It
is now universally acknowledged that the 'invisible hand'
of the market is a greater force of common good than the
benevolence of the rulers. But even 30 years ago, this was
not so obvious. I entered government service as a starry-eyed
socialist with great faith in the power and intentions of
the State. Then, in early 80's, my stint as special officer
of Visakhapatnam Steel Project, then India's largest public
sector project (Rs 8000 crore), looking after land acquisition,
rehabilitation, labour relations and pubic order issues,
cured me of my illusions. I learnt to my consternation that
public sector in India is largely the private sector of
those in public office, giving endless opportunities for
pelf, privilege, patronage and petty tyranny. Mercifully,
things have improved since then with progressive expansion
of competition and choice. The communications and consumer
goods revolution, and accelerated growth are two obvious
gains of liberalization.
But
the market cannot be the panacea to all our problems. The
state clearly cannot abdicate from key sectors without creating
opportunities to the poor for vertical mobility, we cannot
promote equity or growth. Even in developed democracies,
there is evidence that birth and wealth are determining
a child's future much more than talent and hard work. Despite
the avowed classlessness of American society, the bottom
quintile of population is finding it harder than ever before
to reach the top quintile. Such social stagnation is not
only detrimental to harmony, but it also undermines growth
as the talent and potential of a large section of people
are underutilized. The state in modern world has a vital
role in helping fulfill that potential, and preventing avoidable
suffering.
But
what about society, particularly the privileged and wealthy
segments? Do they have an obligation to society beyond wealth
creation in search of profits? Market fundamentalists may
argue that it is glorious to be rich, and greed is good;
therefore pursuit of wealth in self-interest is the best
contribution the wealthy can make. But that is not how the
capitalist West behaves! The charities of Bill Gates and
Warren Buffet are known to all. The great North American
Universities of Harvard, Yale, Carnegie Mellon, Johns Hopkins,
Cornell, Vanderbilt, Stanford, McGill, Duke, Illinois Institute
of Technology and Vassar College were all built through
private charities. Smithsonian Museum, and several foundations
- Ford, Kellogg, Rockefeller, Mellon, Carnegie and Kresge
- are all promoting public causes with private funds. Those
wealth creators understood the best value their money could
get, and pursued public causes with vigour.
There
are three areas in which private fortunes can promote public
good in contemporary India. First, wealthy citizens must
work for political transformation. The recent by-election
for Lok Sabha in Karimnagar (AP) is widely believed to have
cost nearly Rs 90 crores for the parties and candidates
- mostly for vote buying. Chamundeswari (Karnataka) by-election
to State Assembly easily holds a record for expenditure,
at over Rs 50 crore! In some cases, the vote of a MLA in
the Legislative Council election in AP is rumoured to be
costing Rs 1 crore! These astronomical sums show how politics
has become big business, with attendant corruption, cronyism
and perversion of justice. The competition and wealth creation
are bound to suffer in such a political climate. The wealthy
would be wise to invest a part of their fortunes in creating
new politics for the new generation, and make politics again
a moral endeavour. Or else, the political rot will devour
the robust economy sooner, than later.
Second,
education and healthcare need not only public attention,
but private funding through charities also. If Bill gates
and Warren Buffet dream of elimination of all preventable
diseases all over the globe, our wealthy entrepreneurs can
fund these activities in our own country. If the poor are
driven to desperation for want of opportunities, it will
hurt the whole society and economy. The collapse of higher
education and inadequacy of school education are there for
all to see.
Finally,
many public goods - libraries, museums, parks - can be funded
by private charities. Our cities are becoming unlivable
concrete jungles and ghettos, even as real estate prices
are skyrocketing. If we value our quality of life, we need
to improve our own neighborhoods. The tru legacy is what
we leave for posterity in the form of public good, not the
fortunes our children inherit, making them smug and slothful.
It
is time that those who, by talent and hard work, or birth
and privilege, command vast resources stood up for larger
public good in their own enlightened self-interest.
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