Prosperity or Bankruptcy

Private initiative, management with personal interest, honest competition, these are the forces as well as the safeguards that produce prosperity. What is called the French miracle, the recovery of the franc, was described by the miracle-worker himself as the "natural triumph of honesty and common sense". It is stupid, if not criminal, to spend more than one earns, holds M. Pinay, and this applies to the individual as well as to the nation.

     A sound and stable currency is the best protection a government can give to its people, and this is true, says M. Pinay, for employers and workers alike. According to him, social security bought at the price of inflation is a delusion and a fraud.

    Political freedom cannot survive unless sustained by economic freedom. This also is M. Pinay's conviction. How relevant all this is to Indian affairs!

     The policy of the rulers here in India is social welfare through socialism and deficit financing. 'Deficit financing' is budget jargon. It means nothing but inflation, the issue of  printed paper to meet liabilities arising out of adventure. M. Pinay holds that government controls should be reduced to the indispensable minimum- "something like traffic lights”. This French Finance Minister does not mind being called am old-fashioned Liberal. He holds firmly that private initiative, integrity, hard work and thrift are not out-dated virtues. On the contrary, he maintains that these virtues should never be allowed to go out of fashion.

     When M. Pinay took over responsibility, France was in a desperate condition. The franc had shrunk to one-twenty-fifth of its pre-war value. Pinay's first objective therefore was to balance the nation's budget. He cut expenditure instead of raising taxes He issued a loan, the repayments of which were pegged to gold, because (he said) it is dishonest to ask people to entrust their savings to government to be repaid in depreciated currency. Again, how greatly relevant when considering Indian affairs !

     “Inflation not only undermines the economic foundation of a nation, it weakens its political and social structure, even its morality", said M. Pinay and insisted on a balanced budget as the essential condition for a stable currency. Depreciated currency makes people lose their sense of reality. M. Pinay puts it as strongly as that.

     We in India can draw lessons from three miracles, the miracle of West Germany, the miracle of France, and the miracle of Japan. Nations reduced to the dust, all the three have not only recovered, but have prospered and are offering loans to India. How one wishes we borrowed their economic common sense and not only their money. Their common sense has enabled them to rehabilitate themselves after the ravages of war by discarding emotional temptations and delusions and shaping their economic policy according to natural laws. Private enterprise, competition and a free market policy gave them full value for hard work. Instead, we borrow from them huge sums to invest in socialism, just what they discarded to regain life.

     It is not deficit financing and regulations and controls, and heavy taxation for raising capital to be put in enterprises to be managed by bureaucrats, that will help us to rise. It is private enterprise, integrity and the principle of living within one's means that will help us to make progress. A special congress of the Socialist Party of Germany adopted a programme from which it is clear that Europe rethinks its socialism. The free choice of consumer goods and services, free choice of a place to work, free initiative for employers, are decisive foundations and free competition is an important element of a free economic policy. Totalitarian control of the economy destroys freedom. The Social Democratic Party, therefore, favours a free market, wherever free competition really exists. As much competition as possible-as much planning as necessary." This then is the language of even socialists where the Erhard miracle has made people re-think things over, where they want freedom and justice not as words only but as reality, and where they do not wish anyone to exploit the conflicts of society to establish the dictatorship of a party.

     After successive straight election defeats each time by a bigger margin, the Labour Party of Britain has concluded that it should not advocate any further nationalization. The British Liberal leader Mr. Grimond said that there might be some hope for Labour parties only if they got rid of the 'albatross of nationalization hanging round their necks". The Government should resist the temptation of seeking to build up popularity for the ruling party by printing money to meet its adventures which results in the depreciation of the currency and the shooting up of prices. The Government should cut down expenditure and not raise money through indirect taxes that will hide themselves in the rising prices, and still further depress the common man's standard of living.

     One of the most significant measures taken by M. Pinay to cut down expenditure was the suppression of many of the in-numerable government subsidies to agriculture and industry. Our Government, on the other hand, is planning for fantastic Subsidies to induce the peasantry to accept the fad of 'voluntary' collectivization. All these subsidies serve to keep government expenditure up and thereby to depress the rupee and make the fulfilment of obligations, private and public, a gross unreality. The party in power and in possession of the public exchequer and the mint can buy votes by subsidies and grants, but these when paid out by deficit financing, destroy the foundation of security and prosperity, viz., a stable currency. Our drive towards social justice should not involve the sacrifice of liberty. We must achieve the one without sacrificing the other. The Congress Party is committing just this mistake in its mad career. The Swatantra Party's emergence may halt this even before the next elections .

     It is usually thought, especially by liberals visiting India from Western countries, that such sound principles of polity may not be understood or obtain favour in India where ignorance and poverty hold universal sway, and therefore socialist promises may easily allure. The Constitution has given universal adult suffrage and it may be that our people are largely illiterate and poor. But I believe they have wisdom to perceive the hollowness of socialist promises and the futility of wildcat schemes. The greatest difficulty, however, for poverty-stricken voters is corruption. They may see the hollowness of promises but they may not resist the temptation of immediate bribes. It is here that a party which cannot command the government exchequer and the power that a regimented economy gives to the official party, finds the greatest obstacles. But this is a question of morality and there is no surrendering to it. It must be fought out until the people one day realize what they do for themselves when they cast votes for immediate temptations. It is here that the handicap lies for a people used for generations to undemocratic forms of government. It is not illiteracy that is the handicap and literacy will not remove it. It is the want of realization of the consequences of dropping a piece of paper in the ballot box, and this can be cured only by gaining experience, and going through the suffering that follows wrong voting. We must not be deterred by difficulties but prayerfully educate the voters against failing into the traps laid for them.