Issue 68 Vol III, July 31, 2008

C O M M E N T

Growth and political stability
Vinod Anand

THERE exists a strong relationship between a country's development strategy and its political system. Authoritarianism or democracy has an unfailing influence on the pace of development and justice. Political institutions always dominate the fate of nations in many ways. The strategy of economic development pursued by a country is an outcome of its political system, which, in turn, also determines its success or failure.

The rate of economic growth and the level of economic and social development represent the well-being and prosperity of an economy, and political stability indicates the well-being of its political institutions. When one looks at the economy and politics of a country, there arise a number of questions. For example, what is the role of political institutions in economic growth and development? Which kind of political institutions (democracy or dictatorship) helps or hinders economic growth and its "trickle-down" effect? Is there a trade-off between economic, political and civil liberties and economic growth?  What is the role of income distribution, poverty alleviation and other social welfare provisions in determining economic performance?

The conventional economics, somehow, fails to answer these questions mainly because it is devoid of the role of the State or that of political institutions, which are treated "exogenously" in all discussions. The answer can only emerge if the role of the State is treated "endogenously". This is done in what is termed as the "New Political Economy" which is, in fact, a revival of what, at one time back in history, was known as "Political Economy".

The "New Political Economy" unlike the mainstream conventional economics, incorporates government's impact on the economic system and its components, without going into the questions of the development of political systems, constitutions and their processes.  In essence, it accounts for the behaviour of the electorate, the legislatures and the bureaucracy. It is only then that we are able to answer various questions related with the behaviour of the State and its impact on the economic functioning of a given system.

There is a strong relationship between economic growth, capital accumulation and democracy on the one hand, and between political instability and income inequality on the other.

Let us now find answers to the question with regard to the linkages between the well-being of an economy and its political set-up. These answers emerge from the experience of different countries and take the form of distinct hypotheses as given below:

1) Democracy retards economic growth (India's experience up to the eighties).

2. Democracy helps achieving high rates of economic growth.

3. Authoritarian regimes lead to faster economic growth (East Asian experience).

4. Dictatorial regimes lead to poor economic growth (African and Latin American experience).

As the hypotheses are contradictory and inconsistent, the picture is hazy and no categorical conclusion can be made.  Nonetheless, the fact remains that political institutions play a crucial and relevant role in the process of economic growth and development. The way political institutions influence the pace of economic growth is not something which is quantifiable nor it is a matter of trade-off between economic and civil liberties and economic growth.  It is something which is not easy to notice, understand, or explain in concrete terms.  It is, in fact, a subtle relationship, which has to be qualitatively analysed and that too with great caution.

An attempt to reconcile hypotheses (1) and (2) and again (3) and (4) makes it clear that both democratic institutions and dictatorial regimes are practised in different countries in different ways, and it is this variation that makes all the difference to the attainment of economic growth. Countries can be more democratic or less democratic in terms of the basic democratic tenets of regular and reasonably free and fair, multi-party elections and dispensation of economic and civil liberties. It, therefore, follows that in democratic countries, where these two conditions are partly met, other things being given, the pace of economic growth gets retarded, and where these two conditions are honoured, and economic growth gets accelerated. We can make similar statements for dictatorial regimes.

All this leads to the conclusion that whether it is a democracy or a dictatorial regime, what matters is its political stability. The degree of political stability cannot be measured directly. It depends on a number of factors like, political upheavals; riots, strikes and lockouts; crime and (political) assassinations; coups and change of power; infighting amongst political parties; scams including rent-seeking and directly unproductive profit seeking activities; lack of people's faith in the government; poverty and income disparities.

One may use these indices to work out the degree of political stability in different countries/regions over different periods. This would lead to a number of interesting hypotheses establishing a link between the indices of political stability and economic growth.  For example, during the periods of political unrest, or coups, or change of power, or even intense infighting within the ruling party, the rate of growth has been seen to slow down, and even become negative, essentially through lower savings and investment rates, and also through a lack of vision in the part of the bureaucracy.

It is now understood that the magnitude of these activities and political instability reinforce and strengthen each other to quite a great extent with the result that, taken together, they work against the growth process. They require being neutralized, weakened and counter-acted.

Beyond “Rent-Seeking” and “Directly Unproductive Activities”, there are two other explanatory socio-economic factors of political instability that require our attention. These are Poverty and Inequality of income distribution. There is a two-way relation between poverty and political instability in the sense that they lead to each other and are mutually reinforcing.  It is a known fact that poor countries are, by and large, politically unstable. It is also known that political instability is not conducive for saving and investment, and, thus, adversely affects growth efforts which, in turn, perpetuate poverty. The two-way cause and effect link between the two traps the economy into an acute vicious circle.

To say that economic growth would lead to equality of income distribution has became a myth in recent times, though it was an accepted belief during the fifties, when it was thought that in the initial stages of economic growth, inequalities would rise, but eventually they would fall. During that era, countries, therefore, depended on the growth process to attain equality of income distribution. Recent research suggests  that income distribution is a key factor to promote economic growth. There are two ways in which this happens. Income distribution influences growth via its impacts on political stability, and also through other means. For example, unequal income distribution leads to social unrest, which, in turn, creates demands for changes in the status quo. In such situations, savings and investment are adversely affected which imply low growth. Inequality of income distribution has a dampening effect on economic growth through other means as well. It encourages private rent-seeking activities creating distortions in the market-behaviour, which results into poor investment, and thus low growth.

It, therefore, means that apart from adopting an appropriate macro strategy for growth with implications for poverty alleviation, employment generation and social justice, we will have to devise direct programmes targeted at the poor and the lower income groups and aimed to provide them with entitlements, employment and (productive) assets, and also to pursue welfare-oriented minimum needs programmes which aim at improving the social consumption of essential goods and services by the poor and the downtrodden, notably in the areas of health, education, housing, drinking water, and also in a number of other areas through discriminatory pricing and subsidies.

We also have to evolve an optimal mix of new and strong (economic, political, social, and legal) institutions to provide the necessary support for the promotion of growth, prosperity, and social justice. For example, a strong legal system, with an authoritarian regime within the framework of democratic traditions, will play an important role to provide the required built-in mechanisms to correct distortions and malfunctioning in the government as and when they occur. Equally important would be the integrity and political honesty of the people who are at the helm of political affairs.

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American defence spending exceeds rest

AMERICAN defence spending in recent years has either matched or exceeded the military budgets of the rest of the world combined. Presented with that fact, the next logical question is, where is all the money going? The answer is simple: Everywhere. Ali Gharib of IPS follows this money trail from Washington.

In "The Complex: How the Military Invades Our Everyday Lives" (Henry Holt, 2008), Nick Turse carefully follows the money trail of the Defence Department into everything from the traditional players in the defence contractor industry to a handful of Southern catfish restaurants.

The book takes its title from the Military-Industrial Complex -- the one President Dwight Eisenhower warned about on his way out of office, but nonetheless appears to have run rampant since. However, the 'Military-Industrial' part of the moniker was dropped as the armed forces and defence giants have lost their monopoly on the system.

And the 'invasion' that Turse regards as veering into the fabric of U.S. civil life is not simply alarmist rhetoric; the Complex rears its head everywhere from high schools to Hollywood to your local Dunkin' Donuts.

"[T]he DoD [Defence Department] is well tied to the doughnut trade -- more proof of the ridiculously expansive (if not simply ridiculous) reach of the military-corporate complex," writes Turse in "Chapter 8: The Military-Doughnut Complex (MDC)", documenting at least 3.2 million dollars spent on doughnuts in 2005 alone and linking the MDC back to the traditional Military-Industrial Complex with defence contractor Carlyle Group's 2005 purchase of Dunkin' Brands -- Dunkin' Donuts' parent company.

The doughnut example is typical of Turse's engagement of the Complex. Through an often hilarious acknowledgement of the absurdity, Turse follows all the connections by relying mostly on Defence Department documentation of spending, pulling key dollar amounts and other figures from what must have been a painstaking research effort.

The book begins with a fictitious (but completely realistic) "day in the life" of a typical U.S. citizen and all their contacts with the Complex, proffering a nifty chart of food brand names and their associated parent companies -- all of them DoD contractors. Even if a reader skips over the numerous charts throughout the book, they will understand the broad reach of the Pentagon; this first chart has two columns and runs three full pages.

Next, Turse tears through the "old-school" Complex of defence contractors like Boeing and Lockheed Martin. Three of the top five contractors when Eisenhower made his famous speech remain at the top of the list, and Turse notes that consolidation has created an alarming monopoly for many of the firms -- "a 2003 Pentagon report found that the fifty largest defence contractors of the early 1980's have become today's top five contractors," he writes.

Then there's the traditional Military-Academic Complex, which Turse reveals as going far beyond the military's own university systems and into the "increasingly militarised civilian university". The Massachusetts Institute of Technology, for example, pulled in a cool 600 million dollars in Pentagon research and development contracts just in 2005.

"The Pentagon has both the money and the muscle to alter the landscape of higher education, to manipulate research agendas, to change the course of curricula, and to force schools to play by its rules," warns Turse before launching into the real crisis, whereby augmenting the U.S.'s military might may go against the raison d'etre of universities -- places for free thought -- and "gives the idea of the ivory tower, or perhaps now an up-armored titanium tower, new meaning."

But that was the Complex of old, says Turse, and today's Complex has traded in its "olive drab...with the emphasis on drab" for flashier means of reaching its tentacles into the daily comings and goings of U.S. citizens.

The military, with its insatiable need for young men and women to staff its ranks, works hard to up its "cool" factor by cooperating with Hollywood on blockbuster movies. In exchange for access to military equipment, personnel as extras, and authentic filming locations, the Pentagon gets portrayed positively in the final cut.

Or take the military sponsorship of the U.S. stock car racing circuit, NASCAR, which Turse points out has 8.5 million fans at the prime recruiting ages of 18 to 24. In 2005, the army, navy, air force, and marines "spent more than 38 million dollars in taxpayer money to fund various racecars."

Fans of the same age are also likely to play video games, which, in addition to glorifying the military, serve to "pre-train youngsters". So the Pentagon has opened up its programmes developed as training tools to civilian games, hoping to breed strong fingers and quick responses for today's and the future's high-tech computer equipment.

The Complex also still employs its old recruiting network in high schools -- but has loosed it on youth to a new level in line with the recent strains put on the force by retention problems and recent troop-intensive misadventures in the Middle East.

But the most troubling of Turse's chronicle of the spread of militarism through the Complex is the literal invasion of everyday lives -- both at abroad and, shockingly, soon to come locally in the U.S.

Turse offers up as an example a Long Range Acoustical Device that blares at a tone so painfully loud it incapacitates those who hear it. The company producing the weapon was bragging about good test results from the battlefields of Iraq in 2006, but it was apparently already at the ready for the New York Police Department's handling of protests against the 2004 Republican National Convention.

"The only question now is when will its eardrum-shattering tones be brought to bear on civilians in the U.S. 'homeland'?" Turse asks.

In fact, the acceleration into a domestic branch of the Complex has exploded since the attacks of Sep. 11, 2001, when "a previously diminutive arm of the Complex -- the domestic security component -- began to grow at an exponential rate," writes Turse.

Leave alone the NYPD sound blaster, or that the Los Angeles Police have reportedly been using military developed unmanned drones for surveillance, it's not just the Complex showing up in the U.S. 'homeland'; the military itself is getting in on the action.

With the 2002 creation of U.S. Northern Command (NORTHCOM) the Pentagon put "America's homefront" within its military purview.

NORTHCOM has formed domestic links with the CIA and FBI, working on such projects as "report suspicious activity" programmes, providing links via armed services websites, such as the air force.

"Among behaviours that merit the air force's attention," says Turse, "are the uses of still or video cameras, note taking, making annotations on a map, or using binoculars. (Bird watchers beware!)"

"Having garrisoned the globe," Terse writes in his conclusion, "the Complex is returning home in new and unnerving ways." [Courtesy IPS]

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In search of a true Sikh leader
Balvinder

MOST of the Sikh History can safely be termed as turmoil unlimited. The living Sikh Gurus’ period, which incidentally coincided with the Mughal reign, bore the maximum brunt of the imperial repression particularly during its concluding years.

However, throughout most of the repressive period no guru, from the very first to the ninth one, preached or practised non violent methods to counter it. Rather fifth and the ninth Sikh gurus, Guru Arjun dev and Guru Tegh Bhadur, challenged the imperial repression by scarifying their lives without any rancour.

Though the Sixth Sikh Guru did start wearing symbols of royalty to match Mughal chieftains, it was only during the tenth and last living guru’s period that Sikhs virtually took to weapons. And this can well be justified without any doubt or debate.

It is well known that all Sikh gurus, being basically of non-violent and greatly tolerant nature, never used any kind force or allurement to win over people of other faiths. Rather they tackled even those inherently wicked people, who intended to harm them in one way or the other, with sacred sagacity and verbal persuasion.

The stories of such people, ranging from Bhumia chor to Koda Rakshas to Blai Kandhari to Sajjan Thag to Banda Bairagi, who later became ardent followers of Sikhism, are sufficient examples of Sikh Gurus benevolent and forgiving nature.

That is why it goes beyond ones imagination that in this modern and democratic age of full freedom where no one, including Sikhs, has to fight Mughal like oppressors, what prompts the Sikh community, to take to violence.

Brutal aggression, whether it is the recent one that Sirsa/Bathinda area is witnessing these days or the past one that damagingly engulfed not only the whole state of Punjab but the entire Sikh community, can neither be rationally justified nor eulogised.

Since one cannot hope of any goodness from our present day politico-religious leaders who in fact thrive only on divisive designs, (no wonder there emerged a strange voice to support our PM, not on certain bold stand that he has taken, but because of his Sikh-ness), towards whom one should look forward?

Sikh community requires today, rather desperately, some sane leader who, instead of ordering the slaughter of all the inmates of a mental asylum because someone there had pronounced himself as the incarnation of some Sikh Guru, would simply laugh away such a foolishly ignorant act.

Soon after Bhai Makhan Shah Lubana found the true heir, in Guru Teg Bhadur, of the Sikh Guru Gaddi that remained unoccupied for quite some time after the untimely demise of the eighth Sikh Guru, Guru Harkishan, he reportedly went to a roof top  and started shouting Guru Ladho re, Guru ladho re!

Alas, in search of a true Sikh leader today, we can only utter, in extreme desperation; Nahi ladho re, nahi ladho re!

[Balvinder is Former Principal Government College Chandigarh
balvinder.artist@gmail.com, http://ba1vinder.spaces.msn.com]

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