Recently I wrote on why socialism fails? The article may sound a complete no-no to socialism. I believe any concept is inherently not flawed. The flaw is mostly in the execution – be it capitalism, socialism or any other “-ism. So, what can possibly be socialism the right way? I am sure many would know Venezuela going through hyperinflation and complete chaos – that is one gift that socialism may give you.
In economics many of the rules are written in some assumption or concept like – “everything else being constant…” the concept will work like this or like that. For an example – demand curve or supply curve. These curves are belied by the prices in some cases such as – price of oil or price of diamond.
Similar is the case of assumption in the underlying concept of socialism. The assumption is – no one will try to game the system. If I take the same example of Sarla or Kishore of the previous blog any Sarla or Kishore with average intelligence will stop working or will try to get a certificate that proves (s)he is the bottom 20% of Indian population to get the benefits of NYAY scheme announced by the Congress Party in its election manifesto.
In India, Amitabh Bachchan got a certificate of being a farmer long back. So, it is not difficult for people to get a certificate to the race to the bottom. Though, off late Mr Bachchan has paid off loans of many farmers in UP. The way a farmer’s certificate was easy to obtain for Mr Bachchan it is easy to get a BPL certificate too. What the scheme Nyay is most likely trying to do is – make youth and many Indians lazy or to game the system. This is how Socialism fails.
There is another example of similar scheme running in India – MGNREGA. I have heard of cases where there is immense corruption in this scheme. People are getting part of the allocated fund per person just for signing a document (rest goes to the chain of officials). Thus, the unskilled people for whom it was an employment guarantee, get money for free. If one wants to get the same work done by someone, the wages asked are higher. It results in increase in inflation.
With schemes like MGNREGA or Nyay, does not the leaders of the political parties implying that they do not have any idea for – 1. how to create more jobs (run the economy) and 2. how to increase skill level of the citizens so that citizen can do something for themselves rather than depending on others. It looks like these politicians have not heard the idiom – “Teach a man to fish and you feed him for life”. By the way, MGNREGA was started by one of the most renowned economists of the world!
If I recall 2009 farm loan waiver of Manmohan Government – again a Congress government – more socialistic in its letter and spirit that did not augur well to our economy. The impact of that according to Bank of America Merrill Lynch the farm loan waiver will cost 2% to the GDP of India by 2019. At times educated economists try to fix a problem at the wrong place. Possibly the Modi Government GDP numbers could have been 2% higher!
No doubt the basic principles of the right to food, shelter, water, education, and healthcare is considered given in today’s capitalistic economies and countries – example Obama care in the USA or Ayushman Bharat Health Scheme in India. There is a universal education program running in India Education for all (Sarva Shiksha Abhiyan). When I started looking at quick implementations of government’s schemes such as Pradhan Mantri Awas Yojana I feel current Indian Prime Minister Narendra Modi is more socialistic than the Socialists / Marxists in India. In fact, recently I went to a village (about 500 KM from Mumbai), and I first hand saw – took some photos too shown here – the scheme being used by the villagers effectively.
However, good the intentions to keep everyone at an equal level, humans do not seem to have found a way for equality. Possibly in the ant world, socialism is practically depicted to a better extent. Why USSR failed and communism of China is not worth appreciating, why Venezuela failed? Because there is no incentive to work or there is no ownership (common ownership) involved. Further, the move from capitalism to socialism follows communism as a midway stop. Communism gives power to the few, who – like any other human being – would not want to relinquish their power? The result – communism does not seem to end ever.
Socialism (to some extent any -ism) can only work if we create a different scale for all of us – human beings. A different scale for success, survival, and growth. Many times greed and wish to control – people, things and systems – makes way and thus the Marx intermediary (read communism) from capitalism to socialism remains never-ending. Why can not we have a good execution, social good, and profit together? We can have it, provided we look at some new scale to measure ourselves.
If any form of socialism needs to survive it has to be a middle path – a mix of different approach to economics, policy making and system. A system where we reward work, we provide essentials at appropriate cost or subsidy or for free and let people benefit from their work. At the same time, all the world political, social, economic and cultural systems must include teaching spiritual practices, trust and fairness – example is concepts of Jainism – Ahinsa (non-violence), Asteya (non stealing), Aparigraha (non-attachment) and concepts of Buddhism – meditation, interdependent co-arising. These concepts are essentially from different philosophy of Hinduism.