Tamil Nadu politicians are not any less corrupt than other states. However the PDS has some notable features:
1. It is universal - not restricted to only people below the "poverty line". Thus many people are incentivized to have it work.
2. The PDS "ration" shops are run cooperatively by localities and villages, not private dealers.
3. Simple schemes make it transparent like an SMS that will reply telling you the current stock of a given shop, when new stocks will arrive and so on so that the shop keeper cannot simply cheat you out of your ration.
If we help boost agriculture productivity and work on our economy most people will be able to buy food.
We must avoid giving Freebies. Giving away things for free/subsidy is the root cause of the problem.
First, nobody can pull ten million jobs from their ass. Like, what the fuck do you propose they work on? Should we hire ten or twenty Indians to make us sandwiches that we won't eat? To farm more food that nobody will eat? There's simply not enough demand for labour today. If those people that were starving today were instead fairly rich, and could buy something, yeah, sure, there would be more demand for that labour that could create that something.
Second, we are talking about, like, giving them food. It's not like the developed world sat and decided to give each beggar a Mercedes. Apparently you think barely feeding them for a while will turn them into lazy asses without no ambitions such as, I don't know, an apartment, a car, a 40" TV screen and two or three kids. Maybe so. I don't see how it follows.
This reasoning is separate from the effects of welfare dependence. While they are also important considerations, they are hardly the only ones. The core consideration is as above: there exists a fundamental problem in the market, and throwing money at those most affected by it doesn't solve it, but instead just prolongs it and distributes the issue to those whose money is being thrown. In the long run, things get worse. India's growth is not helped by its programs, but hindered by them; its growth and its poverty levels would be better, not worse, without the programs.
So basically, there's no part of any of the calculus that involves ethics or anything. It's purely that we find, scientifically, that if you want the most people to be the most well-fed, market policies and low/no subsidies are the way to go. See: the Washington Consensus point 2 .
You're right, of course, because their parents would have starved to death.
A civilised society does not allow its citizens to die of starvation. In the long run of course it would be preferable to not have to give out free food, but until there's a viable alternative, that's what a civilised country does.
I think a civilized society should hold parents responsible for their own kids, outside of true emergencies.
While this would be nice in an ideal world, your analysis severely underestimates just how strong the desire to have sex is, and vastly overestimates the ability of someone without education, money, or healthcare to access reliable means of birth control.
In the long run, the enablers and the dysfunctional are equally guilty for destroying the overall society.
At some point, you have to expect members of a society to meet some minimum behavioral requirements in order to be allowed the benefits of that membership.
Search for: Former World Bank economist, Dambisa Moyo argues that the current approach isn't working. In her book, "Dead Aid", she says it has proved to be an "unmitigated political, economic and humanitarian disaster".
It seems for most people the answer is a firm yes. They can't think beyond the short run positive (e.g. free food keeps child alive) to see the overwhelming long run negative (e.g. millions die when free food can't be sustained). When you point out the long run negative you usually get a blank stare or a downvote.
It's funny that some people are fervent believers in Darwinian evolution and at the same time they think an organisms desire to propagate its genetic information is somehow dysfunctional. It's like they disavow the divine yet they can't let go of the idea of divine teleology. I'm not saying creationists are right, I'm just saying that they are ideologically more consistent than most Darwinian evolutionists.
Say what? How can 10% of the distribution be a "substantial portion"? Ten percent is ... ten percent. For a normal statistical distribution, 10% of the IQ distribution is normally 10% of the population as a whole. To see why, ask yourself what percentage of the population is at or below the 50% IQ level. Then, having pictured that, ask yourself how 10% of the population could represent "a substantial portion" without contradicting what's just been demonstrated.
Your remark reminds me of the special conditions in fictional Lake Wobegon, where all the children are above average.
In India, healthcare workers have had trouble convincing villagers to accept free vaccines for diseases like polio because of rumors (with some loose history behind them) that the government is actually trying to sterilize the poor.
Culturally, discussing sex is a very big taboo.
Even in a "first world country" such as the United States, politicians regularly block the availability of contraception on shaky religious grounds.
In the city Mumbai alone, it's estimated that the number of people living in slums could be as high as several million.
People in slums may see having children as a way to increase their potential income (kids can work too), or intake from begging, or as a way to ensure that someone will take care of them in their old age.
Given these issues, how would you roll out a program to provide condoms to the slum dwellers in Mumbai alone, and how do you convince them that they should not have children?
I'm against giving aid that isn't part of a super holistic temporary (even if decades) solution that could conceivably work. Today's solutions have mostly failed; they've made the problems worse.
The Indian villagers may be justified in being wary of the vaccine, because the Indian gov't is highly corrupt. So the holistic solution should deal with the corruption too. If that's too hard to do it may be better to do nothing. The same is true with the larger cultural issues.
I do believe the problems are intractable in many countries. We don't have enough resources to solve them. (Esp. since the US is perhaps the poorest country when our national debt and unfunded liabilities is considered.) So, rather than make the problems worse with nonviable attempts, I think it's best to do nothing and let Nature sort it out.
The point of humanity is to control our destiny and not be left to the vagaries of nature.
Do note : it was assumed that people were on the same page about certain things and they need not be discussed.
For example: so far this discussion has never considered the reasons which lead to the poverty in the first place.
Since you are in disagreement, with the soundness of humanitarian goals, the scope of the discussion changes, quite dramatically.
Does india get redressal for the food and raw materials stolen during British rule?
Do we get repatriation for people sold into slavery?
Can we launch counter attacks on countries which benefited from this? Do we have a claim on GDP output from the UK/France and Portugal?
Your theory of least misery is under the utilitarian school of jurisprudence. It's limits are the same. It fails for situations where actions are unjust but create beneficial outcomes for the majority.
What you are inherently arguing for is using your comparative advantages and somehow letting a portion of people die of starvation, Intentionally.
That is heinous. It is not intellectually sound or risqué,
it is "let them eat cake", just couched in other terms.
You haven't consider the complexities on the ground and have in general hand waved them away. That's being rhetorically empty. Your last comment was that the problems are intractable.
No the problems are hard. Extremely extremely hard.
But thats what entrepreneurship is about - finding the solution to hard problems.
So when you do that, a perfectly well-meaning but stretched family might decide to, say, live in a house with heavy lead contamination. Which, aside from the heavily detrimental effect on the kids, has very large externalities, as children who have been exposed to lead in high concentrations are much more likely to become criminals.
If we make parenting a birthright (as many people support, esp. for the poorest for some reason), mass starvation is the inevitable result.
The core assumption is that it is morally correct to distribute value from the taxpayer base into the hands of those whose lives depend on it. In essence, the many are forced to save the few. This force is measured in terms of the amount of money redistributed; if it costs €10 a month to provide basic food to those who need it, and there are 10 taxpayers for every 1 person who qualifies for welfare, the institution manifests as all people in the country being required to pay €1 per month to contribute 10% of saving a person.
So the core question is, then, what is the moral justification for this force? In what way are people obligated to help their neighbors, such that society has moral grounds to force them to help their neighbors if they don't want to?
If you feed ducks you get more ducks, until eventually you can't feed them all.
We had a population explosion while we were racked by famines and deaths through starvation.
What you are mixing up is first world and third world economics.
In the third world, children are seen as units of labor, and not as units where time, training and money has to be sunk.
There are other reasons for the pop boom, but im hitting only the relevant one.
You are muddling up causation correlation and misinformation here.
Firstly in 3 world economies,skilled labor is a minor section of total available work. Most of the work is manual labor, or artisan ship.
There is simple rational actor logic that makes the correct conclusion that more children means more security.
Add in strong family bonds, a focus on ensuring a male child to carry on your legacy and you have the basis for a pop boom.
All developing economies see children as units of labor. The argument that giving aid is somehow an enabling action is, well,,somewhat funny.
Here is the logic : high infant mortality, low comtraception availability, no family planning, lack of access to loans, children as force multipliers, the need for a male son, male children's obligation to take care of their parents in their old age make the calculus pretty simple.
It's been a while since I read the research on it, but it's there on the web. Search for population dynamics and developing/third world economies I guess.
I'm drinking coffee right now. If someone gives me a dollar without conditions it does enable me to drink coffee, and anything else I choose to do.
OTOH in the very long run, people from India are likely to emigrate and provide cheap labor.
It's hard to imagine a way to survive on two quarters ($0.50) per day. The minimum price for pretty much any quantity of food or drink around here is about $0.79. That doesn't get you very far, and certainly not a whole day.
Suddenly I have a wonderful appreciation for how lucky we are to be born in a context that allowed us to learn to become programmers (and also to make money from it).
2 guys tried to actually live on those amounts and logged everything.
It's really a fascinating experiment and some of the hacks they had to come up with to manage calorific intake were quite stark.
On top of that they describe how they were managing hygiene, transportation and the other necessities of life.
And then they tried to live on rs 32 a day.
I actually come from a pretty poor financial background.
What helped me rise is self esteem to never accept help and learn to be strong instead. In fact right from the beginning I've refused scholarships.
I purposefully turned down the option of reservation for my engineering course though I was perfectly eligible for it.
My dad always says if you let people be strong they will be strong. Let them be weak and they will be weak.
What these people need is not free stuff and reservations. They just need to be shown how to be strong and work their way out of the problem.
This is one of the most stereotypical fallbacks of those who have "made it". It leads naturally to the conclusion that those who are weak are so out of their own accord, which is a laughably false statement.
It is not a position that is hard to understand - assigning moral blame to those less fortunate can be a defense mechanism against the hopeless and helpless injustice we see everywhere.
> "What helped me rise is self esteem to never accept help and learn to be strong instead."
This is nice rhetoric and a feel-good platitude, no better than believing in "the power of the self" or such motivational-speaker BS.
A hallmark of meaningless rhetoric is an inability to generate specificity. I've noticed in your other posts in this thread that this is the case. There are a lot of technically true, but ultimately useless statements.
> "If we help boost agriculture productivity and work on our economy most people will be able to buy food."
How? I think we can all agree that if the economy was booming these people would have work and be able to buy food at fair market value - but you make it sound like "working on our economy" is trivial, or even possible in the short term. Along your logic, if we can just perfect cold fusion and supply free energy to everyone poverty would cease to exist! The devil, as usual, is in the details.
> "This indicates they are not earning enough. So fixing that makes more sense than fixing problems in the free food program."
Again, you're technically correct, but you've conveniently missed the how. The Income Problem is the most fundamentally difficult problem facing governments of our era, particularly in poor countries like India. So unless you have some groundbreaking insight into how this can happen, the statement is empty.
How did it happen that India increased its per capita GDP 4x since independence, and still a lot of people face hunger? It just means many people simply failed to take any action for generations.
Besides you can give every reason under the sun why working hard may not yield to results. Or you can try working hard and see for the results yourself. There will be failures, misfires and hits off target. But with a little trying eventually a person will make it.
> "Besides you can give every reason under the sun why working hard may not yield to results. Or you can try working hard and see for the results yourself."
Again, an empty statement unless accompanied by specifics. It's easy to ask "why don't these people just try hard work?", but the specifics get, naturally, much more complicated.
- What is the realism behind expecting hard, industrious work from a demographic of people who can't even reach caloric break-even each day? How realistic is it to expect severely malnourished and starving people to bootstrap themselves? This strikes me like finding a person who's been stuck at the bottom of a well for days, tossing a rope ladder down, and wondering why they're not climbing. The answer is simple: they have passed the threshold where they can help themselves, but they are not yet past the threshold where they cannot be helped by an outside force.
> "There will be failures, misfires and hits off target."
The consequences of which is quite severe. When we try something and fail, our feelings get hurt, we might lose some money, and maybe we get to pull our belts in a bit tighter for a while.
When the already starving fail, they die. I don't think it's extreme to say that we shouldn't experiment with social policy on the potential deaths of tens of millions.
And this is actually a salient point - subsidy and direct-aid programs like this are never meant as a permanent solution to anything. Nobody is dumb enough to believe this. These programs buy time to find a systemic solution - because it's better to keep these people hobbling along while we try to fix the larger systemic issues that perpetuate their poverty, than to simply let them all die while we tinker with the knobs and switches.
> "But with a little trying eventually a person will make it."
Reality does not support your argument, even in first-world nations. Despite the stereotypes, the USA is full of industrious, hard-working people who have not made it. The entire world is full of industrious, hard-working people who have not made it.
And this is why I think your argument is typical. In order to reconcile your world view (that enough hard work means success) with reality (the vast, vast majority of the world is unsuccessful), one must make the assumption that those who haven't made it have not worked hard enough.
This is a sadly typical view that's as vindictive as it is false.
Everybody Loves a Good Drought: P. Sainath. There's a haunting picture there of an emaciated man who climbs trees to gather toddy. The most poignant thing about it was that he needs protein since he does hard physical labor. The solution is for him alone to eat a couple of tablespoons of fish everyday (no other member of his family gets to do so).
Nickel and Dimed: On (Not) Getting By in America, Barbara Ehrenreich.
This book explains why some poor people have no savings. E.g., they have to live in relatively expensive pay-by-the-day motels instead of apartments since they literally don't have the $500 to put up a month's rent as deposit.
FYI: I have not read this book, but have read reviews of it.
Anyway, the main point here is that lots of poor people with average willpower remain poor because life is just too tough for them. Nobody is saying that it is impossible for a poor person with above-average willpower to become rich.
There is no prejudice against the middle-class person with average willpower who remains middle-class. Why should we shower contempt on the poor who possess only average willpower?
My main point here is that upper-middle-class people who go as far as Ehrenreich to argue that you just plain need an upper-middle-class income to get by are revealing more about their level of decadence than about the plight of the actual working poor. At best it's well-intentioned but patronizing--at worst it's just plain cynical.
Again, an explanation that made sense to me. At the extreme low end (using the analogy of quantum mechanical effects), effects of the lack of money will be different than the effects at a higher income level.
Just speaking for myself: if I had only $40 at the end of the night, I would check into a motel rather than go to a homeless shelter. AFAIK, there aren't an abundance of homeless shelters either, and they are populated by literally mentally ill people and I would be afraid for my safety. Not to mention the question of losing ones dignity by going to a homeless shelter. YMMV.
See also the "30 Days" episode on living on a minimum wage in America: http://movies.netflix.com/WiPlayer?movieid=70129649
While your intent is good, I think you are letting your ego do the talking - dishing out theories over practicals. Practicality beats the st out of theory any given day. Try telling the farmer who hasn't eaten for a week to stand up and be strong - I bet he can't stand (quite literally).
And as hashpipe rightly said, by turning down your reservation seat you probably let a less deserving (mark wise) reservation candidate over a more deserving candidate who probably won't even receive a scholarship let alone the seat. I would even go as far to say that you perfectly gamed the broken reservation system.
No, there's a whole range of factors that play into an individual's economic situation, and skill, intelligence, and "strength" is not the entirety of it.
"They just need to be shown how to be strong" is a convenient line that solves absolutely nothing.
They turned down food stamps when I was an infant, purely due to pride. That, and my dad wasn't even getting paid regularly by his employer. They were living on $10000/yr back in '82.
But "It made them better people".
addendum: I should also add that when I was born in '81, I required craniofacial surgery to the cost of $18000. They were required to make payments on this, to avoid garnishment.
Somewhere along the way the social consciousness changed to more of a "get everything I can get from those 'other people'" as opposed to a "do what I can for myself first". It's not obvious to me that the result is better as a social contract, though it can obviously be better for a particular family.
Now there are definitely social problems when the self-reliance ends up trading off against other public goods (e.g. having your kids well-nourished and educated, not stealing, etc). But if people just want to be self-reliant in reasonable ways instead of falling back on public assistance as soon as they're eligible, I really don't see a problem with that.
In Central America, I found local food prices to be highly correlated with affluence. Food (both served and in markets) in Costa Rica is significantly more expensive than just north in Nicaragua. Rural Panama is a lot cheaper than Panama City. Honduras is generally expensive; Guatemala is generally cheap; but there are zones of relative expense within those countries. Food in general is dramatically cheaper south of the US border, especially if you shop in public markets.
I have not been to India but I am told by friends that food prices are significantly below US prices.
PS: There are places where houses sell for less than 1,000$ in the US.
I am seeking to better myself so I can be a productive member of US society. Is what I am doing wrong?
As a compromise I'd support giving every US citizen a free netbook and rolling out free public wifi that only routes to a subset of the internet with each site hand-approved (or with a sufficiently clever algorithm from Google or someone else) to be "of public utility for learning" rather than entertainment. No facebook, no porn, no games, and education sites will have to host their own videos instead of using youtube (or an education-only youtube clone can appear), at least if they want the free users to see it. If you want the full internet, pay for it, which we already do. (Very inexpensive all things considered.)
That sounds right with what my mother and other relatives say about the old days. She told me; 35 years ago she could go to a university during fall and spring. If she then worked a job or 2 during summer, she could have it paid all off. If she got a campus job as well, she could have had spending money to boot.
Also, due to lack of 'provable education', I can only get jobs that require manual labor (or thereabouts). Also 4 years ago, I shattered my shoulder and have a permanent injury (it is obvious in the way my arm moves).
I was let go recently from a gas station after not being able to repetitively reach across the register.
I have applied for SS disability and medicaid. I was denied for both. I do have my schooling paid for via Vocational Rehabilitation (govt agency that acknowledges permanent physical disability), as well as FAFSA. That is the route I am going, so I can do something as a respectful citizen.
"My point is why give free food at all?"
Because these people are starving? Is that not a good reason?
1) There is an X amount of food and Y number of people in India.
2) Someone is eating that food (let's assume nothing gets thrown out/rots because of corruption: someone who steals food eventually sells it and it gets eaten, not trashed)
Meaning: corruption does not change the supply and demand, so it doesn't impact the prices (total money that is charged for the food in the country). It only changes the hands which get the money. Nobody starves because of the food getting stolen unless, again, the stolen food is either trashed or ends up exported.
That is a simplification. It is both being stolen and it is rotting.
Even the article states that there is tons of food that is rotting/wasting away. If it doesn't mention it, I can give examples of food stock being wasted from as long back as, I think 1970-1980.
Also - Corruption DOES shift the supply curve so "corruption does not change supply and demand" is only true in the land of platonic ideals.
So the problem shifts from corruption to affordability. The free food program exists because they can't afford it. If we can fix the affordability problem, there won't be a need for a free food program and there by corruption related to it won't exist.
These people need to get jobs. But since they don't have it. You may by all means fix corruption and give them free food, but they will hungry again in the next six months. Where will you get free food from, then and till when?
IIRC Mr. A. Sen won the nobel for showing that people starved not because of lack of food, but because of lack of purchasing power.
The wiki page suggests that his findings are being debated though, to be fair.
My google foo is also a bit literal at the moment, and I wasn't able to produce a result which explained what he won his nobel for.
The subsidy/pds is supposed to shift the price of goods down, so corruption does affect the intended price of goods by making them unavailable at the subsidized rate.
That's why I chose the supply curve. Correct me if I got it wrong.
Demand shifts of course (the overall price of the product drops because the stuff that wasn't supposed to make it to the market gets there, but free stuff disappears -> structure changes).
The supply curve is the amount of goods produced at x price.
Since x isn't being changed here for sellers, it doesn't move.
The demand curve does move because of the distorting effects of the subsidy/PDS, and then again because of corruption.
Assumption: Food isn't rotting in India. Google: 'Rotting Food India'
Your logic: Corruption/Theft doesn't change the price of a commodity. You are forgetting that the government has already bought the commodity. Now it is being sold again. This drops the price (still too expensive for the poor) which means that those who can afford food buy at a lower price.
Lower Price = Less Supply
This is elementary because the rice is being supplied once but sold twice. Therefore the farmers are being paid half of what they deserve.
Besides India is such a big country that monitoring these things is nearly impossible. With corruption rampant and lack of accountability, these schemes are designed to fail from their very inception.
What these people need is not food, may be they need it at the moment. But what these people need is a way to make a decent living, which nobody shows them how to- And often we come back and talk about hunger.
I disagree very strongly. Monitoring food distribution scales really well. You add monitors. That's it. If you want concrete examples of effectively monitoring things over large areas I can provide some.
If the monitors themselves are corrupt then the problem is not that somehow monitoring big things is impossible. The problem is corruption.
Edit: For sillysaurus, because he asked. Walmart effectively monitors food distribution over the US. Power companies effectively monitor the power grids over large areas. Electoral commissions (in some countries) effectively monitor elections over large areas.
Short of a massive cultural shift (the kind that only happens when millions of people get murdered), Indian society is what it is. Think of this as a game theory problem - you can't change the players, you can only change the rules of the game, and even that with only limited authority. What approach will accomplish the desired goals?
As an outsider, I get the feeling that an awful lot of Indian public policy starts with the assumption that humans are dutiful and honest. That seems like a problem.
(1) Many of them aren't starving. (The system covers other people, who tend to crowd-out the actual starving.)
(2) The relevant question is "why are they starving". Feeding them typically solves the wrong problem and guarantees that you continue to have starving people.
(3) Such programs tend to reduce local food production, leading to more starving.
The law of unintended consequences doesn't care how good your intentions are.
If you do not feed starving people you then have dead people. This is the end state we wish to avoid. Setting up a system so that you do not need to keep feeding them yourself is a good idea. It does not negate the need to feed them now to avoid them being dead.
There are going to be dead people no matter what you do. However, we can affect how many dead people there are.
My goal is to minimize the number of dead&starving people. Your strategy produces more dead&starving people than my strategy.
What's your goal?
I know that you think that "now" is different, but it isn't. Applying your strategy in the past produced starving people. Why should we keep doing that? ("this time" isn't different.)
I forgot another point, such programs always result in corruption which steals food money from poor people and gives it to rich ones. Why do you support that? (You don't get to point to the good that would supposedly happen if such corruption didn't happen. It does, so if you support the programs, you're willing to accept the corruption and its consequences.)
I don't think that your desire to feel good about yourself justifies policies that are as harmful as yours are.
My idea; feed them now and change the system so they are fed in the future.
Your idea; change the system so they are fed in the future.
You say that your idea creates fewer dead people (or, we should say since every person alive will die, fewer people dying of starvation) than my idea. I disagree.
"I don't think that your desire to feel good about yourself"
Please, please, do not project your moralising onto me. I don't give a fuck how I feel.
For what it's worth, I find myself suspecting that you have the particularly Western faith (and it is a faith) in the mythical free-market as a solution to all problems of supply. I say this because I don't know if it's true or not, and given that I suspect it is, it's only fair to voice it so you can correct me (or not).
Late edit: You choose not to address our differing strategies, or correct any misapprehension I might have about yours (which, as above, seems to be the same as mine, except that I also feed people now) and instead spout more airy, unspecified junk about how my strategy (which is the same as yours, with the addition of food now as well) is harmful without explaining how. Fine. I didn't really expect an addressing of the facts. It's HN all over. Every problem simply must have a clever "hacky" solution that would read well in the Freakonomics blog and magically make everything better.
Not at all. I've described what happens when the different strategies are implemented. Why should we expect anything different this time? If things are going to work out the same....
> "I don't think that your desire to feel good about yourself" Please, please, do not project your moralising onto me. I don't give a fuck how I feel.
You're right. I don't know why you're advocating policies that have such harmful effects. It was wrong for me to attribute to you a positive motive.
I didn't mention the free market and nothing that I wrote depends on a free market.
However, now that you mention it, I'll point out that poor people in the west are fat, not starving.
> And this is actually a salient point - subsidy and direct-aid programs like this are never meant as a permanent solution to anything. Nobody is dumb enough to believe this. These programs buy time to find a systemic solution - because it's better to keep these people hobbling along while we try to fix the larger systemic issues that perpetuate their poverty, than to simply let them all die while we tinker with the knobs and switches.
How long has this program been in place?
These programs waste resources so they're not available to solve the problem. In addition, their supporters and dependents fight to keep them around and will sabotage efforts to make them unnecessary.
That's why there are few things as long-lasting as temporary govt programs.
Certainly not, if/when it's true that giving the free food causes more people to starve in the long run. Less misery is better than more misery, as sad as any misery is.
Corruption is happening inside this free food distribution program.
But why do those people even need free food? Unfortunately this question is never asked. Those people don't have productive jobs to afford it. That is why we always keep hearing of these stories.
Our focus must be to provide them jobs so that they can buy it, instead of making it a free stuff.
The immediate problem here is corruption and a non-functioning law enforcement and court system. The pervasive root problem is actually that a fair amount of Indians don't have the disposable income to create enough jobs for everyone, or to provide for the sick, elderly, or disabled in their communities.
And letting people die or suffer from malnutrition, whether they're productive or not, is just sick.
The PDS system creates a floor price for agricultural produce, ensuring against the vagaries of the market. At th same time it distorts market prices.
Given the inefficiency in the system, and it's lack of gearage which can transmit efficiency benefits to the bottom of the pyramid, the PDS system is an interim measure to help pull the bottom out of poverty.
But the point is this hunger stories reappear after the aid exhausts out. Which means people are not put to work to afford it.
In broad outlines though
1) On the one hand this is our social safety net, and the floor to ensure that farmers are guaranteed a floor price for their efforts
2) We HAVE boosted agricultural productivity, which is why we have stocks which are now rotting.
3) We are stuck (edit: Didn't finish this point) with the legacies of our past. Which include our own step backwards in the 1960s.
4) > We must avoid giving Freebies. Giving away things for free/subsidy is the root cause of the problem.
The food isn't free. Its at a nominal subsidized rate.
The poverty line is about 32 rs a day. This system acts as a social safety net, while also at the same time ensuring a floor price for agricultural produce.
NREGA, a right to work act; may well be digging holes to fill holes. Yet it also is working to support a minimum wage across the country.
Can they be scrapped? Yeah.
Will it be good for India? No, it will likely be a disaster.
The transition from an inefficient, old school system to a modern system will immediately close out entire generations from the economy. No amount of education and retraining will close that gap.
Expect a gradual transition, as alternatives to western systems are dreamt up which work in an Indian context. Some of them are redundant, but are what people will swallow and accept.
Other fun stuff:
Heck forget freebies, you should check out the reverse taxation mechanism that recently got introduced and is applicable from mid year.
The larger firms now are responsible for collecting the taxes they pay for obtaining services! If you work for a large firm and rent a car, if the final bill contains service tax, you are now obligated to pay that service tax to the government separately.
Why? Because the govt knows it can't go after the unorganized sector directly. So they make it inimical for the un-organized sector to remain disorganized.
MNCs will transfer their work to companies like Hertz, or other rent-a-car companies and so on.
Smaller firms will have to register and become compliant to survive.
Widening the tax net, and increase compliance.
At the expense of the more established firms.
Bizarre? Yeah, its par for the course.
2 MBA students actually tried to live at 100 Rs/day and then Rs 32 a day. At the 32 mark, they said travel was out of the question because the calorific/time effort required to move that distance to get to a bus station would have curtailed other equally important activities. (http://rs100aday.com/about/)
But the point in discussion is why do people need to be provided food for free? Clearly if they are not able to buy for a real long time- This indicates they are not earning enough. So fixing that makes more sense than fixing problems in the free food program. Because if we fix the affordability issue we will not need the free food program at the first place.
Yes the distribution system is broken. I think a step to fix that was tried- FDI in retail was good. Companies could buy directly from the farmers, eliminating middle men and the entire inefficient distribution cycle. But I and you know well the political opposition to those reforms.
Also your goal is good in the long term. In the short term we will be taking a lot of stop gap measures to reach that point.
I don't think we have the option for mass production/industrialization to boot strap our unskilled labor.
I know of some people who are building startups aimed at giving people in slums more usable skills - like carpentry, plumbing and so on. Those private sector moves will still bear fruit only to a moderate extent at best in generation N=0.
Its only after we get that to reach N=2 and beyond that it should start making an impact.
In short, for us, its going to be a hugely drawn out battle.
I hope that changes, and I may easily be wrong, looking at things from this scale (mobile VAS could suddenly create tons of alpha for its users or who knows what).
First hand horror stories again:
(Do note I am pro FDI)
A disturbing case that I received second hand was regards how Reliance handled their farmers.
For other HNers, Reliance is a huge (gigantic) Indian conglomerate which does nearly everything.
Reliance encouraged its producers to use a series of crop enhancing pesticides and chemicals which had long term negative impacts to the farmer's land.
At the end of it, the land was fallow. At which juncture Reliance washed their hands of it.
"Companies could buy directly from the farmers": this has nothing to do with FDI in retail. Indian companies are free to do so already. The reason it isn't happening has probably to do with small landholdings, bad public infrastructure like roads, electricity etc. Hence it probably makes sense for somebody to specialize in aggregating the output of multiple producers (aka middleman).
Also transport of goods within India isn't friction-free (AFAIK agri. products can't be transported across states w/o a permit). Yet another opportunity for specialization aka middleman.
These things won't just go away because FDI is allowed in retail. YMMV.
That push ended at the same time those stores got stoned and looted by the various small traders men who were protesting.
2007 link (wow 5 years ago?) http://www.rediff.com/money/2007/may/12ril.htm
Our lack infra wise, is in Logistics and cold chain storage, last I checked.
1. Price floors are net harms to economies. Overall growth and employment is reduced at the expense of artificially bolstering the farming industry, which otherwise would be seeing necessary cuts in jobs and profit margins. Re: American New Deal farm subsidies and Japanese rice subsidies.
2. Oversupplies are offset when the market is fully private, because the price mechanism is a consideration for all participants, not just those who are too rich to qualify for the public distribution system. As a result, Purchasing increases as prices decrease, which India doesn't like allowing.
4. Subsidies and freebies exist on the same continuum; when they mean that the government is paying for some portion of the price of a good, they create price floor pressures. Price floors create surpluses . As a result, you have supply exceeding demand, and the country suffers as too much labor is put into producing the oversupply.
It can be debated all day whether social welfare systems are good or bad, but they are undoubtedly more effective when they support people in very broad ways (such as welfare providing money) rather than narrow ways (such as subsidized food) since the market distortion is more acute when individual industries are subsidized: prices, supply and employment are both distorted. It is natural for countries to reduce the proportion of their population that farms as they grow, and so it's an immediate consequence of that that many farmers need to be allowed to be unprofitable in their farming, so only the most efficient are left.
It is incredibly important that the market be allowed to do its work. Prices need to be allowed to go below the point of profitability for many producers such as farmers, because the industries otherwise become overstaffed and create surpluses, which is a far greater harm in the long run. The same for other employment systems, such as the NREGA you mentioned.
There exists a tradeoff between economic growth and how much the government forces employment over its natural level. If you look at , and replace the y axis with "Economic Growth level" and replace the x axis with "forced employment above natural equilibrium", you'll find that policies like NREGA are working to push India closer to point C than B. The same tradeoff curve exists for farming profit margins versus food distribution efficiency, and many other things.
But this is an excellent economic case, and it goes to show why well-meaning policies that seek to guarantee the welfare of the few that are most disadvantaged end up creating an overall worse effect--they cannot solve problems, they can only redistribute them across the rest of the economy. A population segment that is producing €1 billion under their GDP potential can be uplifted, and produce at that maximum potential, but at the expense of €2 billion of economic harm done to the rest of the economy. The net result is that overall, the country goes nowhere with its efforts to reduce poverty and create growth. So India's public distribution system may feed a million people, but only at the expense of a massive economic inefficiency, perhaps of the size that could have fed 2 million, or more. The net result is that everyone ends up a little hungrier and a little poorer than they would have otherwise been; and to now return to Kamaal's point, we can now see why these freebies and subsidies cause problems in the first place. They create the very poverty they were designed to solve.
The ultimate hallmark of market economics is the recognition that the few can only be saved at the expense of the many. It is only economic and technological growth that ultimately moved entire nation's populations completely above poverty lines, and so all efforts that take away from economic growth to instead give to subsidies and forced overemployment or price floors are also efforts that stop countries from ever moving past those poverty issues in the first place. So saving the few at the expense of the many, over time, undermines your ability to save anyone at all; and countries slide into despair, as those nations that tried the hardest to support the few in theory (such as communist economies) severely underpreform in comparison to free market economies, and eventually disintegrate. India is fortunate to be free enough to avoid that backslide, but it could solve its problems much faster if it were to look to market economics, and allow its problems to solve themselves.
I agree it distorts the market. The theory is sound, and also known. The PM and the FMs definitely know.
In practical terms though, when enforcement and justice dispersal is weak, the best business model is theft.
The point raised, doesn't address/account for the trust deficits, weak enforcement abilities, and uneven power structures which already distort market forces.
On top of that though, you do have social structure and ideologies that are hesitant to embrace full fledged market ideologies.
the politics ofmthe country can currently accept only incremental change.
All in all, the lesson you mention has been learnt, you are watching its implementation. Being carried out, at a rate which doesn't tear a country apart, while members of government actively oppose them.
Income inequality is known to lower growth, and the development of industrial economies occurs concurrent with the growth of the middle class. The oft-praised Scandinavian economies are extensively socialized. However, it's also known that subsidies, benefits, etc. can create harmful disincentives and lower productivity.
So to whatever degree that markets are effective, socialist policies can add benefit within a certain kind of mix that lowers inequality without destroying productivity. And I agree that this doesn't translate directly to subsidies or targeted programs. These kinds of interventions are a powerful tool, but they need to work with the market incentives, not against them. That was the mistake of the Communist concept.
Modern thinking in this realm tends to look towards concepts like basic guaranteed income - instead of affecting firms(which, as we already know, will optimize emotionlessly, ignoring negative externalities) these concepts ultimately rely on the ambitions of the most motivated individuals outweighing the downsides of potential freeloading.
"Most people" simply isn't good enough.
Free markets generally work great for items that are not necessities. Efficiency, variety, and innovation is incentivized. But you always end up with some people who can't afford the items. If they're not a necessity, that's perfectly fine. But food is a necessity, and always having some people who can't afford food is not acceptable.
How often do "not free" markets have famines?
In the US, poor people are fat. They don't lack food. (They don't lack TVs, cars, or houses either.)
It is to the people starving.
> The issue at hand is when there's enough food that isn't well distributed, which is a completely different phenomenon.
As I pointed out, US poor people are fat. Why don't we have distribution problem?
No. Famine means a widespread lack of food. The problem for the people starving isn't famine, because if it was, there would be a lot more people starving. The problem is that they lack food. "Famine" is not a synonym for that.
Why doesn't the US have a distribution problem? Two reasons: 1) we produce so much that it covers up a lot of inefficiencies in the system and 2) widely available government assistance. Despite this, people do still go hungry here.
Where else are the poor as well off? (Inequality does not make someone less well off. Well off is what you have, regardless of what someone else has.)
It's the (mostly) free market that is producing that food at low cost and in such large amounts.
As I asked at the beginning, where do you have both free markets and starving people? I ask because it's easy to find places with starving people, yet they're not uniformly distributed.
And, how many places with not free markets manage to not have starving people and/or the occasional famine?
Not particularly well. We'll have to reduce our exports and draw down some of our reserves.
In other words, our poor people can continue to be fat, not starving. They might buy fewer TVs for a while or reduce the amount of processed calories to handle the extra cost.
We can have several years of bad crops before we'll have a food shortage.
Of course, it would help if we stopped using food for automobile fuel. (The brazilians would love to sell us methanol for less but they don't have an early presidential primary.)
So you have to boost the yield in the existing land and even that doesn't scale really well.
To solve the food problem, we should start eating animals that reproduce really fast, pigs and rodents :), no matter how disgusting it is, to even think about.
The notion that providing essential services and goods like education, healthcare, and food somehow weakens a society or an economy needs to be squashed so that our global society can focus on how to accomplish those basic tasks.
I can see the benefit of free education. When you educate people, it has a multiplicative effect on the mobility of the individuals. Education has the ability to unlock a great deal of potential in each person which has a seemingly obvious benefit for the rest of the society.
I would argue that giving completely free food and healthcare do weaken most societies. The problem is that there's an all-too-large portion of most societies that will avoid working if they can get basic necessities like food, healthcare, and housing met for free.
Working is good for people. It gets them out of bed, gets them thinking, gives some people their only exercise, forces people to deal with others socially, and quite literally keeps some folks out of trouble that they'd otherwise get into if they were completely idle.
I'm all for a safety net to keep people suffering from catastrophic health problems or temporary situations from dying/starving... but the notion that we should make "free food" a policy is just broken.
Free food subsidies are really doomed for failure. This is in part a lack of long term solutions to these problems. Around 12-15 years back in India everybody had something called 'Ration card'. Its there today too, but back then you were eligible for rations at subsidized prices, I remember standing in long queues outside ration shops for wheat, rice, oil, sugar and kerosene. Needless to say these schemes were a legacy of the communist set up that India had for a long time. Realizing that this is not likely to scale. The government now issued new cards called 'BPL cards'(BPL- Below poverty line). That means this wasn't even for the poor, this was for the poorest among the poor. This is failing too. There are also other food schemes, in my state Karnataka, kids in government schools get mid day meals called 'Akshaya Patra'. Which is largely bad food served. Often contracted to some guy who pays the highest bribe. The food is generally unhygienic and lacks nutrition. I think by now everybody must know these free food schemes are a big failure.
The problem is India has huge inefficiencies in agriculture. The farming framework is massively unproductive. There are many reasons for this. Firstly the methods themselves belong to old stone age. Many farmers in villages farm with cows and bulls. Fertilizers/insecticides/pesticides are abused to the core to boost production. Irrigation isn't figured out yet. There are some major dams, but irrigation infrastructure is just totally absent. Droughts and floods are common. We either don't have water when we need it or there is simply too much water and we don't what to do about it. Farming land is subject to division through inheritance.
Apart from this the distribution is broken. Tons of grain rots because its not shipped and transported. Middle men act as a parasites in entire food-supply chain and add no value driving the end consumer prices high.
There are various experiments carried out especially forming communities in villages to encourage building local reservoirs and other efficient farming methods. But this will take a long time.
The political parties are dead opposed to FDI's in retail and farming. There by technology inflow from outside is limited. All this for vote bank politics.
Basically India is reeling under effects of its communist past and is held back because of inefficiencies of its political system combined sum total ignorance among the farmers.
So its not just corruption there are train of issues that result in these sort of problems.
This is a quote for the ages.
The problem is distribution and affordability.
You can buy Pepsi for ten rupees, and the fact that its everywhere talks a lot of Pepsi's distribution model.
I think this article follows a pattern of op-eds in India: the private sector eyes a plump public-sector undertaking. Suddenly there is a series of articles often pointing at the weakest link in the chain - Uttar Pradesh or Bihar is always there to be poster boys of decay, the articles never focus on functional systems in the south, like Kerala or TamilNadu - and then libertarians chime in on how any kind of sharing/caring/government is bad. Lo and behold, due to the weight of public opinion, the sector is sold off - classic crony capitalism.
Stories like this come out of India fairly often.
How come the government hasn't been overthrown yet?
Or severe riots, insurrections, etc?
Seems like that would happen elsewhere, no?
In this article, for instance, only the poorest of the poor are truly starving and the vast majority just doesn't care enough to protest. While the middle classes are too busy with their own lives, the poorest and most disadvantaged people are too busy trying to eke out a basic living to actually protest about it.
Let me try to list some reasons as to why.
India has no real opposition party in the centre or most of the states. Most ruling parties end up having uncontrolled power.
Corruption has become so pervasive in the Indian pillars of governance that we don't really have a Law & Order System anymore. The Police are corrupt and the judicial system is corrupt. Criminals thrive, as long as they have money.
Failure of the Law & Order system encourages corruption in the political class. The times that an opposition party does become a bit powerful, they end up being just as corrupt as the ruling party. Most Indian election candidates use the support of various mafia and unscrupulous businessmen to win elections. Once they win this way, they need to help such people now that they are in power.
Over a period of time, these issues have become so pervasive in the Indian system that today the educated and the middle classes stay away from politics. They live in their own laissez-faire life with private utilities, security and medicine. They pay their taxes but don't expect much from the government in return as long as the government doesn't interfere or hinder them.
The powerful media is too busy and is rarely anti-government because government advertising forms a big part of their revenues. So they don't carry such stories for long. The media has their own pressures since they have to keep circulations high by keeping the prices virtually free.
A section of the civil society had been trying to hold anti-corruption protests in recent times. They started with a lot of support but soon the media lost interest in them and nobody really pays any attention to their rallies anymore.
Now for all these reasons, the middle classes are mostly apathetic to the plight of the poor or the fact that the rich are exploiting the nation.
Oh, common please stop this.
If the poor worried about themselves, they will no longer be poor. Expecting other protest for you, earn for you, farm for you is a thing of the communist past.
Nobody is going to come and do it for them.
Also, your whole idea that only the affected should protest in a society is grossly simplistic and if I might say then naive. A society exists to protect all its members including the weaker sections. This has nothing to do with communism.
Social evils are fought by the society as a whole. Should men not fight for women rights, should straight people not stand up for LGBT rights, what about priveliged races against racism?
I think you need to think your argument through without getting needlessly worked up.
I'm invoking Godwin here but this quote is thoroughly apt.
When the Nazis came for the communists, I said nothing; I was, of course, no communist.
When they locked up the Social Democrats, I said nothing; I was, of course, no Social Democrat.
When they came for the trade unionists, I said nothing; I was, of course, no trade unionist.
When they came for me, there was no one left who could protest.
1. Wait for free food to arrive every six months.
2. Note the pattern that the current job/work/profession is not working out and shift to something else instead.
3. Wait for somebody else to protest for me, and stubbornly insist for a free food package every time my village goes hungry.
If I were the person I will opt for 2).
But I take your point that we must protest. But protest against what? These men are in need of jobs, the maximum we ask for is the government to pass reforms which can create jobs.
Without this we can very well fix corruption and solve this for the moment. But they will need food again in the next six months. Like I said before, now this time where will you get the free food from? and how long will this continue?
Anyway, at an NGO that tries to build skills among the poor, the middle-class employees were all talking happily about how nice it was that it rained the previous night, because it had been a hot few months. One of the trainees then quietly said during the conversation that people like them don't really like the rain, because it pours in through their shanties and RUINS THEIR STORED FLOUR (!!) that they use to make rotis.
The last part was that the thing that nobody (including me) had ever thought about. That takes the suckage due to rain to a whole new level.
If you've never watched the Vice Guide to Liberia (http://www.vice.com/the-vice-guide-to-travel/the-vice-guide-...) you should. One of the things that stood out to me when reflecting on it is the very first few seconds when they're crossing stagnate water likely containing disease and insects carrying disease. There are nevertheless trees around and lots of dirt--why no bridges? In West Point, why no latrines and toilet pits near or on the beach? Why is there so much systematic incompetence?
In the US at least much of the systematic incompetence comes from the fact many homeless people have some form of mental illness. You can excuse these people and by all means help them, some can even become quite "normal" and productive if they have access to medication that helps keep them stable. The rest? It's hard to find much pity for them.
I don't think my attitude here is particularly "conservative" either, but more due to an engineering personality. If there's a problem, fix it. Unfortunately many poor people give in (through culture, religion, or something else) to a sort of defeatism or general acceptance of their suffering, and those that are theoretically capable of imagination and problem solving nevertheless shirk from it. That's what is truly depressing to me.
Obviously, they would started doing so after the rains started. The point of the story is not to say that the poor are too stupid/poor/helpless to figure out how to protect a few kilos of flour.
The point of the story is like quantum mechanics, the effects of events on a poor person will sometimes be surprising and hard for a non-poor person to understand.
Also it would be ridiculous to ignore the mentally ill and disabled living in poverty. Often people can't transition into new lines of work easily because of physical limitations.
The same reason why the Chinese government still exists: hope and the middle class. There is a growing demographic of middle class people whose fortunes improve every year due to a prospering economy. This growth has not really trickled down into the lower classes, but it doesn't matter - so long as the middle class does well, stability exists. Likewise, so long as there is hope for the poor to join the burgeoning middle class, stability exists.
This, coincidentally, is also the greatest challenge facing China. Inevitably the explosive growth will slow down, and there will be no more hope for social mobility. At that point everything is going to go to shit.
> "Or severe riots, insurrections, etc?"
I can't speak for India, but in China there are. You just don't really hear about them because the government has a very tight lid on things, and they are such regular occurrences that they would hardly get much airtime in the West, even if journalists had unfettered access.
Its just that people by now are so used to all these problems so many of them sort of just go by it.
Are there any good examples of a really corrupt society successfully making the transition to an relatively uncorrupted state?
Playing a bit further with the data, the correlation between corruption and GDP is rather impressive .
 Google public data explorer link: http://bit.ly/PQ12bj
 Again Google: http://bit.ly/Ttp24m
Things like much larger populations, greater mobility and communications may make the solution to corruption a lot different today than what worked in the past.
All we can do is help it decide how many.
another major disadvantage of democracy.
Its a place to learn and know interesting perspectives. Just as there have been discussion on inefficiencies of agriculture in the US, fights in McDonalds over glasses and other US political stuff things like this get discussed.
It gives a perspective to people on poverty in the world and how things are else where beyond your cubicle and first world countries.
Stories like these, while tragic, are not new phenomena. Unless one is naive, one should already know that the world is full of corruption and that there isn't anything particularly novel about this brand of corruption. On the other hand, a story about cleverly planted subtle bugs in a high-frequency trading algorithm would make for a great HN story involving corruption since the details would be intellectually gratifying. But plain old selling of supplies meant for the poor? That's been going on forever. How is your intellect gratified by hearing about yet one more case?
That is why probably most people on this thread are discussing agricultural methods, distribution and issues related economy.
Besides you always have a right to flag this.
See . From the abstract - "We provide empirical evidence that strongly shows that technology-induced private sector development is associated with a decline in aggregate corruption.".
Also see . From the abstract - "The paper suggests that societies that continually stay open to productivity-enhancing activities will eventually enter a takeoff stage of anti-corruption efforts..."
 Corruption and Technology-Induced Private Sector Development. www.imf.org/external/pubs/ft/wp/2006/wp06198.pdf
 Corruption and Technological Progress. www2.econ.osaka-u.ac.jp/coe/dp/dp_no.14.pdf
What are the benefits and costs of discussing these issues here on HN?
1. It gives rise to a discussion which hopefully translates to solutions and actions for future
2. It is a nice break from discussing technology ( ?? )
1. HN being an international forum, it gives an idea that India is choke full of problems that nothing good will come out of India .
No wonder latest discussion on India's Mars vision was derided along the lines of "Get food to your people first"
2. It is not of interest to a large number of hackers
3. It is a fertile ground for armchair theorizing.
I am of the opinion these stories should be flagged.