Professor Christopher Lingle, an American economist who now teaches at Universidad Francisco Marroquín in Guatemala, has two views on India. Whenever he is not here, he is an optimist about India, but he becomes a pessimist as soon as he lands here.
An acclaimed authority on public finance in Asia, Lingle predicted the Asean financial crisis of the late 1990s. Ask him about that and he says he is not a soothsayer, he just got the timing right.
A senior fellow at the New Delhi-based think tank Centre for Civil Society (CCS), Lingle was in the capital to deliver a lecture on ‘Democracy: The “God” that Failed’. He spoke with Trithesh Nandan on democracy, economy and policymaking. Edited excerpt of his interview:
The topic of your lecture, ‘Democracy: The “God” that Failed’, sounds like the title of a book.
There are certainly two books written on this subject. A decade ago, Hans-Hermann Hoppe, a professor emeritus of economics at the University of Nevada, Las Vegas, wrote the book. The other was in the 1950s, relating to the Soviet experiment. Both of them were my source of inspiration. Hoppe was making an argument that public-owned enterprises tend to be inefficient and private ownership would be more efficient.
The Indian parliament celebrated 60 years of its existence on May 13. While this is an occasion for celebration, how far do you think democracy has deepened in India?
Democracy gets a bad name in India. In places like China, people suggest that the country is successful because there is an authoritarian government. But the problems of Indian economy have less to do with the democracy and more to do with socialism. It is not that Indian democracy has failed per se. Initially, post-independence leadership sent India on the road of socialism. Unfortunately, democracy has been blamed for India’s underperformance. Criticism of India is not the criticism of Indian democracy. Having said that, democracy does present a problem in any country. The Indian parliament which celebrated its 60th anniversary has left itself open to a number of criticisms.
What are the criticisms?
It is a disgrace of a democracy to have so many people in parliament who are charge-sheeted. There are legal cases, some of them serious, pending against a few members. The remedy for that is to fast-track the judicial system to clear them of charges or convict them before they take public office. Justice comes very slowly in India. It takes too long for hearing, so these guys sit in parliament. As long as these issues are not resolved, it is a disgrace to parliament. None of the parties wants to change it. They all have their own people (with dubious background). They depend upon them for sake of vote banks.
You seem to be echoing the sentiments of Team Anna member Arvind Kejriwal. His similar remarks angered the parliamentarians who passed a privilege motion against him. It was arguably in that context that prime minister Manmohan Singh said, “We should firmly reject those who would mock the institutions of our democracy that have developed over decades of experience.”
What I understood from Manmohan Singh’s speech on the 60 years of parliament is this: he basically criticised the critics of parliament. Firstly, I believe those potshots against parliamentarians were fair comments. Secondly, these people make comments because there is a reason to do this. There are also many reasons to complain about policy inertia, policy paralysis and unfulfilled promises.
Recently Kaushik Basu, chief economic adviser to the finance ministry, said there might not be any significant reforms for two years. In other words, Indian people will have to continue suffering for another two years. The rupee is collapsing because it is not convenient for them to act. That is an outrage. For politicians, comfort with the job is more important than steering the country ahead. These things leave them open to criticism from different quarters. The fact that they can’t even come to consensus about how to stop policy paralysis, the sliding of rupee, holding back reforms, driving foreign investment away and retarding domestic investment is shocking.
Who is to be blamed?
To think that the government solves problems and more government will solve more problems and giving more revenues and resources to the government will solve problems – that is itself a problem, the problem of unlimited democracy. So all the government’s apparatus share the blame, there can’t be any escape from the fact.
Why do you think that unlimited democracy is a problem?
Unlimited democracy has never been achieved. It is something that you move towards. Whenever people say that this problem can be solved if government spends more money, then you are moving closer towards unlimited democracy. When you give government more power and resources, the citizens have less freedom and fewer resources. If government gets more, citizens get less.
Is India inching towards unlimited democracy?
I think so. It is based on emotional attachment. Indians, like Americans, are attached to democracy. We are proud of it, believe in it and desire it. In the same way, it makes us incapable of seeing its faults. Then people start thinking that whatever government is doing must be right. In America, that was the attitude in the 1950s. If government ministers say it, it must be right. We need to question them. That we don’t question our government enough is the part of the blame on us.
In India, people like Anna Hazare are questioning the government and parliament, but the political leadership maintains that policymaking and lawmaking is parliament’s prerogative.
I think that is a dangerous attitude of the parliamentarians. Manmohan Singh made a reference to the supremacy of parliament. That frightens me in the sense that no parliament is supreme. Only supreme element, in my view, is citizens. They must be supreme. Otherwise, if parliament is supreme, then we are its servants. That is not what democracy is. Democracy is to select our servants in our interests. But they do exactly the opposite; most parliamentarians work in their own interest, that’s the problem.
What are the difference between India, the largest democracy, and America, the oldest one?
I am optimistic, most optimistic about India when I am not here. When I leave India, I think about possibilities, people and their abilities, and I become very optimistic. But when I come back to this country, I read in newspapers the nonsense about public policy, ridiculous arguments made by politicians who can’t fix the problem – all that makes me pessimistic.
India sometimes takes one step forward and two steps backward. India exports food and at the same time, people starve here. Grains are lost in open space, this is grotesque. That’s bad public policy. They should not be in business of setting the market price for food grains. Indian farmers are more productive than farmers anywhere else in the world. They produce five percent more but the government wastes 20 percent more. So, Indian farmers are behind by fifteen percent. Put anything in the hands of the government, things will underperform. In India, people do not have opportunities; they have been taken away from them by the government.
What about America?
The country is moving towards unlimited democracy because the government is taking more and more responsibilities. Politics should not be the determinant of life’s outcomes.
How do you see pro-democracy people’s movements happening all over the world – the movement against corruption in India, the Arab Spring and Occupy Wall Street in the West?
Corruption is a fatal cancer in democracy. The more regulation and bureaucracy you have, there will be more opportunities of corruption.
But in India, even after liberlisation and the end of licence raj, corruption continues to thrive. Private companies also indulge in the same practice.
The private sector bribes because it has to. You don’t earn profit by bribing bureaucrats but by expanding business. They are corrupted by government policies. When government brings so much of licences in anything, it is natural that officials will make use of it.
You once wrote that “claims of democracy have allowed the political class to impose misguided policies” in India.
There is an unfortunate intellectual bias in India against markets and pricing. It goes back to interpretations of Gandhi and Nehru. It is in political DNA. There is this debate whether the government should acquire land on behalf of private companies. I absolutely believe the government should not do it.
There was a misunderstanding of colonialism as the logical outcome of capitalism. But that’s incorrect. There was colonialism in India but that does not mean that it will be capitalism. Colonialism is restricting competition, restricting markets. Capitalism is about competition.
You also wrote in the New York Times that independence and democracy have allowed the political class to become masters over the citizenry in India.
They expect us to serve them. They expect us to pay whatever tax they demand. I believe people should pay taxes. But I believe the government must be accountable for what I give it. It should not waste it, not steal it and use it for a good cause. Can you convince me that the Indian government is not wasting money? So we are their servants. We are like the milch cows. We don’t have choice. We pay their salaries. Why I should pay you more? They become masters and we become servants.
Do you think India will go the way it did in 1991?
I hope not. India’s best chance for future is that the world returns to gold standard. In that case, India would be on the top of the list. You will soon become the second largest economy in valuation against gold.
You predicted the Asean financial crisis in 1997.
I wrote a book on the crisis that got published just before it happened. In a way I am lucky.
Do you predict anything of such sort now?
I think the governments around the world have created a potential for an enormous economic and financial crisis on the excessive accumulation of public sector debt and public sector obligations.