How well can the democratic form of governance serve as a means by which a society is circumscribed, or restricted in some way? In other words, can self-government be used to enact self-discipline on the body politic itself? Adding another level to this question, can elected representatives be expected to go beyond fixes that are perceived societally as sufficient to redress the underlying causes of governmental, economic, or societal problems? Far from urging or implying the supremacy of non-democratic forms of government, such questions invite improvement in democracy itself. In this essay, I reflect on these questions using India’s industrial policy as a case study.
Faced with economic growth below 6 percent, a budget deficit expected to breach 6 percent of India’s GDP, a possible downgrade in the country’s credit rating to junk status, and the rupee hitting record lows, Sonia Gandhi, the head of the Congress Party, spoke for the first time in late 2012 in support of allowing foreign companies such as Wal-Mart into India. Prime Minister Manmohan Singh and others had been urging her to embrace the reform. Appealing to Sonia Gandhi’s passion for social welfare programs, the prime minister told her that more foreign direct investment would be necessary to expand them. Most notably, the Congress Party boss was pushing a $5.6-billion food-security bill and a rural employment-guarantee program. According to the Wall Street Journal, there was already “high spending on subsidies” at the expense of “growth-generating capital projects.” In effect, the latter get “sub-contracted” in foreign direct investment. Relatedly, the finance minister, P. Chidambaram, issued a plan to reduce the federal government’s deficit and sell stakes the government has in state-owned companies.
Lest Sonia Gandhi’s support be viewed as a panacea, other reforms, such as making it easier to acquire land, remained “stuck in the bureaucracy,” according to the Wall Street Journal. The government’s “mind-set is I will not fix the cause of the issue, I will put a Band-Aid on it,” Rahul Bahsin of Baring Private Equity Partners India said. Indeed, although Walmart would doubtless hire local labor both in the construction and retail-operations of the stores, that foreign-direct-investment alone would not be large enough to make a dent in the social welfare needs of India’s poor. Additionally, the company’s aversion to workers’ rights (not to mention unions) and the related low compensation and benefits for in-store employees could mean additional troubles for Sonia Gandhi as worker groups seek protection from the federal government.
In contrast to these questions, an uncritical approach to the spread of democracy around the world, such as potentially in the “Arab Spring,” could actually exacerbate global problems. If the species continues “un-self-regulated,” meaning more and more over-populated, nature will undoubtedly step in at some point and impose restraint (e.g., famine, climate, war, disease). It may be an open question whether we as a species can stave off such a verdict from Mother Nature. Ironically, our consensus form of government may lessen the odds.
Source:
Romit Guha and Rajesh Roy, “India’s Gandhi Now Backs Overhauls,” The Wall Street Journal, November 9, 2012.