SWARAJ is SURAJ

My good online friend, Prasanna, had earlier sent me these essays by Phillip Blond. These were my first thoughts (edited from our email conversation) based on a quick read of the above essays:

Free markets are not incompatible with a communitarian ethic. The actual source of hyper-individualization today is the left’s welfare state. Why have as many kids as earlier in western societies when you have social security ? Why stay in a joint family when the NREGA gives work per house in every Indian village (irrespective of whether a joint family or nuclear family lives there)

In so far as “Red Toryism” calls for a “Big Society” based on not just markets but decentralization and families too, this is correct. Indeed, the atomization complaint can seem to have some “street-cred” what with Mrs. Thatcher having infamously said (paraphrasing) “There is no such thing as society”.

Although of course the context of Thatcher’s remarks was that the constant invoking of society as this abstract entity that should help and redistribute took away from individual responsibility because this invoking happened not through NGOs and religious platforms but in the sphere of politics where any redistribution is perforce by force.

When communitarian-ism is voluntary and not forced, then the real benefits of a big society start to pour in. Maybe I should not provoke that Hindu by deliberately killing cows in the open if many charitable non-denominational schools are funded by a lot of Hindu (if agnostic) billionaires, and not by the state? Maybe I should not burn the Quran in my locality if the local genuinely decentralized school’s PTA has a higher-than-national-average of Muslim parents? Now, of course buring books and eating animals will remain my “right”. But my incentives will now change.

But guarantee welfare benefits along with liberal individual rights and you have the inevitable fraying of society. The sexual revolution need not be subtle anymore, it can now indeed be about “summers of love”. Why should it be otherwise? The state guarantees my healthcare and education till I am (say) 25 and then there are employment benefits anyway! No restraints in the name of (a very predictable, monotonous and conforming) individualism.

A better way to understand how terribly misguided the critique of Red Tories (or Compassionate Conservatives, Christian Socialists or Hindu Swadeshi supporters) is to look at the writings of two individuals – the American Paine and the Frenchman Tocqueville.

Paine categorically differentiated between state and society. Tocqueville noticed that the grassroots and non-redistributive democracy of America actually contributed to voluntary associations unheard of in even then statist France. In India, a Gurumurthy or indeed even an Advani – when they say they reject the absolutism of both the market and state, they are simply repeating a canard. It is a false choice for anybody at this level of intellectual discussion.

Markets need a very strong state to function. But a very limited state too.

We need many police officers internally and many army officers externally. Pakistan is not getting a lot of FDI despite having less business regulations than India according to some reports – for obvious reasons. Then we need that brilliant statist creation – quick and fair courts. My family may prefers business deals only within the North Indian Agarwal Bania community not because we dislike other communities but what if that Tamil dude reneges on our verbal or indeed written contract? Within our community, we can name and shame. What do I do about somebody in Chennai or Ludhiana? A good legal system supports accretion of social capital and free market efficiency.

Finally, to talk about class monopolies and inequalities is neither here or not. Yes a static snapshot will reveal great stratification, but what is infinitely more important is a dynamic observation where class mobility and opportunity is real. And even if normatively we agree on the same level of state benefits, much better to provide them through choice competition and decentralization. Red Tories or their equivalent may not object to this in principle, but in practice their instinctive aversion to markets can lead them to oppose, say, privatizing the social security system in India through the NPS (Yashwant Sinha’s call for guaranteeing returns recently in NPS!) and similar opposition in the West etc.

Indeed, I would highly recommend books by Theodore Dalrymple – especially “Life at the Bottom” to understand why Britain and other countries need less communitarianism of the statist variety. The book is sharp, sad and funny. Hands down one of my best reads. For a more 101 overview of the issue in the British context – more data-intensive, but less inspiring – read “The Welfare state we are in”.

This is the latest piece in Mint (by myself and Rajeev Mantri)

“My appetite is infinite and my greed is more.”

These words were uttered not by a banker or CEO from the top 1% of the income pyramid, but by finance minister Pranab Mukherjee. He was exhorting his officials to ramp up tax collection, according to a June report by the Press Trust of India. His government’s addiction to ever-increasing spending is decimating the nation’s balance sheet. India now is on the dangerous trajectory of persistently high inflation, increasing taxes and slowing growth.

The combined central and state receipts in 2004-05 were around Rs. 5.87 trillion , whereas those for 2009-10 are nearly twice as much at Rs. 11.83 trillion. Yet government spending has more than doubled from Rs. 8.34 trillion to Rs18.30 trillion. The Union government is more at fault here because while its earmarked share of total receipts grew more slowly, central spending actually increased faster.

As a share of gross domestic product (GDP), net central taxes under the United Progressive Alliance has hovered around 7% whereas the state’s revenues (through grants and local revenues) has been around 8% – for a combined tax-to-GDP ratio of 15%. But combined spending has gone from around a fifth to a fourth of the economy, resulting in a consolidated deficit of around 10%.

Fertilizer subsidies have more than tripled from Rs. 16,000 crore to Rs. 52,000 crore. Pension and other retirement benefits increased from Rs. 55,000 crore to Rs.132,000 crore. Yet annual disinvestment increased haphazardly from Rs.17,000 crore in 2003-04 to just Rs. 26,000 crore in 2009-10, despite rapid development of the capital markets and the capacity of the private sector to absorb state assets over this period.

In the midst of this runaway spending, there is only one major sector where allocations haven’t increased much – defence services. Expenditure went up from…

For more, read here

Errata: Defense numbers should be Rs. 76,000 cr to Rs. 136,000 cr.

This is the second piece Rajeev and I penned for our new column in Mint

In September, Rajeev Mantri and I started a (as of now, fortnightly) column in Mint.

Here was the first piece:

Food, steel, communications, aviation, agriculture, petroleum, renewable energy, shipping, chemicals, tourism, coal, power, science & technology, broadcasting, textiles, mining, and housing.

These are not just some of the fast-growing sectors in the Indian economy, but also the names of Union government ministries. Each has its own budget, its own minister, and often a junior minister too. More importantly, in a narrow bid to protect its turf, every ministry becomes the biggest impediment to reform in that sector. Worse, government-granted monopolies in key sectors such as rail transport and coal mining are an unseen but substantial drag on the growth of the economy.

Major public sector enterprises such as Nacil (that owns Air India), HPCL and BPCL have been running up massive losses and are functioning only because of continuous taxpayer support. The only long-term, fiscally-sustainable solution is for the government to completely divest its shareholding in these companies and transfer management control to the private sector. But this is easier said than done and requires strong political will.

During the BJP-NDA government, attempts made to privatize the three entities were scuttled for one reason or another. In 2001, Prime Minister AB Vajpayee went to the extent of shifting coalition partner JD(U)’s chief Sharad Yadav out of the Civil Aviation Ministry because he was against privatization. The government came close to divesting Air India to a Tata-Singapore Airlines group for about Rs.12,000 crore, but the transaction was shelved when the global economic environment changed after the bursting of the dot-com bubble. In 2003, civil society activist Prashant Bhushan filed a PIL against the divestment of BPCL and HPCL in the Supreme Court, which directed the government to obtain parliamentary approval for the policy, thereby stalling the privatization of the oil PSUs.

Since then, just these three companies have absorbed over Rs. 2.25 lac crore in taxpayer funds. This isn’t a notional loss, and exceeds even some of the annual estimates of losses caused by government corruption. It’s also unclear how much more money these organizations would require to continue operating in the coming years. Besides being a huge drain on public money, these public assets are subject to abuse too – petrol pumps and gas agencies are doled out to acolytes by powerful politicians, and Air India flights have been known to be delayed at the whim of government officials.

…

For the rest of the piece, continue here

Most Indians, irrespective of political or economic ideology, would support some combination of spending more on social welfare and cutting taxes for the middle class instead of funding white elephants like Air India, especially when umpteen private airlines already ply our domestic and foreign routes.

Having just been labeled a “pro-dowry activist” (ahem) by @Vidyut, I am forced to come out of my blogging shell. Here is her ostensible set of reasons why dowry should be criminalized. I had a brief twitter “conversation” with Vidyut yesterday in which she responded to my saying that dowry should not be prosecuted so long as there is no violence with a “NO”. As a general rule, you should avoid arguing with people who are far too liberal with caps locks, but the more marginalized one’s position the greater the potential effect of one’s writings.

Of course, I write this very aware that pathos will almost invariably win over logos for most readers in such a sensitive debate (and even the ethos part of that Greek trio of persuasive powers is not in my favor on this issue – my XY chromosomes unfortunately assure that). I also do not know the blogger’s name, so I shall refer to the blogger by her twitter handle – Vidyut.

Vidyut starts off her piece with this assertion:

Dowry is violence.

Now, I am personally not in favor of dowry. A man marrying for money tells me that he has shown the proverbial white flag when it comes to (a) finding love, (b) earning enough for himself and his to-be family. I can only imagine a few things sadder than that.

But, I do not know how to do a hop, a skip, and a jump from that to saying dowry per se is violence or coercion! Well, if you take money, gifts or jewelry from the parents of the girls – the act of dowry has been committed and no violence has been necessarily committed. Later on in the piece, Ms. Vidyut declares even “honor killings” to be voluntary! What part of a murder is voluntary escapes me. Therefore, we must with great sadness declare Ms. Vidyut’s very first statement to be objectively false.

She then says:

Essentially, dowry is a business deal around the marriage of two individuals

Indeed. And as mentioned earlier, I find such deals to be just plain sad. But I am also very sad about infidelity, the burkha system, alcohol abuse and many other issues. That does not mean that a person’s right to cheat, cover, drink and so on should be criminalized. I wish such things never happened – but people voluntarily (happily or not) – commit these actions every day. Therefore, again we are left with the question why should the said deal be criminalized. No answers so far. And if the argument is that something should be criminalized because it is criminalized, people need to go back to logic school.

Then she writes how dowry is related to constraining women’s choices and female feticide. Correct on both counts. But the problem here is not dowry, that is just a symptom. The problem is that women have been, and unfortunately to some extent still are, (as she rightly mentions) – considered commodities.

But how will banning dowry (even if you ban it a bit more effectively, as her less self-righteous but still not very rigorous post here gives ideas for) change anything substantial on the ground? Let us not forget that dowry has been banned in India since 1961 (as she herself notices) – what has changed in half a century? Not a lot unfortunately.

You cannot effectively ban dowry if the demand for that system persists. With so much black money around, exchanging cash is very doable but even if the bride’s family disproportionately pays for the marriage costs – that is also a form of dowry. Stree-dhan and woman’s bank accounts are definitely more preferable, but if the argument is being made that violence is far more common than is reported (this could definitely be the case), then even stree-dhan and bank accounts are not safe from “poaching”.

Public awareness and more “stings” are all very good, but they can only work to a point. Latin American druglords now use submarines and militia-gangs to reach and penetrate the United States; if richer and older governments cannot social-engineer despite much more resources, can our government do so? No. But yes, laws do have unintended consequences. Section 498a has been declared as “legal terrorism” by the Supreme Court itself in Sushil Kumar Sharma vs Union of India.

More anecdotally (since Vidyut has not deigned to provide us facts either) I have not heard of one dowry violence case in my extended upper-middle class family and friends’circle living in Kolkata, Delhi and Mumbai – but I have heard of many cases in which wives in marriages at the verge of breakdown (for other reasons) have used various old and new anti-dowry laws to threaten to put her in-laws in jail unless they gave her X amount of money. Feminists may feel frissons of schaudenfreude here, and I share their feeling to an extent, but surely this is not what they intended – poor, uneducated, rural wives still cannot be effectively helped whereas their richer, educated, urban counterparts who are non-victims get to abuse entire families (including other women like the husband’s mother, sisters-in-law etc)

At the end of the day, not much is likely to change until women are better educated and financially independent. Then they will have leverage against their fathers, brothers (along with their in-law equivalents) and of course their husbands and to-be husbands.

Until that happens (or until the sex ratio becomes even worse), the father of daughters will give money to the groom’s family for various reasons – as a part of the woman’s inheritance, as paying for a certain “standard of living” if the woman is not earning, and out of (unfortunately) sheer cultural inertia. Things may “average” out somewhat for parents with a daughter and a son, but indeed not so for those with only daughters, and this is more likely if those daughters do not earn or did not find love themselves.

Those who want to see the end of dowry should re-direct their energies to creating better economic and educational opportunities for everybody, including women, through school choice and free markets.

Else, it would seem they just want to feel good rather than actually do good.

Corruption and an unresponsive democracy push the middle class to a brink.

The middle class of India, rapidly expanding and no longer as dependent on state jobs as earlier, has grown louder and angrier over the last few months at the corruption of the present Congress government – which has been in power for seven years.

They have found a voice in a 74 year old social activist – Anna Hazare. His group, India Against Corruption, has asked for various demands to be fulfilled regarding a national ombudsman – “Jan Lokpal” – by August 30th, failing which Mr. Hazare will continue his (by then) two week long fast, presumably unto death. The government, probably foreseeing this confrontation, had earlier jailed him on a technicality – but public opinion correctly forced it to release Mr. Hazare.

Yet the Congress government, for all its faults, must think hard before blinking. Mr. Hazare, a well-meaning idealist no doubt, should be free to hurt himself as he pleases, but an agency with unprecedented powers of investigation and prosecution cannot be created exactly according to the demands of any one constituency. Not to mention that passing such a bill in haste could actually increase corruption – any ombudsman risks getting captured by the corrupt; after all the present government managed a tainted appointment to the Election Commission, and almost got away with the same at the Central Vigilance Commission. Moreover, even if the proposed ombudsman remains relatively clean, its prosecutions in a country of India’s size will certainly be selective and colored by political biases – even if not by ulterior motives.

The only lasting solution to corruption – as un-sexy as it sounds – is economic, administrative, and political reforms. Consider the economics first. There is a very clear correlation across countries between economic freedom and less corruption. Indeed, many of the recent scams – about spectrum, land and other natural resources – have been because discretionary allotments were employed instead of transparent auctions. More chronic, retail-level corruption is also because of the state being involved in almost all areas of the economy. Indian politicians, twenty years after its first major economic reforms, still cannot give up on the easy patronage networks provided by, amongst other things, the hundreds of mines, hotels, textile units, banks, colleges and hospitals which are either directly run by the state or so over-regulated that you cannot run it without political “friends”. It is as if the “new public management” theories of where and how the state must interfere – adopted by even many center-left politicians of the West – never hit Indian shores.

Unfortunately, the Congress has completely stalled on economic liberalization, and instead is pushing for universal entitlements on employment, food, education and healthcare. Invariably, these programs are centralized, statist and averse to leveraging private competition for delivery. While fiscal deficits because of the global slowdown has forced the government to partially modernize these programs with better technology, the underlying push remains leftward. These schemes would need many more unionized bureaucrats and teachers, and with their salaries much higher than their private sector counterparts – corruption becomes inevitable in the various layers of their recruitment chain, incentivizing the successful ones to recoup their “investments” and angering the losers at the unfairness of it all.

Then consider the political incentives for corruption. Individual politicians are not allowed to spend more than three cents per voter for campaigning! While parties can spend more, they still have to raise it in dubious ways as lobbying is not legalized. As a result, some have called for state funding of elections – but that is likely to make the situation worse by entrenching incumbents and not hitting at the root cause of corruption, which is the arbitrary and centralized power amongst Delhi’s politicians to dole out policy favors.

Also, the unresponsive nature of the Indian democracy precipitates brinkmanship. In a mature democracy, a government can defuse any shrill demand by simply introducing the relevant bill in parliament and letting members vote according to, amongst other things, their constituents’ wishes. In Mr. Hazare’s case, that would have forced his supporters to pressure individual representatives and the movement’s real strength would have been tested. Unfortunately, Indian democracy – while most certainly not being a sham – is a shallow one. There is no democracy within parties and an anti-defection law empowers party bosses to regularly force its members, at the risk of being expelled from parliament, to vote according to their whips. This gives the executive significant power, while parliament becomes toothless to hold it accountable.

Mr. Singh cannot now introduce the demanded bill and be seen as not issuing a whip just for this bill. A fact worth noting here is that one of the authors of the anti-defection law, a law which was also – surprise – meant to reduce corruption, is now one of Mr. Hazare’s prime backers. Good intentions can indeed have some very unintended consequences.

In the short term, the government must involve the opposition to send a unified message to the public about the dangers of passing radical institutional upheavals overnight. The debate needs to be expanded to all parties and constituencies – not just Mr. Singh’s government and Mr. Hazare’s group.

In Wall Street Journal – India Journal, Yavnika Khanna and I penned a piece in support of more, not less, democracy in campuses across the country. Here are a few extracts:

In the 2014 general election, there will be around 100 million new eligible voters. That is almost the equivalent of throwing the entire population of Mexico into India’s electorate. Almost all of these new voters will have been born after the three major milestones that have defined the nation’s politics for the last two decades: the 1991 economic reforms; the Babri Masjid riots; and the first Mandal reservations’ drama. What does this new, “post-liberalization” generation value? What are its ambitions, its political impulses, and its socio-economic outlook?…

About half the nation is below the age of twenty-five, but many of our “tallest” political leaders are above the retirement age in most private firms. This is because those who genuinely want to be honest politicians face roadblocks such as lack of campus democracy as springboards, and lack of internal democracy in our parties even if they somehow get a foot in the door.

We at the Liberal Youth Forum conducted our own research study in collaboration with a think tank, Civitas Consultancy, on student participation in campus democracy and governance in India. The study takes into regard various aspects of campus democracy by dissecting and analyzing the opinions of students, student leaders, student organizations, faculty, management and other stakeholders. The study covered 77 institutions (both government and private) across various disciplines, including arts, science, commerce, management, law, medical and engineering.

Most of the institutions in the study (especially government colleges) have statutory provisions for the formation of student councils through an election or nomination. In reality, we found that arbitrary nomination systems are often implemented by college authorities as a measure to curb political activity around campus elections.

Nearly half of the colleges surveyed used nomination systems as opposed to elections. Contrast that with another finding: That 69% of students and 52% of faculty surveyed said they preferred elections and democratically-elected student representations.

There is an urgent need to provide young leaders platforms for voicing the youth’s concerns. Campus democracy empowers them as stakeholders rather than as anti-establishment agitators…

Since the Tohoku earthquake and the Fukushima meltdown struck Japan earlier this year, the country’s economics and politics has been in turmoil. The Prime Minister Mr. Kan has been under a lot of pressure to resign, but he has asked for the passage of three bills as a “condition”:

a ¥2 trillion ($25 billion) supplementary budget to cope with the disaster; the issuance of bonds to finance the 2011-12 budget deficit; and an electricity initiative to broaden the scope of feed-in tariffs to encourage more use of renewable energy in the national grid.

Presumably, this is at least as much about Mr. Kan’s ameliorating (in his perception) his legacy post-Fukushima as it is about any intrinsic ideology or political patronage. The combination of statist environmentalism and asymmetrical Keynesianism (where are the Keynesians demanding that a surplus be run during boom times?) is dangerous to any country – but amongst developed countries, Japan with its high debt-to-economy ratio must be especially careful.

For the last two decades, Japan has been building redundant infrastructure (matching in uselessness useless bridges in Alaska or highways in Chinese Gobi Desert), the country has run a very loose fiscal and somewhat loose monetary policy, and yet the country’s politicians refuse to further liberalize sectors like agriculture and retail where Japan is relatively inefficient. If the retort here is “food security”, Japan can easily have “food reserves” just like many countries have “oil reserves”. But of course the real reason is the political economy of a few retailers and fewer still farmers holding to hostage an entire economy.

Similarly, another no-brainer in Japan’s context is allowing more skilled immigration – the country is heading towards a major demographic contraction; many of the government bonds have been bought by its own people (a positive so far), but they are about to retire and they will encash, no matter what.

Unless freer trade, freer markets, and freer immigration is not three additional conditions Mr. Kan is ready to emphasize, his legacy will be that of just another Japanese Prime Minister who had to go under the disgrace of disaster.

This post is to write about my impressions of Germany, where I was for a two-week seminar recently (this genre being very much inspired by my co-blogger Dhruva’s insightful posts on “An Indian in Israel” and “An Indian in China” )

While Germany is certainly not as exotic to the Indian mind as Israel, or perhaps even China – and two weeks is hardly enough to even begin observing a country – nonetheless I found the country to be very interesting in certain ways:

1. Germany’s cost of living.

When you have to pay 3+ euros for a bottle of drinking water, you know you are in an expensive place. North-western Europe definitely seemed more expensive than the USA on a PPP basis – granted that many of its prices have a VAT incorporated, whereas many American states do not have a sales tax (and hence effectively let tourists pass tax-free). Even then, given the PIIGS debt crisis, it seemed to me that the Euro was slightly overvalued. Maybe a monetary break-up is due.

2. A vibrant but not-very-integrated-yet Muslim minority

Speaking of expenses, the only tasty (and presumably) healthy food that was affordable was Turkish food. It was in all the towns – and of course reminded me of Indian food. The folks at the restaurant were very friendly, but it seemed to me that German Muslims (mostly of Turkish descent) are socially not very integrated yet, and economically still lagging significantly (unlike, say, American Muslims)

3. Palpable differences in standards of living exist between the erstwhile “East” and “West”

I spent some time in and around Cologne, and some time in and around Rostock. The former is West Germany (not very far from Brussels and Amsterdam), whereas the latter is on the Baltic sea in the north-east of the country. Despite unification two decades ago, the East still lacks economically. Partly this is because of restrictive labor laws – which has counter-intuitively prevented the East from re-surging as fast as it could.

4. The Autobahns

Are simply impeccable, better than American highways (though I hear not as good as the Chinese ones). They of course drive on the “wrong” side – and many of their autobahns do not have speed limits! But because everybody follows some rules – left lane for the fastest, do not overtake from the right, and so on – it works. Could not help but think about India….

5. Where are the young people?

Germany is a greying country – at least the “native” white population. Apparently, there are some empty or almost-empty government schools around. The same waste should be replicated in India two or three decades from now, unless of course we privatize before that.

6. The Germans are punctual.

And I mean, really punctual. A few international seminar participants may have missed the bus a couple of times as part of our seminar travels.

7. A unique democratic model and a strong federal structure

A combination of Proportionate Representation (PR) and first-past-the-post. The PR method has a cut-off of at least 5 percent of votes. But can this or should this be replicated in India, I think not? We may soon have real bodies like the IUML and the VHP becoming more dominant, and parties like BSP no longer obliged to form inter-community coalitions. The German federal structure is also very unique – maybe not as strong as the American or the Swiss one – but nonetheless, on issues like education etc., the central government has relatively very little say.

8. Too touchy about neo-Fascists?

Perhaps because I was being “guided” by the Free Democratic Party supporters (liberals), there was repeated condemnation of the National Democratic Party (NDP) as neo-fascists – an equally strong condemnation was not reserved for the far-left parties. While I was glad that the Germans were very keen to suppress any neo-fascist movement, did they come across as too keen? Moreover, apparently many of the NDP leaders are government agents! Where does one cross internal security needs and start entering political interference mode? Germany is one of the great success stories of the last century’s second half (and more recently post-recession) but is it completely at peace with its past?

This very readable WSJ review of the book “Unnatural Selection” by Mara Hvistendhal – which documents the tragic reality of tens of millions of girls being aborted in countries like India and China over the last few decades – caught my eye for another reason, one that I had often thought about during my discussions with American feminists and “liberals” in college. That is, to quote from the review itself:

There is so much to recommend in “Unnatural Selection” that it’s sad to report that Ms. Hvistendahl often displays an unbecoming political provincialism. …Ms. Hvistendahl is particularly worried that the “right wing” or the “Christian right”—as she labels those whose politics differ from her own—will use sex-selective abortion as part of a wider war on abortion itself. She believes that something must be done about the purposeful aborting of female babies or it could lead to “feminists’ worst nightmare: a ban on all abortions.”

It is telling that Ms. Hvistendahl identifies a ban on abortion—and not the killing of tens of millions of unborn girls—as the “worst nightmare” of feminism. Even though 163 million girls have been denied life solely because of their gender, she can’t help seeing the problem through the lens of an American political issue. Yet, while she is not willing to say that something has gone terribly wrong with the pro-abortion movement, she does recognize that two ideas are coming into conflict: “After decades of fighting for a woman’s right to choose the outcome of her own pregnancy, it is difficult to turn around and point out that women are abusing that right.”

So what does she propose?

Late in “Unnatural Selection,” Ms. Hvistendahl makes some suggestions as to how such “abuse” might be curbed without infringing on a woman’s right to have an abortion. In attempting to serve these two diametrically opposed ideas, she proposes banning the common practice of revealing the sex of a baby to parents during ultrasound testing. And not just ban it, but have rigorous government enforcement, which would include nationwide sting operations designed to send doctors and ultrasound techs and nurses who reveal the sex of babies to jail. Beyond the police surveillance of obstetrics facilities, doctors would be required to “investigate women carrying female fetuses more thoroughly” when they request abortions, in order to ensure that their motives are not illegal.

As the reviewer Jonathan Last rightly responds

Such a regime borders on the absurd. It is neither feasible nor tolerable—nor efficacious: Sex determination has been against the law in both China and India for years, to no effect. I suspect that Ms. Hvistendahl’s counter-argument would be that China and India do not enforce their laws rigorously enough.

But then I do not fully agree with the reviewer’s following words:

For if “choice” is the moral imperative guiding abortion, then there is no way to take a stand against “gendercide.” Aborting a baby because she is a girl is no different from aborting a baby because she has Down syndrome or because the mother’s “mental health” requires it. Choice is choice. One Indian abortionist tells Ms. Hvistendahl: “I have patients who come and say ‘I want to abort because if this baby is born it will be a Gemini, but I want a Libra.’ “ This is where choice leads. This is where choice has already led. Ms. Hvistendahl may wish the matter otherwise, but there are only two alternatives: Restrict abortion or accept the slaughter of millions of baby girls and the calamities that are likely to come with it.

It is true that is problematic to imply that abortion is OK, unless you happen to kill girls. If abortion is wrong, so is aborting boys, sick babies (as the reviewer writes) or indeed children being born because of extreme and unusual circumstances like rape, incest etc. That is, IF abortion is wrong. This blogger does not have the philosophical, moral, or theological (Christian, Hindu or otherwise) arsenal to answer that normative question. It is, to use a much-despised phrase, “above his pay grade”.

But I do think that there could be a way of squaring this circle somewhat – short of unrealistic bans of on all ultrasounds, and short of a ban on all abortions. Why not re-direct our welfare states (the existing ones in the West and Japan, and the incipient ones in India and China) towards the young, rather than the old? Generously subsidize every child birth – half in the form of an education savings account for the child to be used in the coming years, say, and half – this is what could be crucial – for the biological mother.

In other words, give women – at least relatively poor women – a monetary incentive to have babies. Now, of course this is, to channel Newt Gingrich, right wing social engineering, which ironically could have various unintended consequences – adverse ones for social conservatives, ironically. For example, would this further encourage single and/or underage motherhood, especially amongst socio-economically underprivileged women? Maybe the monetary incentive should be higher for married women? – but then wouldn’t that a) be less targeted – married women may be marginally less likely to abort babies b) economically “regressive” – married women may also tend to be financially better off, on average. Perhaps, a better way would be to have a “top-up” subsidy for babies which are given out for adoption via the appropriate procedures. Of course, it goes without saying, there is no silver bullet here.

In short, while there is no easy clear-cut answer for one of the great moral debates of our times but to make abortions “rare”, at least one set of tools has to rely on monetary incentives. Subsidize child-birth, especially adoptions, and cut government welfare for the aged (especially those coming from the upper-middle classes). In the US, this could mean partially mean-testing Social Security whereas in India it could mean having more of our healthcare/maternity budgets re-directed towards subsidizing births of female children, and a further subsidy for adoptions (especially that of girls).

Amit has a post partially in response to this post on Broadmind. Ashok Malik and Arvind Kumar have also weighed in. Amit says:

There is no denying the fact that there is a concerted effort to define what constitutes the Right in India. The economic right which has assumed the intellectual mantle to define alternate (to the Congress’s socialist agenda) policies and governance agenda wants the Right to emerge as a Liberal Nationalist movement. For them anything to do with Hindu Right is taboo…

This is the heart of the issue. What should the Indian right be – firstly in an ideal situation, and secondly given the political realities that we face?

I will certainly be losing accuracy here, but generalization is called for to model the debate. We have the Hindu nationalists on one side, and the liberal nationalists on the other – both disagreeing to some extent with the current government’s economic and foreign policies. But when it comes to domestic, religious and socio-cultural issues, there is an apparent schism. The introspection caused by MF Husain’s death recently is a good case to examine. The liberal side says Husain was an Indian citizen and because of our laws and lawsuits – as well as a small but violent minority – he could not paint whatever he wanted to. That is unacceptable, period – and I could not agree more. The Internet Hindu side says it is not Husain painting Hindu goddesses in nude that necessarily offends them the most, but the double standards when it comes to Tasleema Nasreen’s expulsion, Da Vinci Code movie bans, and so on. And that is a very strong point too.

But if hypocrisy is what really rankles some, then there is an easy way to resolve this. A lot has happened – regrettable or not – but will the Hindu nationalists now support an American-style First Amendment pro-free speech measure in India and lobby BJP to push for it? That is, would they really be fine with people like MF Husain and Arundhati Roy painting and expressing anything? Anything? Even a Ram version of this? Or a tricolour version of this? Because only then would speech like Mohammad cartoons, Bangladeshi genocide tell-alls, and salacious gossip about Christ be protected. With such an amendment, there is no or little chance for any hypocrisy on the part of our politicians as they try to pander for votes. They will simply no longer have discretion to divide-and-rule.

But those who do not support such an amendment, then they are merely complaining about the (real or perceived) inconsistent applications of discretionary power in the hands of government, not really about the discretionary power itself. And make no mistake – laws that can punish you for casteist comments, blasphemous statements, and seditious writings will always be applied in a discretionary manner. Given the reality that pseudo-liberal and left-leaning luminaries are well entrenched in our media, some incidents are more likely to be reported than others. Some grievances are more likely to be stroked than others. Attacks on MF Husain were all condemnable and wrong in and of themselves. But if you so much as even try to contextualize any of these, you will be toast in the public sphere. Fair or not, but that is how it is. Certain songs and movies will be banned, edited or censored – whereas other works of art (which are equally offensive to other groups) would be allowed.

My principles tell me that there is nothing wrong if somebody expresses himself or herself so long as no one else’s liberty or property is physically or financially harmed. But you may not agree with my principles. Fair enough. Yet, my political intuition also tells me that the BJP/RSS junta is never going to win enough votes, seats and media influence to (a) first preserve these anti-speech and other such illiberal laws and then (b) somehow apply them more “consistently” or “fairly”. Therefore, even from a non-principled but more “realistic” point of view, the only way to stop such offenses against the “Hindu community” is to create deterrence. That is, if you want a community to discourage those members amongst them who offend other communities, then those communities need to know that the state will not be able to selectively “protect” them from offensive speech committed by those in other communities either.

But I do not think we need to be so Machiavellian (or Kautilyan, lest I be accused of being inauthentic). The Hindu community not only has no papacy (oops, another “non-Indic” reference) or holy bureaucracy, it has no one correct orthodox theology either. Moreover, non-violence has always been an important part of religions born in ancient India. Our cultural sensibilities at their very best value persuasion and reject coercion.  When persuasion fails, ostracizing can be followed – but coercion, no. Therefore, in my humble view, most Hindus should have no problem supporting free speech – and if they do, where is the difference with the liberal nationalist crowd?

Moreover, its not just about speech. On major issues like Article 370 and Universal Civil Code, liberal nationalists and the Internet Hindu crowd are on the same page. The Ram Mandir issue has almost been resolved by the courts. There may be some difference on relatively minor issues like cow protection, forcing people to sing Vande Mataram etc – but by and large there are no major problems. The Hindu right does not care about gay rights (or lack of them), abortion is not a major issue here, the feminism/sexual revolutions in India are proceeding in India in a mature and low-key manner, the Pakistan issue is not half as important for our globalizing and growing economy as it may have been a decade ago. Honestly, where are the substantive differences? Amit had written – to repeat – that “There is no denying the fact that there is a concerted effort to define what constitutes the Right in India”. I want to make that point more specific before we even get to the specifics of liberalism/economics/foreign policy in some future discussion.

I think there should be a more concerted effort first to define what constitutes the Hindu right in India. Should we leave the Hindu right to only self described Internet Hindu activists? Their faults have been exaggerated, I do sincerely believe, but even in this post Amit manages to get a nice parting shot incorporated – “Presumably they (the Liberal Nationalists) have been subsumed by left’s contempt for anything native, anything Hindu”. So anybody who disagrees with you about the role of Hinduism and its self-proclaimed vanguard in Indian politics and the Indian state (not the role of Hinduism in our popular culture, private education, and so on) is just another brown sahib?! Unfortunate. But this is exactly what this “debate” has been reduced to – ad hominem from both sides, without any major substantive differences underneath.

If most Internet Hindus are actually not bigots, but simply sick and tired of the double standards they see all around them – their best bet is actually to join ranks with the liberal nationalists. The Hindu right definitely outnumbers the liberal right for now and the foreseeable future. But it must also not be smug about getting only a fifth of the country’s polled votes, and should anticipate future demographic trends. I have not met many (I said “many”, not “any”) young, educated, urban female professionals who are breathlessly waiting for 2014 so that they finally cast a vote for the BJP. You can ignore this group for now, but it is growing rapidly. Nagpur, we have a problem.

If you are complaining about Munnu getting the rosagullah, and not Chunnu (despite the fact that Chunnu is the elder one and does more house work) you have already missed the plot. Chunnu-Munnu in real life are voting adults, and the government is not their mother and should not have the power to dispense or withhold delightful Bengali sweets. India needs a genuinely liberal and nationalist alternative – one that in a happy co-incidence fulfills the political demands of the overwhelmingly moderate yet silent majority of Hindus too.

Mr. Ferrero Jr., in an unfortunate incident, died yesterday at the age of 47. He was the third-generation of a great family business that brought us Nutella and Ferroro Rocher, amongst other chocolate products.

The Ferroros have made a lot of people a little happier than what they they otherwise would have been. I am also amongst those who have enjoyed their products often. While I cannot vouch for all their businesses, they seem to have made money by voluntarily accepting small amounts from millions of people in exchange for their chocolates. Indeed, Michele Ferroro, who survives his son’s tragic death, is the richest man in Italy by some estimates.

What an amazing family. If Pietro Ferroro Jr.’s soul can hear me, I just want to say two words – thank you.

Today the S&P sounded a warning about American sovereign debt. While the equity market fell, the more relevant market – the bond market – shrugged the report, again showing rating agencies to be anything but a lead indicator. But what is behind the soaring American debt?

The most important structural reason for the American federal government’s high spending, deficits and debts is Medicare (subsidized healthcare for the old), Medicaid (subsidized healthcare for the poor) and now (unless repealed in 2012) Obama-care (subsidized healthcare for almost everybody else too)

The other worries are trivial in comparison. Current deficits are caused more by low tax/GDP ratios because of an epic yet temporary recession rather than Obama’s stimulus and Bush’s bailouts. Social security is a simple actuarial problem that can be more than fixed by raising retirement age by only one month per year. Three wars have and are bloating their defense budget, but even a saving of 1 percent GDP every year or a current cut of around 150 billion dollars in defense spending pales against the ~50 trillion dollars of unfunded liabilities the US faces (yes, we are comparing flow vs stock here, but even a 3 percent coupon on 50 trillion is 1500 billion, and 1500>>150)

So the diagnosis finds healthcare entitlements to be the problem. Well, how to cure it then?

Both the Democratic President Obama and the Republican star-wonk Paul Ryan genuinely seem interested in limiting government’s per-recipient’s health spending (though Obama would prefer to have a few million more recipients). Both have talked about bending down the cost curve in the long run. But the methods differ.

Obama wants medical experts, scientists, ethicists and well-meaning technocrats deciding which treatment should be subsidized and how much – perhaps, focus less on end-of-life treatments. Ryan has proposed vouchers or premium support – let people shop around for the cheapest/best treatment and give vouchers to people (sized according to needs, and perhaps other conditions)

Prima facie, both may sound like reasonable approaches. Indeed, you can tweak Ryan’s vouchers/conditions and make them more egalitarian – and make Obama’s medical insurance exchanges even more market-friendly. Therefore, there are no significant normative differences (at least not many that cannot be reconciled) between the Democratic and Republican approach. Both believe in slowing down the growth of health subsidies, while recognizing the need for government redistribution.

What we face is substantially a policy/positivist debate regarding which method is more efficient. The Democrats say how having more centrally-decided medical spending will provide significant bargaining advantages when the government procures supplies and hence will reduce costs. The Republicans say the third-payer issue, which government intervention accentuates, de-links medical costs from patient incentives, and hence vouchers present a partial remedy.

My personal judgement is that the Republicans/Paul Ryan are more correct than Democrats/Barack Obama. Public choice theory should remind us that the government is not Walmart (a private company which does extract significant bargaining powers from its suppliers). The government does not have shareholders to report to – but yes a lot of lobbyists often. A theoretical bargaining advantage of the Feds is likely to get dissipated amongst commercial and political pulls and pushes. Moreover, the third-payer issue persists in such a system.

For American fiscal solvency – and global financial health – the Democrats should rethink their opposition to medical vouchers. Democratic exegesis has already found the entire Ryan Plan to be partially insolvent; hence they can extract tax reform and more egalitarian vouchers during congressional passage. The current American entitlements must be killed to protect the American welfare state. Separate the normative from the positive; adopt choice as a comprehensive progressive slogan.

Because he bans books. Vajpayee of course famously said “kitaab ka jawaab kitaab se do” – answer a book with a book (H/T Rajeev Mantri for the quote)

Freedom cannot be divvied up – those who defend economic freedom, must defend personal freedoms also, and vice-versa.

Comparing Modi with Friedman is unfair to both – the former is a politician, the latter was an academic. And yes, on most economic policy issues, I would still go with Friedman’s counsel.

Nonetheless on higher education, the scorecard may be opposite. One of the biggest market imperfections, and I do not refer to market imperfections lightly, is the global market for higher skills. Prima facie, there are many immigration restrictions. But high supply of skilled labour might force mindsets to change; it might be the ultimate fait accompli – the recent discussion of the US entrepreneurship visa despite the general overhang of protectionism and nativism is a case in point. In any case, what the embassy will not do, cables of KPOs might accomplish to a large extent. Here, India has a huge advantage – we will be adding more workers in the next couple of decades than China, EU and US combined.

This is what Modi has grasped – and his India Today Conclave speech demonstrates this well. Milton Friedman was against government funding of higher education (In fairness, that was in the American context which did not and does not face the same global demographic scenario as India does today). But I believe limited funding of higher education for all – through the voucher model, similar to the American GI bill – of colleges and/or leading certificate programs like CFA etc would be very beneficial for us. Also, it would be the best pro-woman move by the government as their school-to-college transition is often set against marriage – where the latter unfortunately wins at a much higher frequency than it should.

PS: While I recognize that most of the benefits of this subsidized higher education would still be private (rather than positive public externalities) – and hence some people may reasonably oppose my suggestion, such a subsidy would be infinitely better than spending money on dead end schemes like NREGA. Thankfully, firms like TeamLease have been lobbying for such a transition (Disclosure: No interest in TeamLease or any other educational firm)