Centrepiece
The sin of pessimism
Colin Welch
In Lyndon Johnson's Great Society, a New Yorker boasted: 'I've joined the war on poverty. This morning I shot a beggar.' Mrs Gandhi's life-long war on Indian poverty, to which many fulsome tributes have been paid, was of a similarly perverse sort. Mr Kinnock's tribute was adorned with the obligatory quotation from 'her friend' Aneurin Bevan: 'political liberty is the by-product of economic suffi- ciency'. Like other Bevanite maxims, this makes as much sense turned back to front, and more still if for the word 'political' we substitute 'economic'. For economic liberty Mrs Gandhi had no time at all, though the otherwise odious Sanjay may have done; so may Rajiv — the two possibilities which, with the Green Revolution, may in part explain whatever in India's present apparent economic success is real.
In her contest against Indian poverty Mrs Gandhi herself scored only own goals. Playing in theory for the other team, she was in fact poverty's greatest ally. To be fair, she did not make India poor: she found it so. She left it not absolutely poorer, but certainly much poorer than it should have been. Among factors impover- ishing India, Dr Roy (in Pricing, Planning and Politics, Institute of Economic Affairs, £1.80) notes a vast and flabby public sector, sluggishly producing everything from beer to wristwatches; subsidised and protected private monopolies; a labyrin- thine system of controls and licences; strict control of imports, including machinery and raw materials, and of exports too, including lizards and robins (a touch here of the ecological Indira?); a hideously costly policy of import substitution; artifi- cially depressed agricultural prices and unbelievable restrictions on inter-state movements of food, both conducive to famine, as is the prohibition of futures contracts in grain; an overvalued rupee; a state monopoly of foreign exchange; poli- cies which favour towns at the expense of the country and (unintentionally) big far- mers at the expense of small peasants; a manic prejudice against middlemen and 'speculators'; a disastrous preference for high-cost, low-quality products; many, many more.
Of all these crass and damaging mis- takes, nearly all of which survive her, Mrs Gandhi was if not the only begetter then the preserver and compounder, or the protector, patron and champion, mistress or slave, of the hordes of left-wing eco- nomists, planners, academic quacks and publicists who dreamed them up. For the existence and perfection of these poverty- mongers we in Britain are bravely to blame. We educated them, or educated their educators. In what passes for econo- mic wisdom in India, we may recognise all the prejudices of the old left-wing LSE, of wiseacres like Laski, Tawney and Cole, half-digested, half-adapted and applied ruthlessly to an economy far less able than our own to bear the consequent misfor- tunes. Idiocies which produce here incon- venience and recession produce there famine and death. We are further to blame for the vast and preponderant civil service we left behind us. Often deemed our finest legacy to India, apart perhaps from the railways, it has been the instrument where- by a straitjacket of controls has been clamped onto the Indian people. Without it the planners would have been helpless. As it is they found it to hand, actually performing already some of the tasks they expected of it.
What hope iS there for effective, liberal and wealth-creating reforms in India? More perhaps under Rajiv than ever under his mother. But he still faces what she faced: the fact that, as Dr Roy notes, 'incumbent politicians, government offi- cials and public sector unions . . . [will] vigorously oppose any reduction in govern- ment intervention in the economy, for feat' of losing the rents and sinecures of the status quo'. Even private industry is opposed to reform. An Indian industrialist told Dr Roy that free trade 'would wipe us out'.
Adelightful young man called me the other day 'a pessimist — perhaps the most pessimistic journalist now writing regularly'. He meant it kindly, he assured me; he affected to enjoy and admire the weekly crop of woe which, watered with tears and fertilised with rich, steaming and evil-smelling gloom, I force from the sandy Prussian plain of my mind. Sugared as it was, I couldn't take the charge com- placently. We are all flattered to be thought the sort of chap who is not deceived by false hopes, deluding dreams, dud prospectuses, insincere promises, con- tricks and improvements which improve nothing (though on the other hand Arland Ussher did once write that 'to expect nothing is to be disappointed twice'). But pessimism is inexcusable. It is forced to reject rational hopes, fruitful dreams, sound prospectuses, genuine offers, prom- ises and improvements. It is only optimism or credulity turned round, just as much a prey to illusions, if of a different and darker kind. Pessimism is a sin, better known under its proper name, despair.
It is particularly inexcusable if you hap- pen to be, say, Prime Minister. I have already tried to defend Mrs Thatcher against odious charges of having willed unemployment and of using it as an instru- ment of policy. I have suggested that it is rather the hateful by-product of her sound money policy, to which 'There Is No Alternative', operating in an economy hideously restricted, rigid and distorted. For these distortions she was in no way to blame; but she will become so, as' time goes by, if she does nothing more to correct them.
She seems in a sense to have swallowed Labour's argument that nothing much can be done about unemployment except mas- sive public spending and borrowing, with renewed inflation to follow. Against such evil quackery she has rightly and courageously set her face. While Labour thus offers false hopes, she offers little or none.
But there are for high unemployment some 'dry' Thatcherite remedies, sharply distinct from anything advanced by gurus like Kindhi and Gandersley. Some of them have been recently laid out for her by Peter Hordern and Michael Fallon,' two of the Tories' most constructive and shrewdest economic thinkers. None of them involves public spending. They are not about job creation but about job-permission, not make-work but let-work or, if you like, laissez-faire. The philosophy behind them was expressed by the manager of Mr Fallon's Darlington unemployment benefit office: 'There's plenty of work about, but very few jobs'. Mr Fallon suggests a right to compete ia the provision of goods and services right across the public sector; a right to set up a business in one's own home without prior permission from anyone; the forced sale of derelict 'hoarded' public land by auction; and, most important, a right to work, a right to underbid all wages fixed by statute, wages councils (which would go), mono- poly or union diktat. Employment protection acts should be suspended for ten years or till six-figure unemployment is attained, whichever the sooner. To this list Mr Hordern adds abolition of the Rent Acts, which would free people to seek work anywhere and 'also give a boost to the ever-complaining construction industry. All these proposals would cause storms. So will high unemployment, with the atten- dant impoverishment and dereliction, la the end. Tories will have to find their own answers to it, or others will apply theirs, far worse. Would the proposals work? TheY would do much good: I am an optimist about that. Will they be tried? I can't share Dr Roy's pessimism, because it is in part self-fulfilling. But a government which was aware of their urgency would surely have tried them already, or would not now clog its programme with relative trifles. Has the sin of despair found a toe-hold even in Mr,,s Thatcher's resolute and sanguine nature. If so, she should chuck it out, as should vve all.
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