Produced below is an essay by B.R. Shenoy, published in a December 1957 issue of The Indian Libertarian Magazine. The author was an Indian economist and notable critic of the India’s five-year planning model. A proponent of individual freedoms, in this essay, Shenoy outlines the characteristics of a true welfare state.
The accent of the welfare state is, clearly, on welfare as there can be no welfare state without welfare. The question at once arises, whose welfare does the welfare state aim at achieving? The answer, probably, would be the welfare of the common man. If it is objected that the common man is very hard to find, we would, probably, amend our answer and say that the objective of the welfare state is the welfare of the masses of people, the maximum of well-being of the maximum of people.
At first sight this answer might seem to satisfy the question well enough. But it really begs the question. We have said little more than that welfare is equal to well-being of man. We are still far from formulating the issues. If we wish to be scientific and logically consistent, we cannot run away from certain fundamentals of the problem of welfare. Human well-being is inseparably bound up with the immediate and the ultimate purpose of human existence. We cannot escape the question, what are we here for? Are we here to worship on the altar of man’s standard of living? Would it be right to say that the purpose of human existence is to live a life of carefree comfort? Much of our thinking to-day seems to move in that direction.
What Is The Aim Of Life
What has Gandhi to say on the subject? He is always a good and safe guide in these matters. Gandhi had his feet firmly on Indian soil. His thinking went to the roots of our tradition. He has answered the question of what is the purpose of human existence in the Introduction to The Story of My Experiments with Truth. Says Gandhi: “What I want to achieve- what I have been striving and pining to achieve these thirty years is self-realisation,…. to attain Moksha. I live and move and have my being in pursuit of this goal. All that I do by way of speaking and writing, and all my ventures in the political field, are directed to this same end” (p. 5). Since it is Gandhi that writes, he means every syllable of what he has recorded. The purpose of all his activities, public and private, political activities not excluded, was the attainment of Moksha. This goal of life conforms to the traditional teachings of this land.
The problem of human welfare, of how best to cater to it, is not a recent problem. It is as old as the human race, and, therefore, dates back to the early phase of this Manvantaric age when man, with the lighting (activation) of Manas, which had been hitherto latent, acquired self-consciousness. Man has been since pursuing the goal of his life, the Compassionate Ones who attained the goal helping the rest in the great task.
Our institutions and our way of life were attuned to it. The attunement was done scientifically and with rigorous logical consistency. Our daily duties and responsibilities on the mundane plane broadly fall under two categories, the wealth or income acquiring (Arthic) activities and the want satisfying (Kamic) activities. Since both activities had to be regulated as to attain Moksha, their roots had necessarily to be well-grounded in Dharma. For speeding up the inner journey towards Nirvana, it is important that we acquire wealth only in consistence with Dharma and Dharma alone should govern the propensity for the satisfaction of wants.
Where does the State fit into this context? It is obvious that the State has no jurisdiction over the inner changes leading to self-realization, Nirvana. But the remaining three, Dharma, Artha and Kama, the thri-vargas, fall within its purview. The responsibility of the king, who symbolised the State, was to propagate the thri-vargas, subject to the overriding requirement that the Arthic and the Kamic activities were always conditioned by Dharma. It is significant that, under Indian polity, sovereignty lay, not in the people, but in Dharma. The concern of the executive wing of the State, the king and his ministers, was to ensure that the rule of the sovereign Dharma prevailed. Dharma, like Truth, is indivisible and all pervasive. The state enforced the Rule of Dharma in all the activities of the people coming within its ambit, in the administration of justice, in the collection and disbursal of revenues, in the defence of the country, and in every other of its functions and responsibilities.
A state where the Rule of Dharma prevails, is a welfare state, the objective of welfare here being the creation, to the extent permissible on the governmental side, of conditions facilitating the attainment of the goal of life by individuals. How far can such a state go in developing its public sector of economic activity, to borrow a familiar phrase of present-day discussion on planning in India? It is relevant to quote here that tradition enjoins an individual to select a vocation which is homogeneous with his nature.
The Essence Of Welfare State
It follows that under the Indian concept of a (welfare) state each individual should be left free to pursue his lawfully chosen vocation. Free enterprise, subject only to the Rule of Dharma, is an essential feature of the economic set-up of the (welfare) state. As the injunction applied to the king and the ministers, it follows, too, that the state, consistently with the Rule of Dharma, cannot enter into the sphere of economic activities, which is the sacred domain of the private sector, even if the state was capable (which is a matter of serious doubt) of more efficient production than private firms. The Rule of Dharma would restrict governmental activities to public utilities, basic industries (which the private sector is unable to undertake), basic needs of development, industries of strategic importance from the standpoint of defence, and the like. In particular, a policy of indiscriminate nationalisation of private enterprise was contrary to this doctrine.
Minimum State, The Ideal Of India
This suggests that the Indian concept of a welfare state was a minimum state. It was wholly antagonistic to a garrison police state. The latter rests on violence and Adharma; under it the individual is coerced into yielding to the will of the state, which, in practice, means the tyranny of an individual or a group of individuals, who are, for the time being, in possession of the machinery of state.
The concept of a welfare state to-day is linked up with the provision for all citizens of “minimum” standards of consumption. It provides (or aims at providing) minimum standards of food, shelter, education, health and income (either by way of minimum wages or public assistance for the destitute). The minima are a floor below which no individual would be allowed to fall. In an economy with an expanding national income, the minimum standards would be progressively lifted up.
This concept of a welfare state does not necessarily conflict with the Indian concept. It is the responsibility of an enlightened state to provide relief from abject poverty, which causes starvation or such other suffering. Even in the richer economies, there may be people in need of such relief. But how far shall the state go in lifting up the minimum for all? Will it be the responsibility of the state to provide the more unfortunate families of the nuclear age with motor cars, at least scooters, washing machines, refrigerators, telephones, television and radio sets, and the like? Or would we say, that to do so would be going too far. I wish to suggest that this difficult problem may not confront the welfare state of the Indian conception. The limiting condition of the Rule of Dharma will prevent the state from acquiring such large revenues as vulgar charity of this character may demand. Already in U.K. the national government acquires over 25 per cent of the national income in furtherance of the concept of the welfare state and in U.S.A. over 30 per cent.
The need for ensuring minimum standards of consumption is great in under-developed economies, like ours, where the level of consumption of even foodgrains by the masses of people is below nutritional standards. But this cannot be done by legislation alone, Indian national income at the close of the First Plan averaged Rs. 23.42 per month, per individual. The corresponding figure for U.S.A. was Rs. 775 and for U.K. Rs. 413. It is not possible to prescribe, with any hope of successful implementation, minimum consumption standards before the physical volume of output would permit such benevolent action.
The Lurking Danger
The pressing necessity for a speedy increase in national output has presently rivetted our attention on a successful execution of the Second Plan. An overriding emphasis on accelerated economic growth is beset with serious dangers to the welfare of the individual in the sense of maximum freedom to arrange and pursue his own affairs in his own way. This may lead, step by step, to a totalitarian state, so that, if the tendency was not curbed soon enough, we may be cutting at the very roots of welfare in an effort to accelerate the pace of attaining it.
Economic development was a function of invested savings. Savings were both limited and slow to grow in a democratic set-up, where the individual, after payment of tax, had full sovereignty of disposal over income. As habits of consumption changed slowly, savings in the short-run were a more or less rigidly fixed percentage of the national income, the change in the rate of saving responding only to changes in real national income. During the five years of the First Plan period the rate of saving in India rose 6 to 7 per cent of the national income. The rate of investment which this permitted, yielded but a commensurate rate of growth of national income, the rate during the First Plan period being 3.5 per cent per annum.
Communist experience has shown that it is possible to accelerate the pace of progress by an expansion of the public sector to cover the entire economy. The state would, then, take over from the pricing system the allocation of the resources of production among the several trades and industries, such allocation being effected arbitrarily by the Planning Commission. By reducing the allocations to the consumption trades sufficiently, it becomes possible, under this arrangement, to add to the quantity of saved resources and implement a plan of development much more speedily than a democratic set-up would permit. According to official statistics the rate of increase in national income of communist economies varies between 12 to 16 per cent per year. The rate of increase in U.S.A. during the past decade was 4.9 per cent. Under communist technique it may be possible to implement the Second Plan even without foreign aid.
Guided By Communist Advisers
In the formulation of the Second Plan we have availed of the advice of technicians subscribing to the communist philosophy of life. We are not without Marxists in the Administration and among our advisers. Some have advocated, in the interest of speed in production, communist planning under the euphemistic guises of “co-operativization” “physical controls”, and “extension of the public sector.”
But to take recourse to this device would be to sacrifice freedom for speed in economic progress. For, the changed conditions will no longer permit free enterprise, a free pricing system, free markets, and, what is most diabolical, freedom of choice of one’s own occupation. We will have total planning and a totalitarian state- a garrison police state in the name of planning. Is it possible to strike a via media between these extremes? We cannot surrender our freedom and have it at the same time. The self of matter and the self of spirit can never meet. One of the two must disappear. There is no place for both.
To accept this development would be to extinguish with our own hands the best heritage of this land, which it should be our effort to revive. In the Indian context of poverty, the urgency to raise the ratio of goods to man needs no stress. But shall we do this at the sacrifice of the dignity and freedom of the individual?
What use is that welfare, which ignores the true goal of human life and sets aside the elevating Rule of Dharma. A welfare state, which aims solely at Artha and Kama (suppressing Dharma or leaving it out in the cold), is devoid of true welfare. Our happiness and welfare (and also our greatness) would be in proportion to our success in recapturing and translating into our daily life and activities the Dharma-pradhan ideal of life. To think that to do so, we would have to run away from the external appendages of the modern world or of the nuclear age of tomorrow, is to miss the essence of that ideal. Consistently with that ideal, our conception of a welfare state would be a minimum state. To quote Gandhi: “That state is perfect and non-violent where the people are governed the least” (Harijan, 12, 1940).
To summarise, the objective of life, was the attainment of self-realisation (Nirvana). The changes, inner to man, which characterised the progress toward Nirvana, were beyond the jurisdiction of the state. But they were attained in the course of the mundane activities of man. These fell broadly under two categories, Arthic (wealth or income earnings) and Kamic (want satisfying). The objective of life being Moksha, both activities were rooted in, conditioned by, Dharma. These three, Dharma, Artha and kama, (the Thrivargas) fell within the ambit of the state. Their propagation was its sole purpose.
Sovereignty, according to Indian polity, lay, not in the people, but in Dharma. It was the responsibility of the king to enforce the Rule of Dharma. A state where the Rule of Dharma prevailed was a welfare state, the objective of welfare being to assist man in the attainment of the goal of life. The welfare state of the traditional Indian concept was, thus, a minimum state. It was wholly antagonistic to a garrison police state. It did not conflict with the present-day idea of a welfare state guaranteeing minimum standards of consumption. In the excessive importance we are paying to the successful implementation of the Second Plan there was inherent danger to this concept of the welfare state as, insistence on the Plan, might lead, step by step, to the adoption of totalitarian devices for raising the requisite resources. To prevent this we have to be constantly on the vigil.
– From a speech at a symposium on “My Idea OfA Welfare State” at Bharatia Vidya Bhavan, Bombay.