It is always a great pleasure to while away time by reading Hayek's 'The Road to Serfdom'. The book as it is, is probably the blasphemous capitalist's last source of comfort. Written in 1944, it can applied to any situation at any point of time whenever there is a policy impasse. And going by that thumb rule, it fits almost perfectly into India's current crisis of democracy.
India's democracy-the world's largest is probably also the most chaotic and dysfunctional of all modern democracies. Work never gets done in India's parliament houses. Much needed economic reform and liberalization of India's economy never gets passed because of endless opposition. It seems as if democracy has failed. Much of India's population lies impoverished even as India's democracy carries on nearly 65 years after Independence. What can explain this failure?
Hayek writes in his famous book 'The Road to Serfdom' under the heading planning and democracy that essentially democracy doesn't guarantee public ends will be met, it only ensures that absolute power in reaching these ends is prevented. It therefore is probably the greatest obstacle to meeting those public ends it was first designed for. Economic planning as it is carried out in India cannot be done in a democracy. You cannot reform a giant economic machine through consensus. And democracy is all about consensus. So how do you reconcile the two? One, you could abandon democracy for planning or two, you could abandon planning for democracy.
In essence this a tough policy choice. In my opinion the real solution to India's political impasse is to reform the Indian state. By reducing the state's functions that presently encompasses everything from oil exploration to electricity production, to merely that of protecting life, liberty and property, the role of the state should be effectively reduced. How does this help? If there are few things for the state to do, consensus can be reached. But if the state has to manage the entire economy, then democracy is not the ideal form of government for that. India's biggest problem is not democracy or corruption, but it is India's huge state apparatus. Destroy it and much of India's problems will be solved.
Hayek writes in his book that dictatorships with limited roles often ensure greater degrees of freedom than most illiberal democracies. Look at Chile under Pinochet's regime. Chile transformed from a failed economy to become Latin America's shining beacon. And for all human rights activists who campaigned against it, just a few years later, Chile re-established a democracy, far more sustainable than it's socialist predecessor. I believe that India's current problem is that of India's mammoth planning. If India endures a temporary dictatorship to reform India's giant state then India will have a much better democracy in a short time.
To manage a large country like India, democracy is neither effective nor recommended. Indeed India's closest rival, China manages its large empire with an Iron fist not ballot boxes. If a country as large as India or China has to be managed, it warrants a dictatorship. However if the managing in India is left to states or even better individuals and families, this problem vanishes. India can then be effectively managed under a democracy because the only 'public' questions are that of common defense, not of common fuel subsidies. India's policy impasse will persist as long as policies are designed in New Delhi and not in private homes and companies. They can only be solved if India's huge state is dismantled in favor of liberal economics. Only in a liberal economy can democracy persist, or else as Hayek points out, democracy destroys itself where it does more than what it is required to do.
India's democracy-the world's largest is probably also the most chaotic and dysfunctional of all modern democracies. Work never gets done in India's parliament houses. Much needed economic reform and liberalization of India's economy never gets passed because of endless opposition. It seems as if democracy has failed. Much of India's population lies impoverished even as India's democracy carries on nearly 65 years after Independence. What can explain this failure?
Hayek writes in his famous book 'The Road to Serfdom' under the heading planning and democracy that essentially democracy doesn't guarantee public ends will be met, it only ensures that absolute power in reaching these ends is prevented. It therefore is probably the greatest obstacle to meeting those public ends it was first designed for. Economic planning as it is carried out in India cannot be done in a democracy. You cannot reform a giant economic machine through consensus. And democracy is all about consensus. So how do you reconcile the two? One, you could abandon democracy for planning or two, you could abandon planning for democracy.
In essence this a tough policy choice. In my opinion the real solution to India's political impasse is to reform the Indian state. By reducing the state's functions that presently encompasses everything from oil exploration to electricity production, to merely that of protecting life, liberty and property, the role of the state should be effectively reduced. How does this help? If there are few things for the state to do, consensus can be reached. But if the state has to manage the entire economy, then democracy is not the ideal form of government for that. India's biggest problem is not democracy or corruption, but it is India's huge state apparatus. Destroy it and much of India's problems will be solved.
Hayek writes in his book that dictatorships with limited roles often ensure greater degrees of freedom than most illiberal democracies. Look at Chile under Pinochet's regime. Chile transformed from a failed economy to become Latin America's shining beacon. And for all human rights activists who campaigned against it, just a few years later, Chile re-established a democracy, far more sustainable than it's socialist predecessor. I believe that India's current problem is that of India's mammoth planning. If India endures a temporary dictatorship to reform India's giant state then India will have a much better democracy in a short time.
To manage a large country like India, democracy is neither effective nor recommended. Indeed India's closest rival, China manages its large empire with an Iron fist not ballot boxes. If a country as large as India or China has to be managed, it warrants a dictatorship. However if the managing in India is left to states or even better individuals and families, this problem vanishes. India can then be effectively managed under a democracy because the only 'public' questions are that of common defense, not of common fuel subsidies. India's policy impasse will persist as long as policies are designed in New Delhi and not in private homes and companies. They can only be solved if India's huge state is dismantled in favor of liberal economics. Only in a liberal economy can democracy persist, or else as Hayek points out, democracy destroys itself where it does more than what it is required to do.
