There has been a great apparent uproar in recent times about the privatization drive being undertaken by the Government of India. Strikes have been called by Unions, Op-eds have been written by intellectuals, studios have been gripped by Darr ka Mahaul and youth leaders have accused the PM of taking the poor peoples’ money and putting it in the pockets of his industrialist friends.
The government’s implicit reasoning is that any entity owned by the government inevitably leads to laziness, inefficiencies and corruption, thus draining the nation of its potential and causing misery overall. There is some truth in this. In order to understand this phenomenon, we need to examine closely the craze and the craving that grips most Indian middle class families: securing a government job.
What is it that makes a government job so lustrous? It has a lot to do with something fundamental and deeply entrenched in the human nature: seeking security. And in today’s time, money is what provides a lot of security to most people, if not to all. And what better way is there to obtain and keep obtaining money month after month, securely, if not a government job? Once you’re selected for a government job, it almost ensures that your life is settled.
And once your life is settled, there simply is no incentive to be innovative, or to have initiative. In fact, these qualities often result in reprimand from the higher-ups and the co-workers. So, even those who are idealistic, patriotic and looking to improve the system, with time the system molds them to be complacent. Complacency results in laziness and the tendency to maintain the status quo. This also brings about the much talked about lack of efficiency of government organizations.
There is another fundamental tenet of human nature which is entrenched deep within the psyche: Greed. Those in the private sector satiate their greed by working hard and trying to bring about innovations, because they are incentivized to be productive and innovative with the carrot of bonuses, promotion based on merit, et al. On the other hand, in government jobs, promotions are generally based on “yes sir” attitudes and by seniority. Bonuses, if any, are generally well distributed among all the employees, and not to only those who did the hard work or brought about the innovations. So, where does this greed find its outlet? In the form of corruption, of course. What easier way to satiate the greed than to earn a few (or a lot of) extra bucks by blocking a file? Those who want to get their work done need to oil (read: chai-paani (read: bribe)) the cogs in the wheels of the government machinery in order for the file to move. And thus, corruption is born and sustained.
Inclusive Institutions vs Extractive Institutions
In their book titled “Why Nations Fail,” American economists Daron Acemoglu and James Robinson have given the beautiful concept of Inclusive Institutions and Extractive Institutions.
Inclusive economic institutions are those which support the material aspirations of the majority of the population. Their features include secure property rights, an unbiased system of law, and a relatively level playing field in which people can exchange and contract, provided by a provision of public services. That the people realize most of the gain from their own efforts is ensured by these institutions. Knowing that they will realize material gains from their efforts, people are encouraged to choose the careers that make the most of their own skills, to get educated and develop the said skills, and to start their own businesses and invest and grow.
Extractive economic institutions are the polar opposite: They steer the economic rewards towards a relatively small elite. These institutions either disincentivize the people from taking economic initiatives, because they know that little of the gain from their efforts will be accrued by themselves. Or they outright cut the peoples’ opportunities to take economic initiatives by a variety of hurdles, including, but not limited to bribery and red-tapism.
The general trend is that government institutions tend to be extractive while private institutions tend to be inclusive.
How is this relevant to India and the Idea of India? The relevance becomes apparent when we think about the consequences of liberalization and privatization of the economy. For the initial 44 years of the existence of the modern state of India (up to 1991) everything was under the government control. Every institution was extractive, thus giving us the ‘Hindu rate of growth’. Some people ask shouldn’t it be called ‘Secular rate of growth’ or ‘Socialist rate of growth’? (Although the words ‘Secular’ and ‘Socialist’ were added to the Indian constitution by way of the 42nd Amendment of the constitution in 1976, the governments of the earlier period already carried out in spirit the tenets of these words as they’re defined in the Indian context.)
Most of the money and wealth was concentrated in the hands of a small elite, who sipped their fine wines and gourmet coffees while criticizing the country and its poverty, and at the same time doing everything possible to keep the country poor.
Post 1991, inclusive institutions began to rear their head, and this resulted in the rapid economic growth that has provided Colour TVs and Cable, Smartphones and internet connectivity, motorcycles and cars and many other material benefits that we see around us.
This resulted in more a self-assured and self-confident middle class which began to ask questions like “Who are we as a civilization? Who are we as individuals? What has our history been? What will our future be?” Now this is hugely problematic for the wine sipping elite, who found that the uncivilized brutes are also learning the proper ways to hold a glass of wine, and talking about this civilization and this nation in a positive way at the same time. Their whole narrative crumbles if they can’t keep the nation poor and unproductive. Only people who are poor and who feel oppressed think about doing revolutions. Hard working and confident people think about improving things, but without painting the roads red. The elite is now finding that there are not many takers for their idea of revolution and people are actually working on making the nation grow, whether consciously or subconsciously, and learning and thinking about their past, present and future at the same time. This doesn’t bode well at all for the Idea of India.
What is the Idea of India?
The idea of India is to balkanize India. Period. If you have even the slightest doubt about it, you’re essentially Arjun in the battlefield just before the battle is about to commence. The only difference is, the battle, no, the war has already been commenced, and it’s been ongoing for a few centuries now. One needs only to open their eyes and see how you’ve been under attack in all sorts of ways. Whether it is blocking of a Dam project, or making fun of a deity in a movie, or instigating Maoist insurgency in natural resource rich states or blocking of infrastructure projects like the Mumbai Metro, the war is always on. It has always been on. Each individual can see with their own experiences, the various ways in which this war is being waged. And how toothless this country feels fighting this war.
There’s hope. With the advent of a new generation of leaders who understand the importance of both the Sanatan traditions, as well as the array of modern phenomenon that is taking shape around us, and who also know how to win elections and retain electoral power, there’s hope. Teeth have started to grow. The skin is being pierced and it is causing some discomfort for the time being, but the result in the form of sharp teeth will be satisfactory.
And this, the intellectual elite can’t stand at all. Their narratives are being rejected
left, right and center. With every new policy which cuts out the middle men, their funding, and hence their power wanes. With every new person getting employed in a private organization, their power to call people to the streets wanes. These are just two examples. Upon examination, each individual will find hundreds, if not thousands of ways in which the elite have been entrenched everywhere, and are slowly being thrown out. They’re feeling desperate and in their desperation they’re are showing their true colors, thus speeding up the process.
Protests against privatization are just one piece of the puzzle. But it is necessary to see the importance of this step, to both the people who love India, and to those who love the idea of India.
They see it with perfect clarity. Do you?