Monday, 13 December 2010
There Is No "Model" Of Liberty
The headline read: "Privatisation is not a solution for development" - and I clicked. Here is what I found.
The finance minister of Kerala, Thomas Issac, while speaking at a three-day annual international conference of the Network of Asia-Pacific Schools and Institutes of Public Administration and Governance (NAPSIPAG) at the Institute of Management in Government in Thiruvananthapuram, said that "privatisation is not a solution for development in Kerala."
What is the solution then, Mr. Minister? - nationalisation? PSUs?
The minister was arguing in favour of the "Kerala Model of Development."
According to the minister, "Development has to be designed in such a manner that emphasis is laid on decentralised participatory governance."
Frankly, this mantra of "decentralised participatory governance" is NOT what they practise. Kerala - like all our other states - has a State Planning Board, and two of its Members participated in these discussions. There is a Central Planning Commission in Delhi. Ours is a centralised State. The political parties are centralised. So is the bureaucracy.
Since only politicians and bureaucrats engage in State Planning, this is always "authoritarian."
It is The Market, on the other hand, that is completely "de-centralised," for its ultimate driving force is The Individual, in his capacity as a Consumer. Whereas he is alone, the fact remains that all the "higher" actors - the entrepreneurs, the technologists, the capitalists - they are trying to succeed by anticipating as well as satisfying the future needs of consumers as a "class." Consumers are "served" in markets - not "ruled."
The extremely worthy goal of "development" - which is an "economic goal" - can ONLY be accomplished by The Market.
"Economic development" in The Market is is an Individual Economic Achievement. It is based on Individual Knowledge.
These Individual Economic Achievements fund Taxation - which funds "State welfare" - which is something else. Welfare is NOT an "economic achievement."
The minister says, "the State would have to shift its development path with stress on knowledge-based and skill-based industries."
Earlier, I have quoted him saying, "Development has to be designed in such a manner that emphasis is laid on decentralised participatory governance."
As the italicised portions above show, this very "idea" is Centralised. Some Centralised Mind has to "design" development and "shift this path."
But all entrepreneurship and speculation is about The Future!
The Market works to satisfy almost all our myriad needs, because there are billions of individuals trying to satisfy future needs of "the masses" - all the unknown strangers out there.
In this market-based exchange order, "knowledge is fragmented."
That is why it works.
For the Future.
And "Five-Year Plans" are also about a future - the future thought of by a Centralised Mind.
Kerala "exports" its literate youth. There are no opportunities for them to make "economic achievements" in their own state. A good country attracts immigrants. People flee from bad countries. People have been fleeing communist Bengal for decades now. Millions tried to flee communist East Germany - and were shot!
The Kerala Model of Development doesn't work. It doesn't work because it is a State-based model. This "knowledge" - this "idea" - is false. It is the idea of the State as a "mastermind."
"What cannot be known cannot be planned," said Hayek, about this "idea."
Liberty is not a "model."
Liberty frees the Individual Mind - to plan the future of its proprietor. With its own "fragment of knowledge" - and many uncertain guesses about the unknown and unknowable future. Free to "speculate."
The process of knowledge acquisition is itself largely "speculative" - as students attempt to guess which course of study will give them the best jobs and careers. Often, they don't succeed - and switch to learning other skills. With rapid technological obsolescence, new skills will have to be learnt many times in one lifetime - and all in The Market. This is the "knowledge economy" that is fast emerging. No one can design a "model" of Liberty. The Market, after all, surprises us each day with new offerings. Liberty will be full of surprises too.