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Poor in India Starve as Politicians Steal $14.5 Billion of Food (bloomberg.com)
234 points by codelion on Aug 29, 2012 | hide | past | web | favorite | 185 comments

Incidentally, the problematic public distribution system is solved in parts of India, most notably the southern Indian state of Tamil Nadu - http://www.thehindu.com/arts/magazine/article2475948.ece. The estimated loss in Tamil Nadu is 4%, as opposed to over 90% in some states.

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.

My point is why give free food at all?

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.

I can guess from where this sort of, seeing the market as a moralistic play, comes from. Macroeconomics can, via some stretching of the perfect-markets hypothesis, be transformed into this almost-Calvinist cosmology, where the virtuous labourers will be blessed with an eventual retirement, and the sinful free-loaders will be punished with the sin of contentment. I guess you worked hard all your life, too. It's the classic "I think I made it without help so fuck everyone else", plus some missionary fervour, Saint Theresa style: "don't give them free stuff! They must earn it or else they won't see the light!".

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.

Regardless of whether you want to make the market as free as possible, or whether you want as many people to be as well-fed as possible, the long-run solution is the same for both [1]. The more the market is allowed to work, the better off people will be, and the more food they will be able to buy. Welfare systems offer a temporary solution at the expense of long-term growth, and so are overall negatives to making sure as many people can be as well-fed as possible. Importantly, efforts to artificially solve the high unemployment rates will similarly just increase poverty.

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 [2].



While that's all true, sometimes you have to accept some drag on growth to get from here to there. Market solutions take some time to settle out, and people who are hungry today aren't going to wait. Revolutions are a problem when you're trying to construct efficient markets, so as long as the growth arrow is going in the right direction it's probably wise to leave these kinds of programs in place. Presumably as the Indian economy modernizes they can be phased out.

This is a good point, but a contrasting point is that people who are hungry today aren't going to wait until tomorrow to get a job. It is incredibly valuable to be able to cut the benefits, so any cuts that can be made should be taken. Revolutions would happen if a dramatic change came about, such as the welfare programs disappearing overnight; but by market logic, the poor would not riot for welfare if the welfare had never existed, giving them no expectation of it, and giving them a lower likelihood of being poor in the first place. Chances are very high that these programs will never be phased out, and likely never cut in size over time--in the long term, welfare expands to fill the gap of how much the rest of society can afford to comfortably pay. But if they could be phased out, say over a 10, 15, or 20 year period, my judgement is that it could be sociologically workable. That is to say, if there is a level at which people switch from not rioting to rioting when their benefits are cut, you just cut near that level continually until you're close enough to find creative ways to stop sending checks altogether without them noticing.

India was a socialist country from independence, so that expectation has been there already for generations. I agree the best thing to do is phase out the benefits when you can. The trick is actually doing it.

I think there's plenty of evidence that free food does more harm than good in the long run, outside of emergency situations that couldn't reasonably be planned for. In the long run millions of beggars wouldn't have been born in the first place if free food hadn't been available. (That's not to say that beggars are always caused by free food.) Humans aren't much different than ducks in this regard.

> In the long run millions of beggars wouldn't have been born in the first place if free food hadn't been available.

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.

Or, the parents wouldn't have had kids they couldn't feed. The parents wouldn't have starved because, without too many kids, they weren't overly dividing the available food.

I think a civilized society should hold parents responsible for their own kids, outside of true emergencies.

> Or, the parents wouldn't have had kids they couldn't feed.

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.

Being enablers of dysfunctional behavior is an acceptable solution?

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.

I think you might be overlooking the fact that aid does have a long term goal. It's not simply about feeding someone in the short term -- it's to help the impoverished fulfill their most basic needs so that they can go to school, get educated, get a job, and earn a living. If you haven't eaten in three days, you're not going to be in school, you're going to be on the street begging.

As part of a super holistic solution, aid could work, especially when a big chunk is birth control and gov't corruption / dictators are addressed. But today's solutions lead to even greater problems.

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".

Yeah, aid to Africa has proven to be just that. Sub-Saharan Africa has been booming in the last decade at least in part because NGOs have lost interest.

> Being enablers of dysfunctional behavior is an acceptable solution?

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.

>Being enablers of dysfunctional behavior is an acceptable solution?

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.

At some point you have to acknowledge that a substantial portion of your population is in the bottom 10% of the IQ distribution. Holding them to behavioral requirements isn't going to really change their behavior.

> At some point you have to acknowledge that a substantial portion of your population is in the bottom 10% of the IQ distribution.

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.

I don't buy that argument. I think the consequences of having kids one can't feed can be strong enough even in poor countries, to prevent the conception of those kids. Basic forms of birth control should be free (that's way better than providing free food). The least educated, poorest people can understand their usage.

I'm not saying poverty, hunger, and overpopulation aren't problems that can't be solved, but I do think they're more complicated than you propose.

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?

Great points! Yes the problems are complicated.

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.

It is part of a holistic effort. So worry not.


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.

This really isn't true. My dad has spent a big %-age of his life working on family planning in the third world. It's a tremendous challenge getting people to use birth control, even in places without effective food aid.

Everything I've read says it's indeed a tremendous challenge, mainly for religious/cultural reasons. (They don't want to use birth control, and/or they want lots of kids even if they can't support them.) That's why the solution must include consequences for the parents who have children they can't support, like loss of freedom. If the consequences can't be enacted (e.g. it would take war to enact them) it may be best to do nothing and let Nature sort it out. I haven't read of family planning efforts in the third world (as aid from the first world) including such consequences.

You forget that in a poor country, children are not a luxury, but a retirement policy. There certainly isn't going to be any social security for a poor Indian woman, so what does she do? Have four or five children, and hope that one of them survives and does well enough to provide for her when she's older. A food shortage means more babies, not fewer.

If that poor Indian woman sits in prison as a consequence for having kids just to make herself a living, she may not end up with as many children and others may be deterred from following her example. A food shortage needn't mean more babies then. That may seem harsh but the alternative is worse: when you extend your example to its inevitable conclusion there will be millions of Indians dying young, when the amount of free food can no longer grow along with the exponentially growing population.

Sounds great! Except all too many parents are incapable of being responsible for their own kids, either out of apathy or economic inability.

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.

This assumes there are no consequences for such parents. Add strong enough consequences (e.g. loss of freedom) to deter others. A "well-meaning but stretched family" is more likely a set of parents who didn't responsibly plan their family. If that's the case the parents should be punished. (In the US, even the poorest parents can be punished for exposing their kids to lead.)

If we make parenting a birthright (as many people support, esp. for the poorest for some reason), mass starvation is the inevitable result.

[edited] OK - I've gone through your comment history, and can see that you would rather people starved to death than give them food, so I'm not sure there's any point in wasting each other's time in continuing this.

It's an excellent question to bring up, though. You note that a civilized society gives people food if they absolutely need it. Do we then want to be a civilized society?

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?

The real story is, I'd rather less people starve to death than more people starve to death. Mass starvation is the inevitable result of giving the masses free food.

If you feed ducks you get more ducks, until eventually you can't feed them all.

Again, that's theory.

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.

When the first world gives the third world free food, it enables them to see their children as units of labor, which leads to even greater numbers of deaths to famine when (inevitably) not enough free food can be given.

Nope, incorrect.

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.

What I've read says that almost everywhere in the poor areas of the third world, basic birth control is easily available and free, and even the poorest most uneducated know how it works. They just won't use it, for the religious/cultural reasons you noted. If you give them food for free without conditions it just enables them to do what they're already doing, making the problems worse.

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.

In the long run, having so called "Jokers" i.e. people that cause havoc in a given system is a net positive (think murders, con artist, psychopaths). Law still tries to stop them.

OTOH in the very long run, people from India are likely to emigrate and provide cheap labor.

I presume you live or have lived in India? In that case, consider yourself that the people targeted for this earn less than Rs. 25 per day - that is the official poverty line in India. Please consider yourself what you would be able to afford to buy and eat and that price. For yourself and 2 children. If you live in India please attempt to go to a store and buy food for the same price and see what you get.


Context: 25 Rs per day is $0.44 or 0.35 euros.

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).

Check out http://rs100aday.com.

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.

> "My dad always says if you let people be strong they will be strong. Let them be weak and they will be weak."

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.

I know a lot of poor people, and they all share a poor man's mentality, so he must be mainly right. I never been to India, so i am not trying to present myself as an expert, but in Russia, the opportunities are limitless, and yet the vast majority of people are very poor. They make no real attempt to change they life (and those who do almost always succeed), and live in illusions about society, economy, and themselves.

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.

One manifestation of that poor man's mentality is having a lot of children being unable to feed them. Birth control is trivial and affordable to everyone. In Russia it is called 'hey what else you can do except having sex?'

Can you please make a point without passing personal remarks?

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.

So far as I'm aware I haven't attacked you personally - my post is entirely focused on your argument and statements.

> "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.

Read the following classic books (I'm sure there are others) to get a better perspective on why "working hard" itself may be a luxury. They helped me understand better. Good luck!

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.

Ehrenreich's book has been pretty widely rebutted, especially by Adam Shepherd, who wrote his own book. Shepherd started with $25, a sleeping bag, a tarp, and an empty gym bag and ten months later managed to have a job, an apartment, a pickup truck, and $5300: http://en.wikipedia.org/wiki/Scratch_Beginnings

Adam was a SINGLE, male, white, young, healthy, 25-yr old who worked mostly in construction during a construction boom (iirc).

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?

More to the point, Adam was willing to live the way poor people actually live, rather than maintaining unreasonable middle-class lifestyle expectations (living in day motels!?) and whining about how being poor didn't pay the bills like Ehrenreich.

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.

Just to clarify: Barbara also wrote about others she met living in motels because of lack of money for a deposit. She wasn't the only one doing so.

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

It's strange that you refused a scholarship - who knows where that money went (another needy student or another scam). Plus, turning down a reservation only means that you made sure that someone less deserving (via reservation) got an engineering seat over a more deserving one (a general student who otherwise would have ranked just enough to get admitted).

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).

Any time someone gives you something you then have to dance to their tune. Do it on your own and you call the shots.

True. But only in theory. Practically impossible for anybody to call the shots every time.

If you come from a poor financial background, wouldn't it be good financial (and common) sense to accept the scholarship?

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.

That's a conveniently self-fulfilling attitude. People just need to be shown how to be strong. If they still fail, it's because they didn't learn the lesson properly.

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.

Who will be showing them?

You sound like my Republican parents.

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.

So... once upon a time, falling back on others giving you stuff was something to be done as a last resort, when you had no other options. Presumably your parents felt like they had other options.

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.

10k per year is only 'poor' in the US replace that with 1,000$ in 2012 dollars per year and you might have an idea where India considers the poverty line.

Is that adjusted for the different costs of living between the two countries?

Basic food costs, which is most of what we're talking about, don't actually vary that much (if anything, they tend to be cheaper in the developed world due to subsidies). It's true that Indian poor pay much less in rent and clothing. But food makes up the bulk of what they have to buy each day, and they don't get a meaningful discount (beyond assistance programs like the one described in the linked article).

I don't have any statistics on this, but your statement does not match my observations. Even within the US, the exact same product in a Kentucky supermarket will often cost twice as much in a California supermarket. I shop in both and my food costs are dramatically lower in KY.

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.

Yes, basically, the only economic exchange at that point is bulk cheap food and that's at close to the same exchange rates. The real differences is how it's almost hard to be that poor in the US, even though so many people are that poor in India.

PS: There are places where houses sell for less than 1,000$ in the US.

Your parents and the OP are wise.

I'm taking handouts for my education. I'm also on foodstamps to make sure I can eat healthy foods as I learn. When I am done with my educational program (draftsman, and then mechanical engineering), I will be able to support myself and others via taxes.

I am seeking to better myself so I can be a productive member of US society. Is what I am doing wrong?

It's not wrong. Yet if the handouts and food stamps weren't available you can bet your education would cost less. Free stuff enables you and others to pay more, which promotes inflation. In the same vein, easily procurable student loans have made tuition soar.

Yes it might "cost less", but I wonder, he also gets food stamps, do you think (in this case) less would some how be affordable for him? In reality without the handout tuition might cost less, but he still wouldn't be able to afford it and now he would have no alternatives to getting an education when he's clearly motivated. Interested in any thoughts on this.

Suppose you're right, that even with lowered tuition other factors don't go down enough for many people to afford it. This means they don't go to college, this doesn't mean they don't get an education, especially if they're already motivated to learn, and especially in the US where even the homeless can get free access to the internet if they really need it. In your scenario, if the job market continues its insistence on Bachelor's degrees they will find a quickly shortening supply and will have to loosen up that requirement to stay competitive.

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.)

Good question. The existence of food stamps probably makes the tuition more affordable. Before student loans, tuition was affordable on a minimum-wage job. Houses were far more affordable before easy mortgage loans created a housing bubble. There's lots of evidence that easy money of all types causes inflation. But the food stamps cause food inflation more than they do tuition inflation, so they're likely a net benefit in this case.

"Before student loans, tuition was affordable on a minimum-wage job."

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.

Same with my parents. They wouldn't pay for my college based on the belief that I could easily do it myself, after tuition growth had far outstripped general inflation for a couple decades.

If you're on foodstamps then it's because you don't have the ability to work, right? Or are you saying you're healthy and able to work but you're on them?

That is partially true. I am unemployed at this time. I have tried plenty times to gain work I can excel in, and still look/apply.

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.

How is that possibly the root cause of the problem? Right now, there IS enough food to feed these people; it's being stolen before they get it.

"My point is why give free food at all?"

Because these people are starving? Is that not a good reason?

"being stolen before they get it" - nonsense!

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.

>. 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)

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.

I think his point is stealing food redirects it those who need it and can afford it.

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?

It redirects food to people who have the buying power.

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.

How does it shift the supply curve? The food is getting bought from farmers anyways, for cash, they don't give a damn about if it is going to be sold to people in shops, distributed for free, or stolen.


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.

There is no relation to the supply curve. Because there is no change in the price at which the product is purchased from producers.

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).

Ah yes, got it, you are correct. Thank you.

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.

Your assumptions and your logic are faulty.

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.

Free stuff is considered as doing a favor.

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.

"Besides India is such a big country that monitoring these things is nearly impossible."

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.

What are some concrete examples of effectively monitoring things over large areas?

I am not convinced that this makes a useful point. "The problem is corruption" - sure. But adding monitors doesn't seem to address that issue; actually, adding bureaucrats and regulators (which India has in abundance) seems to exacerbate the problem by establishing petty fiefdoms. How many bribes do you have to pay to open a business?

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.

You would be surprised to know, that a majority of the starving people in India are farmers or daily wage laborers doing construction work. The problem is not that people aren't working. It's that their profession doesn't pay enough be able to buy food at the market rates. It's a problem of economic disparity. Food prices fluctuate with the stock market and oil prices, while the poor who have nothing to do with that suddenly have so much lesser purchasing power. While a software developer on the other hand can easily absorb the impact and live without any change in his consumption.

> Because these people are starving? Is that not a good reason?

Probably not.

(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.

> If you do not feed starving people you then have dead people.

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.

You have presented a straw man argument.

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.

> You have presented a straw man argument.

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.

To quote another post earlier in this thread

> 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.

> subsidy and direct-aid programs like this are never meant as a permanent solution

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.

> Because these people are starving? Is that not a good reason?

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.

By this logic, the humane thing to do now is to create a super-virus that kills all humanity. No more human misery, ever. Thanks for that. :)

No, that would be more misery. The least amount of misery is the fewest deaths.

+100 for the reason !

I don't understand this mentality. Even the most developed countries have problems with people going hungry for a variety of reasons. Why shouldn't food be free? Why is it that you must pay to eat? Reducing basic human requirements to dependency on economies and money will always leave some people out. To say that food should not be free is to say that you value wealth and economy over people's lives. In fact, as technology makes it easier to produce more food, we should be using that abundance to provide food to anyone that wants it.

You've read through the entire article which indicates huge levels of corruption, and your conclusion is simply "Giving away things for free/subsidy is the root cause of the problem"?

Because I know corruption is one of the many many issues that resulted in this problem and not the only thing responsible for it. If you were to fix corruption, may be they will be fed this season, but they will hungry in next 6 months.

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.

If income is distributed too unequally, it is extremely common that there just aren't enough jobs to go around at any given time. A wealthy person only needs so many servants. Everyone else has needs too, but if they don't have money to throw around they can't stimulate the economy.

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.

of course, jobs are needed. #1 is food tho- if you are starving then you are unhealthy and not able to take care of yourself . some people are born into poverty and need more of a leg up in the beginning because if they make any mistakes they die. if we make mistakes, we have many legs to stand on, because we are very very privileged. have you ever given to charity or given anything away for free? or have you ever been given something for free?

Giving away things for free is the scheme/blanket the corrupt use to hide their corruption. Removing the blanket may not fix corruption, but it's a start.

That sounds great in theory, but it will take decades to make significant improvements in agricultural productivity (mostly for political reasons) and preventing mass starvation in the mean time is also important.

There are always two way to solve the problem. In this case politician can solve this problem by implementation and execution of plan for increasing the productivity and increasing the jobs. Second plan is to feed them with free food. Second one is easy and give them quick votes, though its dangerous for poor people as well as country.

Again, the food isn't free. It's drastically subsidized.

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.

I agree with you on this.

But the point is this hunger stories reappear after the aid exhausts out. Which means people are not put to work to afford it.

Perhaps, but I should note that India has historically suffered from highly inconsistent monsoons which have lead to famines, as recently as the 1960s. The failure of those monsoons lead to the creation of a PDS system.

This is a question that requires more than a HN post to answer.

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.

----------------------- Side note:

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/)

I agree with you in principle.

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.

Substitute free food for welfare and it might make more sense.

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.

Just to be pedantic: I don't think it's literally free, it's subsidized.

"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.

Well there was a push for retail stores a while back.

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.

This is a very important topic, so to answer many of these points from the canon of modern economics:

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 [1]. As a result, you have supply exceeding demand, and the country suffers as too much labor is put into producing the oversupply.

[1] http://upload.wikimedia.org/wikipedia/en/thumb/e/e9/Surplus_...

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 [2], 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 know.

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.

With government interventions I usually base my reasoning on these facts:

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.

> If we help boost agriculture productivity and work on our economy most people will be able to buy food.

"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.

When's the last time a free market had a famine?

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.)

Famine isn't the issue. A famine is when there simply isn't enough food within a population. The issue at hand is when there's enough food that isn't well distributed, which is a completely different phenomenon.

> Famine isn't the issue.

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?

"It is to the people starving."

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.

Dance around all you want, but we're still stuck with the "inconvenient truth" that poor people in the US are almost always over-fed. They're not starving. (The exceptions are folks who don't like the free food, which makes them a lot like the folks who are homeless because they don't like the free shelter.)

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.)

Why is that an inconvienient truth, exactly? I don't understand why the excellent access to food of the American poor has anything to do with whether the free market can feed everyone.

> I don't understand why the excellent access to food of the American poor has anything to do with whether the free market can feed everyone.

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?

How are the crops doing in the US this summer, btw?

> How are the crops doing in the US this summer, btw?

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.)

We cannot boost agricultural productivity with the current mono/dual crop culture, in a country like India. That's because there's very little 'new' land available for agriculture.

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.

Seems to me like it works if implemented correctly, and that corruption and poor implementation are the root causes.

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.

notion that providing essential services and goods like education, healthcare, and food

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.

World GDP is ~70 trillion. Cost of feeding everyone in the world a healthy diet for 1 year = ~2.5 trillion. Or 3.5% of world GDP to feed everyone on the planet, hmm that may or may not be worth it but food is hardly the backbone of the world economy.

Are you aware that people are dying for lack of food in India? Food is a basic need. Denying food to starving people and letting it rot does not help boost agricultural productivity or help people 'work on our economy'.

When somebody is ill or weak why do give him/her medicine let body recover by itself, may not work most of the time and it will become severe. The whole idea of helping somebody is to recover from that state.

because giving freebies makes people feel good. There are two parts of problems: one is to make people satisfied that they are helping others; another is to help others.

Because it takes years if not decades to improve agriculture and the economy, and people are starving today.

> If we help boost agriculture productivity and work on our economy most people will be able to buy food.

[Citation needed]

"LIVIN' THE GOOD LIFE, CHUMPS, sittin' here on this dirt floor at subsistence level. GOT IT MADE."

where were you till date. World has missed you, so how can you take your opinions further into actions? Or was this a thought bubble which came and went away?

In India, there are several levels of bureaucracy that are involved. The main layer is called the Public Distribution System (PDS), whereby people are issued ration cards and allowed to purchase a certain amount of food at subsidized prices, or in poor families, given it for free. There is a colossal amount of corruption and theft; people simply report grains as sold and sell it on the black market. Due to the immense number of small traders and grocers who take cash and sell stuff without receipts, there are no taxes paid on this, and so everyone involved makes a profit, except for those whom this is supposed to benefit. Also, the sole source of storage are government granaries & silos, where a lot of food has either been found to have rotted, or been stolen. While people on HN are busy reading all the time about various Indian inefficiencies, corruptions and crimes, let us not forget that India's history is a socialist one (and like all socialist economies, the inefficiencies are built into the system - look at Venezuela/Cuba/Argentina/Hungary etc. today), and it is only in the last 20 years that there has been some liberalization and the Indian entrepreneur's spirit has been allowed to flourish. As you can see from all these headlines, there is still a long way to go for free market reforms. There are several sectors like the agricultural sector, energy sector and construction sector, where reforms would help a lot.

My boss once told me fix the cause, not the effect.

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.

If you can buy a Pepsi in every village in India, why can’t the government get us our rations?

This is a quote for the ages.

This actually speaks volumes of the true nature of the problem.

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.

Does anyone keep in perspective that the biggest achievement of independent India is avoiding famines thanks partly to the help of the "rotten" PDS?


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.

Serious question --

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?

I'd say apathy of the masses is the biggest reason that any of the things you mention haven't happened.

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.

>>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.

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.

Not sure what you're getting at but as I mentioned there are way too few people in the weakest sections that they would be able to garner any political muscle.

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.

Sorry, if I could not explain it well. Lets say I am one of those poor affected. This is happening since years. What should I do:

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?

Wow, it is really clear that you have not been poor and/or lived in a scenario where you don't have access to work. How exactly are you going to get the energy and ideas to start protesting when you can't even eat? Or that the work you can find, if any, consumes almost all of your time for little pay? You talk about securing your food for next 6 months, but these people can barely secure their food for the next day or week let alone month. The situation is complicated and will require action and change from more than just the most screwed over people in society, so let's not pretend that the poor can just pull themselves up by their bootstraps, which is what you are advocating.

Here's another free anecdote for you. You seem pretty smart, but you need to think hard about your model of the world. Cancel that Economist subscription (I subscribe, btw) if you need to. :)

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.

Here's what people like kamaal probably think to that sob story (which is sad, no doubt, but I find myself thinking the same thing): is it really that difficult to make a small volume, where you put important things, waterproof? I grew up in a fairly conservative part of the US, and I was in boyscouts when I was younger (only achieved my First Class), I know it's not that hard and children can do it. Same with making a bridge.

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.

> is it really that difficult to make a small volume, where you put important things, waterproof?

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.

Put more straw on that roof.. it is not rocket science

Please see my reply to Jach.

How can someone switch to a better paying job or profession if they don't have the training? And training costs money. Travel also costs money. If you live in an area with a depressed job market, you are often stuck.

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.

> "How come the government hasn't been overthrown yet?"

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.

It happens in India too. There are massive anti-corruption movements in progress. There are also riots, everything exists as else where.

Its just that people by now are so used to all these problems so many of them sort of just go by it.

Unlike elsewhere protests are peaceful. People sit for fast, and that allows the govt. to easily pass away. The whole political system is full of such people!

Corruption, above all else, is the biggest thing holding humanity back, but I wonder if it is possible to cleanse corruption from a society where it is so deeply ingrained?

Are there any good examples of a really corrupt society successfully making the transition to an relatively uncorrupted state?

I would argue that the transition from feudal societies to modern nations is a example for such an transition. On a much shorter timescale, there seems to be quite some variability in corruption[1]. And connecting the plot lines, there seems no show stopper at any value of this corruption metric, so there seems to be no problem in principle to move from a very corrupt society to a uncorrupt one on a timescale of 20 years.

Playing a bit further with the data, the correlation between corruption and GDP is rather impressive [2].

[1] Google public data explorer link: http://bit.ly/PQ12bj

[2] Again Google: http://bit.ly/Ttp24m

Agreed, I was thinking that as well. I wonder if the same factors in transforming those societies all those years ago could be used in the modern world? Or has the world changed so much since then that the same factors could no longer apply?

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.

It would be nice but it's part of human nature. It's simply a form of survival. You'd need an external non human entity to prevent it, which inevitably leads to bad science fiction stories being recalled...

No 'public distribution system' can ever fix any of problems society faces. It just makes government bigger, in the end making things worse. Maybe it's okay in big cities where you give free food to avoid people killing for it, i.e. suppressing crime, but works only in conjunction with strong law enforcement. Nobody is going to become a better/more productive person because (s)he received free food for years.

Everyone has received free food for years: it's called childhood. Saying that just because someone has their most basic needs provided for they won't strive for a better life is preposterous.

This makes me so angry and sad. I see such corruption happening everyday. Uttar Pradesh is a state of 200 million people and one of the most backward and corrupt states.It is another fact that Uttar Pradesh due to the sheer number produces some of the best talent in India and the world. Most of these people migrate out of Lucknow and UP. I wish more of them would come back and try to build companies so that more jobs are created. We just watch from far and lament but do nothing about it. We have made a small start by being based here, and hope we can make an impact.

I have read that there is no rule of law in India, meaning corruption from top to bottom so deep that the average person is living a more and more miserable life.

Appreciate the downmod, would appreciate a reason/discussion about the above even more

I am surprised why nobody has questioned the harsh language in the title. Read it again - Poor starve as politicians Steal - "Steal"?

The market wants people to die.

All we can do is help it decide how many.


this is the real story that really depress me!

thanks to the contention arising due to equitable distribution of food among the states, the grains rots in the godowns again.

another major disadvantage of democracy.

How are hackers supposed to hack it off? I don't understand why such news travels to the top of HN. In case no one has a soln. for it, why write big posts? IF you gotta do something go and do it, i am pretty sure, the ones who are most concerned won't be hanging around here. This seems to me OT.

HN is a place people across the world meet.

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.

According to PG's guidelines, the criteria roughly boils down to whether or not something gratifies your intellectual curiosity. Shall we flood HN with stories of corruption in the Congo, Thailand, Haiti, Russia, Egypt, and so on? Maybe HN should have a weekly feature of poverty-stricken AIDS victims in various countries in Africa? Perhaps title this weekly feature "Poverty Perspectives Beyond the Cubicle"?

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.

I've apparently flagged too many submissions which I thought weren't HN material as last week the flag option disappeared for me. Perhaps flagging a submission is heavy-handed (I rarely used it for comments), but as there's no downvote option on a submission that was the only signaling mechanism.

OMG! i didn't know that. Thanks for enlightening me. But i along with other fellow geeks would want to see more tech stuff than why people have got used to corruption and talks about protests etc.

Most articles on HN are about technical subjects so I don't see why you complain about some discussions which are on others topics. If there are news on India corruption on HN, it's because there is a lot of hackers interested in it. If you're not, just ignore these articles.

Technology has a very direct effect on corruption, and hackers and entrepreneurs are squashing corruption everywhere.

See [1]. 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 [2]. 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..."

[1] Corruption and Technology-Induced Private Sector Development. www.imf.org/external/pubs/ft/wp/2006/wp06198.pdf

[2] Corruption and Technological Progress. www2.econ.osaka-u.ac.jp/coe/dp/dp_no.14.pdf

No disrespect to the people described in the article, but how is this relevant on HN?

First of let me say that I am from India. I have been watching the number of (negative) political posts regarding India on HN for quite some time now[1]

What are the benefits and costs of discussing these issues here on HN?

Some benefits: 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 ( ?? ) Some costs: 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 [2]. 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.

[1]http://www.hnsearch.com/search#request/submissions&q=ind... [2]http://en.wikipedia.org/wiki/Negativity_bias

Such stories shouldn't be flagged according to the submission guidelines.

I concur with [3]. This was also a front page article on reddit which is probably a better suited place for such discussions

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