Swarajya, October 31, 1964
Between ourselves, honest voter, these private monopolies created by the pernicious system of permits, licences, quotas and controls (to be extended now even to foreign capital which voluntarily comes into the private sector) make the Congress Party's rich friends richer, and the poor poorer. It is a close conspiracy; we have a battle between money and liberty, between dharma and atheism, between freedom and communism clothed in Congress robes.
Parochialism, not in its constructive and positive aspect, but in its baneful attitude of refusing to share natural or other advantages with those outside who do not have those advantages, will easily be admitted by all to be an enemy of national unity. Every one, to whatever party he may belong, would admit that the economy of parochialism must, if not effectively overcome by broader patriotism, lead to disintegration. Water-hoarding, meanwhile preferring waste-flow into the sea to allowing its Utilization by neighbours, internal transport barriers against free movement Of food grains and pulses (e.g., the recently announced Punjab and Rajasthan bans on grain export), the Organization of law-enforced famine-causing food zones—all these are obviously bad. Not only States but even districts within States are for such bans on food grains going out. But these very things are the easiest forms of patriotic propaganda in the local areas. For vote-catching, there is nothing like slogans based on this parochial economy and parochial philosophy. The statesman who rightly pleads them has hard work to do. Do we not know that violence is easy to preach and it is a hard thing to make people believe in and practise nonviolence? Similarly it is easy to deceive people to believe that government control and State-subsidy can solve all the problems of the poor. And, on the other hand, it is a hard task to explain to the people that for giving any subsidy, open or concealed, Government will have to get the money by taxation, which with departmental inefficiency and waste must mean added misery in the shape of higher prices and depreciated currency.
Socialist economy means decrease in production, while profit-motive is the only effective incentive for industrial and agricultural advance. But it is easy to paint the profit-motive in ugly colours because some people moving about before us are so obviously prosperous; whereas it is difficult to make the uneducated comprehend the inherent weakness of socialist economy. It is said as a point for the Swatantra Party to note that it can attract only the intelligent educated people, but that the masses will continue to swarm round those who promise big things and paint false pictures. Maybe this is the case; but the Swatantra Party must toil and pursue its course along the path of truth however difficult it may be. Deception may be easy at the outset, but as disillusionment starts, the arrow will boomerang back. Already we have seen enough to convince us of this and to encourage us on the toilsome toad of truth.
Advocates of socialism make real or alleged private monopolies one of their principal targets of attack. But their remedy, to turn all economic enterprise over to an omnipotent and omnicompetent State, is clearly far worse than the alleged disease, as W. H. Chamberlin has very justly written. Prof. F. A. Hayek hammers this home in his famous book, The Road to Serfdom:
Our freedom of choice in a competitive society rests on the fact that, if one person refuses to satisfy our wishes, we can turn to another. But if we face a monopolist we are at his mercy. And an authority directing the whole economic system of the country would be the most powerful monopolist conceivable. What the socialists overlook is that, by concentrating power so that it can be used in the service of a single plan, power is not merely transferred hut infinitely heightened; that, by uniting in the hands of a single body power formerly exercised independently by many, an amount of power is created infinitely greater than any that existed before, so much more far-reaching as almost to be different in kind. To split or decentralize power is necessarily to reduce the amount of power, and the competitive system is the only system designed to minimize by decentralization the power exercised by man over man.
The free and profit-motived competitive economy that SWATANTRA stands for has not only been demonstrated in the world’s past and current history as the best method of creating wealth through human labour, intelligence and capital; it is also the most effective minimizer of concentration of power. Controlled economy is control of people and as a necessary consequence, an extinguisher of human incentive. The socialist philosophy of controlled economy is based on the two false assumptions of the omniscience of government and the stupidity of the people. But it is the intelligence and interest of the people that ultimately must produce all the wealth we seek to produce.
Every one now knows that Soviet Russia has at last come to depend more and more on the profit-motive. This is done very quietly. Soviet Russia manages on a very large scale to ignore its own socialist doctrines; a great deal of free enterprise is allowed to play its natural part. The highest rate of economic growth has been achieved in Japan whose economy is free and competitive, and not in countries where coercive regulations are depended on.
The natural result of the crushing taxation in India and of the permit-licence-quota system will be the gradual collapse of our industries. What came into being before these disastrous policies were adopted, manage to survive and go on by reason of the inescapability of people from what they have got into, and partly also by reason of evasion. People cannot give up their industries, so they carry on as best they can. The resort to evasion and black money are the natural issue of coercive policies and the killing government levies.
Communism is a menace to the nation and must be resisted; but the internal communism of the Congress is no less an evil, which has already seized hold of the nation. It is the road to serfdom.
