Their Greatest Error: Morality

Another scandal has enveloped our central State - and this is serious stuff, for it concerns their anti-corruption commissar, the Central Vigilance Commissioner. It seems that the new man appointed to this post has a corruption case pending against him - and the Supreme Court has challenged his appointment, much to Chacha's embarrassment. You can read a detailed news report here.

What I would like to discuss is the fact that all this political and administrative corruption we in India suffer from is rooted in ideology. This socialist State started off on the wrong foot - with Jawaharlal Nehru saying that, for him, "profit is a dirty word." Nehru shackled enterprise. He began "central planning." He placed his State at the "commanding heights of the economy." He invested all his revenue - along with a lot of "deficit financing" - in "public sector enterprises." It is this ideology that is the root of all corruption.

Take the case in which this CVC has been implicated. It pertains to the import of palm oil by the government of Kerala. This palm oil was meant for the "public distribution system." And our man was then "food secretary" to the Kerala state government. Quite obviously, if profit had not been a dirty word, the trade in palm oil would have been left to traders - and the government would not have entered it. There would have been no food secretary. There would have been no public distribution system. The State would have been "limited" to specific functions - viz., the protection of life, liberty and property. Thus, if we wish to be rid of corruption, we must get rid of this corrupt ideology that enlarges the role of the State. There is little point attacking individuals in the system. After all, how many corrupt people have been brought to book by all the previous CVCs in all these decades?

In reality, the profit motive is the most "innocent motive" of them all. In a competitive market, the only way to earn profits is by satisfying one's customers by providing them goods and services that they prefer over what the competition offers them. "Cheats never prosper" and "honesty is the best policy" are both business ethics. "Brand equity" is highly valued by businesses. Nehru was a "pandit" - but he knew nothing of the wisdom in the Hindu saying, Shubh Laabh.

Of course, it needs to be emphasised that the key to an honest business community lies in Free Competition - and this must include competition from foreigners. But then, this State that Nehru set up, and which his descendants continue to run, has always preferred to offer favours to select businessmen, so as to "protect" them from competition. This is corruption. This is also tyranny - for, as Bastiat pointed out, "competition is liberty, and the absence of competition is tyranny."

To many people, laissez faire capitalism and unilateral free trade seem too "extreme" - and they advocate a half-way house which they call a "regulated market." It is Ludwig von Mises who has thoroughly discredited such ideas - pointing out, among other things, that such regulation (or "interventionism," as he called it) would serve to destroy democracy itself, by converting parliamentarians into representatives of various regulated business interests - for all this regulation would require both legislation as well as bureaucracy. Indeed, this is precisely what he saw unfolding in US democracy in his time. If you click on the label "interventionism" on the right-hand bar, you will find a series of posts I have written against this idea. Laissez faire pits businessman against businessman - and we all gain as consumers. The State is then truly "limited" in its scope. Political and administrative honesty prevail - if the people and the press are vigilant.

To conclude: State socialism in India, which is combined with the Gandhian village vision, is nothing but a plethora of grave intellectual errors. However, their greatest error lies in the sphere of morality. They have confused ideas of good and evil. It is this ideology that we as citizens must dethrone from the commanding heights if we are to be rid of all this rampant corruption, if we are to attain our true potential as a nation, and if we are to save our shattered civilisation.

Recommended reading: My recent column, titled "The morality of free markets."