Everyone is Lying About the Truth
A dinner time conversation and my irritated daughter accused our generation of not levelling with hers. And how right she is. Our economic models have been failing for some time now, flat wages and increasing unemployment are only three dimensions of an increasingly disempowered bottom of the pyramid. Inequalities are rising massively globally. And we still like to believe that greater investment will yield high economic growth and high economic growth will lead to a better life for the masses. Whether developed or developing, the pre-Covid19 economy was failing badly while also failing the environment. People were electing leaders who were calling for locking down the boundaries so that people or products from other countries could not enter. Religious fanaticism was growing stronger across the world. These are all outcomes of an economy that was failing to deliver even before Covid19 hit us.
We were all happy with our own delusions, the economic liberals on how trade and investment remained the answers to all human problems. The socialists and nationalists were calling for a greater role of the state. A few large businesses were sitting on hundreds of billions in cash, and just about all others lobbying hard to get special favours from the state. And this we believed would get us into a happier, more equitable and sustainable 21st millennium.
The global belief is that the “the economy needs more liquidity, we need greater investment, in such times the state needs to be strong and play a decisive role, and we can bother about the environment later, and all of this is to ensure no one is left out…..” and so on and so forth.
But each of these is a lie.
Governments will put in a lot of liquidity into the economy in the next few months, huge amounts of debt will be taken in by the government, and this debt will need to be repaid by future generations, they don’t know it but their economic policies are being prescribed by our actions. High debt levels are dangerous if not followed by high economic growth, and so all kinds of actions need to be taken to ensure that high economic growth occurs, whatever be the cost to society or the environment. And the economic power so generated will further concentrate in the hands of the few. Yes, we are lying about the truth. We will at best buy temporary respite if these actions work, and create a bigger mess if they don’t.
The lie is that we have the answers and this gives us the right to draw down the assets of the next generation. High national debt is nothing but borrowing from our children. Environmental destruction is nothing but reducing the assets that they can build upon. Greater centralization is nothing but taking over their rights and freedoms.
So what is a better solution? First and foremost, let us act like caretakers and not owners. Everything has been handed over to us free of cost, and humanity’s survival depends upon our ability to improve upon what has been handed to us. But our models have not been working even before Covid19 hit us, and will become even less relevant in the future. Let us admit and accept this failure first.
Two, having more is not always better than having less. Our economic models are built on an incorrect presumption, taught to us from childhood using flawed logic. No, I am not saying less is better, I am simply saying more is not necessarily better either. And therefore higher economic growth that concentrates the gain is not better than lower economic growth that spreads it. Having more to pollute, consume or throw away, is not better than having less. We, therefore, need to dump the false notion that modern humans and their nations need greater and greater incomes every year.
Third, the state is creating a bigger mess day by day, we need to reduce its overarching power not increase it. Whatever be a policy change here or there, the unambiguous trend worsened by Covid19 fear, is for the state to decide over more and more domains. For the sake of freedom and the sake of efficiency as well, the power to tell us what we may do or cannot do needs to be taken away from the state. The bureaucrats and politicians are not smart enough or well-meaning enough to be given so much power.
Fourth, take away power from the bureaucrats who effectively control the rural and city governments and hand over accountability and responsibility to the lowest tier of the government – PRIs, RWAs, municipal corporations, sarpanchs and mayors. Decentralizing is critical and the more local we go the better.
Fifth, rules need to provide a level playing field for local businesses. Don’t get it? Let me illustrate. In the lockdown, while couriers of branded global and national companies were allowed, delivery boys employed by local kirana shops frequently got beaten up. While foods from far off were available, many mandis could not get fruits and vegetables from the neighbouring district. While large companies’ trucks labelled essentials were allowed to pass through district and state boundaries, a farmer on his tractor going to the local market could not. Local should always get preference or at least have a level playing field, the more we consume from our vicinity, the less we pollute, and the more we connect with our community.
Sixth, tax more what harms more, and therefore whether it is toxic plastics or coal-based power, they need to be far more expensive. The environment and pollution problems are not problems of technology, but that of economics. And the economic solution always is that the price is closest to underlying value when it also incorporates the harm caused.
Seventh, don’t give subsidies and cheap credit to businesses, instead, just let small businesses function. For example, no city in India has space allocated to the largest economic sector of all – the informal sector. Vendors, service providers, weekend markets, are only some examples of micro-entrepreneurs who function from occupying public space illegally. What else will they do when no space was allocated for them? Our celebrated urban planners and organizations like DDA have allocated zero per cent urban space for 80 per cent of the employment! And to top it, the police and municipal inspectors, beat, threaten, expropriate at will those that need to be protected the most.
Eighth, be honest to the objectives we take up. For instance, toilets don’t work without water, let us not delude ourselves into thinking more toilets mean more hygiene. Or how centralized buying in Public Distribution System has annihilated hundreds of thousands of jobs of small local traders. In almost every welfare scheme, there is such a design flaw. Welfare itself has become a lie, designed not to empower but to increase dependence on the state. Such lies have hidden the ugly truth for long, but for how long?
Ninth, take away the power to borrow from future generations from politicians and bureaucrats. If they don’t have the money, then they cannot spend, period. Let not the decision-makers under the guise of a better tomorrow borrow from the future.
Tenth, let us stop claiming that high economic growth is for the masses. The state appears to be more interested in high growth for high tax revenues so that the elites can throw welfare tit-bits at the poor every once in a while. Policies mould not just the level of growth but also its character, and the character of economic growth for some time has been to enable greater economic power for a chosen few. Perversely, the state frequently uses some of these revenues to provide ad-hoc ‘gifts’ for the disempowered, buying their subservience for some more time.
Finally, we can continue with the same models in ramping up the economy in the post-Covid19 world. With that, we will buy some more time. In that time bought, we will create further environmental damage. But this destruction will not be creative, it will only make lives worse for future generations.