Swarajya, January 13, 1962
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.
Is a change from capitalist economy to State-capitalism a profitable business for the nation? This is the issue which hides itself under various smoke-screens of emotionalism but which must be firmly held and examined calmly, and answered straight.
The issue being a fundamental one, argument has a tendency to become dogmatic. Those wedded to socialism will not accept the fundamental truth here explained. To ignore the law of human nature is the socialist’s obstinate creed.
If we had a marvellous dictator—a truly God-sent man with a mission to help the nation (and not merely to help a party) and, secondly, if we had also an exceptionally honest, loyal body of officials, withstanding all corrupt influences arid well-qualified for the task of business management, and, lastly, if we did not care much whatever may be the form of government, the change from capitalism to State-capitalism could work to advantage.
But instead of such a rare dictator and such a good bureaucracy, we have now a political party to rule over us. All political parties consist more or less of hungry men intent on their own good. They are also likely to become corrupt in addition to being greedy. And instead of a bureaucracy trained for business management we have officials whose incapacity for managing the affairs of production and distribution has been demonstrated over and over again. The constant contacts between ministers and their staff and their party men with business bosses and their agents is not conducive to the development of the best character on either side.
State-capitalism will only rob people of their savings, and put them in the hands of spendthrifts. We shall be substituting indifference for the vigilance born of personal interest, substituting the irresponsibility of monopoly for the eager interest that goes with competition and profit motive. We shall be adopting inexperience and mismanagement in place of the efficiency and careful administration associated with capitalist control.
We may ignore the misery of poor people and the middle classes and levy heavy indirect taxes. Taxes and expropriation of savings and other properties can make the required capital for State-capitalism, but the question is whether man-power and capital will prove fruitful in the hands of State officials. Free saving going into capital has the inherent capacity to produce much more than taxes and expropriations handed over to the inefficient management of people who have no interest in the business, beyond the smiles of superiors and the vista of prospective careers based on that approval.
The learned mysteries of political economy cannot make wealth out of poverty or alter the laws that govern human nature. We may mystify ourselves by the jargon of the economy of money in whose grip we are, but natural laws cannot be evaded or overcome by any such mystification.
No amount of proliferation of the bureaucracy can make up for its inherent defects and become a good enough substitute for the owner or the proprietor, who takes his fair share and gives to the State its dues. The present owner-managed economy, which we call capitalist, is not the result of intrigue or greed or conspiracy but has grown out of nature. Inventions and innovations show their defects when tried, and prove the superiority of natural evolution. What the State should and can do is to watch, control and regulate, not go into the business itself thereby depriving itself of its governmental function. Once the State takes over any business, the officials begin to suppress failures and no longer remember the function of government to watch and judge and regulate. It is not profitable for a country of the size of India to hand over the management of production and trade to the State and its officials. There will be vast mismanagement, and there will be no one to control or judge, the party to be controlled having it if become the judge.
