TCA Srinivasa-Raghavan: The reservations issue

OKONOMOS

"Intergenerational distributive justice and efficiency are largely distinct"

Readers will forgive me if I have narrated this incident before. About four years ago, I was privileged to spend a few days with Valerie Giscard D'Estaing who was drawing up the European constitution at the time.

I told him there might be some insights for him in the Indian Constitution. He told me, in a very patronising tone, that Europe was different.

I was a little put out at his refusal even to ask a polite question or two. But now when I see the debate on the reservations issue I find Indians are guilty of the same "India is different" syndrome.

To be sure we talk of "affirmative action" in the US, but do we really know what it means? A recent paper*Louis Kaplow of Harvard discusses precisely what we have been talking about: distributive justice and efficiency, albeit in a much broaders context than merely of college seats. Everything that has got us all so worried and exercised is there in this paper, even if in a somewhat technical manner.

The author comes to the conclusion that "intergenerational distributive justice and efficiency are largely distinct". In other words, if you want to apply this to India, don't worry that reservations now will affect efficiency tomorrow.

Intragenerational issues, though, are different, which is what the striking medical doctors are concerned with. On this, the author has this to say. "Some complexities are purely intragenerational; that is, they influence analysis within each of the generations affected by policies but do not create any distinctive challenges along the intergenerational dimension."

There is then the issue of "creamy layers". Such concerns are doubtless valid but, says the author, after discussing John Rawls and Amartya Sen, that this class of issues "seems tangential to most imaginable notions of intergenerational distributive justice since the differences were purely intragenerational." In other words, what seems unjust now may not be so if you take the longer view.

If one looks at the SC/ST reservation of 22 per cent, this certainly seems to be true.

The real question, however, is whether efficient policies with intergenerational consequences can be implemented in a way that makes everyone better off. After all, this is the underlying rationale for any sacrifice. It doesn't matter whether it is a soldier being asked to die or a student being asked to study or a worker being asked to accept lower wages or whatever.

The problem here is that everyone can not only be worse off but also end up being much worse off than they thought. The soldier might know, as the GIs did in Viet Nam, that there was no point in fighting; the students, like my sons, may know that the exam is a lottery so it makes no sense to work very hard; and so on.

"This seems difficult to defend and, moreover, inconsistent with typical appeals concerning intergenerational distributive justice....If, those (future) generations to whom obligations are owed are hurt rather than helped, the positions become difficult to comprehend."

This is the credibility problem that both those for and against reservations are facing. The record suggests that given how awful Indian politicians and, therefore, governments are, everyone may end up being worse off.

The author then makes a statement that applies specifically to our liberals who (by definition, if you ask me) are a confused bunch. "An important possibility is that seemingly non-welfarist moral intuitions about what is due to future generations are implicitly surrogates for directing sufficient concern toward those generations' welfare." That is, you feel bad about something, so you do something now, never mind its actual consequences.

The key lies in the analysis that follows. Suppose we know that because we are doing this or that or not doing it, we are causing increasing harm, say, to the environment. (The same logic applies to education, as well). To fix this, "efficiency requires that a great deal of investment be made".

This is what everyone has been saying for a long time now in whichever context one takes. Be it the now dead Kyoto Protocol which required US firms to undertake huge investments over the next 20 years or, in the Indian case, the OBC reservations issue "" the issue is the same, increase investment.

But "investments should be determined by considerations of efficiency, once a principle governing intergenerational distributive justice is adopted."

That however, is the easy part. The hard part is the intra-generational one, especially in a democracy where those who get harmed immediately also vote immediately.

*Discounting Dollars, Discounting Lives: Intergenerational Distributive Justice and Efficiency, NBER Working Paper No. 12239, May 2006