Well, maybe it does, maybe it doesn't, who knows? One way or another, it probably doesn't matter much,. But there's a related issue which does not appear to have been adequately examined by those who are paid by society to think about such things. And it is this: if you can concede the possibility of market failure in a capitalist system and take preventive action, why can't you concede the possibility of political failure in a pluralist democracy and take similar action? If market failures lead to socially inoptimal results, so do political failures in democracies. So why can't we do something about it. India, after all, is provides a shining example of political failure.
When I first asked this question to some friends, they made a lot of fuss over what exactly constituted a failure. So I think it best simply to say that a failure in such situations refers to perverse outcomes which were not anticipated. This is not unlike like the definition which economists use for defining market failure. It works there, and I think it should here as well.
The difference between economics and politics, in this particular context, lies in the fact that thanks to unrelenting pressure by the non-market wallahs, economists were forced to recognise the possibility of market failure. They then proceeded to analyse the phenomenon threadbare and
prescribe preventives.
Eventually, they came to the conclusion that unless regulated, markets could -- and did -- fail. Whence the voluminous literature on regulations, especially in the US. If all the rules and regulations governing different US markets are put together they would run, according to one conservative estimate, to 120,000 A-4 pages. In contrast, the regulations that govern politics would barely cover 10 pages. In India, they would cover even less.
Is it any surprise, then, that a person of foreign extraction like Sonia Gandhi is sought to be elevated to the prime ministership by the very party which drove out foreigners, a Laloo Yadav gets his wife nominated as chief minister, and rapists become legislators? Imagine the outcry if similarly perverse outcomes were to hit the markets, wherein there were no defences against insider trading, no remedy against breach of contract and no redressal against cheating etc.
One way of explaining this is to say that people value their money more than their political provenance and therefore prefer highly regulated markets to similarly regulated political regimes. Alternatively, you can say that too much political regulation would go against the spirit of democracy and that, ultimately, reliance must be placed on the good sense of political parties and politicians. So Laloo shouldn't have nominated his wife, the BJP shouldn't give tickets to history-sheeters and the Congress shouldn't shield bribe-takers.
But all of them do precisely these things and if these aren't perverse outcomes, what are? What can we do about it? Also, how can it be argued simultaneously that self-interest in the economic arena needs tempering because it can lead to perverse outcomes, but that in the political arena it is enough to rely on something as vulnerable as good sense because anything else smacks of reduced freedom, liberty etc?
It is not even as if a high degree of literacy, if not education, prevents perverse political outcomes. If it did, India could still hope for a better political future. But as so many outcomes even in the developed countries show, an educated population is no safeguard against political failure. Crooks get elected and reach high office regularly. Nor is it as if a particular political structure -- presidential against Westminister, or proportionate against first-past-the-post -- prevents political failure. The frequency of such failure, if you itemise it, is evenly distributed over all political systems. The problem is under-regulation, clearly.
It could be argued, as it often is, that what seems like political failure
to one class (or caste) may not be so for another. Not just this, but also that political failure in one context may not be so in another. Finally, what seems like a failure now may turn out to be a masterstroke when viewed with hindsight. But this, to my mind, is a greased pole. It reflects, at bottom, the absence of a set of absolute moral imperatives, as do all one-man's-meat arguments, at least in the political context.
Indeed, the whole point of market regulation is to have an unchanging but agreed upon set of imperatives. By not having them in political life, the total cost is altogether too great, as we all can see every morning.
So as India greets its 50th anniversary, it would do well to reflect on this aspect of its political development. I can suggest a simple rule for starters: don't give the illiterate and the criminally inclined tickets in the next general election.
Any takers?
