August 29, 2005

Six a year

This was a comment, but I think it warrants a small piece by itself.

Aadisht Khanna did a remarkably detailed analysis of NSS (National Sample Survey) data here. This data is about the consumption of various foodstuffs; in particular, how patterns of such consumption in the rural areas and among the poor has changed over the last couple of decades. Aadisht's whole aim is to refute the argument made by Utsa Patnaik in an article in the Hindu. Patnaik takes NSS data that shows the rural poor are eating less grain than they were doing before our liberalization process, and claims: Rural India is in deep and continuing distress, and in village India ... calorie intake per head continues to decline.

Aadisht contests this, and Patnaik's use of this data to severely criticize liberalization. He writes: There is a decline in rice and wheat consumption, and also in the consumption of dal ... But at the same time, the consumption of other stuff has risen.

His logic is clear, his arguments are persuasive.

Then he concludes his analysis with these sentences: the consumption of people in the lowest five income percentiles has also increased - even the poor are better off. How much better off? On average, about six eggs a year. [My emphasis]

This stopped me in my tracks. After fifteen years of liberalization, the poor eat one extra egg every two months, and that's "better off"? As I wrote to Aadisht, this seems to me to be a damning of liberalization and the reforms themselves.

***

Aside: this is what prompted my earlier Egg a week.

35 comments:

Ravikiran said...

"As I wrote to Aadisht, this seems to me to be a damning of liberalization and the reforms themselves"

The fact that after 28 years of the Maharashtra Employment Guarantee Scheme, people in Thane are still starving is not a damning of the EGS, but an argument for extending it all over the country?

Dilip D'Souza said...

Re: previous comment. You miss the point. Aadisht makes an good case that Patnaik's reading of the data is mistaken; that in fact there has been improvement in consumption patterns etc.

But he ends with ... what? Telling us that the poor are better off because they can now get six more eggs a year. This is the ultimate triumph of reforms? Surely there's something else?

Of course people are starving. Of course EGS has failed in places. How does that answer the question about Aadisht's use of the six eggs?

phucker said...

A higher number, is a higher number. If they are on average eating 6 more eggs per year, that's a big increase in egg consumption. And how can you just throw frame of reference out the window? Before liberalisation. Number of eggs consumed less(6 less) - amount of wheat/cereal/whatever consumed more. After liberlisation, this situation reversed. This means there's been an improvement. "Democracy is an awful system of government - but it's the best one out there". The same can be said of capitalism as an economic system.

This is the ultimate triumph of reforms? Surely there's something else?

C'mon man, don't be so naive. Obviously there is, and you know it.

Reforms so far have been half-hearted, and entirely incomplete. For the full effect of reforms to be felt, they need to be fully-implemented. The labour market, the retail market, the property market - these have yet to be reformed. Besides which, a new generation has to take the reigns - one which has grown up with satelite TV, cellphones, supermarkets and malls

It should be obvious that the first set of people who will benefit from the unshackling of the economy will be those who are economically better off - So obviously the middle class is going to benefit first. And if you boost the middle class, they will eventually help push the poor people out of poverty too. Who is going to clean those malls? Who is going man those car parks with security guards? Who is going to construct those malls? When a new call centre opens up, who is going to cook in the canteens. Where before there was no mall and no call centre, now there a 10 malls and numerous call centres- new job opportunities, for people from all specturms have been created. When a software engineer makes more money, he's going to eat more. Who is going to grow his food? George Bush? He's going to buy a car, when a few years ago this would be unthinkable. What kind and class of people man the assembly lines in car factories? Ivy-league MBA graduates? If more cars are being rpoduced, do only rich and middle-class people benefit? Does nobody from a low income group get the chance to work in these places? Why is somebody who isn't starving not worth a damn to you? Why should that person's wants and needs be dismissed, just because he gets enough food in his stomach? If the middle class is kept happy, enough of those people will dream a bigger dream, and help pull some poor people out of the poverty line with them.

Dilip D'Souza said...

Great! Just the discussion I wanted, TTG.

I didn't throw frame of reference out of the window in the least. In my post I quoted Aadisht's pointing out the decline in rice, wheat and dal consumption, set against the rise in the consumption of other things. Which is exactly the before/after situation you claim I have thrown out the window; and I'm glad to note that Aadisht had the patience and ability to dig throught he figures to find all this.

My sole point: Aadisht says, the poor are better off because of the reforms. How much better off, he asks rhetorically. At this point, I'm expecting him to answer himself by saying: so many more calories, or so much more purchasing power, something substantial like that. But what does he pick out to tell us? Six eggs a year. A damp squib if there ever was one.

So I'm asking Aadisht, is this how you're going to trumpet the benefits of the reforms, by telling us that after 15 years, the poor are eating one egg more every two months? Because if you are, it seems to me that's a damning of reforms by itself.

Let's say I'm trying to get into the IITs. I do the entrance exam three times and fail, getting an all-India ranking each time of, let's say, 100,000 (a definite failure, given that all IITs together admit something like 3000 students a year). Then I wisen up and spend lots of money and a couple of years in intensive coaching in Kota. Then I do the exam again, get the results, and rush to my mother to say: "My results are better, these coaching classes really work!" How much better, she asks. I say, "I'm now ranked 99,500!"

Would that be a damp squib? That's what I'm getting at.

As for this: Why is somebody who isn't starving not worth a damn to you? Why should that person's wants and needs be dismissed, just because he gets enough food in his stomach?

OK, I do the same old thing again: do show me where I've claimed that that somebody is not worth a damn to me, that his wants and needs should be dismissed. Or even anything I've written that implies these things. Please.

Is it not possible to argue the benefits of reforms without assuming that I've claimed all kinds of foolishness? Is it not possible that I might be concerned about your wants and needs (assuming you have enough food in your stomach) and also concerned that the reforms seem to be leaving some other people behind?

And what will it take for you to comprehend that some of those guys who think they have been left behind are bone-tired of hearing your argument about how the middle-class will help pull some poor people out of the poverty line? That they are tired of waiting for this supposed "help", and now want to simply pull themselves out, on their own terms?

How persuaded can you be of your own arguments if you response to questions in this vein?

phucker said...

How much better, she asks. I say, "I'm now ranked 99,500!"

Awful analogy, and I'll tell you why. You're talking about an individual here. Let's say there are 500,000 people trying out for the IIT, and all of them fail the test and get ranked 100,000. Now let's suppose all 500,000 of these people get dragged to a coaching class, and after the test - the average rank now turns out to be 99,500. Is this still a lousy achievement? We just got 500,000 people to improve their ranking, on average. That's 500,000 people. Before this coaching class, did any of the other methods work in improving their rank? Sure they're far away from the IIT. But they all got a bit closer. Further, consider that's the average rank, some of them may have gotten a better score. I'm using the term average here, because that's what I got from Aadisht's post. These slightly more intelligent ones can help the slightly less intelligent ones get up to speed. So when they try next year, who knows how much higher the ranking will be. We can play around with that analogy to suit our points all day, however.

I understand you're trying to say that all Aadisht could come up with is "six more eggs a year, buddy",
after 15 years of reform.

Frankly, I'm surprised it is as many as six more eggs a year - because the reforms have been so half-hearted.

Half-empty, vs half-full.

We are still, in many, many ways a socialist country, where the Goverment is still your baap who decides what's good for you.

do show me where I've claimed that that somebody is not worth a damn to me, that his wants and needs should be dismissed. Or even anything I've written that implies these things. Please.
This comes across in the flippant dismissal of malls, and cellphones, and emphasis on the building of roads (which apparently are good only for rich people) and the like. Gimme a few hours, I'll elaborate.


Is it not possible to argue the benefits of reforms without assuming that I've claimed all kinds of foolishness? Is it not possible that I might be concerned about your wants and needs (assuming you have enough food in your stomach) and also concerned that the reforms seem to be leaving some other people behind?

Well then I, as a not-so-humble irritant of cyberspace, take issue with the way you decide to go about 0it - because if what you say would be the case - what is the need to dismiss the other changes reforms have brought about - although I've probably have read things wrong, but the tone that you seem to bring about is one of mutual exclusivity. One which says so long as there one starving child out there in India, no improvement should be trumpeted (green revolution, booming economy, et al), no change is good enough.

And what will it take for you to comprehend that some of those guys who think they have been left behind are bone-tired of hearing your argument about how the middle-class will help pull some poor people out of the poverty line? That they are tired of waiting for this supposed "help", and now want to simply pull themselves out, on their own terms?

When I use the term "help" it's used loosely. What's really at work is the much maligned "Invisible Hand". Those middle class people who have now got more opportunities will not be "helping" the poor people out because they're kind-hearted souls but because they're selfish bastards who need cheap labour to help them make more money. So the more middle-class people get opportunities to make and spend money the more the poor will too. Going directly out to the help poor is a useless, pointless exercise, as Atanu Dey recently pointed out. He said that it's true, the Indian Government's policies are definitely "Pro-Poor". They help increase the number of poor.

Also if, these people want to drag themselves out, they don't need an EGS either.


How persuaded can you be of your own arguments if you response to questions in this vein?


Let's just say I'm a hot-blooded, Punjabi male....

Ravikiran said...

EGS has been "failing in places"?
According to a study conducted by the Rajiv Gandhi Institute for Effectiveness of Government Expenditures 4.5 paise out of every 100 spent on the EGS actually went to the poor in 99-2000. This ratio has been actually getting worse over time, because in 93-94, this ratio was 12.4. If this is your definition of "failing in places", I wonder what it would take for you to call something an utter failure.

So I think fairness demands that when you say that 2.5 paise out of every 100 will be enough to eliminate hunger from the country, you should point out that the amount we need to spend to actually achieve the result is 20 times that.

I also think that to be really fair, you need to think of what alternative uses those 50 paise would have been put to. How many factories in rural areas could they have financed? How much employment could it have provided if only the private sector were spending the money?

How much employment would it have provided if only the government would spend the money on something whose output can be measured (roads, for example) rather than on something where the more inefficiently you do something, the more your measure of success?

Dilip D'Souza said...

Re: previous comment. I ask again: How does all that you say answer the question about Aadisht's use of the six eggs?

previous comment said...

" Re: previous comment. I ask again: How does all that you say answer the question about Aadisht's use of the six eggs?"

Because, it is quite clear to me that you consider the achievement grossly inadequate. So naturally, one needs to look at what you consider to be an achievement good enough to be considered worth emulating.

The fact that the average person's diet has gone up only by six eggs a year is for you an indictment ("damning") of the reforms that have gone on for fifteen years.

The fact that people are still starving in Thane after the EGS has gone on for 28 years is for you reason enough to attempt more of the same, all over the country.

Tell me, why doesn't the continued existence of poverty and hunger damn the EGS as much as the fact that the diet of an average Indian has gone up by just six eggs a year damn the reforms?

Anand said...

Ravikiran -- I'm surprised to see that you say this: "The fact that the average person's diet has gone up only by six eggs a year ..." Both of us had some conversation over Aadisht's post (@ indianeconomy.org), and I had argued that Aadisht's calculations aren't alright. You didn't say anything against my argument at all. Both of us also agreed that lack of original data is frustrating. (We were looking for consumption data for bottom percentiles).

Maharashtra EGS was quite successful in its initial decade when it was implemented with full vigour. For instance during the period 1977-1983, the decline in poverty was over 19 percentile points in Maharashtra whereas the national average was around 7. The state of Maharashtra was gradually cutting down funds allocated for EGS.

Aadisht Khanna said...

Dilip,

I'll be responding to your query as well as some others in a post soon. I have endterms coming up, so I don't really want to get involved until those are over.

For now, I'd say that on the basis of the evidence- as I've analysed it so far- we can't say whether six eggs a year is because of reforms, because of the lack of reforms, good, or bad. I'll do that once I have the time.

Dilip D'Souza said...

it is quite clear to me that you consider the achievement grossly inadequate.

No, previous comment. This is why I said far above on this page: you miss the point.

The point is this: why does Aadisht pick this -- the six eggs -- to showcase as a triumph of the reforms, as how the reforms have benefited the poor? I simply cannot understand. Surely there are other benefits the vocal proponents of the reforms can identify?

But by choosing this and defending it, you -- or Aadisht -- are yourself damning the reforms with faint praise. And I wonder why you would do that.

You say: The fact that the average person's diet has gone up only by six eggs a year is for you an indictment ("damning") of the reforms.

Do try to understand the point this time, previous comment. I don't at all see the diet going up by six eggs as an indictment of the reforms. I welcome any increase in that diet.

But when you and Aadisht cite this as the success of reforms, to my mind that citing is the indictment of the reforms. Because then it seems to me that even the vocal reform proponents and free marketers can't find substantive things to say about them. As I said, I wonder why.

(And this is apart from Anand pointing out his problems with Aadisht's calculations in the first place, but let that pass).

As for EGS -- note that I'm answering the question even though you have evaded answering about the eggs -- of course the continuing existence of poverty and starvation damns the EGS. (It damns a lot of things, but we'll let that pass too).

I don't recall saying, ever, that your indictment of the reforms (as explained above), or my questions about them, means I want the reforms rolled back. In the same way, my problems with the EGS don't mean I cannot see some of the good things it has done.

For example, what Anand mentions. For example too, I pointed outhere, that Maharashtra's EGS worked to slow down rural to urban migration; and that tribal people under the EGS can afford the "luxury of eating rice in the dry season."

Things are not black and white. Not the EGS, not the reforms.

Dilip D'Souza said...

Thanks for your response, Aadisht. I appreciate, again, your detailed analysis of the NSS data. I look forward to anything else you might have to say, because I believe it will be well-reasoned.

TTG, it is not an awful analogy at all, and I'll tell you why. Rising 500 places in the rankings is no mean feat. In the context of the entire examination, it still means I'm far away from getting into IIT, but it is no mean feat.

But now let's say my Kota coaching class took out a full-page ad, or let's say a blog post, saying "Our student Shri DD rose 500 places in IIT-JEE rankings, from 100,000 to 99,500!" I think you, reading this, will snort in wonder. I don't think you, reading this, will jump to send your kids to the same coaching class. Right?

That's my point.

I've never tried to claim, or imply, that we should hide all our achievements under the carpet because there are starving kids out there. These are not mutually exclusive things. But I would have liked to see the reforms transform the lives of the poor as dramatically, or even a tenth as dramatically, as they have, for example, transformed the way our cities look.

When I said there are people who are tired of hearing about this "help", I meant just that, and in whatever form this help comes (noble or selfish bastard variety). They are just tired of being told to wait, that's all. They want to find their own ways to more prosperity and more political power -- and yes, some of that means EGS too. Because they are also tired of being told what's good for them and what isn't. They want to find out for themselves.

I don't know how to emphasize this enough: this is the reality of India that all of us have to come to terms with. This is the explanation for the appeal of the Mayawatis and Lalus. If you blind yourself to it, you fool only yourself.

Thanks for the back and forth. May it continue.

Dilip D'Souza said...

TTG, one more thing, sorry. Earlier, you said the reforms have been so half-hearted.

This is exactly my point in this entire discussion, in my earlier post Only way too.

I think the reforms are half-hearted because they don't seem, to me, to be addressing the people in greatest need of them.

Dilip D'Souza said...

Absent-minded this evening! Forgot two other points I had meant to respond to.

First point:

fairness demands that when you say that 2.5 paise out of every 100 will be enough to eliminate hunger from the country, you should point out that the amount we need to spend to actually achieve the result is 20 times that.

No, fairness doesn't demand anything like that. Your citing of the Rajiv Gandhi Institute figures shows only this much: that if we put in place a programme that spends two paise of every 100 on nutrition projects (which is what I referred to), it is likely that less than 5% of that amount will reach the poor -- and perhaps Alan Berg had taken that into account when pointing this out.

And actually it's not even clear we can make that assumption about the 5% -- after all, as you yourself say, the RG Institute figures are talking about money spent on the EGS, not on nutrition programmes. And Berg's 2% spending number is an extrapolation from TN's successful nutrition programme.

So no dice there.

Second point:

the average person's diet has gone up only by six eggs a year ... the diet of an average Indian has gone up by just six eggs a year.

Nope, the average Indian's diet is not what we are talking about. It's the diet of the poor, as Aadisht says, that has gone up by six eggs a year.

Big difference, previous comment.

Ravikiran said...

OK, I will take the points in roughly reverse order
"Nope, the average Indian's diet is not what we are talking about. It's the diet of the poor, as Aadisht says, that has gone up by six eggs a year."

No. You can confirm this with Aadisht, but he has specifically confirmed this to me. It is the average per Indian, not average per poor Indian. Also note that Aadisht hasn't found data on the distribution by income groups and Anand took him up on this point.

I got data from elsewhere which indicated that the caloric consumption of upper income groups has been reducing. So this is indirect evidence that the benefit to the poor has been more than six eggs a year, because eggs are high in calorific value. I am not asking you to believe this, because the evidence is rather indirect.

Anand, on the other hand, seems to believe that it is the other way round, but he has given no evidence why it should be so.

Ravikiran said...

"if we put in place a programme that spends two paise of every 100 on nutrition projects (which is what I referred to), it is likely that less than 5% of that amount will reach the poor -- and perhaps Alan Berg had taken that into account when pointing this out."

Perhaps? But where did Alan get the figure of 2 paise from? Is he saying that in the absence of corruption, 0.04 paise would have been sufficient to adequately feed children? What does the book say?

And actually it's not even clear we can make that assumption about the 5% -- after all, as you yourself say, the RG Institute figures are talking about money spent on the EGS, not on nutrition programmes. And Berg's 2% spending number is an extrapolation from TN's successful nutrition programme.

I think that this is more likely. In that case, shouldn't you be calling for scrapping the EGS and replacing it with a nutrition programme? What is the point in using figures from a successful programme to argue for the replication of a programme which leaks so badly that it is embarrassing to see it being defended? It is money that could have fed children that we are talking of. 95% of it leaks out and you still think that it is a worthwhile effort?

Dilip D'Souza said...

It is the average per Indian, not average per poor Indian.

Really? At the end of his post, Aadisht has these lines that I quoted: even the poor are better off. How much better off? On average, about six eggs a year.

You're telling me now that this is to be read as referring to the "average Indian"? I'm completely baffled.

Ravikiran said...

Anand,
Let's be clear. The only problem with Aadisht's figures were that they were inadequate, not that they were wrong. They are consistent with what we supporters of liberalization expect, though they do not prove that liberalization has actually resulted in those figures. More importantly, they do not prove that liberalization has done any harm.

Besides, Dilip is a supporter of liberalization. He's said so many times himself. He seemed willing to grant for argument's sake that the extra six eggs a year came as a result of liberalization and was willing to argue on that basis, so I too proceeded on that basis.

Ravikiran said...

Dilip, I am rather sorry if it seemed like I was "evading answering about those eggs". It is just that this point has been answered so many times that I naively assumed that you were actually familiar with the argument. So let me explain it in eight words:

Few reforms -> Few benefits

More reforms -> More benefits.


You agree with this argument don't you? You've said so many times, so I thought you'd be familiar with it.

So I take it that you agree that we should privatize PSUs, abolish small scale reservation, relax labour laws, remove restrictions on sale of agricultural land, reduce government spending, abolish geographic restrictions on sale of agricultural products, abolish rent control, abolish the urban land ceiling and regulation act, etc. measures which most supporters of liberalization agree, will really turbocharge growth and reduce poverty even further.

Now I am sure that you will admit that the claim encapsulated in those 8 words make at least superficial sense. We cannot prove that more reforms will lead to more improvements because we haven't tried them yet. We can only use the experience from around the world to make that claim. But all I am asking you to believe is that this argument makes superficial sense.

On the other hand, I would be the first to admit that when one goes on train journeys and sees that many people are still poor, it is only natural to raise questions about the direction and pace of the reforms. Completely natural. Happens all the time. I've experienced those things myself, though I haven't written articles and articles on them.

What I don't understand is, why, when faced with the fact that poverty, hunger and unemployment persist in the face of 28 years of running the EGS, doubts don't arise in your mind about the EGS. Surely, if it is true that 95% of the money spent on it gets wasted, then it is worth worrying about?

Isn't it worth asking ourselves if we are going on the right path? Surely the subject deserves more attention from you? I've counted 2 phrases on the subject: "though marred by corruption" and "failed in parts". Is that all that is there to be written on the subject?

We supporters of liberalization can atleast claim that reforms have done a miniscule amount of good and haven't done any harm to the poor. On the other hand, every paise that we throw after the EGS is money that could be used in other ways to help the poor. Isn't that something worth writing about?

Ravikiran said...

Dilip, about whether it is average per Indian or average per poor Indian, you can check with Aadisht. It is a simple question of fact and a potential case of sloppy writing.

Dilip D'Souza said...

where did Alan get the figure of 2 paise from? Is he saying that in the absence of corruption, 0.04 paise would have been sufficient to adequately feed children? What does the book say?

He got it by estimating how much it would need to expand TN's programme nationwide. He doesn't say anything about the absence of corruption. I said, half-facetiously, that perhaps he had taken corruption into account. Seeing that my facetiousness fell flat on its face, I hereby withdraw it.

What is the point in using figures from a successful programme to argue for the replication of a programme which leaks so badly that it is embarrassing to see it being defended?

Good question. Only, I didn't make such an argument. Please go look. I used the figures from a succesful programme to ask why that successful programme should not be expanded.

you still think that it is a worthwhile effort

To repeat: my problems with the EGS don't mean I cannot see some of the good things it has done.

that this point has been answered so many times...

Where?

you agree that we should privatize PSUs, abolish small scale reservation, relax labour laws, remove restrictions on sale of agricultural land, reduce government spending, abolish geographic restrictions on sale of agricultural products, abolish rent control, abolish the urban land ceiling and regulation act, etc. measures which most supporters of liberalization agree, will really turbocharge growth and reduce poverty even further.

Some of it, yes. Some of it, no, or not fully (e.g. some PSUs).

Which is my point about a mix of ideology and practice.

Isn't it worth asking ourselves if we are going on the right path? Surely the subject deserves more attention from you?

I don't get it. What do you think I am doing? What do you think my Only way article was all about, except a questioning of whether we are going on the right path?

We supporters of liberalization can atleast claim that reforms have done a miniscule amount of good and haven't done any harm to the poor.

Be smug in that claim if you so desire. But I've been asking again and again, what will it take for you supporters of liberalization to understand that there are people in this country who don't see this "good" coming to them from reforms? They just don't see it. What are you going to do about that, apart from saying "we can at least claim they've done good"?

Tanuj said...

Dilip,

You say that 6 additional eggs per household, over 12 years, is "a damp squib if ever there was one." I agree with TTG in that this is an incomplete argument in the absence of a frame of reference. My question to you, therefore, is how many additional eggs should we consider "enough" or "good"? And how must we arrive at these benchmarks?

Here are a couple of ideas:
1. Benchmark relative to base: Whatever we did since 1947 through 1988 (~40 years), helped us reach an average rural consumption of 6 eggs per person. Whatever we did in the next 12 years doubled that. Is that really that bad? I don't think so. I think it is a pretty significant achievement, but perhaps we need another benchmark.
2. Urban consumption as a benchmark: Per capita consumption is urban India according to the same NSS report is 24 eggs per year. (That sounds like a damp squib too, but if that's the best benchmark we have, that's what we have). So, if rural consumption grows at the the 1988-2000 rate, in the next 12 years, i.e. by 2012, rural consumption should be equal to urban consumption (in year 2000). That tells me the trend is pretty good.
3. Benchmark with experience of other countries embarking on a similar reform process.

So, based on these preliminary frames of reference, 6 more eggs on for each of 600 million people doesn't sounds like a damp squib, but am happy to consider other benchmarks.

To reiterate - what is a realistic goal to strive for in the next 12 years? What should rural income be, or egg consumption, or whatever else? And how must we arrive at these? In absence of agreed goals or benchmarks, our arguments are simply random points of view - you will always see some numbers as good, I may see them as bad, based just on some vague opinions and biases we might have.

iu said...

Dilip,

"But I've been asking again and again, what will it take for you supporters of liberalization to understand that there are people in this country who don't see this "good" coming to them from reforms?"

It's highly presumptuous of you to think that "we", supporters of liberalization (apparently, we are a monolithic group), do not understand that some Indians may not have benefited from the reforms. Do non-supporters of liberalization have a monopoly on that understanding?

I second Tanuj's questions. Could you be more specific in your criticism of how "bad" the 6 eggs are?

Dilip, you question why the reforms have not been effective. But, your statements do not specify objective, measurable criteria to gauge its degree of failure nor do you suggest alternatives that may be more successful. Could you be more specific in what your criteria are for liberalization policies to be deemed effective?

Also, since you are unhappy with the current state of reforms, what specific economic policy/implementation changes do you propose and what criteria should be used to judge them? (For instance, you support the EGS. What criteria should be used to measure its performance?)

-iu (iu00007@yahoo.com)

Dilip D'Souza said...

Not much time just now...

It's highly presumptuous of you to think that "we", supporters of liberalization (apparently, we are a monolithic group), do not understand that some Indians may not have benefited from the reforms. Do non-supporters of liberalization have a monopoly on that understanding?

First, iu, why do I get the pointed remark for clubbing supporters of liberalization into a monolithic group? I merely picked up on the previous commenter's use of it: We supporters of liberalization can atleast claim ...

Did you point out to him in parenthetical sarcasm that you are perhaps not a monolithic group?

Second, nobody, least of all me, has a monopoly on understanding these issues. Believe me. But if you recall, I reacted to this statement: We supporters of liberalization can atleast claim that reforms have done a miniscule amount of good and haven't done any harm to the poor.

So I'm saying, if you want to believe that, please try to understand that a lot of people don't believe it.

I'm out of time for now. more later.

Sriram said...

Here is something to ponder about: If someone gets arrested and goes to prison, he gets food three times a day. That might include eggs!

There is more to freedom than just the number of additional eggs eaten.

Freedom is not some magical goddess that drops eggs into kitchens.

Freedom is about people not being hampered from doing what makes them happy. If, in pursuing that happiness, they earn more and eat better, good for them. If someone chooses to not do that, that is their choice as well.

Economic liberalization (and hence, all such discussions) are misleading because they make it sound like it is some active policy that the government pursues. In reality, freedom is about the government stepping back and not doing anything in pretty much every area.

More details: Consider the following two statements.
(a) Government should privatize insurance.
(b) Government has nothing to do with insurance and should never be involved in the first place.

The former is the statement of a statist who is still thinking in terms of "what should the government do?" The latter is the position of freedom, recognizing that govt is a man-made institution that is, at best, a necessary evil in some areas (like defense and law)

Ravikiran said...

As I was saying, we supporters of liberalization hope to liberalize more, so that more people see the benefits of liberalization.

But you count yourself as a supporter of liberalization, don't you? What do you hope believe we should do about it? In terms of concrete measures, all I can see is that you are supporting a measure that will waste 95% of its money. It is almost as if you are more intent on punishing the middle class than on helping the poor. You are more worried about wiping out the supercilious smiles of us supporters of liberalization than on actually effectively delivering the benefits of liberalization to the poor.

iu said...

"I merely picked up on the previous commenter's use of it"

Agreed -- my sarcasm was unwarranted. I withdraw the parenthetical fragment.

"I reacted to this statement: We supporters of liberalization can atleast claim that reforms have done a miniscule amount of good and haven't done any harm to the poor. So I'm saying, if you want to believe that, please try to understand that a lot of people don't believe it."

I can't speak for Ravikiran but I would make the same statement that he did. That statement does not assert that the reforms have reached everybody. Just that they haven't, at worst, done any harm to the poor.

Gaurav said...

That statement does not assert that the reforms have reached everybody. Just that they haven't, at worst, done any harm to the poor.

I would go one step further and say that whoever the reforms have affected directly, they have benefitted. Which is why we need to bring more people under the ambit of the reforms.

Srinath said...

Hi Dilip,

Nice to see your blog. This is srinath. Your host on campus when you had come down for I4RI (CEL). I personally need to apologise for not thanking you for the snaps you had sent. Those were awesome and have been carefully treasured by my mom in an album containing precious photos.

Right now I'm in bangalore workin. Woudl like to send you a detailed mail. Please let me know where I could send it.

Regards,
Srinath

Dilip D'Souza said...

I'm responding as I find a few moments, so this might be disjointed.

Tanuj: once more, I do think that increase in egg consumption is an achievement. My whole point is, it surprises me that the supporters of reforms (Aadisht and others) would speak about this as the triumph of reforms. I mean, for example, has purchasing power gone up? Significantly? If so, would that not be a more persuasive measure of the success of reforms than the poor in India eating an average of one more egg every two months?

That said; you write: Whatever we did since 1947 through 1988 (~40 years), helped us reach an average rural consumption of 6 eggs per person. Whatever we did in the next 12 years doubled that.

Are you assuming here that rural consumption was no eggs in 1947? I'd like to see some proof of that.

To other points.

we supporters of liberalization hope to liberalize more...

iu, I hope you have taken note of this continued presumption of monolithic groups.

It is almost as if you are more intent on punishing the middle class than on helping the poor. You are more worried about wiping out the supercilious smiles of us supporters of liberalization than on actually effectively delivering the benefits of liberalization to the poor.

Ah so that's it. I'm out to wipe smiles off faces. (iu, do all "supporters of liberalization" monolithically sport supercilious smiles?)

This whole exercise makes me wonder, as I've wondered before: is it simply impossible to have questions about the reforms?

Here's what has happened when I asked questions: I was told I'm a "statist" and "leftist"; that I wanted to go back to the old socialist days and ways; that "anecdotes don't count"; that people who aren't starving aren't "worth a damn" to me; that I'm using the figures from a successful programme to argue for the "replication" of a failed one; that I am in fact and after all a "supporter of liberalization" (nothing like coopting the doubters); and now that I'm in the business of wiping smiles off supercilious faces. (Or was that superciliously wiping smiles off faces. Or something else).

Why is it so difficult for at least this set of supporters of liberalization (and who knows whether I'm now part of the fold or not) -- the ones responsible for all these statements -- to simply recognize the doubts and address them? Why is it easy instead to ascribe every possible convoluted motive to the doubter?

This is why I applaud Aadisht: he simply got out the figures and did the analysis. This is why I'm sure he will respond clearly and reasonably once he's done with his end-terms. I don't believe he'll have use for the supercilious smiles argument, and that's why he gets my respect.

Tanuj said...

Dilip,

"I do think that increase in egg consumption is an achievement. My whole point is, it surprises me that the supporters of reforms (Aadisht and others) would speak about this as the triumph of reforms."

I think Aadisht was responding to Patnaik's article on food consumption - hence, the eggs, milk and palak consumption growth numbers. If person A uses the food argument to "prove" reforms don't work, then it makes sense for person B to use the same argument to debate the point. If you have no problem with Utsa Patnaik using the argument, ideally you should not have issues with Aadisht using it.

On the other hand, if you think there are better parameters to measure income growth in rural India, I am with you. Perhaps, you're right in asking for people to use other measures like "purchasing power."

However, you haven't really addressed my question to you - whatever parameter you use, be it "purchasing power", egg consumption, etc.:
1. what is the benchmark? how much growth in this parameter is good/enough? E.g., do you think rural per cap income shd double in 15 years? triple? grow 5%?
2. how will you define this benchmark? E.g. if you say, rural income shd have doubled in 15 years, why did you choose 100% growth to be the benchmark.

Again, in absence of agreement on such a benchmark, any debates about how well reforms (or schemes like EGS) have done are totally futile.

You say, "Are you assuming here that rural consumption was no eggs in 1947? I'd like to see some proof of that." I am doing no such thing - all I was trying to do is to get a couple of frames of reference to judge whether 6 more eggs was good or bad. And that helped me form a more informed opinion. What are your benchmarks?

P.S. However, if I did assume zero egg consumption in 1947, it would only make my own case weaker! E.g. if you're happy with a 3 eggs number in 1947, we doubled consumption in 40 years, and then doubled it again in 12. voila!

Anonymous said...

Dilip,

I dont think the proponents of liberalization argue that the measures adopted so far have any DIRECT impact on poverty alleviation. Indeed, if you look at the liberalization measures--doing away with licensing, import controls, and reducing entry barriers in general--they are not directly linked to poverty one way or the other. So, if poverty alleviation has not progressed as fast as you would have wanted it to, then you really cant pin the blame on liberalization.

On the other hand, if povert alleviation has actually worsened, as the critics of liberalization argue, then you could build a case against liberalization provided there is adequate causal explanation, not simple correlation (that would be a post hoc fallacy). Now, if you read the debates about poverty numbers, even the most pessimistic reading of the controversial numbers will not argue that the percentage of poverty has actually increased. The more optimistic ones will argue that poverty has declined faster and quite dramatically. The truth is probably somewhere in between. Poverty allevation has neither acclerated nor decelrated in all likelihood. So, all this controverys over liberalization is really an ideological battle.

Instead of debating this, we should start with the undeniable fact that there is still too much stark poverty in India. This much we agree, i think. What can be done about it? Here is where I disagree with you. The EMployment Gurantee Scheme is a DIRECT poverty alleviation scheme. Its efficaiacy has to be measured against its purported goal. So, if all that the Maharashtra EGS achived was that people could have rice during off-season, then it is even more pitiable than the controversial 6 eggs. Of course, one could argue that the scheme was not implmented properly. Perhaps. But the fact is that most government schemes are utter failures. If public interest groups were that vigilant and powerful in India as would be required to make this scheme succesful, then we wouldnt be having people like Laloo around.

Most protagonists would point to the Tamil Nadu noon meal scheme launched under MGR. Actually, the precursor to this scheme was started way back in 1954 by Kamaraj. These schemes worked becasue the initiators of the schemes themselves believed in them, had themsleves suffered deprivation. This gave them a personal stake in ensuring the success of the schemes. More importantly, TN is quite unlike the rest of the country. Local governments, and local govenrment officials in TN in general are actually quite responsive and efficient to the needs of their constituency. There is far greater awareness among the masses about their rights an about politics in general. The people at large are quite angry about petty corruption even if they are unable to do anything about massive corruption at higher levels. One example of the difference in attitude between TN and many other states can be seen from the movies. In recent times, a number of commerical Tamil movies have dealt with petty corruption in populist ways. Most of these movies have been blockbusters. Remakes of these movies in Hindi have sunk without trace. From my own experiences, I can say that people many parts of the country are simply not incensed enough about petty corruption. In fact, many see it as an entitlement of the office.

Without people's own awareness of their rights, entitlement schemes will only result in boondoggles for politicians. That is a sad fact.

Dilip D'Souza said...

Tanuj, about benchmarks. I have no clue what a proper benchmark might be. In this case, I'm only saying this much. (To repeat). Let's say someone came to me and said "It's not true that reforms are not working, as Utsa Patnaik writes in the Hindu. They are working! Do you know, after 15-odd years of reforms, the poor in India are eating six eggs more a year?"

Let's say, I would be mildly surprised.

My sole benchmark is what I see around me: that's what interests me as a journalist.

So one thing I see around me in the cities is an explosion in malls and cars and cinema theatres and consumer goods generally. That tells me there are many people who have benefited from the reforms.

Another thing I see around me in the cities and elsewhere is the same abject poverty I've always seen in India. I don't need to run through examples, I hope. That tells me there are many people who have not benefited from the reforms.

What I'm trying to say in this and other discussions and articles is, a lot of those people who have not benefited are asking, why? They are asking a subtly different and more important question too: why should we wait?

Such questions, in my opinion, don't really get answered by saying the stats show that the rural poor are eating six more eggs a year.

I think it is a mistake for the supporters of reforms to ignore these questions or their implications. This is why I'm trying to understand them.

I

iu said...

Dilip,

"Let's say, I would be mildly surprised."

Do you mean that you would be underwhelmed that the statistic is touted as a measure of success of the liberalization policies? (I don't think it was being touted, but that's tangential to this discussion.)

However, would you be surprised if the same person claimed that the poor in India are eating 1000 more eggs on average? My point is that you have an implicit threshold beyond which you would no longer be surprised. While perhaps it is difficult to come up with an exact number in this case, do you agree that we need some quantifiable and objective criteria to measure the degree of success of any policy?

Also, could you please address the questions I posed in my previous comment -- I'd be interested in knowing what your thoughts are:

Could you be more specific in what your criteria are for liberalization policies to be deemed effective?

Since you are unhappy with the current state of reforms, what specific economic policy/implementation changes do you propose and what criteria should be used to judge them? (For instance, you support the EGS. What criteria should be used to measure its performance?)

Michael Higgins said...

Hi Dilip
I think there is another major factor to consider here: the caloric burn rate among farmers is declining, and very dramatically. Basically, farmers are doing less donkeywork. Ox and plow are being replaced by tractor. So while consumption is not increasing (in fact, total calories are decreasing) the farmers are probably gaining weight.