Poverty and debate
Published by Yazad Jal May 16th, 2005 in EconomicsThere seems to be some problem with adding comments on my Poverty, footwear and cold water post. I’ve closed comments there, but please feel to continue the debate here.
Both the webguru and I are tired of fixing various MT glitches (thanks to all of you who’d emailed with their concerns). We’ll be moving to a spanking new WordPress system soon. Till then, please bear with us. If you can’t comment due to an MT tantrum, please email me your comment and I’d post it.
err… your #120 from previous post, points back to itself, instead of this one.
Indian PM warns growth to fall below target….PM unveils big plan for rural infrastructure
Return of socialism? I hope not. The later statement would be an excellent (and expected) step had the first been not true.
i had read initially Dilip’s column and was infact impressed by it coz i agree to his thoughts… later on i read Yazad’s article and came to this link…. quite a good discussion it is… i even started a blog of my own after all this… Check it and all comments are welcome!
Yazad quotes in his article - “India’s GDP per capita in 1990, before liberalisation, was $1,300. Today it’s $2,830, more than double. It’s increased at around 5.33 per cent per year”
I wonder if he has adjustd these numbers for inflation - as cumulative inflation between 1990-2005 is more than 100%, which could potentially wipe out all the benefits of the GDP increase.
Vel, when people talk of GDP growth, they talk of *real* GDP growth, i.e. adjusted for inflation.
I was away in no-Web land for four days, so apologies for taking a little while getting to this.
Eswaran, in your #119 in Yazad’s earlier discussion, you say: You might ask me why should the goal of reforms be increasing the GDP and not reducing the poverty. … the simple answer is, the first strategy has worked to reduce poverty in many countries …
Now you’ve completely confused me. (No rhetoric, I mean this). The goal of reforms is increasing the GDP, you say, and not reducing poverty. But then you say increasing the GDP is itself a mechanism to reduce poverty.
Therefore, the aim of the reforms were to increase GDP, which is a means to reduce poverty — which is the aim I said I wanted for the reforms. Are we agreeing with each other or is there something I’m missing?
In his recent book “Being Indian”, Pavan Verma makes a point that’s relevant here. He says increasing GDP (i.e. the pie) is the only way to reduce poverty in India, and for this reason: in his estimation, people in India are profoundly indifferent to the state of the poor, and that’s why other mechanisms to tackle poverty have failed.
Semantics aside, Eswaran, do understand: a lot of people are tired of being told to “wait”. They heard that during garibi hatao and they are hearing it now, and they simply don’t see a difference. Because they don’t see others as being made to wait. (which is why I said, “they can see for themselves how middle-class lives have been changed dramatically.”)
Vel, I’d like to see some confirmation of what you say about inflation being better than 100% between 1990 and 2005. Are you saying I’m paying better than double today to maintain the same lifestyle? I’m not so sure. Some things, like long-distance rates, have actually gotten substantially cheaper, and I’m not sure other things have better than doubled in price.
And in my last line in #116 in the earlier discussion, I missed a link. It should have read thus: “And finally, disagreements should be conducted in a civil manner, and many users tend to use such forums to vent their frustrations.
About inflation. If we assume that the average rate was 5%, it is indeed reasonable to expect that the prices have doubled. Yes, prices of many things have gone down, but I don’t think India has enjoyed (or suffered, depending on your point of view.) a general decline in prices.
I think Easwaran means it in the sense that if we have a choice of two policies
1) One which will increase GDP by a large amount
and
2) Another which will be a drag on the GDP but promises to distribute the increased income more equitably,
we should go in for the former. That is because, according to him, either
a) the promise of equitable distribution usually turns out to be false
or
b) The drag on the GDP is so much that the poor are better off under policy 1 than under policy 2.
Or both, of course.
Dilip
As Ravikiran already explained, an average of 5% inflation per annum brings about a >100% net effect. And in some years, 1990 for example, inflation was as high as 10%.
Of course, the commodities that are tracked to determine inflation do not include long distance phone calls and cell phones et al .. They strike much closer to the heart of India - Rice, pulses, cooking oil etc …
And, if you think about it, the price of rice has easily doubled in 15 years - Probably tripled or quadrupled …
5 steps to Achieve Double Digit Inclusive Growth - LK Advani
The work on ambitious infrastructure projects such as the National Highway Development Project, the Pradhan Mantri Gram Sadak Yojana, the Indian Railways’ Rashtriya Rail Vikas Yojana, modernisation of our airports and construction of greenfield airports, the Sagar Mala project for the modernization of our ports infrastructure, the many initiatives on urban renewal, implementation of power sector reforms as per the Electricity Bill 2003, strengthening of our Science & Technology infrastructure – all this must receive strong, focused and sustained attention.
I am sorry to say that the implementation of many of these projects has slowed down, especially the power sector reforms. If the alarming situation in Mumbai and Maharashtra is any pointer, then we must realize that we cannot live in the past and continue with old attitudes about the role of the private sector in electricity generation, transmission, and distribution.
Dilip, dont you agree that Congress is hurting our goal for a better GDP and hence of lowering poverty?
Hammer, no I don’t agree. Especially not based on something from LK Advani, whose job, by definition, is to pick holes in what the government is doing. (Besides his other shortcomings, which I will leave aside here).
Vel, fair enough. Compounded inflation is not really what I asked. I wanted some backup to show that inflation has been >100% over the last 15 years; meaning, are you sure it has been >=5% for each of those 15 years? But this was just idle questioning, and I get your point.
Ravi, someone just emailed me something you’ve written at your site, in which you say (among other things) this about my article on rediff: I must insist that we look only at what the article says and not at any subsequent clarifications that he gives.
Now I agree with this; I also believe I made no subsequent clarifications that changed anything I wrote and meant in that article. So I’m not arguing with that.
But I am puzzled at why I don’t get the same consideration Eswaran clearly gets from you. He says something which confuses me, and it’s not even him who has a “subsequent clarification”, but you who make it for him, saying this is what you “think” he means. How is it that with his assertion, you don’t say “I must insist we look only at the post he made and not at any subsequent clarifications that he or I may give”?
Besides which, you also say “An article on Rediff and the Hindu reaches lakhs of ill-informed readers“. The condescension here is startling. “Ill-informed”? How do you know?
Especially not based on something from LK Advani - Ad homenian.
And you also left open what dont you agree. (I understand that you might have time constraints responding to so many of us..)
As far as I know (from Financial times, Indian express, rediff… other), Indian economy is NOT on the roll and if fact has slowed down (bad for GDP, hence bad for other issues)
The engines of growth have been clogged, reform has been put on the slow track, and yet ambitious plans are drawn up for social sector spending
Hammer, you say: Ad homenian.
Really? In what way? It is Advani’s job definition, as leader of the opposition, to call the government to task on its policies and plans, to criticize those minutely. He does that. I salute him for doing it, recognizing that it is his job. And that’s an ad hominem attack?
You also say: And you also left open what dont you agree.
Funny. You ask me in #11: dont you agree that Congress is hurting our goal for a better GDP and hence of lowering poverty? I reply in #12, “No, I don’t agree.”
What exactly have I left open?
I looked (again) the definition of Ad Hominem (just for my clarity):
1) A makes claim B;
2) there is something objectionable about A,
3) therefore claim B is false.
—
In our setting:
1) Advani claims things have slowed down
2) Advani is opposition leader
3) therefore whatever he says is false
I see that you dont agree with my (and many other partisan and non-partisan) views. But what I really meant to ask was why rather than what - why dont you agree with me?
And just to give credibility to my claims/views, I had linked another non-partisan article. Here is another from the PM himself: Indian PM warns growth to fall below target
If I am not wrong, you agree that GDP growth and poverty are linked and the former can mitigate the later.
Hammer: I am not claiming whatever Advani says is false, do try to understand. One last time, I am saying, his job definition is to criticize the government. Therefore he must look for the worst aspects of their performance. Otherwise he would be failing in his duty to us all.
But therefore, his is not the most, shall we say, balanced and credible criticism. This is hardly a reflection on him, but on his role as opposition leader; it would hold of any opposition leader in any other regime. (So in the same way, I wouldn’t have been inclined to take Sonia’s word for it when she, as leader of the opposition, criticised the previous NDA Government).
This is an ad hominem attack?
I don’t agree with the statement that the Congress is “hurting our goal for a better GDP and hence of lowering poverty”. Because I don’t believe the Congress’s goal is to lower the GDP. There are other, lesser reasons I don’t agree with that statement, but this is the major one.
But Dilip, I’ve applied exactly the same standard to you and to Easwaran!
Assume for a moment that I have summarised Easwaran’s argument
accurately. What does that mean?
It means that a reasonable man (i.e. me) can read that statement and
explain what it means to another reasonable man (i.e. you). I did not
have to double-check with the person who made that statement. I tried
to do exactly the same thing with your article and you’ve seen the
results over a couple of my posts.
So where’s the contradiction?
If it turns out that I interpreted the statement wrongly, then it
either means that he wasn’t coherent in the first place or that I
goofed up. In the former case, the same criticism that applies to your
article applies to his statement too. In the latter case, someone
needs to explain to me where I goofed up and I’ll accept it. I am
willing to do the same about your article too.
All this is apart from the obvious reasons to treat your article
different from a comment on a blog (to wit
- An article should aim to be self-contained while a comment is a part
of a conversation. Your readers from that article are not going to
come over here and get clarifications, while Yazad’s readers are
likely to return and read the thread. )
As for the “ill-informed” readers - is the average reader of the
Hindu going to be familiar with NSS statistics and results of economic
surveys? Most people are ill-informed about most things. That is more
or less inevitable and is not to be taken as a condemnation.
Please note that I did not call them simple-minded or unintelligent.
My implicit assumption was that those readers are intelligent enough
to understand the reasoning behind why exactly you support economic
reforms even though by your standard of what they should achieve, they
have failed. If only you explain it to them.
Sorry for the weird formatting. I had to save the stuff because the site was acting up.
Hammer Sickel, you might as well look up concepts like “Burden of Proof” and the fallacy of “Arguing from authority”. Logical Fallacies are pitfalls to avoid in your arguments, not just sticks to beat the other side with.
I wasn’t going to rejoin this debate, but I can’t pass on a chance to take Dilip’s side. His comment about Advani is not ad hominem. Ravi had a post ages back on what constitutes an ad hominem in which he clarified, correctly, that “[f]or an argument to be ad hominem, it is not enough that the argument attacks the person. It should attack the person instead of the person’s argument, i.e. the attack on the person should have no relevance at all to the argument.”
In this case, Dilip’s comment about Advani clearly has relevance to the argument, since Advani is bound to make the kind of statements he did by virtue of being leader of the opposition. Had Dilip meant “Advani is a communal scoundrel and everything he says must be rubbish”, it would have been ad hominem. But he hasn’t said that.
Please note, Hammer, that my disagreeing with you on this one point should not be taken to constitute an insult!
Guys, why are we arguing about semantics …. I feel that we are missing the point here !
Vel, thanks for the reminder. It’s easy to miss the issues and get caught in the semantics, and it needs guys like you to catch that.
Has the price of rice indeed doubled or tripled in the last 15 years?
Quote:“For the people BPL the issue price of wheat was raised from Rs 250 per quintal in 1997-98 to Rs 450 per quintal in 2000-01. Likewise, the issue price of rice has been raised from Rs 350 per quintal to Rs 565 per quintal.”
So the price of rice/wheat through the PDS route has almost doubled in 5 years (97-01) ! So, I find it easy to believe that the price of rice must have tripled in the last 15 years.
Here is the link to the above information
http://pd.cpim.org/2004/1024/10242004_dipak%20basu.htm
Dilip’s comment about Advani clearly has relevance to the argument, since Advani is bound to make the kind of statements he did by virtue of being leader of the opposition
“Ad hominem” or not, it is still illogic for the simple reason that an argument is being discredited not by showing it to lack strength but by attributing motives to the person who stated it.
Vel,
Prices have actually not tripled in the last 13 years. they have about doubled. Using 1997-98 and extrapolating that back is actually misleading because starting that year the government introduced a two-tier PDS with those below the poverty line (BPL) getting much lower prices. SO adminstered prices actually dropped sharply between 1996-97 and 1997-98! The net result is that over the past 15 years, adminstered prices have not tripled. Prices for stuff like textiles have gone up even less. You can check all these data in the CSO website.
Regards
Srinivas
Not a regular here. Chanced upon this debate.
My thoughts.
I would have read about 30-40% of the comments by various people on debate. One thing that stands out to me is everyone seem to agree “Poverty” is a “Problem”.
Given that, what do people do when they have “Problem” big or small, they try to “Solve” it. The bigger/complex the problem the “Harder” its to solve.
Now what if we consider “Poverty” as a “Risk” or “Liability”. One doesn’t “Solve” Risk, one “Manages” Risk. This entails to the fact that we manage Poverty such that it won’t Risk us NOT achieving our Goals. Here the Goals being anything the country wishes to be.
With an obsession to “Solve” Poverty “Problem” this in itself becomes our GOAL which is NOT good.
Countries GOAL shouldn’t be “Solving” Poverty, but the “Manage” it in such a way that poverty doesn’t become a hindrance to other achievable goals.
Think about it. Which is appears to be easy do, “Solving Poverty problem” or “Managing poverty” so that we prosper in the things we do better.
My 2 paisa.
Amit,
Thanks for your clarification on ‘real’ Ad Hominem argument.
I, however, agree with most of the points made by LK Advani especially the point that: “The Indian economy has slowed down”. It comes from various credible sources (the PM himself).
And what really is surprising, is Dilip’s rejection because it was said by Advani. Funny.
If not ad hominem, it must be hypocracy.
I was expecting a quantitative reply to the content of a bunch of articles I pointed to rather than a mere ‘rejection’ based on ideological and past differences.
If not anything, one has to agree that India cannot grow economically under a communist supported and supressed government (past 50 years have shown that).
Srinivas, thanks for the clarification.
Yazad quotes in his article - “India’s GDP per capita in 1990, before liberalisation, was $1,300. Today it’s $2,830, more than double. It’s increased at around 5.33 per cent per year”
Then Srini says “Prices have actually not tripled in the last 13 years. they have about doubled. ”
Doesn’t this mean we effectively had no
growth (since Per capita GDP doubled which is nullified by price rise doubling ?)
Am I missing the “real” concept here ?
Also this, aren’t we mistaking the “low base” concept ? we had a low base in 1990 and this doubling doesnt mean much.
Also we sustaining the Doubling factor is a great question mark.
An interesting take on economic reforms in India.
• On the other hand, anti-globalisation always becomes synonymous with anti-Americanism. Like in new York, one placard would say ‘Down with Bush’ and the other would say ‘Down with globalisation’.
Exactly. I think the anti-globalisation movement is the coalition to keep poor people poor. If India would have paid attention to anti-globalisation, they would never have had the reforms of 1991. Is there anyone here today who thinks that India is worse off today than before making that change?
• I call this crowd, the Povertarians. Their principle is poverty is my birth right and you can have it.
That is wonderful. Who want to share their poverty with others. And look at all the potential that has been unlocked here. And that doesn’t mean that the government has to wither away. We still need the government for a lot of things—for regulation, for social protection and safety nets—but the basic impulse of 1991 was right. And we listen to those people, we do wrong.
Wonder what Dilipji has to say on this?