, many of the ideas expressed in “The Constitution of Liberty” have become broadly accepted by economists — e.g., that labor unions create a privileged labor sector at the expense of the nonunionized; that rent control reduces the supply of housing; or that agricultural subsidies lower the general welfare and create a bonanza for politicians. His view that ambitious ­government-sponsored programs often produce unintended consequences served as an intellectual underpinning of the Reagan-Thatcher revolution of the 1980s and ’90s. Now that the aspirations of that revolution are being revived by Tea Partiers and other conservatives, it is useful to review some of the intellectual foundations on which it rested.

• Hayek’s skepticism about the effects of “big government” are rooted in an epistemological observation summarized in a 1945 article called “The Uses of Knowledge in Society.” There he argued that most of the knowledge in a modern economy was local in nature, and hence unavailable to central planners. The brilliance of a market economy was that it allocated resources through the decentralized decisions of a myriad of buyers and sellers who interacted on the basis of their own particular knowledge. The market was a form of “spontaneous order,” which was far superior to planned societies based on the hubris of Cartesian rationalism. He and his fellow Austrian Ludwig von Mises used this argument against Joseph Schumpeter in a famous debate in the 1930s and ’40s over whether socialism or capitalism offered a more efficient economic system. In hindsight, Hayek clearly emerged the winner.

Measure growth at individual level

Mani Shankar Aiyar writes: 

• ...........at a function where S Tendulkar the Chief Economic Advisor to the Prime Minister, drew attention to the Presidential Address of Simon Kuznets - the greatest authority the world has ever seen on national income - to the American Economic Association, where he said, “…all growths lead to widening inequality and therefore the higher the growth rate the wider is the chasm that grows between the better off and less well off.” He argued that this inequality does not amount to any lack of equity because the processes of growth raise the living standards of all. I think, statistically it is impossible to deny this. The only thing is that it does not apply to any one generation of people. It takes 250 years in historical terms for levels of living to be raised in society as a whole to render questions of inequality as being beyond the pale of democratic politics. 

• In India we ought to recognize that we are doing something that is historically without precedent: creating a full-fledged democracy before embarking on the processes of growth. In the USA, the constitution proclaimed the right of all to life, liberty and the pursuit of happiness but denied it to those who were the indigenous people of the USA. Perhaps some of the worst expropriations of other peoples land without the payment of any compensation and with death inflicted as punishment for refusing to part with land was in the same USA. It was quite late that the right to life, liberty and the pursuit of happiness was in theory granted to an entire people who had been stolen from another continent and transported across the Atlantic Sea to provide the manpower for the economic development of North America. After the proclamation of the emancipation of the slaves in 1863, it then took another 101 years till 1964 for the Civil Rights Bills to be passed to enable the American Black to enjoy the same civic political rights as others in his country.

• In the United Kingdom, democracy took approximately 1,000 years to evolve from being a matter of the rights of the Barons vis-à-vis the King which is what the Magna Carta was about, to women getting the Right to Vote in 1928. In France, they had a revolution in the name of ‘liberty, equality, fraternity’ and because fraternity means fraternal relations between brothers, half the population of France - the women - did not get the vote until after Hitler had been defeated in 1945. It is not surprising that the first feminist was a French woman called Simone De Beauvoir and her most celebrated book is called the ‘Second Sex’. Trade union rights, which are a phenomenon of the second or third century of the industrial revolution in developed democracies, had been enshrined in our Constitution and our law approximately 25 years before we even began our industrial revolution. So, as a result of 60 years and more of unbridled democracy, we have created a class consciousness among people that doesn’t require a dictatorship of the proletarian. These people, who have exercised political rights, are today asking themselves increasingly the question ‘what is in it for us’? What profits us if Bangalore becomes the IT capital of the world? What profits us if in pharmaceuticals the Indian industry is unbeatable? Curiously, the question becomes more and more serious as you go down the social hierarchy for it is by the most poor, the most deprived, the most exploited and the most discriminated-against segment of the Indian population, namely the tribals, that this very disturbing question is being put to the Indian State.

All those shalas!!

Don’t mistake me!!

That is what Ritu Birla says "to dharamshalas, pathshalas, gaushalas... all those shalas!" 

From a good review by Vikram Doctor:

• .....found explicit categories of donation: "anukampa-dan, a gift given out of compassion; ucit-dan, a gift given out of duty; kirti-dan, a gift given to earn fame; abhay-dan, a gift of fearlessness; supatra-dan, a gift of religion." 

• She started researching this and it lead to the subject matter of her Ph.D. thesis and a recently published book entitled Stages of Capital: Law, Culture and Market Governance in Late Colonial India. Recently in Mumbai she delivered a lecture on the subject, the fifth in the excellent series of annual lectures on Indian business history organised by the Godrej and Tata archives.  

• This synthesis took the form of (and was influenced by) legislation like the Indian Companies Act (1882), the Indian Income Tax Act (1886) and the Negotiable Instruments Act (1881), as well as infrastructure like the telegraph and railways. But it also took the less tangible form of a cultural view of the market and of Indian merchants by the British government that mixed suspicion and support (and which one could argue was later inherited by the Indian government, persisting till today).  

Birla writes, “The standardization of trust procedure saw attempts to align the family firm and other forms of customary association with contractual models. Case law that had coded the endowment as a trust opened new possibilities for governing custom as analogous with the social relations of the market” (p. 105).

Let’s see what others said about the book: 

• G Balachandran, writes: The three chapters of the first part of the monograph explore the constitution of Marwari commercial groups and actors as economic subjects. The first chapter studies three pieces of legislation dating to the 1880s, viz. the Negotiable Instruments Act, the Companies Act, and the Income Tax Act, to uncover the construction of a public market in opposition to the ‘kinship-based’ exchange relationships of vernacular capitalism. Interestingly, while the latter two pieces of legislation promoted the constitution of the Hindu Undivided Family (HUF) as an economic entity fenced in as a cultural institution, debates over the negotiable instruments act mobilized both tropes of difference and similarity to justify subordinating local usages conditionally to practices and conventions familiar to British businesses in India.   

• B. R. Tomlinson writes: While Birla shows clearly how the Marwari community adapted its traditional behavior to new market structures, she does not explore the degree to which the market imperfections of twentieth-century India have made possible the continued dominance of family firms there.  Problems of information, knowledge, and trust limited the development of market institutions in colonial India; since independence, the state’s deliberate policy of preventing the growth of fully functioning capital markets—through  restrictions in the form of import licenses, planning controls on plant size and location, and limits on foreign exchange—dominated the process of economic development, at least until the mid-1990s.  Many analysts of India’s current “economic miracle” ascribe the imposition of these restrictions  to the close relations between the Indian government and major family-based business groups  until  the 1980s.  Cronyism, corruption, and political favoritism have characterized the growth of Indian big business during recent decades. Under  such circumstances, it may be that the Marwari community had a better chance of succeeding within the particular business structures that emerged over the course of their history than might have been possible within a more open and institutionally evolved market structure.  The continued growth of the Indian economy under increased economic openness may provide the answer to such questions. 

• Ishita Pande writes: In offering these insights, Birla's work cuts sharply through the popular slogan of "India shining" and images of the "corporate guru" that circulate in the premature celebration of India's future as an "economic powerhouse" on the global stage. For this reason, one hopes that Birla's work might also find an audience beyond the circle of postcolonial critics and interdisciplinary scholars of South Asia that Birla engages and addresses here. For this latter group this work might indeed be indispensable.

Sorry, we can't

 Liberals should accept defeat and get back to their goals

Some interesting readings

• Ralf Dahrendorf on Freedom
• Friedrich A. von Hayek on the safeguards of individual liberty and the rule of law
• Hernando de Soto on property
• Karl Popper on the state, democracy and the importance of freedom of thought and free discussion

More here.

Remind the liberals

Jonathan Alter has an interesting but reminding article on The State of Liberalism.

Some excerpts:

• Liberals are also at a disadvantage because politics, at its essence, is about self-interest, an idea that at first glance seems more closely aligned with conservatism. To make their more complex case, liberals must convince a nation of individualists that enlightened self-interest requires mutual interest, and that the liberal project is better constructed for the demands of an increasingly interdependent world.

• That challenge is made even harder because of a tactical split within liberalism itself. Think of it as a distinction between “action liberals” and “movement liberals.” Action liberals are policy-oriented pragmatists who use their heads to get something important done, even if their arid deal-making and Big Money connections often turn off the base. Movement liberals can sometimes specialize in logical arguments (e.g., Garry Wills), but they are more often dreamy idealists whose hearts and moral imagination can power the deepest social change (notably the women’s movement and the civil rights movement). They frequently over indulge in fine whines, appear naïve about political realities and prefer emotionally satisfying gestures to incremental but significant change. Many Democrats are an uneasy combination of realpolitik and “gesture politics,” which makes for a complicated approach toward governing.

• Action liberalism has its modern roots in empiricism and the scientific method. Adam Smith was the original liberal. While “The Wealth of Nations” (1776) has long been the bible of laissez-faire conservatism, Smith’s first book, “The Theory of Moral Sentiments” (1759), pioneered liberal ideas of social and moral inter dependence. By today’s standards,Abraham Lincoln’s support for large-scale government spending on infrastructure and appeals to “the better angels of our nature” would qualify him as a liberal. In the 20th century, progressives cleaned up and expanded government, trust-busted on behalf of what came to be known as “the public interest,” and experimented with different practical and heavily compromised ways of addressing the Great Depression.

• The quintessential example of the pragmatic core of liberalism came in 1943, when President Franklin D. Roosevelt announced that “Dr. New Deal” had become “Dr. Win the War.” Roosevelt believed that the ends of liberalism — advancing democracy, expanding participation, protecting the environment and consumers (first promoted by a progressive Republican, Theodore Roosevelt), securing the vulnerable — were fixed, but that the timing and means of achieving them were highly negotiable, a distinction that often eludes modern liberals.

Liberty vs choices

T N Ninan on liberty vs choices

• Societies usually emphasise one of two values: freedom or liberty (as in the United States, where they talk constantly of “libedy”) and equality (typically in the socialist states). The two are often posed as a choice; the more you have of one, the less you have of the other. The US was a surprisingly equal society in the late 1970s, in the wake of President Johnson’s Great Society legislation of the 1960s, but has become progressively unequal under mostly Republican presidents since. And though the Soviet Union is defunct, the independent countries which were once Soviet constituents, as well as the “transition economies” of Eastern Europe, remain among the most equal societies on Earth.

• Those who drew up India’s Constitution in 1950 tried to ride both horses. The Constitution underlined the inviolability of basic freedoms, by enshrining fundamental rights, but also stressed equality (social and economic justice) through the Directive Principles. This has typified the choices made in public policy for 60 years. Through the socialist phase, the fundamental rights were chipped away (for example, the right to property, while the first amendment circumscribed freedom of speech). Through the reform years, it is freedom (in favour of individual volition, and a rollback of state control) that has gained the upper hand.

• For some reason, those on the equality platform think that stressing modalities (i.e. minimising waste, corruption, etc.) is somehow anti-poor. Ditto with providing the intended beneficiaries the freedom to choose. They are also opposed to taking away subsidies enjoyed by the non-poor (as on cooking gas) to provide the fiscal elbow room to hand out more subsidies to the poor. Perhaps they think that the efficient and honest delivery of goods and services to a properly selected target population is a pipedream and, therefore, a diversionary tactic by those who speak in the name of efficiency but only want to deny the poor their due. Or, the expansion of the state is an ideological end in itself — as must be the case with the Communists. Also, talk of markets being efficient, or at least working better than bureaucrats do, is to the bleeding hearts the equivalent of waving a red rag. Despite all this, is it too much to hope that the revived National Advisory Council, dominated by well-meaning, civil-society activists, will look to see how efficiency also enhances equity?

Barack Obama and Saul Alinsky

When Barack Obama came to prominence as a presidential candidate, his Chicago background—in particular, his efforts as a "community organizer"—reignited an interest in Saul Alinsky (1909-72), the hard-charging activist whose 1971 book, "Rules for Radicals," was said to have had a formative influence on Mr. Obama's thinking. Some critics worry that Alinsky's ideas guide Mr. Obama even today, in the White House. About such matters Nicholas von Hoffman cares little. But about Alinsky himself Mr. von Hoffman cares a great deal. He knew Alinsky, worked with him for 10 years in Chicago community groups and now offers a portrait of him in "Radical."

If Saul Alinsky were around now, what seven pieces of advice might he offer today's progressives?

Alinsky called himself a radical to differentiate himself from liberals who were wishy-washy wusses in his book. As far as he was concerned, liberals were the people who left when the fighting got serious.

The Liberal Assault on the Poor

Jacob G. Hornberger writes:

"Liberals say that they love the poor, needy, and disadvantaged. Unfortunately, however, the economic philosophy that liberals favor constitutes a direct assault on the economic well-being of the poor, along with nearly everyone else in society.

Liberals claim to combat poverty in two principal ways.

First, they use the force of government (e.g., income taxes) to take money from those who have earned it in order to give it to the poor.

Second, they restrict people’s use of their property to enable the poor to have access to such property.

What liberals fail to understand, however, is that the very means they choose to combat poverty – socialism and interventionism – actually exacerbate the problem that they claim to address. Their war on poverty hurts the very people they say they are trying to assist.

In proposing welfare-state programs, by necessity liberals always make an important assumption. They assume that there is wealth in society. After all, if there is no wealth then what good would welfare-state policies do? The welfare state operates on the assumption that there are people who are earning wealth or have accumulated wealth. Those are the people from whom the government takes money in order to redistribute it to the poor".

Universal values

Prof Donald Boudreaux on universal liberal values:

“Classical-liberal (or, if you prefer, libertarian) political values are no more than the application to society at large, and to government, of some of the most fundamental and indispensable rules that every decent person learns early in life and adheres to until death.

In this light it is interesting to read a recent observation about libertarianism by University of Virginia government professor Colin Bird. He tries his hand at explaining the increased acceptance, over the past 30 years, of libertarian ideas. In his opinion, this success results from the fact that libertarianism was able to represent itself as the true heir to the liberal mainstream rather than as a revolutionary departure from Western political values. That is not to deny that libertarians often portrayed themselves as radical and even socially progressive: but at root libertarianism claims to be radicalizing the familiar (individualism, freedom, rights) rather than to be familiarizing the truly radical.

Indeed so! Professor Bird, however, believes that radically insisting (as libertarians do) that the government be bound by all of the same basic rules of decency that bind individuals does not really render libertarians radical. As I recently wrote in this space, if by “radical” we mean consistently sticking to sound principles, then libertarians are indeed radical—and radical in a way that deserves praise.”