Thursday, March 01, 2007

India and Her Critics

Amity Shlaes notes that India’s phenomenal 9% yearly growth has its critics: leftist egalitarians. Unhappy that some succeed as long as others struggle, egalitarians damn India’s capitalist-driven success on moral grounds. This, of course, is part of a pattern. Israel has created a vibrant economy and liberal democracy, but is damned because so-called Palestinian Arabs are as poor as those in Egypt or Syria. America creates $12 trillion of wealth annually but leftists damn such productiveness as “taking a disproportionate share” which “harms the environment.” The main problem, however, isn’t a failure to understand economics.

Shlaes does an excellent job describing India’s progress since abandoning the socialist model that was fashionable in the West (and the world) at the time of India’s independence. However, she defends this success on utilitarian grounds and concedes the high-ground to her critics who “want to moralize.” This totally misses the problem. The virulent ferocity with which the left wants to destroy America, Israel, and now India suggests that the problem isn’t their flawed understanding of economics but a deep moral malady.

A top executive from India, Gurcharan Das, answers his leftist critics: “Everyone doesn't rise equally, but eventually studies have shown all boats do rise.” This, of course, will never satisfy the collectivist egalitarian morality. The general beneficial nature of broad-based economic progress can’t address the fundamental collectivism and altruism of those who damn capitalism as a “den of inequity.” This isn’t a mere mistake about economic theory. It’s a disagreement about goals, ethics, and what makes life meaningful.

Is Shlaes wrong to tout the economic success of India? Of course not! Such success is to be expected of a liberal economy. But it is not the criterion. This is an important point that Ayn Rand makes best in her book: Capitalism the Unknown Ideal. Capitalism, the social system that respects individual rights, lays the groundwork for a high level of economic success because it respects the source of human efficacy: the individual human mind. Reason is man’s tool of survival and it is an attribute of the individual requiring the cultivation by a lifetime of initiative in thought and practice. To be alive is to be actively initiating rational action in producing one’s values.

The new leaders in India may implicitly grasp a pro-life philosophy and they’ll make substantial progress imitating the market economies in the West. However, progress will only reach a fraction of its potential unless it is freed from the moral shackles of collectivism. Without a moral defense, advocates of a liberal economy will be worn-down by leftist moral badgering. Without a moral defense the entitlement philosophy of the left will mobilize the mob to cannibalize its most productive citizens. India needs more than an economic rationale if it is to become the great nation that she deserves to be. India needs the moral confidence of a reality-based rationally-sound defense of individual rights.


Blogger Weingarten said...

“Egalitarians damn India’s capitalist-driven success on moral grounds.” Apparently, they view morality as equality, so that if everyone’s wealth doubled, they would lament the increased gap between rich and poor. Their view is reminiscent of the two spiteful Russian neighbors; when a genie told one that he could have whatever he wished, provided his neighbor received double, he responded “Pluck out one of my eyes.”

I submit that the moral view is rather that people get what they deserve, whereupon inequality is advisable. I would also argue that in absolute terms, the poor rise far more rapidly than the wealthy, once one considers the subjective utility of not having children die early, or be diseased or starving. Compared to such matters, the difference between one person who has a billion dollars, and another who has no disposable income is minor.

I concur that “the problem [with the left] isn’t their flawed understanding of economics but a deep moral malady [and] without a moral defense, advocates of a liberal economy will be worn-down by leftist moral badgering.”

3/1/07, 11:48 AM  
Blogger Mr. Ducky said...

Is it significant that you see a lot of insurgent activity in India today (and it is NOT strictly muslim, not by half)?

I think so. They are at a very, very critical point similar to what's happening in China.

I think the forces of economic growth will win and the forces of democratic freedom lose. Here's how it happens.

As will certainly happen in China there will be an alliance between the newly formed monied class (below 10% of the population), entrenched government oligarchies and the military.

We have in fact seen this alliance forming in the U.S. as well.

Objectivists are not contributing anything to the problem of finding a system that combines freedom with equality which I say is a necessity. GDP growth is a poor way to measure the progress towards that growth and will fail the poor time after time until they strike us dead in our beds.

3/1/07, 12:02 PM  
Anonymous Bilwick said...

So what should India do, Ducky? Come down with a big hob-nailed Monty Python boot and kill economic freedom and growth before the "menace" has a chance to get out of its infancy?

3/1/07, 12:42 PM  
Blogger Mr. Ducky said...

I wish I knew. However, you can get a good look at some of the problems.

There have been a number of stories lately about the price of onions. Onions are an important staple in India and the inflation has really hurt the poor who are not participating in the growth.

Growth is only part of the solution. Distribution must also be considered if you want a stable society. There is a middle path. We have had it in our history and it has done well.

One thing you do is stop talking about the left's "flawed understanding of economics" and encourage a debate that can incorporate a range of ideas.

3/1/07, 1:31 PM  
Blogger Weingarten said...

The concept of equality in human outcomes is incoherent. Scientists claim that we will not find two equal snowflakes, let alone two equal humans. Nor is it desirable, since progress derives from those who are head and shoulders above others, or simply very different.

There is the notion of equality before the law, but that is primarily a matter of preventing one person from aggressing against another. It cannot mean that people who argue their case have equal capabilities or resources.

From the point of view of economics, people in a backward state are close to equal in capabilities and rewards. That is, when each man is a farmer, one person cannot do much better than another, and all are close to subsistence. However, under the division of labor, one person’s capabilities & rewards can be worth tenfold that of another. The more the economic progress and division of labor, the greater the inequality, to the point where an entertainer or CEO can be worth hundreds of times the value of a single laborer.

On a basketball court, children aspire to be like the stars, rather than equal to one another. Similarly, scientists will aspire to be a Newton, rather than one of the mass. Nor do individuals wish to be akin to one another, for each finds that he has idiosyncrasies that set him apart. Where then does the aspiration of equality arise? It doesn’t, save as a cover for envy. Many people find themselves envious of those who are better than they. That was the story of Cain and Abel, and the correct lesson drawn was “Thou shalt not covet.”

Perhaps someone can make a coherent case for equality of outcomes, but I have not heard it. Walter Williams noted that when Mrs. Williams took him, she deprived the mass of women from having his services. So wouldn’t it be fairer if all women had equal access to each man? Maybe not, but it is the only promising case that I have heard for equality of outcomes.

One final thought. Incompetents, lowlifes, and irresponsible individuals, need the lessons of failures and loss. Is there any reasons why those who are destructive should have the same rewards as those who try to produce?

3/1/07, 3:10 PM  

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