Many prominent Indian Liberals challenged the Socialist leaning of successive Indian Governments. They did not just critique the philosophy of Socialism but also presented a better approach to solving India’s problems. Produced below is a piece published in the February 1970 edition of the Freedom First Magazine. The author Mr. M.R. Pai presents a coherent and comprehensive case on his opposition to Socialism.
Socialism is fashionable in India today, like sideburns and tight pants in her cities. The competitive race that politicians professing socialism are running with each other does not, however, mean that socialism is good for India. Nor, that it would endure. As a citizen of Indian democracy, I oppose socialism mainly on four grounds.
First, socialism cannot solve our problem of poverty. With socialism, India would slide from poverty to pauperism. Second, it would lead to the destruction of individual liberties. Our democratic constitution would disintegrate under the pressure of socialist policies. Third, socialism would result in glaring inequalities between the rulers and ruled and lead the country away from the path of social justice. Finally, it would come in the way of India’s greatness while destroying her noble traditions.
Since there is considerable confusion even among socialists on what it means, it is better to define socialism. Broadly, its objective is to create a society of the free and the equal. This is also the objective of several other ideologies and non-socialists. The crucial difference lies in the methodology of socialism. The methodology is (a) Central Planning of economic activities by the State, and (b) State ownership of means of production, distribution and exchange. This methodology has failed elsewhere. It will not succeed in India either.
Opposition to Central Planning is generally confused with opposition to all planning or all state intervention in economic affairs. It is dubbed as a plea for laissez-faire. Far from it. The modern state has to plan its own duties and obligations towards citizens. For instance, defence of territorial integrity and freedom; maintenance of law and order; provision of infrastructure facilities (such as honest and good administration, roads, ports, etc) which cannot be provided by citizens by themselves but without which there can be no economic activity; provision of basic amenities like drinking water, public sanitation, education, regulation of private enterprise, a stable currency, an institutional and legal framework for economic transactions etc., are obligations of the modern states. They have to be planned and provided for.
In place of these basic functions, which would keep an underdeveloped country’s government fully occupied, central planning has come to mean high-cost steel plants and other inefficiently run state enterprises and a tangle of monopolies or near-monopolies in insurance, air transport, banking etc. impeding economic activities of citizens and rapid economic growth.
State ownership through a Public Sector and nationalisation of private industries is no longer acceptable even to socialists in countries like Sweden and Great Britain, which have had socialist governments. In Sweden, over 90 per cent of the economy is in private enterprise. Yet Sweden has had socialist rule now for about 40 years! Most European Socialist have found that state ownership does not transform the economy into a paradise of plenty. In state enterprises, technological and managerial problems remain much the same. Production and productivity, the very basis of a better life for all, tend to fall precipitously. If Parliamentary control over the Public Sector is sought to be made effective, efficiency falls. If autonomy is granted in the interests of efficiency, then the bureaucracy in charge of the Public Sector runs amuck, enjoying power without accountability. Individual freedoms, including trade union rights of employees, are progressively destroyed.
Poverty, our basic economic problem, can be solved quickly only by releasing the creative energies of the people. Freedom, not statism, is the answer. Socialists in India have developed a vested interest in poverty, just as communists have in disorder and chaos. The prescription of both will not eliminate poverty; it will add the tyranny of Authority to the tyranny of Poverty. Moreover, socialism in India will lead the country from poverty to pauperism because of the tremendous waste of scarce resources. The Public Sector, with its record of losses (Rs. 35 crores on an investment of Rs. 3,200 crores in central “running undertakings”) and misdirection of scarce resources into capital intensive, low-employment potential industries will aggravate Indian Poverty. Other consequences of this statism are food problems and inflation (i.e. a cruel tax on hard-working fixed income groups). Neither are calculated to eradicate poverty, nor promote social justice.
If the economy and people of India have survived the shock of socialist economic policies over the past 15 years, the reasons are to be found in the fortunate circumstance of a good sector of the population being beyond the pale of monetisation (and consequently the mischief of several government’s economic policies) and the immense capacity of the people to circumvent the plethora of impractical laws imposed on them by the rulers in the pursuit of socialism. As an old saying attributed to a farmer says: “What I eat today is mine: what I save for tomorrow will go to the king.” Socialism was described by someone as the bridge of totalitarianism. Socialists are verbal champions of freedom, but their actions destroy freedom. Thus, they pave way for totalitarianism.
With increasing state ownership, and control over the economy, Trotsky’s warning will come true: Formerly the rule was that he who does not work shall not eat, but now the rule is he who does not obey shall not eat! There need be no surprise over the totalitarian trends in our public life on the heels of bank nationalisation and other socialist measures. Threats to the freedom of the Press, the right to property, to every industry and trade, to sacred treaty obligations, and misuse for personal and factional ends, demand for a “committed bureaucracy” which will be followed by a demand for “committed armed forces” (in other words, “commissar” system) are inevitable first steps in the march towards a full-fledged socialist state. Destruction of family and religion would complete the process of transformation.
It is seldom realised that socialism is not only the enemy of individual freedoms- the socialist’s rulers always having the uncontrollable itch to control everyone except themselves- but also specially so of farmers, middle classes and generally the small man. This is necessary because state ownership has a tendency towards bigness for sake of bigness, and for easy control over all the rules that bigness affords.
The developments in the banking field illustrate this. When we became independent, there were about 740 banks. Most of them were catering to the needs of small men. They were systematically destroyed by mergers and dissolutions until barely 70 banks were left at the time of nationalisation in 1969. Except in the case of a few weak units, this process was unjustified, and small people were adversely affected. Between 1960 and 1967, over 200 banks were thus destroyed. Now, when. Seven-eighths bank is appropriated by the government through nationalisation, and the trend towards centralisation and monopoly has been initiated, there are tears for helping the small man through these huge nationalised banks!
To cover up this thirst for bigness and monopolies in the state sector, there is a lot to talk about by socialists about monopolies and Big Business in private enterprise. Truth is of little consequence. A government-appointed commission could not find any monopolies in private enterprise. An intricate licensing policy of the government has prevented competition which is the best anti-dote for any tendencies towards monopolies in the economy. As for bigness, not a single Indian private company figures in the list of the world’s top 200 firms. A small country like Japan has 45, while a huge country like India, ranking 15th in national income in the world, has no private enterprise big enough to figure in the list!
The socialists always speak of social justice and set out to do things that destroy it. Take equality for instance. Equality of income and wealth is a mirage except in a stagnant society or a colony of slaves. The essence of equality is equality before the law. In the socialist state, it is destroyed. The rulers and the ruled become two distinct classes, with the same set of laws administered with a split personality. Socialists who preach equality of income and ceilings on income have no hesitation in enjoying huge perquisites at public cost. Central ministers who draw barely Rs. 2500 a month and enjoy perquisites worth Rs 17,000 a month are but one example of this conspicuous hypocrisy. Legislators are not much behind in the race for perquisites. Under socialism, professional politicians evolve a perquisites society and destroy equality before the law.
Equality is destroyed in another way. The huge and growing army of government servants is denied access to political power. The area of decision-making left to the citizens is progressively reduced and there is a concentration of decision-making in a few political hands. Social injustice is perpetuated in yet another way. The emphasis on equality of income and cry for ceilings result in similar rewards to the deserving and undeserving alike. After 50 years of bitter experience, the Soviet regime is realising the necessity for income differentials. As one Soviet economist, Prof. Alexander Birman, put it: Why should “loafers” get the same pay as good and efficient workers?
Socialism has introduced in Indian society the poison of class welfare. Big against small business, businessmen against the public, urban workers against farmers, landless labour against peasants – all are taught to hate others instead of creating economic opportunities for all and building bridges of understanding. The professional politicians are not aware of the consequences of setting a placid society on fire. When the day of disillusionment with socialism comes, as it is bound to, nobody can save these politicians from the fury of the masses which have been systematically taught to hate. The sight of legislators jumping from windows to escape the wrath of the ill-treated police in one State is only a warning to be heeded by all politicians of what happens when class warfare introduces distortions in society.
The cumulative effect of all these things is to place a premium on sub-mediocrity and to destroy excellence. Is it any wonder that with vigorous socialist measures, a larger number of people are running away from this country? In the phenomenon broadly known as the Brain Drain, during 1968-69, about 9,500 persons left this country. How many socialists politicians have left this country for good? Certainly not when they can live as the self-appointed sons-in-law of the Indian people.
A strategically located country like India, with its vast natural resources and resourcefulness of people, is designed to become a Big Power. Socialism is an obstacle in the early realisation of that supreme status because socialism will take the country from poverty to pauperism; and from freedom to slavery. But with the inevitable process of disillusionment, ultimately Indian people will reject socialism and find a philosophy more in tune with the genius and requirements of the country. Till such time, those who believe in freedom and national greatness have to fight a battle against incipient authoritarianism because socialism is indeed the Road to Disaster.
Those well-versed with organizational dynamics know that the real crisis in the rural areas is fragmentation of whatever organization that had traditionally existed. It is often not realised that break-up of existing organizational set-up generates quite a lot of tensions when compensatory new forms of organizations have not been built up. Our policy-makers and planners are so busily engaged in the process of breaking up existing organizations with least caring to provide for substitutes that many of the aspects of violence in rural areas are the conclusions of organizational break-up.
Where organizational integration has taken place in rural areas, stability has resulted and this stability has been able to cushion many onslaughts on it. For instance the best standards are possible for development when we see a phenomenon as organised as agriculture in the Plantations in rural areas. When plantations with larger and larger size developed, they generated standards arising out of orderliness and measurement that benefited everybody involved in the process of such organization. This organization has been able to provide a high degree of stability all around without in any way sacrificing equity and justice requirements. Somehow these lessons do not seem to have been learnt by the policy-makers nor by the Home Ministry when they deal with the problem of rural violence.
All vote-catching devices of radicalism can have very little significance if in actual fact the impact of such radicalism is towards break-up of organisation instead of generating or integrating organization. The present race seems to be between competitive anarchy and organisation, with the latter gradually losing the battle. The Home Ministry announcement about rural violence seems to be one more nail in the coffin of organizational development in the rural areas.