Saturday, October 29, 2005

Another blow for Communism, but Indian commies needn't worry

Two Harvard economists Alberto Alesina and Nicola Fuchs-Schündeln have brought out a paper titled “Good bye Lenin (or not?): The effect of Communism on people’s preferences”, in which they present data on East Germany in the period 1945 to 1990 (the communist regime). The study has been receiving a lot of attention because of the conclusions it draws. East Germans, more than West Germans, were in favour of redistribution post-reunification in 1989. This was true more of older Germans who had lived through the heyday of communism. “Is it possible that living under a specific system leads to adaptation of preferences?” This in a nutshell is the basis of their research and the findings veer towards a “yes”. They say, “in fact, we find that the effects of communism are large and long-lasting.”

This provides two immediate inferences, both of which are mentioned in the research paper. One, that the likeness for State stems from the overdependence that people come to rely on in communist regimes. There are fewer tendencies for individual enterprise in a communist state. There is a propensity to blame society at large for one’s distress and so greater acceptance of public intervention. And two, communism comes across as a self-fulfilling prophecy. It creates conditions of deprivation in a society, which demands the very policies, viz. redistribution, state ownership, that further propel misery. In this way, it is a vicious cycle that perpetuates itself.

The study is contemporaneously relevant to us because the UPA government is continually cowed down in its policies by the Left. Whether it is introducing pension reforms or FDI in retail, the Left has mastered the art of giving the Congress top brass sleepless nights to further its ideological agenda. Well, the Left’s gotta do what the Left’s gotta do. What is befuddling is why the Congress is putting up with this intimidation. History will judge them more graciously if they stuck to their guns and relinquished power rather than dilute their agenda with the Left’s able guidance. Mr. Singh, take note. It’s your vision, after all, that is being so casually frittered.

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