The State, The Market, And Food

In yesterday's post, I presented the horror story of "education" in the prestigious Jawaharlal Nehru University (JNU) located in New Delhi, as reported by a young student. Today, I will discuss the published views of one of their "bureaucrat-professors," on an issue of great national importance: the fact that some 60,000 tonnes of foodgrain are rotting in State custody, being eaten by rats; this, while "food inflation" has been skyrocketing, and while the same State is about to legislate a "universal right to food."

The JNU don writes:

It is obvious now that the unnecessary stocking of foodgrains contributed to the upward pressure on food prices by creating an artificial scarcity and speculation on prices.

Needless to say, procurement is not in itself a problem. The problem is that the government is clueless as to what should be done once foodgrains have been procured. Its inability to offload grains derives from the systemic failure of the Public Distribution System (PDS), as well as the lack of political will to ease inflationary pressures and hunger.

The failure arises at every step of the government machinery and is now obvious to everybody except the food ministry.

This JNU don then concludes his article as follows:

The solution is not to create more storage capacity and, therefore, build up stocks. The solution lies in making sure that grains reach those who deserve it. Hopefully, the food security Act being debated by the National Advisory Council will look at the delivery mechanism with some seriousness.

Having examined the convoluted workings of a JNU don's brain, let us now look at the same issue from a different ideological perspective - that of classical liberalism, which sees The Market as the primary social institution by which people obtain their need-satisfactions. Those who see the world in these terms do not believe that The State has any role in creating "delivery mechanisms" by which scarce economic goods reach the populace. Lots and lots of stuff reach our kitchens - cereals, pulses, spices, vegetables, fruit, eggs, meat, fish, tea, coffee, oil, sugar etc. In almost all these instances, it is The Market that delivers these goods - and we pay market prices for them. There are hordes of private businessmen involved - wholesalers, retailers, warehouse keepers, transporters and so on. And wherever these matters are handled by such private businessmen, we NEVER hear of stocks rotting or being eaten by rats. This is because of the "profit motive" - such wastage of stocks would cause huge losses to the private businessman, and private businessmen therefore have a powerful incentive to carefully superintend the storage of the goods they buy and sell. Private businessmen seek to "accumulate capital." Private businessmen never engage in "capital consumption."

Our JNU don says:

Needless to say, procurement is not in itself a problem. The problem is that the government is clueless as to what should be done once foodgrains have been procured.

Actually, it is procurement that is the real problem. This is where our taxes are going. We as a people can either pay taxes for food - or we can pay market prices. In choosing between these two ways of obtaining food, we must decide which is the more "efficient" - that is, which delivers the results at lower costs. Obviously, as we experience every day when we go to The Market to obtain all our needs, private businessmen are much more "efficient" than our The State can ever hope to be. If we relied on The Market for food and everything else, the taxes we pay can be used for better things. In the case of "procurement and distribution of foodgrain" by our The State, what is really happening is "capital consumption." The rats are eating our collective Capital. And the bureaucRATS are rats too.

The Science of Economics concerns itself mainly with questions of "means and ends." If the "end" in question is how our kitchens will be supplied, then the correct answer as to the "means" is The Market. Today, our society is opting for State provision, paying taxes instead of market prices, guided by socialist ideas; but if all the accounts of The State are carefully audited, it will be found that the real cost of the cheap rice or wheat at a PDS store is infinitely higher than "what is seen."

In my view, therefore, Indyeah must abandon The State and turn to The Market for all its needs, including food, housing, clothing, whatever: the roti, kapda, makaan everyone requires. Further, international trade should be free, so that imports can augment local supplies.

The dysfunctional socialist State, and its bloated bureaucracy should be severely cut down in size, and made to perform prescribed duties essential to the maintenance of the market order. Further, the Public Revenue obtained from taxes, our collective Capital, should be invested in Capital goods - like roads - and not "consumed" in this thoughtless fashion, by all kinds of rats.

If at all there is a role for the State in the distribution of food, then this comes into play only in cases of severe famine. But this is a temporary role in an emergency, and not a permanent "food ministry" employing millions, spending billions, with nothing to show for it.

Therefore, I believe that:

1. The Ministry of Food should be closed down.

2. The Food Corporation of India should be closed down.

3. The Public Distribution System should be closed down.

4. And, most importantly, JNU should be closed down as well.