Richer or Poorer
This was written in September 1995 in response to a young Indian colleague, who, during a correspondence in response to my essay "Personal Sovereignty,"(see CommonPlaces) wrote, in part: "It is my personal grievance that amongst all the measures taken by the Indian government to up lift India (literacy campaigns, industrial revolution, self sufficiency in grain etc.), the one that remains delinquent is abolition of poverty - the greatest of all violence and the root of all evil."
It has been said that all of the young are socialists until they inherit property, after which they become conservatives. I think rather that the young (or I should say the younger) suffer from the delusion of "social synergy." By this I mean they harbor the assumption that when people join together to form any organization, that act somehow produces a synergy, an organism which is not only greater than the sum of its parts but which possesses a strange autonomy.
There can be no question that social structures, such as clubs, self-help co-operatives, churches and governments, possess collectively power and resources which individuals lack. However, equally there can be no valid conclusion that organizations possessing independent wills, morals or conscience. The illusion that they do is merely a reflection of the values and actions of those who control and lead organizations, seen through the dim lens of the individual.
Therefore, it makes no sense to speak of the government doing or not doing anything. Those things done by governments are only those things made possible by the desires of the leadership within the limits of approval (or sufferance) of the led. The main event in governing is just that: balancing the wishes and actions of the leaders against the needs and tolerance of the followers. When the balance tips, the social whole suffers and violence may ensue.
Thomas Jefferson recognized that the best government is that which governs least and that, in the event that the governmental balance shifted away from the people, there was a right, even a duty, to change or even overthrow the cause of the imbalance.
My young colleague, after noting that 70% of Indians live in rural settings, lists as government initiatives to end poverty, efforts to increase literacy, to promote industrial revolution and to produce self-sufficiency in grain production. He omits the most successful and perhaps paradoxical initiative: the improvement of rural hygiene leading to lower infant mortality and rising adult life expectancy.
The history of the rise of industrial nations in Europe and on this continent all share the same features. In each nation, there was a long period, in some cases many, many centuries, during which the population was rural and stable. Then conditions changed, there was a very rapid increase in population over a few generations and industrialization, with its accompanying social dislocations and rise of cities, ensued.
There can be no question that the same pattern is leading India, as well as neighboring countries, including China, forward into a new 21st century industrial revolution.
Why are the governmental efforts listed futile in changing the state of rural poverty? Primarily because positive acts by governments serve the needs and desires of social leaders. India, in addition to possessing a vast rural population, has perhaps the greatest national "middle" class of any nation. The principle need of the middle class is rural peace, permitting low food costs and stable demand for locally provided goods and services. This enables continued wage employment, much of it in governmental bureaucracy, for themselves and their sons and daughters while releasing their purchasing power for acquisition of middle class "goods": washing machines, color televisions, automobiles and vacations.
Thus each of these governmental efforts can be seen to promote rural peace rather than rural advancement:
Literacy campaigns detract from the reality of poor (or absent) schools and help to hide the reality that education (not mere literacy) is the most powerful engine of individual and collective social advancement.
Education, especially of women, is the most successful birth control measure: in all Western countries there is an inverse relationship between quantity of education (and proportion educated) and average birth rate. Thus true rural education improvement (rather than literacy campaigns) tend to offset the effects of improved hygiene, thereby stabilizing populations and producing rising economic demands.
Industrial revolution, especially in a context of central planning, rises from the bottom rather than coming down from the top. However, promoting selected rural industrial development hides the reality of practices, imposed through taxes, labor regulation and land use policy, which stifle the efforts of the ingenious entrepreneur to enter the market while protecting existing industries and their empowered owners. The great failure of the Soviet system, amongst many others, was the inability to promote industrialization through central planning in the absence (even suppression) of free market practices.
Grain self-sufficiency is a false goal in that it overlooks, perhaps deliberately, the power of international market forces. Countries, by definition, export those things for which they possess production advantages and use the income thus raised to import goods and services for which they have a relative production disadvantage. "Self-sufficiency," in any form, is chauvinistic and protectionist. In this case, it is especially invidious, as it provides an argument for keeping the rural poor rural: their labor is needed to grow the grain to produce self-sufficiency. Industrialization requires the rise of cities, to consolidate and utilize labor, and a concomitant industrialization of agriculture. A century ago, more than 50% of Americans lived on farms and each farmer fed only a few people other than himself. Today, less than 2% of our population lives on the land but each farmer feeds over 1200 people and the US is the world's largest exporter of food and other agricultural products.
What is the road from poverty, especially rural poverty and what role does governmental action play in approach to that destination?
Wealth, individually and collectively, is the result of free market processes driven by individual initiative. Adam Smith recognized this in 1776 and it is even more obviously true today. Thus, the roles which social leaders, acting through government, can play are very limited:
* Provision of peace by providing defense against external threats and through establishment and enforcement of class and gender neutral laws to promote internal order.
* Statutory provision (and enforcement) of individual civil rights, unaffected by individual financial, geographic or social differences.
* Enabling private access to and ownership of land and property through appropriate law and regulation and by the absence of land seizures, excessive taxation or regulation of sale and inheritance of property.
* Imposition of minimal necessary regulation of the economic playing field through insistence on fair market practices (enforcement of truth in advertising, requiring the use of a single currency for settlement of all private and public debts, examination and possible regulation of large scale monopolies, etc.)
None of these enabling (rather than pro-active) policies will ensure the wealth of individuals or of nations. However, their absence has and will guarantee continued poverty and suffering.
In thinking about India today, reflect that 125 years ago, at the end of the US Civil War, 70% of Americans lived on the land and in rural villages. For India, perhaps the comparable historical clock should be started in 1947.
The young, in addition to being socialists, are also, bless them, impatient with the status quo. What will be the state and quality of Indian life in 75 years? Far better one can hope, but only if the young recognize that it is we the people, not the government, which builds great nations and ensures domestic tranquillity.