Saturday, May 04, 2013




“Would you tell me, please, which way I ought to go from here?”
“That depends a good deal on where you want to get to.”
“I don’t much care where…”
“Then it doesn’t matter which way you go.”

—    Lewis Carroll, Alice in Wonderland


PROLOGUE

As a general rule, which of the following two do you think is better?

    A. MAXIMIZE *GOOD*
    B. MINIMIZE * BAD*


Chapter 1: HOW TO GRADE THE GOVERNMENT?

As we all know, the two commonly perceived narratives for the role of the governments are (A) the economic function and (B) the social function.

One narrative concentrates on what the governments should do for improving of the economy, keeping the investors happy, encourage entrepreneurs and indigenous industries, create jobs, promote growth and progress [see footnotes 1]. The second narrative emphasizes the social and civil responsibilities of the government reminding us of the social contract between the state and the citizens, discussing the performance of the state in enforcement of fundamental rights, controlling corruption, crime, poverty, quality of basic health and sanitation, air/water quality, environmental and ecological degradation and often, highlighting the tragedy of the commons.

I see these two narratives as two fairly distinct (but not entirely disconnected and in fact, even partially-overlapping) priorities for the government. The first one can be interpreted as a MAXIMIZATION of (general) *GOOD* measured by Sensex or GDP or % growth etc. The second narrative can be read as a MINIMIZATION problem, that of keeping the numbers of the undesirable (like the number of people dying of hunger or air pollution) as low as possible. Assuming that we are all interested in creating a progressive society that is on a sustainable path of development, which one of the two strategies seem more rational to you?

Now, to the above question, I know that the ideal answer is: BOTH and the clever answer is: A LITTLE BIT OF BOTH. However, I'd want to explore a deeper issue in political philosophy: In the real world of limited resources, what should the government concentrate on? How can the citizens grade the government's performance?

Of course, it won't take much long for anyone to realize that the main focus these days is the "maximization" problem. In the last decade, India had a pretty good run. Our economy consistently grew at over at least 7% each year, our country has seen the fastest growth of millionaires than anywhere in world, there has been an explosion of employment opportunities in the cities for the middle-class etc. Everyone has a cell-phone and once in a while, the malls offer a good deal on a pair of jeans. Of course, the scams have increased too. The Organization for Economic Cooperation and Development (OECD) reports that the inequality in earnings has nearly doubled in the last 20 years meaning that the richest earn more than twice now than what they did 2 decades ago while the poorest are in the same state (42% still live on less than $1.25 a day). Consider that along with how costly everyday items like groceries, drinking water etc. have become, one can infer that the quality of life has gone down for way more than 60% of the country. Our government spends less than 5% of GDP on social programs which is the least among all emerging economies. It also has the least rates of taxation about 20%. So, we collected lesser taxes, cut down spending on social programs in order to achieve growth.

Yet, the government's priorities on growth (a.k.a. the maximization problem) in the policy debates that I see in the media largely remain unquestioned. Well-intentioned patriotic, university-educated citizens are swooning big time for politicians if he is "achha development le kar aa raha hai".[see footnotes 2] Intellectuals and media mostly never question if the government's primary function is the economic one which is being achieved at the cost of neglecting the social function. Even the recent so-called populist movements in the country that have arisen only go as far as to talk about "fighting corruption", "bringing more accountability", "controlling the black-money" while making the progress in the country. One can't help but notice that there is somehow the underlying hypothesis that "the general direction of their efforts is alright. Let's keep the good parts and take out the bad and problem solved!”.

Today, I want to argue that focusing on MAXIMIZATION problem and concentrating on only the *GOOD* is never the most efficient strategy when addressing hugely complex problems. Forget about the bureaucratic inefficiencies of an intricate, pluralistic democracy such as India. My thesis is that even if you have a truly smooth-functioning, corrupt-free government, the very idea of trying to maximize *GOOD* is still not a good policy to adopt.

Hey, don't take all this the wrong way. I like a booming economy, people having the freedom to work on their passionate ideas and people being forced to work because they need money for other things. I am very pro-growth. In fact, I am as pro-growth as John Abraham is pro-gym. The way I see it, it's not just with politics but the general class of problems described as MAXIMIZE *GOOD* suffer from two fundamental inadequacies:

1.     CONDITIONAL BLINDNESS TO EXTERNALITIES
2.     MYTHOLOGY OF ENDLESS GROWTH


CONDITIONAL BLINDNESS TO EXTERNALITIES (CBE)

You don't have to go far to see how hard the middle-class and the poor have to work to put food on the table these days. When I was growing up, every family took at least 2-3 vacations a year visiting relatives, now we are so busy that we don't have time to note down our neighbors' phone number in case of an emergency.  We got municipal drinking water delivered right into our home both morning & evening and I used to bathe in the evenings with that water using a rubber tube in my backyard out in the open with nothing between me and the sky but air. Nowadays, every urban family spends a fortune on drinking water. When I was a kid, No parent really worried if their kid is smart enough to clear the entrance exam for a neighborhood pre-school. Nowadays, they are cutting down on diapers for their new-born baby and saving all that money for its education. Even 10 years ago, no one even heard the concept or the need for medical insurance and now medical costs plunge 40 million people to poverty every year in India. Beyond my brief obviously grandfather-type nostalgia trip down the memory lane, it can be seen that a lot of growth has come about because the government has stepped away from the business of essential services like education, water and health and handed them over to private players. All for the bottom line!!!

Throwing spotlight on just the affirmative leads to Conditional Blindness to Externalities (CBE) that results from progress. We have a hard time comprehending the social, economic, environmental, ecological and moral costs required to achieve the so-called growth in the economy. This makes any discussion on the minimizing the damaging side-effects extremely hard to rationally factor them into a democratic debate leaving us to free-market to address these costs or perhaps, to a company with a sound ISO: 9002 Corporate Social Responsibility (CSR) policy after it had a good quarter and is in the perfect mood to organize a picnic, extract blood samples from on-looking public by distributing complimentary pens and caps with the company's logo and call that a "blood drive" !!! Moreover, these costs are usually discussed by only opponents and activists who are very easy to silence once you got the money and control on media.

THE MYTHOLOGY OF ENDLESS GROWTH (MEG)

Also, focusing on aggregate, big-picture, "positive-sounding" indicators of *GOOD* like the GDP or stock-market makes it very easy for governments and policy makers to be trapped with a mythology of endless growth. Everywhere around the world, we see that it's the same agenda, same policy, and same mission statement: the economy must grow forever and ever and ever. The political future of a lawmaker who says, "I think we have had enough growth. Let’s stop here and move on to other issues in the country" can be easily imagined. In turn, more growth implies more CBE effects which are always in acceleration mode till the system is pushed to a breaking point and the job of reversing growth is handed over to recessions.

The effects of major economies unable to get off the treadmill of forever maximizing their own individual growth can be easily noticed in our collective inability to commit to reasonable legislations and protocols to address the looming climate change crisis despite near-universal acknowledgement about the seriousness of the crisis. 


EPILOGUE

The biggest irony of life is that is we always know what is bad for us more clearly than what is good for us. Most of the time, there is nothing like absolute good. Even if you find something that is universally-accepted as good, there is no such thing as too much of a good thing. You want proof? Eat 2 tubs of ice-cream and see what happens. (In fact, many adults reportedly hate the good parts of their life because they are so high-maintenance). Politically speaking, what is *GOOD* happens to be so context-driven. The poor want basic health and sanitation, the middle class wants affordable prices and a decent public education system, the farmers want irrigation and fair prices for their crop and the corporations want tax cuts and no government oversight on their operations. In a culture with huge inequalities & where money equals power, the priorities of the powerful take precedence. Besides, there are numerous studies which conclusively prove that not just promoting economic growth but also checking unbridled growth, lowering levels of income inequality, increased access to education, freedom of speech, basic health and sanitation etc. are very essential for maintaining the overall long-term health and stability for the society. When it's extremely hard defining "common good" without leaving out / hurting some or the other demographics, how can we even maximize it?

There may not be universal definitions for good but as a society, we can come up with broad universally-acceptable definitions for "bad". I contend that it always makes sense to frame up "A LIST OF RULES THAT WON'T BE CROSSED NO MATTER WHAT" in the name of "development" or whatever. Like the air quality should never go below specified level. Like how many people are we going to allow dying of hunger, how many are we going to allow to die because they can't afford their medical treatment. Like how many people won't have proper access to water. Like how many people earn below minimum wage? It should be this really long list of all bad, depressing absolute worst-case scenario things that we as a society would never let happen. (Actually, this is an interesting way to examine the history of civilization is to see it in terms of how much this honor-code list has changed. Example: Not so long ago, we were an agricultural feudal patriarchy rigidly practicing a hierarchical caste system. We let the exploitation of lower castes happen. Today, we seem to have (at least legally) struck that off but we invented other colorful forms of insulting human dignity).

My answer comes in the principle of VIA NEGATIVA.

Do we have anything that is inviolable? Or is everything up for sale and negotiable? I think it's a good starting point for a debate. Without a declared honor-code list of intangibles like that, the moral and collective conscience of a society is completely misplaced. I humbly think it's more rational to have our political debates and judgments over the problem of MINIMIZE *BAD* and let the government/politicians do whatever they want as long as certain boundaries are not crossed.

Note that all this is NOT to provide a solution but to have criteria for a debate to assess the real function of the government. And I think the negatively-toned question of "What government shouldn't never let happen?" is a more tractable and more practical question than the one we currently seem to be practicing which is asking "What government should do?" and later on having after-thought arguments over the deplorable misdemeanors of the players involved(also termed a ”maximization problem with penalty constraints” ?).

And THAT ... is how I would like to dull my optimistic friends!!!

NOTE: I'll be honest. I don’t think politics is capable of solving any of life’s problems. I am certainly not under a delusion that a perfect set of politicians and lawmakers would eventually come along and frame for us the perfect set of rules because of which justice will be served for everyone for eternity. All these bickering, rules, constitutions, policies and laws can ultimately take society only little far, that nothing can really improve without a combination of a various dynamics like technological, business, political, religious and moral revolutions. At best, a politicians' role is more of a public servant job like a postman or a policeman, a job to take care of our collective civic responsibilities like economic policy, providing basic amenities like schools and hospitals, infrastructure, ensuring clean air and water, regulating bad corporate practices and maintaining a healthy ratio of income inequality. The central aim of this post is to evaluate whether the current over-emphasis on growth is sustainable, how long do we keep having simplistic debates and if there are any moral boundaries for our policy making.

(TO BE CONTINUED …)

Thanks to inimitable wisdom of Noam Chomsky, Michael Sandel & Nassim Taleb etc. and if I sound stupid, it’s my fault not theirs.
 


Footnotes: 

[1*] I might have slept through most of my social studies classes in school, but I don't remember the constitution mentioning growth or development as one of a job function of the government. I still have fond memories of my social studies classes as she went on yapping about justice, liberty, equality, fraternity etc. The way I understand it, economy is not supposed to be a priority for governance of the country. At best, growth’s a highly desirable side-effect.

[2*] One can also argue on how much is the actual contribution of the recent economic reforms to “progress” and “GDP”. I mean, Isn't it that the growth % in GDP is the result of complex interaction of several factors like the (1) sheer momentum of global economy, (2) The overall restlessness / need for people to feed themselves and everything else between (1) and (2)? Just people wanting to brush their teeth everyday so as to not repel their co-workers as we are educated in that toothpaste advertisement contributes to the GDP. Am I to understand that politicians have something to do with my teeth which fight germs round the clock with Active-X formula? Sure, the legislators would have played some part as in, they might have freely privatized a couple of schools and coal mines here and there in the name of public-private partnerships or allowed corporations to freely pollute the rivers but how much of GDP is really ascribable to them ? I mean, shouldn’t the business and the entrepreneur community claim more than half the credit? Anyway, just wondering that’s all. Also, let me ask you this, If we are not clear of their precise contributions and if that's not even in their job description, why do place so much importance on the economy as a criterion to assess the performance?




7 comments :

Twilight Musings said...

From your definition, I am thinking that government should do neither.

My first instinct was, government should minimize bad, as in, maintain law and order. Many have written this - the main obstacle for any growth is *lack of consequence for rule breaking*.

So, people break rules whenever it suits them leading to *nothing* working as it supposed to be. This leads to lack of trust.

That is reason for private popularity. Private enterprise has something to lose due to *lack of trust* of consumer in free economy. Government has so far proven it has nothing to lose.

Once we fix that, we can talk about any policy. Otherwise, it is one more fantasy that rule-making (as in 'policy') will lead to any results.

Also, certain classes of people are more or less the same all the time. Rural-urban transitions are going to always cause less free time and loss of social bond, irrespective of actual overall growth. If we go too far back, hunter-gatherers seem to have much stronger social bond and much less work time.

Sash! said...

Well, I think one can still (rationally) determine what the government has to do based on qualifying the worst-case list (which is worked out based on a debate on minimizing the *BAD*). If we don't want people to die, we gotta do something for that !!!

Regarding "lack of consequence for rule breaking", let me ask you this: would you keep a corrupt official who still meets agreed bottom-lines better than anyone else ? Since, it's anyway near-impossible to introduce 100% accountability, why don't we shift the question to say, "do these things and you get to do what you want". Believe me that's how the managers on my construction company used to run it: "you deliver the goods, meet the bottom-line, do what you want". What do you think of that ? :)

This has been suggested earlier too - make local (city or district) governments as independent and powerful as possible and dilute the general hierarchy - that could increase accountability and efficiency.

I agree with your point on private popularity and I am free-market guy for most items. Just not essential services because "there's too much money to be made off the vulnerability of people" esp. when government gives up completely. Besides, it's not like corporates' are really afraid of consumer's "lack of trust" when they finish their dream of capturing most of the market and leave us with no choice. In my area, there's only one internet provider. I got absolutely no choice but to pay whatever it asks and this'll go on forever ....

Sure, the social structures have been breaking down ever since. But that's not my major complaint. May be, i just like feeling sympathy for myself and complain about that :)

My whole emphasis is "DO WE OR CAN WE DRAW A MORAL BOUNDARY?" It doesn't have to be absolute but even shape-shifting would do. If so, can that inform our policy better than this myopic, over-optimized, "greater good for the powerful loud speakers" format we currently follow ?

Twilight Musings said...

Democracy = people with loud speakers win. :)

Let me tell you this: if you keep an employee who works well but steals on the side, it is never a good strategy. Give them more pay so they stop stealing (recognize their proper value) or let them go because they won't stop back-stabbing at a later date working for your competition. It is not only a "moral" code but also a good business strategy.

This is different from saying, "be your own boss, but show me results". This gives ownership of work to someone but doesn't force them to do something illegal to get results. Otherwise, too much focus on short-term results and spectacular blindness to long-term losses and quality.Here again, one must set-up framework that "show me results within these constraints for safety and quality".

If leaving out one bag cement is no big deal as long as the bridge stands,then it spirals to leaving out many bags and bridge failing proof-test. (This happened in reality! Oh, the stories one can tell on failure of 'check-dams' every rainy season and how those investments gave a leg up to some popular leaders in Andhra these days).

Even a company having monopoly in one area is an indication that it is 'strong-arming' other competition in some illegal way. Otherwise, why isn't someone doing business with a better offer?

In our area, the first cable TV provider pissed-off an entire colony. They lent money for another guy to put up a new dish antenna and switched over. So..I don't know why a new internet provider can't do the same thing if it is truly a free market and not keeping politicians in pocket?

Now, there is new tech for using radio waves for wi-fi. If that works out, there will be as many ISPs as cell phone companies in no time. Nothing goes on forever...

Flawsophy said...

Good point. Taken.

Just to be clear, I am not condoning those twisted people who can meet bottom-lines. I completely agree that without retribution, a wrongdoer won't have the incentive for good behavior.

The way I see it, "Are we going to let 100 people suffer from hunger because we can't tolerate one prick taking more than a share he deserves?" seems to be the moral question for our age. Besides, it's all theory because pricks are taking what they want anyway because of the failure of a collective system of retribution. Since, we have seen that trying to always argue over the right pattern, form and rules for retribution has gotten us only thus far, lets set performance limits like trying to achieve minimum basic living standards for all citizens. And work upwards from there. Sort of like, "Since you are all powerful and are going to do whatever you want, at least finish these tasks, meet these quality protocols ...".

In saying so, may be, I am preferring a less than optimal / ideal moral code.

Besides, the idea is not make criminal behavior legal or something like that. Everything we have stays the same. My rant is on people who ignore the shadowed parts of our democracy and wish to feel happy that the economy is rising and keeping complete faith in the free market which will trickle everything down and solve everything (That's never going to happen because either some areas have too much money to be made and some areas have no money to be made - we need the civilian government for all that).

One some level, I think we are apprehensive to have that debate. I badly want to see this though. I am sure it will be a lot of entertainment to watch people admit, "No, I don't see anything wrong with paying money and hiring someone to go die for me in the war or get down barefoot in my septic tank and clean it. After all, he agreed to do it" or "No, I think it's the fault that the farmer is illiterate to not understand the patent laws surrounding this crop. He better pay."

You nailed it with "one must set-up framework that 'show me results within these constraints for safety and quality'". My complaint is we are not having that discussion in politics anymore. It did happen few times in the past but ...

Before you realize that I ripped the idea from performance based design, I'll shut up May be, you already did. Darn it !!! :P

Ah! Nothing goes on forever and it's always, always the technology that bails us out and not really pinning down these attitudes or asking the malevolent to administer self-control. That's why I have so little faith in humans controlling humans :)

Twilight Musings said...

QUOTE:""Are we going to let 100 people suffer from hunger because we can't tolerate one prick taking more than a share he deserves?" seems to be the moral question for our age"

You have hit upon iterated prisoner's dilemma again. Wasn't that optimal strategy that people would rather take revenge and suffer loss than have reduced profit and let some prick have unfair advantage?

QUOTE: "I badly want to see this though. I am sure it will be a lot of entertainment to watch people admit, "No, I don't see anything wrong with paying money and hiring someone to go die for me in the war or get down barefoot in my septic tank and clean it. After all, he agreed to do it" or "No, I think it's the fault that the farmer is illiterate to not understand the patent laws surrounding this crop. He better pay." "

What you are seeing, I guess, is the reverse swing of pendulum. At one point, people had no problem saying, "No, I don't see anything wrong with that caste-guy cleaning latrines. They are born to do it". or "No, I don't see anything wrong with not touching that person. He cleans septic tanks as a profession and I don't want it in my place". So, you may feel that you want that honesty but in some cases it can easily go to the other extreme. Currently, there is a lot of it muddled due to socialism-veneer over an inherently capitalist-minded society.

Also, if farmer being illiterate thing, I have an example with my grand mother. Some of her justification on caste-division is, "that caste people are not clean since they don't shower each day" without acknowledging that the water is costly and not everyone can do it without extra effort. But, once water is available (free bore-wells), everybody showered twice a day. To her credit, she stopped discriminating when those clean people showed up. But, are we still going to say "it's their fault they are not clean and are supporting caste-based discrimination" instead of acknowledging the underlying problem with water (or education)?


QUOTE: "Before you realize that I ripped the idea from performance based design, I'll shut up May be, you already did. Darn it !!! :P "

LOL. I was going to write that we have to be clear about what is "performance" if we are doing performance-based rewarding, in the last comment. One govt. agency specified one of the performance goals as "number of people allowed to be hurt and penalty for each extra person hurt" for a road design accident rate. But any definition isn't worth it if we aren't going to enforce the contract as specified.

Sash! said...

What do you mean by "Wasn't that optimal strategy that people would rather take revenge and suffer loss than have reduced profit and let some prick have unfair advantage?"

May be some reference will help.

I actually read that cooperation is a better long-term strategy in IPD. (Martin Novak in "Supercooperators")

https://www.youtube.com/watch?v=i3plwTxdSO4)

.....

hehe ... this brings to the point of a market society - where thing can be a financial transaction. Now they want to put a price on rivers and mountains too. The real smooth thing that is done is ask a desperate person, "how much will you take to get down there and clean my septic tank and not touch me ?" and we turn around and say, "we had a deal. we had a contract" ignoring the fact that certain segments are coerced into so-called "dirty jobs". I have seen quite some people rant that the economic coercion is clearly not as effective as social coercion ex: "dang! rickshaw fellow's son is also an engineer these days and there are not enough rickshaws around".

wickedly brilliant :)

................

demanding cleanliness is not necessarily discriminative, but rather a common sense - perhaps.

..............

Absolutely true. No contract is worth it when you don't give a damn about it. I don't want to be completely cynical because we do get some things done. So, i feel there is some value in framing the questions right without getting confused by the media's soundbites.

.....

Twilight Musings said...

Didn't you see this? http://edge.org/conversation/on-iterated-prisoner-dilemma

I recommend the discussion too.

My point is, everything can be a market transaction. But we must put "value" on non-monetary things not "price". Because rivers and mountains are worth a lot in what they contribute to whole ecosystem. Selling mountains for mining rights and rivers for polluting industries is "under-valuing" them not that rivers and mountains should be "price-less".
The whole "national parks" system in US was set up with an understanding that wilderness has a value that is higher than profit from natural resources.


Also, I have no problem with demanding our wishes in our private spaces. But, it was to illustrate the "confounding" factors about "social coercion". Instead of asking,
why are there desperate persons? How do we reduce structural problems to decrease their incidence?
We are asking,
how should we protect desperate persons?
These strategies are simply increasing the number of desperate persons.

That is my problem with the whole govt. involvement in economy. If govt. did its thing with collecting taxes and maintaining order, people needn't be desperate enough to enter buildings with evident cracks. (as with Bangladesh garment factory).

There are already rules for safety of buildings, safety of workers, and minimum working conditions. When they are not implemented, isn't it the problem with "rule-breaking" rather than "private marketers"?

Anyhow, I look forward to your Part -2. Let's increase publication count than long blog comments. :)

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