Sunday, September 11, 2005

Poverty Of Spirit

Bloggers, and op-ed writers, have validly argued that Katrina (and before then, the Mumbai cloudburst) are clear evidence that public bureaucracies are not particularly competent in handling complex human catastrophes. Instead, what's needed is strong leadership that can cut through the weeds of red tape.

That bureaucracies are inept is hardly news; that American bureaucracy too is incompetent is also not news to those of us who've obtained visas, driver's licenses, and postage stamps here. The surprise was the grand, public stage where the emperor was stripped of his clothes.

Few have pointed out an even more profound reality that washed up with the storm surge.

75 odd years after America's Keynesian New Deal, and 25 odd after Lyndon Johnson's anti-poverty Great Society programs, America still has poverty -- poverty so extreme that people don't even have resources to escape known catastrophes on the way.

Thus, it can be safely argued, the American welfare state has come tumbling down. There are lessons here for India, where too many, naively yet aggressively, give voice to the claims of the welfare state.

Reality is, welfare states create dependency, not wealth. They sustain poverty, not eliminate it. In effect, they pay people to remain poor.

One could argue, that while wealth is created from risk taking and hard work, there are times when societal confidence is at ebb and government spending can bridge the years needed for such confidence to be restored. OK. But, this spike in government spending must be just that -- a bridge to a future where wealth creation will once again happen without artificial economic subsidies and constraints. Too frequently, alas, such bridges become permanent ends in themselves -- in effect, self-serving bridges to nowhere.

When the Great Society debate was raging in the 60s, Daniel Patrick Moynihan (an early neo-conservative and later Ambassador to India) pointed out the difference between a poverty of means and a poverty of spirit.

People can find themselves in poverty for reasons beyond their control, but as long as their spirit is not broken, they get up each morning and go out there to work harder than they did yesterday. They may be poor, but their poverty is resolvable.

Then, there are people with a poverty of spirit. They are dependent on the state for survival, and when the state fails (as it frequently does), they are left marooned. Such poverty is not resolvable.

The key is to make sure that we don't end up with poverty of the spirit. In India, many millions are poor, but they work just as hard as all of us slightly more privileged. They are heroes who build India's wealth every day with their sweat -- it must be India's objective to resolve their structural poverty.

Instead, what India has been doing since independence, alas, is creating a dependency society -- with poverty of the spirit -- where all manner of reservations and subsidies and artificial jobs guarantees ensure a perpetuation of poverty for many.

Indian economy has, thus, become a badly distorted shadow of what it could have been -- like an image in an amusement looking glass.

Lets please learn from Katrina. Lets please not create a generation of wards of our incompetent state. Lets please attack and destroy our poverty of spirit and the political ideas that give it life.

6 comments:

Niket said...

I don't think Katrina is a good example of what is right and what is wrong with government doles. Everyone, socialists, capitalists, communists and libertarians alike made the observation that the government response was inept and that the leadership was lacking. While the libertarians took the view - much like you - that this is an example of government ineptitude and we should therefore not rely on it to bail us out. On the other hand, socialists take the view that over the past few years, the governments ability has been hampered significantly due to reduction in funding, the war and having a clueless idiot as the FEMA director. They argue that this is a libertarian ploy: weaken the government, reduce its ability to respond in a calamity, and then use this as a proof of government ineptitude and a need for "free markets". I think libertarians need to acknowledge that there is some truth in that, and that someone like Giuliani would have been much more effective than Nagin or Brown.

Being conservative-leaning myself, I tend to agree with you more than what the above paragraph seems to suggest. For example, had this been a private enterprize, rather than a government, Nagin and Brown would have paid much more heavily than they did. They will not be held accountable for their ineptitude.

However, I don't see how government getting out of disaster relief will make things any better in the aftermath of a disaster. In a free-er market, I don't see how the poor would be any better off. I agree completely with the argument that we may not have as many poor in a market-state than a welfare-state. But US under this administration is much more of a market-state than a welfare-state; we have the poor and we just can't wish them away or ask them to eat a cake.

So, free markets: yes. But that government should get out of the business of disaster relief: umm, not so much.

libertarian said...

PR,

Very thought-provoking. Welfare states truly weaken the weak. This can be seen at the personal level (children on Economic Outpatient care from their parents) and is certainly visible at the nation-state level.

Niket, your point about disaster-handling is a tactical one. PR's point is a much more strategic one. Regarding your comments, sure, I agree that Giuliani would have been more effective than Brown or Nagin. But's that the reaction. Keep in mind that the people of even reasonable means (which is most people) got out of New Orleans. The only ones left were the desperately poor (in spirit) or the desperately deluded, or in a few some sad cases, the handicapped. PR's point is that if poverty of spirit had been eradicated in New Orleans, even the economically poor (since there would be no broken-spirited) folks would have made it out of there.

And Yes, being libertarian, I think we pay outrageously high taxes for the service governments render. In some ways though, thank GOD we don't get what we pay for.

sanjay said...

IMO, there is a need to frame this analysis differently from the rather old fashioned good vs evil dichotomy i.e. socialism = bad; capitalism = good. There is a need to ask questions like

1. Why is it that 80-85% of the world turned to some form (strong or weak) of socialism in the 20th century? it would be too much of a coincidence to suggest that only 15% of world is smart & that they happened to live primarily in western europe in the 19th - 20th centuries
2. Why is there such a strong correlation between formerly imperialistic nations & those nations with weak form socialism?
3. What is the impact of large scale migrations out of rural areas to other countries? almost 40% of western europe migrated to the "New" world in the 19th & 20th centuries. How did that help to mitigate population pressures in the home countries?
4. If a country like India does not have the luxury of physically migrating out 40% of its rural population, then how can it avoid a major human disaster?

It is too easy to keep beating up on socialism without realizing that it may have been a necessary phase to help us get over a particularly difficult "hump". Of course, the real trick is to recognize that you're over the hump & it is time to reject socialism & move towards freer markets.


Sanjay

Primary Red said...

Niket: As libertarian notes, our point was a larger one -- about the nature of poverty itself. The specifics of Katrina merely brought out this point. Clearly, government has a role in dealing with tragedies at this large scale. But that does not mean we need a huge government all the time.

The point is that 75 years of American welfare investments haven't wiped out poverty. If a nation with relatively few poor people and very large resources cannot wipe poverty off via welfare, what makes us think India can?

Sanjay, why much of the world adopted socialism relates probably to the fact that most of us newly independent nations mistakenly equated free markets with imperialism. What a tragic miscalculation?

Best regards.

sanjay said...

Primary Red: I don't want to go off on a tangent from the main topic but to your point, logic would dictate that nations adopt a successful model. This would mean cloning/ adopting the imperialist model, not rejecting it.

No, I think there were powerful & compelling, tangible reasons why nation after nation had to turn to some form of socialism.

Sanjay

reformist_muslim said...

Hmmm, I'm not a libertarian but even if I were, I would agree with Niket in that this is not an example of how big government fails.

Libertarianism requires government to fulfill certain roles and emergency planning is definitely one of them. This was an example of poor leadership which needs to be addressed.

Also, when comparing different states why not look at Scandinavian countries for instance. It undeniable that investment in education and healthcare has been severely lacking in large parts of urban America for many years - that is the state's fault.

Why for instance is it acceptable for middle class America to send their children to excellent state schools and welfare state dependency to encourage greater investment in inner city schools?

Of course we need new ideas about how we provide certain necessary goods (e.g france actually has a private insurance healthcare system with the govt filling in the gaps)and Bill Clinton's welfare reforms for instance did quite a bit of good for employment, but to dismiss the welfare state as socialism/marxism is slightly wishful thinking.

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