arvind/arun in DNA: The misery of socialism

aug 10th, 2011 CE

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From: Arvind Kumar

http://www.dnaindia.com/analysis/column_arvind-kumar-and-arun-narendhranath-the-misery-of-socialism_1573658

The misery of socialism

Arvind Kumar & Arun Narendhranath | Monday, August 8, 2011

This is the fourth part of an eight part series on the contemporary history of the Indian economy.

Fabian socialists claimed they wanted to achieve the goals of communism in a gradual manner without a bloody revolution. By the 1970s, the Fabian socialists had kept their promise in India.

Unlike the communists, they took control of the Indian economy without bloodshed but the effects of their rule were similar to those under many communist regimes.

While the communists in the former Soviet Union executed millions of people, the hundreds of millions of deaths due to socialism in India were not bloody in nature but resulted from infant mortality, poor health care, undernourishment, and in some cases, starvation.

The inspiration for India’s economic system was the Soviet Union and India implemented Lenin’s idea of the state controlling the “commanding heights” of the economy. India’s fourth Five Year Plan declared, “...the public sector can be expected more and more to occupy the commanding heights of the economy.

It alone would be in a position to undertake investments of the requisite magnitude in such industries of vital importance to us as steel, machinery, machine tools, power generation, ship-building, petrochemicals, fuels and drugs.”

Leaving aside the fact that the inability of the private sector to invest freely in certain sectors was due to the restrictions placed by the government, there were many striking similarities between India and the Soviet Union.

The concept of waiting lists for getting telephone connections or to purchase a vehicle originated in the Soviet Union. This idea found expression in India after Indian bureaucrats went on study tours to the Soviet Union and were highly impressed by the system. Just as in the Soviet Union, many activities related to trading became crimes.

Farmers were routinely arrested for forward trading on the charge of “gambling” and it was not uncommon for the authorities to impound airplanes on the grounds that some passenger was in possession of gold.

Expectedly, these policies damaged India’s economy. However, instead of admitting their mistakes, the rulers turned against the people of the country. Indira Gandhi’s Emergency can be compared to the restrictions of freedoms in the former Soviet Union. The only consolation, as the Fabian socialists had promised, was that there were no mass executions in India.

By the time Indira Gandhi had consolidated her position, she had changed the political landscape of the country to such an extent that every politician claimed to be a socialist. When the Janata Party came to power, it pursued socialism with great zeal. By the end of the 1970s, support for the free enterprise system had completely disappeared.

Apart from the politicians and bureaucrats, people in the academia too were responsible for the sorry state of affairs. They believed in the “scientific socialism” of Friedrich Engels and came up with models of the economy which were incorporated into Five Year Plans. Indira Gandhi extolled the virtues of these methods and stated, “My father often said that planning is the application of science to national problems.”

Any attempt to model the economy was doomed to fail, but the politicians and professors always found excuses for their failures. Sometimes they blamed the people as the population of the country exceeded the number used in their calculations and their models did not incorporate the simple idea of removing controls to increase production and meet the demands of the people.

At other times it was the fault of the ‘foreign hand’ that was out to destabilise India. They even blamed the Hindus for the socialist rate of growth.

Yet another feature of Indian socialism that paralleled the Soviet system was corruption. With a bloated bureaucracy and everything in short supply, government employees with any sort of control extorted money from the citizens.

However, the ruling class had its own privileges. The bureaucrats and politicians in the Soviet Union had their dachas and their Indian counterparts had their bungalows. They granted themselves many other perks that insulated them from the hardships faced by the rest of the society.

Socialism had succeeded only in creating poverty, spreading misery and institutionalising corruption. Life in India became harsher under socialism. However, as George Orwell wrote in Animal Farm, his satire on communism, the rulers always came up with “lists of figures, which invariably demonstrated that everything was getting better and better.”

Ironically for the Fabian socialists, the eventual rejection of communism and socialism would mirror their description of the difference between the two systems. While many countries would overthrow communism in a violent manner, India would move away from socialism without bloodshed.

Arvind Kumar is an energy trader and can be reached at arvind@classical-liberal.net. Arun Narendhranath is a political researcher and can be reached at narenarun@gmail.com.