Reservations - The economy ain’t safe yet
Published by MadMan June 3rd, 2004 in EconomicsSo they worked it out. The Congress (I) and the Left agreed on a Common Minimum Programme for this country, even though the Left’s outdated ideas have died in the very countries from which they came.
Suman Palit, a fellow Libertarian, however is not impressed. He recommends, “…if you have money invested in India, I suggest for your own sake you pull out for now. The new government does not have the first clue how to play hard and nice in the world economy.”
Not normally one to follow politics extensively, this caught my interest enough to make me saunter over to the Congress website and read this CMP for myself. And it certainly does look like a “coalition” job. Besides the usual crap spouted by everyone about improving the condition of women, children, villagers, blah blah blah, two serious propositions made me shudder:
1) Passing a bill for reserving 33% of Parliament seats for women: I’ll leave this issue for another post, but this move cuts off the roots of democracy and should never be allowed. If India implements this law, it can no longer call itself a “democratic” country.
2) Reservations for jobs in the private sector: Says the CMP, “The UPA government is very sensitive to the issue ‘of affirmative action, including reservations, in the private sector. It will immediately initiate a national dialogue with all political parties, industry and other organizations to see how best the private sector can fulfill the aspirations of scheduled caste and scheduled tribe youth.”
If that weren’t enough, we have “Dalit leader” Ram Vilas Paswan insisting that India must have reservations. I quote:
We are happy that most of our manifesto declarations have been included in the CMP, like right to work should be included in the list of Fundamental Rights.
It has been included in the CMP as guarantee of employment. There is no law for reservations (in the private sector) and we have demanded that there should be a law for it.
Oh, but he’s on a roll. When asked if the private sector will suffer because of this, he waxes eloquently:
In India we don’t have reservation in private sector but in America it is provisioned for Blacks. There it is said that a certain percentage will have to be reserved for them in private sector. Take a look at America’s constitution and see how they have done it for Blacks.
Somebody ought to educate Mr. Paswan about the US constitution. There is no law in USA that requires the private sector to reserve any number of jobs for any community, Blacks or otherwise. They only have laws that prevent companies from discriminating against people solely because of their race. That’s a different kettle of fish.
Darn, that was a quick fisking. It wasn’t satisfying enough. But let’s move on…
As you can probably guess, we Libertarians are totally against any kind of reservations, especially in the private sector. The purpose of reservations was originally to give the “backward” castes a helping hand while they reached a better social and economic status. Unfortunately, it continues to be a weapon of vote bank politics even so many years after independence. So in a way, it was supposed to be a form of achieving “social justice” for the disadvantaged lot.
A private company, on the other hand, exists only to provide returns to its shareholders. It is in business to make money, not for social reform. To achieve this, businesses should be free to hire the best talent they can find, not be handcuffed into settling for someone just because of a law forcing him to be hired. If the government wants to ensure the upliftment of these so-called backward classes (Is Lalloo, with his crores, “backward” any more?), it should try and treat the cause, not the symptom. In other words, try to get more people educated. Try to stimulate economic growth so there are more jobs. Try to eradicate the idea of a caste system through information and education. These people aren’t “backward” because they were born that way. They’re so because someone stuck a label on them.
But please… let’s leave the private sector out of this. Don’t make them the pawns of political games. The entire economy will suffer. Instead of doing away with the social evil of the caste system, moves like this will only help perpetuate it further. And as Ravi says, the only thing that will come out of this is another level of inspectors who have to be paid their “monthly”.
(For the record, we already do our bit for social welfare programmes. They’re called “taxes” from which the government is supposed to do all the things it promises but never does.)
22 Responses to “Reservations - The economy ain’t safe yet”
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Speaking of Taxes, this is something I have been (I swear) telling my friends for a long time.
There shouldn’t be any taxes. What right does the government have in taking away my money. (Hard earned or otherwise)
If I take resources out of public land (mines, quarries etc.), or use public resources (water, electricity, etc.) let the government charge me a fee. I don’t mind paying that. But how can the government take away half my revenues in the form of taxes?
Ravages,
Taxes normally come with the condition of no quid pro quo being there.
Why do you need taxes? That is a long story.
Most long term investments (roads, electricity, coal etc) depends on economies of scale, which in turn depends on the ability of companies/govt to sell them at such a low price, not to mention the investment they need.
No taxes = no money for the govt = no investment.
And trust me, you would not want to pay directly for being able to use electricity that comes from a power project, or coal from a coal mine.
And armed forces, the size of which we have, are not quite a profitable enterprise.
It sounds quite old school and so on, I know, but I have not seen a feasible alternative till date.
Flawed maybe, but it works.
Codey? Codey?
Is that really you? I thought we lost you. :)
Ravages, we need some taxes, but I have written a lonnng essay on why personal income tax should be abolished.
My point, MadMan, and Codey, is that if businesses use up social resources (ugh, I hate that, but lets persist), for the purposes of production and marketing, let the government charge a fee, as a fitting compensation. Let it levy tolls on roads for transport vehicles; let it charge an extraction fee for granite and coal and fuel.
What does the government mean to come swooping on me, like vultures after a carcass when I have, after paying off all my dues, my salaries etc, just made some money?
Taxes, should, at the best, be made on revenues, and not on profits. Or at least, that’s what I think.
Also, if somebody again tells me that governments needs taxes to fund welfare, I swear that I am gonna come after them with a shotgun.
Why the hell do I have to pay to keep up an incompetent, inefficient person who doesn’t have the motivation to even take care of his own life?
How long would I then have to keep on paying for his sorry life?
If you ask me (not many do, but…) to hell with taxes and charges and duties and the government even.
Madhu: oui, c’est moi.
Yes, I have been sort of lost trying to see light from where I am these days, but certainly not gone for good.
I think I have read that looooong essay when you had published it.
Ravages: Shoot me after you answer it, but pray tell me how would you fund welfare otherwise?
It is not just businesses that use social resources, normal people do too. Some of them do not have the ability to pay for it. What would you have them do, go kill themselves or get them killed by someone?
Why the hell do I have to pay to keep up an incompetent, inefficient person who doesn’t have the motivation to even take care of his own life?
How long would I then have to keep on paying for his sorry life?
Ouch! And I thought the Third Reich was a thing of the past.
To try another perspective, you travel daily from city X to city Y and no one else does. Would you bear the entire cost of building that road?
Again, I agree it is not perfect, but give me an alternative that can actually work.
The regular libertarian peeves of no taxes no reservations asied, I’d like to ask a question that has been bothering me since the elections. What is the alternative social reform programme that libertarians(though I seriously prefer Hayekian Liberals), have to offer?
Caste is a major issue across the board, in the more as well as less developed parts of the country. But it is a very big issue in the Hindi belt today. Something I noticed was the Kamaraj was the first non-Brahmin to become CM of TN in 1954, whereas the first non-upper caste CM of Bihar was Laloo in 1990, and it is only in 1993 that UP got its first Dalit CM Mayawati.
This ofcourse could attest to the intrinsic problems of reservations, but today most of the OBCs (44% of population according to Mandal Comission) and SC/STs (17%), see reservations, or political intervention as a real solution to fixing millenia of social repression. Us city slickers can sit here and call it “vote bank” politics, but that does not prevent Laloo, Mulayam, Mayawati and Paswan from winning votes on this issue.
What is the liberal alternative? And how do we sell it?
Codey, If you have been following me closely, you would know that I dont believe in welfare at all.
What is welfare but a form of safety net for those “poor” souls who don’t have the least bit of motivation to manage their lives. If there were no safety net, I would be doubly sure I don’t fall off. Take away the safety net called welfare, and lets see how many of these poor people continue to be poor?
Again, this is a rant, of a tortured soul. Discount it.
Ravages,
Sorry for not following you closely, but I think I will have another go at this.
It is great to hear that you would survive, even if the safety net was taken off. I guess so would many others on this blog.
But there are millions out there who cannot do the same, like the disabled or even people who have not had the good fortune of having a decent education like you or me. And please, not everyone one out there has the wherewithal to be a potential ‘rags-to-riches’ story.
To extend your argument, would you even take out the safety net that you might be providing to your aging folks, if they were to fall ill? They’ve had their chances in life, so they should fend for themselves, right? Or is it that being humane is too unfashionable these days?
I’d love to discount what you have said as a rant and etc, but the problem is too many people get away with lots of fancy impossible ideas without even imagining what it actually would entail.
All it takes is for three others who hear it to think of it as ‘oh-so-cool’ and voilà, we have a brilliant new solution to every problem on earth!
It falls in the same slot as the people who argue for a military dictatorship or going on a war to flatten everyone and anyone who irritates us.
The point being, most of us don’t even know what is life like without the freedom that we enjoy and the hardship that most of us have ever faced in life is having to live without net connectivity for a day or a week.
Gautam,
Would not know/think/care if I am a libertarian. My two paisa, regardless.
1) ‘No taxes’ won’t work in India. We are still way too varied in all possible ways for a solution like that.
2) Reservations should go. It was a bad idea in the first place. It only introduces another form of discrimination in an already unequal society. But it is so embedded and misused in our system right now that I do not honestly see how it will go away.
Most “city slickers” I know (including my mother who has multiple masters in social sciences) still vote based on what the caste leader asks them to.
Even among the educated and aware, votes are cast largely based on considerations other than performance. Look at the number of total idiots who get sent back to the Parliament from the cities.
3) Which brings me to the last point that we suffer from the AIDS paradigm when it comes to the problems in the country. It is always “It could not happen to me” or “It could not have happened because of me,” while the problems are very much amongst us too.
It is just more comfortable to point fingers at someone else, who in most cases do not have half the awareness or abilities that you or I have.
Reservations, Castocracy, Puppetry and Dynasty
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I am very disappointed with the the current government formation in India. I mean look at the kind of ministers they have. For e.g. Laloo — the less said the better, and Tamaludin is actually a murderer and kidnapper. And best of all CPI(m). I mean look at the bunch. The most fun part is that most of the parties supporting INC are the ones that fought the party tooth and nail in the elections.
Of-course another bogey that they have thrown out is the new call for reservations in private sector. If they manage to implement that, I think we are definitely screwed. How can India be made a meritocracy rather then a casto-cracy?
And, what is this with congress and dynasty? If they are in a democracy, why is it their own party is not democratic? All their decisions are always “unanimous” lol. And, what is this extra-constitutional authority Sonia? I mean who is the real PM? when foreign ministers totally ignore MMS and talk directly to Sonia?
What we in India need is meritocracy and democracy. And what do we have? The current bunch of politicians are trying to give us is casto-cracy, dynasty-rule, criminals as cabinet ministers and a puppet government. As a friend of mine put it, “Whenever I see MMS on TV, I almost want to move my hands above his head to see if there are any strings attached. :lol”
Ravages, what about some fixed expenses like defence which can not be determined on a user/expense/profit basis?
On reservation: I’m always interested in alternatives to gerrymander-based political representation. I wonder what would change if each district had two seats, one elected by each sex (though anyone can stand for either).
Codey: And trust me, you would not want to pay directly for being able to use electricity that comes from a power project, or coal from a coal mine.
Why should we prefer to pay for it indirectly?
I’m reminded of an anecdote (which I’ve been unable to track down). An Englishman spoke on liberal economics in another country, and after his talk several members of the audience said to him, “I cannot agree with your ideas because I do not like to go barefoot.” The Englishman was bewildered until his host quietly told him that most of the shoes in that country were made in state factories.
To try another perspective, you travel daily from city X to city Y and no one else does. Would you bear the entire cost of building that road?
Are you saying that government exists to build roads that only one person will use?
It is great to hear that you would survive, even if the safety net was taken off. […] But there are millions out there who cannot do the same, like […] people who have not had the good fortune of having a decent education like you or me.
I wonder how people with no education at all endured the thousands of years before some bright spark invented public relief.
Why should we prefer to pay for it indirectly?
Err.. because you would not be able to bear it if it was direct?
Are you saying that government exists to build roads that only one person will use?
No, I was countering the argument by Ravages that you would only want to pay for things you use.
I wonder how people with no education at all endured the thousands of years before some bright spark invented public relief.
Well, they did ‘endure’ to use the right word. But in very exploited and pitiable conditions.
Anton: Why should we prefer to pay for it indirectly?
Codey: Err.. because you would not be able to bear it if it was direct?
Why not? It’s the same service, costing the same, whether we pay for it honestly or through taxation.
(Ideally, that is. In practice, service is generally worse and costlier when payment is divorced from consumption.)
Anton: Are you saying that government exists to build roads that only one person will use?
Codey: No, I was countering the argument by Ravages that you would only want to pay for things you use.
And why did you think that was an answer? I assume that you buy some of your goods and services from private concerns; do you alone pay the whole cost of their equipment and wages? Do you suppose that in Libertaria there will be no entrepreneurs to provide services to a large number of people and charge each a proportion of the cost?
Anton: I wonder how people with no education at all endured the thousands of years before some bright spark invented public relief.
Codey: Well, they did ‘endure’ to use the right word. But in very exploited and pitiable conditions.
Well, it wasn’t my idea to use the word “survive”.
Why not? It’s the same service, costing the same, whether we pay for it honestly or through taxation.
(Ideally, that is. In practice, service is generally worse and costlier when payment is divorced from consumption.)
It is not the same my friend, try running the defence forces or build an airport in the terms you just mentioned. I am sure you can afford to pay for that SU 32 all by yourself. After all why should a person living in a slum, with nothing to lose, have anything to do with something like that?
And why is service “generally” better when payment is directly connected to consumption?
Is it because they provide you better service by default or is it because you ask for more?
In either case, you get crap if you don’t hold the providers accountable.
And why did you think that was an answer? I assume that you buy some of your goods and services from private concerns; do you alone pay the whole cost of their equipment and wages? Do you suppose that in Libertaria there will be no entrepreneurs to provide services to a large number of people and charge each a proportion of the cost?
I won’t repeat myself on this point again here, I have explained earlier in the thread why entrepreneurs will not line up to provide such a service, when there is no visible and direct returns to be made from it.
If you still cannot understand it, try and read up on why rural telephony is a disaster in India, even after a truckload of sops given to the private operators.
And nowhere have I said I was a libertarian. IIRC, I had explained earlier that I don’t give much of a damn to tags or labels.
Well, it wasn’t my idea to use the word “survive”.
Obviously, that explains the whole logic of your line of argument since you do not seem to think people do not have a right to survive.
Anton: Why not? It’s the same service, costing the same, whether we pay for it honestly or through taxation. (Ideally, that is. In practice, service is generally worse and costlier when payment is divorced from consumption.)
Codey: It is not the same my friend, try running the defence forces or build an airport in the terms you just mentioned. I am sure you can afford to pay for that SU 32 all by yourself. After all why should a person living in a slum, with nothing to lose, have anything to do with something like that?
So you’re saying we need taxation so that even people who get no benefit from (say) the Air Force, such as the slum dweller, will pay for it?
Codey: And why is service “generally” better when payment is directly connected to consumption? . . . .
The payer is concerned with cost. The consumer is concerned with the quality and appropriateness of the service. Only when these are the same person can the two be properly balanced.
Codey: In either case, you get crap if you don’t hold the providers accountable.
And the paying consumer has the strongest motive, and ability, to do so.
Anton: I assume that you buy some of your goods and services from private concerns; do you alone pay the whole cost of their equipment and wages? Do you suppose that in Libertaria there will be no entrepreneurs to provide services to a large number of people and charge each a proportion of the cost?
Codey: I won’t repeat myself on this point again here, I have explained earlier in the thread [no you haven’t] why entrepreneurs will not line up to provide such a service, when there is no visible and direct returns to be made from it.
Ah. There is no money to be made from operating a mine, a highway or an airport? Ha ha ha ha ha! Well, perhaps not much if you’re competing against another establishment, legally privileged and subsidized by the state with your money.
As for national defense, here is one proposal.
Codey: If you still cannot understand it, try and read up on why rural telephony is a disaster in India, even after a truckload of sops given to the private operators.
Do the operators have a local monopoly? Are rates politically fixed?
Anton: Well, it wasn’t my idea to use the word “survive”.
Codey: Obviously, that explains the whole logic of your line of argument since you do not seem to think people do not have a right to survive.
You’re talking gibberish. Let’s start over.
Argh. This comment thing does not love links. The item that I meant to cite is “National Defense in an Anarcho-capitalistic Society” by J.Storrs Hall, http://www.etext.org/Politics/Extropy.Institute/josh.090192