A beast called government

via India Uncut: "Part of our blind faith in government comes from the way we view it. Governments are not supercomputers programmed to work tirelessly for the public interest, nor are they benevolent, supernatural beings constantly striving to give us what we require. On the contrary, governments are collections of people, individuals like you and me, motivated by self-interest. The actions of government are the actions of these men and women, and the best way to understand how they are likely to behave—and therefore, how governments are likely to behave—is to consider their incentives."

But the incentives in government are different, and they do not drive a bureaucrat to work in the public interest. This is superbly illustrated in C Northcote Parkinson’s delightful classic, Parkinson’s Law: The Pursuit of Progress. Parkinson, examining the British civil service, found that it tended to expand by a predictable percentage every year, “irrespective of any variation in the amount of work (if any) to be done.” He explained this with “two almost axiomatic sentences”: “(1) “An official wants to multiply subordinates, not rivals” and (2) “Officials make work for each other.”

In other words, it is in bureaucrats’ interest to expand their departments and get greater budgets allocated to them so as to increase their sphere of power. Indeed, mandarins who solve problems and increase efficiency actually risk making themselves, or their departments, redundant. Do we really expect them to be like the proverbial fool on the tree, who cuts the branch he sits on?

The Devil’s Compassion

via India Uncut:

Humans, you see, are fooled by appearances. Come to them as a wrinkled monster with horns, and they recoil. Pretend to be a loving grandpa, and their defences are down. We senior demons realised long ago that to hurt the humans, we have to pretend to care for them. Even as we have nothing but their marination in mind, we must appear compassionate. Stating the most noble intent, we must unleash the very worst of policies. Even better, we must fool some humans, who themselves wish to appear compassionate, into pushing these very policies.

And how we have succeeded! Everywhere there are politicians sincerely pushing well-intentioned policies that are disastrous for the people they are supposed to help. Of course, some people see through our evil designs and protest, but they are dismissed as cruel and uncaring, for they are questioning compassion itself. The irony!

Ah, Maharashtra! Mumbai is particularly dear to me as a demonstration of what compassion can achieve: Just see the misery rent control has inflicted there. It was supposed to protect tenants from evil landlords, but by restricting the supply of housing, has driven up rents, made affordable housing scarce, and made slums inevitable. Even more, it has disincentivised landlords from looking after rent-controlled houses, some of which are close to falling apart. Gravity is an invention of hell, I am proud to remind you!

India has many such price controls, which inevitably distort our enemy, the free market. These apply not just to goods but also to labour – how noble these legislators feel when they bring about a minimum wage, or support labour laws that dry up the supply of jobs and hurt the ones they’re supposed to help: the workers.

India’s redistributive schemes are also a devilish masterstroke, based on the principle, “Steal from the Rich and Pretend to Give to the Poor.” Actually our unknowing stooges, India’s well-meaning and compassionate politicians and bureaucrats, steal from everybody, and the money they steal has a cost: It acts as a disincentive to those it is stolen from, and would often have helped the poor more if simply left with the taxpayer.

The Nehru-Gandhi legacy of shame - The India Uncut Blog - India Uncut

via - India Uncut

Jawaharlal Nehru was one of our foremost freedom fighters, but the freedom he fought for was restricted to the political domain. Once the British had been ousted, he replaced them with a new oppressor: the Indian government. He distrusted free trade, and once famously told JRD Tata that profit was “a dirty word.” He shackled private enterprise with a license-and-regulation raj and tried to build a command economy where the state was all-powerful. His fatal conceit, to borrow Friedrich Hayek’s phrase, ensured that India limped into the modern age while other Asian countries, once behind us, leaped ahead.

One can be charitable and say that the well-intentioned Nehru was a creature of his times. It is hard to give his daughter similar benefit of the doubt. Indira Gandhi not only took Nehru’s policies forward at a time when it should have been obvious that they weren’t working, she systematically began to strip away the little economic freedom that existed in the country. In colleges it would make good material for a course titled “How To Savage An Economy 101.”

She nationalised all our big banks. She stopped foreign exchange from kick-starting the country’s development, and thus creating employment and productive growth, with the Foreign Exchange Regulation act in 1973. The Urban Land Ceiling Act of 1976 distorted land markets, thus raising land prices and aggravating the problem of slums in cities. The Industrial Disputes act (1976 and 1982) distorted labour markets and acted as a disincentive to industrial expansion. And so on and on.

Mommy-Daddy, go away!

via India Uncut: "In their classic book, Law, Liberty and Livelihood, Parth Shah and Naveen Mandava pointed out: “Entrepreneurs can expect to go through 11 steps to launch a business over 89 days on average, at a cost equal to 49.5% of gross national income per capita.” It’s 89 days here, but two in Australia, and eight in Singapore."

Transforming India's Mental Landscape

TCS Daily : "Indeed, economic freedom wasn't fashionable when India became independent. It was perfectly natural for Jawaharlal Nehru to opt for Fabian Socialism as the guiding philosophy for the new-born India. But while Nehru did a noteworthy job of building the institutions that safeguarded India's secular democracy, his economic policies, framed with the best intentions, ensured that India remained a third-world country. 'Profit is a dirty word,' he once said, as he strengthened a state apparatus that throttled private enterprise and created a vast bureaucracy. The License and Regulation Raj that Nehru put in place became worse under his daughter Indira Gandhi, who became prime minister in 1966. She nationalized the big banks, suffocated industry with Draconian labor laws, clamped down on foreign investment, and imposed currency controls."

Mahatma Gandhi still rules Indian hearts

NDTV.com: India at 60 poll: : "As India celebrates its 60th year of Independence, NDTV conducted a poll to identify the icons, events and landmarks that have preoccupied Indians. The campaign was spread across three platforms - an Opinion poll, SMS poll and a Web poll - and people were asked to mark their choices in the following nine categories: * India's Greatest Icon * India's Greatest Pride * India's Greatest/Worst Shame * One Event that Changed India * India's Greatest Political Blot * India's Greatest Sportsperson * India's Greatest Film * India's Greatest Song * What Best Describes India Abroad"