Book Review: ‘The Moon and Sixpence’ and ‘The Magician’ by Somerset Maugham

The Moon and Sixpence is about Charles Strickland, a genius and obsessive painter. For him painting is not just a form of expression but a way of life. Nothing else interests him. A boring person in his 40, living in London leaves behind his family to Paris to focus on painting. Very few understand his paintings or the person, but Strickland does not care as he is driven by the devil painter inside him to get out and the worldly matters such as money, praise do not seem to bother him. Going hungry is routine part of his life as he cannot stick to any job and his paintings do not sell and he is not interested in selling them either so does not put much efforts there. Painting is a compulsion for him, Emotionally he is ruthless. He breaks the family of a friend who helps him and walks away with no sign of remorse. He is a pilgrim on the move. He reaches Tahiti islands and there he accepts a younger wife who does not trouble him in his passion and does not ask him to earn, that is what he wanted from a woman. So he settles down but his solitary life continues, he goes on to create numerous paintings but the leprosy attack shortens his life. Yet he paints till he becomes blind and the death arrives. Fame comes after his death and his paintings fetch great money and become sought after when their creator is no more on this earth.

This story is said to be based on the life of the painter Paul Gauguin. This painting – Fruits and Lemons shown here does get a mention in the novel. That painter himself gives this painting to the doctor who attends him when he gets leprosy.

This novel was first published in 1919 and is said to be one of the best of  what Somerset Maugham had produced. It was also made into a movie with the same title.

Another painting by Paul Gauguin (Source: Wikipedia)

‘The Magician’ is about recreating the life of a real life magician through a novel. Arthur Burdon and Margaret Dauncey live in London and are about to get married. They make a trip to Paris to meet their friends. Arthur being a surgeon has another doctor friend and Margaret has her classmate living there. They get introduced to a magician named Oliver Haddo. An incident leads to rivalry between Arthur and Oliver and the magician plays his tricks to separate Margaret from Arthur and he marries her himself. He takes her away from Paris to multiple places. He then uses her for his experiment that finally leads to death of Margaret. Puzzled Arthur gets to the roots of the evil and in the ensuing fight Arthur manages to kill the magician and destroy his lab. Just five characters make this novel and the last quarter run of this novel is no less thrilling than any Hollywood movie with all its explanation of black magic. When you are done, mentioning the name of Oliver Haddo would scare you for your rest of life, such is the impact of the character author has created in this novel.

This novel was first published in 1908 when the author had developed interest on the subject of black magic. The character of Oliver Haddo was based on the life of Aleister Crowley who wrote an article (published in Vanity Fair) criticizing author of this novel of plagiarism after this novel came out (https://www.100thmonkeypress.com/biblio/acrowley/periodicals/write_a_novel/write_a_novel.htm). Somerset Mougham, author of this novel expresses his regret for not reading what was written by Aleister in the beginning of his novel.

William Somerset Maugham (1874-1965) was trained to be a doctor but the commercial success of his first novel published when he was a medical student helped him become a full time writer. He devoted lot of time to write plays which made him popular and earned him big money. But then he came back to short stories and novels too. He has more the 30 books to his credit. He was born and died in France but his time was spent considerably in London too so he is mostly known as British author. It gets reflected in his novels as well where in central characters shuttle in between in London and Paris.

Gandhi was no economist but yet was better than them

MK Gandhi was trained to be a lawyer and he practiced the same. But the circumstances and his reactions towards them turned him into a political leader. Going by numbers (thirty crore followers during his time), his leaderships was undisputed. Going by purity of soul, he was and is an inspiration to many. But when it comes to economic thoughts, all does not seem to agree. Few (economists of the current times) say, his socialistic approach, preference of labor intensive small scale industries over the big production factories slowed the economic growth of India. I think they grossly miss a point.

Economics says if a good (or a service) can be produced cheap somewhere else (by employing less labor but producing more), that good should be imported and the local market should focus on producing what it is best at. Exchanging the goods helps the economy than trying to be self-reliant. Goods are available at cheaper prices for both parties and it improves efficiency. Theory is sound. Trade is fair but dumping is bad. Predatory pricing by a company can drive all other players out of the market making it a monopoly. Than the prices begin to go up. No further improvement in productivity will help reduce prices as it is not a free market. Laws of economics do not apply there. Check with an insider of steel industry today how much they are suffering from dumping of steel at lower prices from neighboring countries. Before the domestic industry becomes competitive they may get killed. To protect them, Govt. imposes import bans or higher duties etc. It is fair and necessary to protect the interests of the domestic economy. If we did not have our own Govt. and were ruled by someone else, what we would have done?

Before independence, when Gandhi was still not identified as a big leader, England was at the cusp of industrial revolution, its factories were producing surplus, and they had to find newer markets to dump their surplus. What better place than India which was one their biggest colonies for such a dump-trade? Clothing produced there was of better quality, but that killed much of the labor intensive textile industry in India. When Indians were fighting for human rights at that time, how they could have imported a steam engine to drive up productivity? And where was the capital for that? Gandhi fasted for the first time along with textile mill workers for arbitration of their rights in 1918. His struggle for independence began from there and he wanted it to be non-violent. He introduced the spinning wheel not just to produce our own clothing. Spending time at the spinning wheel would teach any one patience and tolerance. And becoming self-reliant would give necessary courage to question and protest dominance of someone else, peacefully. Independence was the first step to economic prosperity. Whatever taxes we pay now get redistributed within India but not so during the times of Gandhi. When poor were going hungry here without jobs, tax was sent (as profit) somewhere else. Gandhi's priorities and the messages were clear. We needed jobs for ourselves and we refuse to pay taxes which do not come back to the same system. Was not this more of a economical fight than political?

Almost two thousand years ago, King Ashoka had ruled the entire India. After that no other King could accomplish the same profile. Even the great Mughals did not rule half of today’s India. It had many languages, cultures. Uniting them was a dream and a gigantic task. But yet there were many common things, much of Indians were poor and most of them were rain dependent farmers living in villages. Gandhi had identified this common social fabric across the lands ruled by the British. His socialistic approach was necessary to unite the people from diverse cultures and mobilize them else India would not have come together. Had a fraction of India fought at a time, it would have become a weak fight and the British had successfully diffused many such attempts in the past. Gandhi traveled extensively to reach all corners with a uniform message of Independent India. Without social integrity, there was no platform for economic prosperity.

When India got its independence nobody had to ask us what the idea of India was as it was already sold to us decades ago by Gandhi. But we did not let him die a natural death. Incredible India! So for what happened in India after 1948, Gandhi cannot be held responsible. He was not alive to tell us to vote for Congress Party or Nehru family. We elected our leaders. Be it Nehru, Indira, Rajiv and now Modi, they all were/are representation of the mindsets of the society which elected them to power. These leaders had all the power to choose what was best for India. If India prospered or not, it is because of the decisions taken by these leaders and the society too is responsible for that.

What Gandhi did was his best given the circumstances in his times. If there was no Gandhi, India would not have been any better than many African countries are now. We owe much to the old man for stopping the economic and moral plight and helping us to fight back.

If we are not at peace with the history, how can we focus on the future?

Global financial crisis: Isn’t it over yet?

In the famous Hindi movie ‘Darr’ there is a scene in which Shah Rukh Khan walks on the edge of a tall building with a flower in a hand and taking out a petal from it at a time and uttering in a staggered manner – “Kiran, tum meri ho (you are mine)” and “Kiran, tum meri nahin (you are not)”. Greece did the exact same thing with Euro zone but unlike in the movie scene, it ended with up with a different choice. Will it be out of Euro and does that mean a steep fall for them? Its banks are already closed for the week and all emergency funding seems to be drying up.  ‘Oh Greece, You are not alone!’ So says Puerto Rico as it is unable to service its debt. (http://www.cnbc.com/id/102794421). That means what we are seeing now would be tip of iceberg and it is difficult to size what is below the water.

Source: http://yalibnan.com/

While Greece is set to pay the price for its mistakes, what will happen to those who lent the money? They will have to take a haircut and write-off the loans as bad debt that causes their balance sheets to shrink too. So both Greece and the countries which lent to them will to have embrace austerity – cut in public spending. Since no economy operates in a silo, economic contraction will spread and it would affect global GDP too.

Source: MarketWatch.com

What is happening in China? Its stock markets are falling sharply. Its central bank reduced rates but it did not help to prevent the fall. If you look at last 20 days chart, you will see Shanghai Composite Index has fallen by 20%. Shanghai Composite Index Yes, it is significant. But if you see the yearly chart, you will notice that it had gone up from 2,000 levels to 5,000 in a relatively short period so a correction was due. But you should not fail to notice that interest rates set by its central bank are the lowest in the last 20 years.

All major economies US, European countries, Japan and now, China are at the mercy of their central banks for their economic revival. But going by history, it seems Central Banks can avert a crisis by choosing to spread the losses over a long term but it takes its own course of time for economic cycle to turn-up.

Japan lost a decade and now some of European countries are going that way. China is slipping into slow growth despite lower rates. Will it be India next? Probably not in immediate future, if we become disciplined with debt and monetary policy. We have the right man in RBI. But will he last? Rajan stays or not, going by global trend, economic contraction leads to inflation in India to slow down as well, triggering RBI to reduce rates again and again.

When the rates are low, savers lose. Borrowers who can use it productively stand to gain (at the expense of savers). If you can find avenues to borrow and use it productively, be ready as a lifetime opportunity is on your way in the coming year. Otherwise get into loans with floating rates now as doing so would become difficult next year. And do your math enough before jumping in as no asset class would hold water when deflation looms.

ಬೆಳ್ಳಿ ತೆರೆಯ ಬಂಗಾರದ ಹಾಡುಗಳು - ಅಂದಿಗೂ ಹಿಟ್, ಎಂದೆಂದಿಗೂ ಹಿಟ್!

ಅಂದೊಂದಿತ್ತು ಕಾಲ. ಅವತ್ತಿಗೆ ರೇಡಿಯೋನೇ ಐಷಾರಾಮಿಯ ಸಂಕೇತವಾಗಿತ್ತು. ಮೂರ್ಖರ ಪೆಟ್ಟಿಗೆ (ಟಿವಿ) ಬರುವುದಕ್ಕೆ ಇನ್ನು ಕೆಲವು ದಶಕಗಳು ಬಾಕಿ ಇದ್ದವು. ಅವತ್ತಿನ ಮುಖ್ಯ ಮನರಂಜನೆ ಎಂದರೆ ಸಿನಿಮಾ - ಬೆಳ್ಳಿ ತೆರೆ. ವಾರಕ್ಕೊಂದು ಸಿನೆಮಾ ನೋಡದೇ ಇದ್ದವರು ಅಪರೂಪ. ಚಿತ್ರದ ಪಾತ್ರಗಳು, ಮುಖ್ಯವಾಗಿ ಕಥೆ ಜನರ ಚರ್ಚಾ ವಿಷಯವಾಗುತ್ತಿತ್ತು. ಕೌಟುಂಬಿಕ, ಸಾಮಾಜಿಕ ಜವಾಬ್ದಾರಿಗಳನ್ನು ಎತ್ತಿ ಹಿಡಿಯುವ ನಾಯಕ ಪ್ರೇಕ್ಷಕರಿಗೆ ಮಾದರಿಯಗುತ್ತಿದ್ದ. ಹಾಡುಗಳ ಸಾಹಿತ್ಯ ಅರ್ಥ ಪೂರ್ಣವಾಗಿರುತ್ತಿದ್ದವು. ಆ ಹಾಡುಗಳನ್ನು ಮತ್ತೆ ಕೇಳಬೇಕೆನಿಸಿದರೆ, ಆಕಾಶವಾಣಿಗೆ ಪತ್ರ ಬರೆದು, ಅಭಿಲಾಷ ಕಾರ್ಯಕ್ರಮದಲ್ಲಿ ಬಿತ್ತರಿಸುವರೋ ಎಂದು ವಾರಗಟ್ಟಲೆ ಕಾಯಬೇಕಾಗಿತ್ತು.

ಮನರಂಜನೆಗಾಗಲಿ, ಸುದ್ದಿ-ಸಮಾಚಾರಗಳಿಗಾಗಲಿ ಎಲ್ಲರೂ  ಅವಲಂಬಿಸಿದ್ದ ಸಾಧನ ರೇಡಿಯೋ. ಮುಂಜಾವಿನಿಂದ ಮಲಗುವವರೆಗೆ ಸಂಗಾತಿ. ಬೆಳಿಗ್ಗೆ ಭಕ್ತಿ ಗೀತೆ, ರೈತರಿಗೆ ಸಲಹೆ, ಚಿಂತನ, ಸಂಸ್ಕೃತದಲ್ಲಿ ವಾರ್ತೆ, ಪ್ರದೇಶ ಸಮಾಚಾರ ಕಾರ್ಯಕ್ರಮ ಮುಗಿದು ಚಿತ್ರ ಗೀತೆಗಳು ಬರುವ ಹೊತ್ತಿಗೆಲ್ಲ ನಾವು ಶಾಲೆಗೆ ಹೊರಡುವ ಸಮಯ. ಸಾಯಂಕಾಲ ಆಟ ಮುಗಿಸಿ ಮನೆಗೆ ಬಂದರೆ ಆ ಹೊತ್ತು ವಾರ್ತಾ ಸಮಯ. ಹೀಗೆ ನಮ್ಮ ದಿನಚರಿ ರೇಡಿಯೋದ ಕಾರ್ಯಕ್ರಮಗಳೊಂದಿಗೆ ಹಾಸು ಹೊಕ್ಕಾಗಿತ್ತು. ನಿಮ್ಮ ವಿಷಯ ಹೇಗೋ ಗೊತ್ತಿಲ್ಲ, ಆದರೆ ನಮ್ಮ ಮನೆಯಲ್ಲಿ ಮಾತ್ರ ಟಿವಿ ಬಂದದ್ದು ನಾನು ಕಾಲೇಜು ಓದುವದಕ್ಕೆ ಮನೆ ಬಿಟ್ಟು ಹೊರಟ ನಂತರವೇ. ಅಲ್ಲಿಯವರೆಗೆ ನಮ್ಮ ಮನೆಯಲ್ಲಿದ್ದ ಏಕೈಕ ಇಲೆಕ್ಟ್ರಾನಿಕ್ ಉಪಕರಣ ರೇಡಿಯೋ. ಹಾಗಾಗಿ ನಮ್ಮ ಮನೆಯವರದ್ದು ಅದರೊಂದಿಗೆ ಭಾವನಾತ್ಮಕ ಸಂಬಂಧ. ಮನೆಯಲ್ಲಿ ಇರುವವರಿಗೆ ಮಾತ್ರವಲ್ಲ. ಹೊಲಗಳಿಗೆ ಹೋಗುವ ರೈತರು ತಮ್ಮ ಹೆಗಲ ಮೇಲೆ ಅಥವಾ ಸೈಕಲ್ಲುಗಳಿಗೆ ಸಿಕ್ಕಿಸಿಕೊಂಡು ರೇಡಿಯೋ ಕೊಂಡೊಯ್ಯುವುದು ಸಾಮಾನ್ಯ ದೃಶ್ಯ ವಾಗಿತ್ತು. (ಆ ರೇಡಿಯೋಗಳಿಗೆ ಬಳಸುತ್ತಿದ್ದ ದೊಡ್ಡ ಸೆಲ್ ಗಳು ಇಂದು ಕಾಣ ಸಿಗುವುದಿಲ್ಲ). ಇಳಿ ಸಂಜೆಯಲ್ಲಿ ಮನೆ ಹಿರಿಯರು ತಮ್ಮ ಮನೆಯ ಕಟ್ಟೆಯ ಮೇಲೆ ಅಥವಾ ಅಂಗಳದಲ್ಲಿ, ರೇಡಿಯೋನಲ್ಲಿ ಸ್ಟೇಷನ್ ತಡಕಾಡುತ್ತ ಕೂತಿರುವುದು ಇನ್ನೂ ಒಂದು ಸಾಮಾನ್ಯ ದೃಶ್ಯ ವಾಗಿತ್ತು. ಅದರಲ್ಲಿ ಬರುತ್ತಿದ್ದ ಹಾಡುಗಳು ದಣಿದ ಜೀವಗಳಿಗೆ ತಂಪನ್ನು ಎರೆಯುತ್ತಿದ್ದವು. "ಹೂವು ಚೆಲುವೆಲ್ಲಾ ನಂದೆಂದಿತು ..." ಎಂದು ರೇಡಿಯೋ ಉಲಿದರೆ, ಒಲೆ ಮುಂದಿರುವ ಹೆಂಗಳೆಯರ ಕೆನ್ನೆ ಕೆಂಪಾಗುತ್ತಿದ್ದದ್ದು, ಒಲೆ ಬೆಂಕಿಗೋ ಅಥವಾ ಹಾಡು ಹುಟ್ಟಿಸುತ್ತಿದಿದ್ದದ್ದ ಭ್ರಮೆಗೋ! ಮುಂದಿನ ಹಾಡು "ಕನ್ನಡ ನಾಡಿನ ಕರಾವಳಿ, ಕನ್ನಡ ದೇವಿಯ ಪ್ರಭಾವಳಿ ... " ಎನ್ನುವುದಾದರೆ ಭಾಷಾಭಿಮಾನದ ಜೊತೆಗೆ ನಮ್ಮ ನೆಲದ ಬಗೆಗಿನ ಪ್ರೀತಿಯೂ ಜಾಗೃತವಾಗುತ್ತಿತ್ತು. "ಯಾರೇ ಕೂಗಾಡಲಿ, ಊರೇ ಹೋರಾಡಲಿ ..." ಹಾಡು ಬಂದಾಗ ಕೊಟ್ಟಿಗೆಯಲ್ಲಿದ್ದ ಎಮ್ಮೆ, ಹೆಮ್ಮೆಯಿಂದ ತಲೆ ತೂಗುತ್ತಿದ್ದದ್ದು ಯಾಕೋ?

ನನ್ನ ಬಾಲ್ಯದ ದಿನಗಳಿಗೂ ಹಿಂದಿನ ಕಾಲದಲ್ಲಿ, ರೇಡಿಯೋ ಮನೆ ಮನೆಗೆ ಬರುವುದಕ್ಕೆ ಮುಂಚೆ, ನಮ್ಮೂರಲ್ಲಿ ಇದ್ದಿದ್ದು ಒಂದೇ ರೇಡಿಯೋ. ಊರಿನ ಹಿರಿಯರ ನೆನಪಿನ ಪ್ರಕಾರ, ಅದನ್ನು ಊರ ಮಧ್ಯೆ ಇರುವ ಬೇವಿನ ಗಿಡಕ್ಕೆ ನೇತು ಹಾಕಲಾಗಿತ್ತು. ಆಗ ಅದರಲ್ಲಿ ಬರುತಿದ್ದ ಜನಪ್ರಿಯ ಗೀತೆ "ನಾನೇ ರಾಜಕುಮಾರ ...". ಅಣ್ಣಾವ್ರು ಅವತ್ತಿನ ಕಾಲಕ್ಕೆ ಜನ ಪ್ರಸಿದ್ದ. ಅದು ಅರವತ್ತರ ದಶಕ. ಪಿ.ಬಿ.ಶ್ರೀನಿವಾಸ್ ರವರ ಜೇನಿನ ಕಂಠದಲ್ಲಿ ಬರುತ್ತಿದ್ದ ಹಾಡುಗಳು "ಆಡುತಿರುವ ಮೋಡಗಳೇ, ಹಾರುತಿರುವ ಹಕ್ಕಿಗಳೇ ...", "ಅಪಾರ ಕೀರ್ತಿ ಗಳಿಸಿ ಮೆರೆವ ಭವ್ಯ ನಾಡಿದು..." ಕೇಳುಗರ ಮೈ-ಮನ ಮರೆಸುತ್ತಿದ್ದವು. ಇತಿಹಾಸದ ತಿಳುವಳಿಕೆ, ಸಾಮಾಜಿಕ ಪ್ರಜ್ಞೆಯ ಜೊತೆಗೆ ಜೀವನದಲ್ಲಿ ಸಾರ್ಥಕ ಭಾವನೆಯನ್ನು ಮೂಡಿಸುತ್ತಿದ್ದವು.  

ಸಮಯ ಸರಿದಂತೆ ಟಿವಿಯ ಅಬ್ಬರದ್ದಲ್ಲಿ ರೇಡಿಯೋ ಕಣ್ಮರೆಯಾಗಿತ್ತು. ಅದರ ಜೊತೆಗೆ ಅದರಲ್ಲಿ ಬರುತ್ತಿದ್ದ ಹಾಡುಗಳು ಮತ್ತು ಅವು ಹುಟ್ಟಿಸುತ್ತಿದ್ದ ಮಧುರ ಭಾವಗಳು ತೆರೆಯ ಮರೆಗೆ ಸರಿದು ಹೋದಂತೆ ಭಾಸವಾಗಿತ್ತು. ಆದರೆ ನೋಡಿ "ಹಾಡು ಹಳೆಯದಾದರೇನು, ಭಾವ ನವ ನವೀನ ...". ಇವತ್ತು ಬೆಂಗಳೂರಿನಲ್ಲಿ ಎಫ್ ಎಂ ರೇಡಿಯೋ ಕೇಳುಗರಿಗೆ, ಹಳೆಯ ನೆನಪುಗಳನ್ನು ಮೆಲುಕು ಹಾಕಲಿಕ್ಕೆಂದೇ ಒಂದು ಚಾನೆಲ್ ಮೀಸಲಾಗಿದೆ. ಅದರಲ್ಲಿ ಕಾರ್ಯಕ್ರಮಗಳನ್ನು ನಡೆಸಿ ಕೊಡುವವರು ಮಾತಿಗೊಮ್ಮೆ ಹೇಳುತ್ತಾರೆ - ಕೇಳಿ, ಬೆಳ್ಳಿ ತೆರೆಯ ಬಂಗಾರದ ಹಾಡುಗಳು - ಅಂದಿಗೂ ಹಿಟ್, ಎಂದೆಂದಿಗೂ ಹಿಟ್!   ಅದರಲ್ಲಿ ಬರುತ್ತಿರುವುದು ಅದೇ ಅಣ್ಣಾವ್ರ ನಾನ್-ಸ್ಟಾಪ್ ಹಾಡುಗಳು. ಪುಟ್ಟಣ್ಣ ಕಣಗಾಲರ ಚಿತ್ರಗಳ ಹಾಡುಗಳು. ಅಷ್ಟೇ ಅಲ್ಲ. ವಿಷ್ಣುವರ್ಧನ್, ಶಂಕರ್ ನಾಗ್, ಶ್ರೀನಾಥ್ ಅಭಿನಯದ ಚಿತ್ರಗಳ ಮರೆತು ಹೋದ ಎಷ್ಟೋ ಸುಮಧುರ ಹಾಡುಗಳು. "ಗಗನವು ಎಲ್ಲೋ, ಭೂಮಿಯು ಎಲ್ಲೋ, ಒಂದು ಅರಿಯೇ ನಾ  ..." ಹಾಡು ನಮ್ಮನ್ನು ಹರ್ಷದಲ್ಲಿ ತೇಲಿಸದೆ ಮುಗಿಯುವುದಿಲ್ಲ. ಕಳೆದ ಅರ್ಧ ಶತಮಾನದಲ್ಲಿ ಜನ ಜೀವನದಲ್ಲಿ ಸಾಕಷ್ಟು ಬದಲಾವಣೆಗಳಾಗಿವೆ ಆದರೂ ಕಾಲದ ತಾಂಡವ ನೃತ್ಯದಲ್ಲಿ ವಿನಾಶಕ್ಕೊಳಗಾಗದೆ ಉಳಿದು ತನ್ನ ಇರುವಿಕೆಯನ್ನು ಕಾಪಾಡಿಕೊಂಡು ಬಂದಿರುವ ರೇಡಿಯೋ ಮತ್ತು ಅದರಲ್ಲಿ ಬರುವ ಸುಮಧುರ ಗೀತೆಗಳು ಚಿರಂಜೀವಿಯೇನೋ ಅನ್ನಿಸುತ್ತದೆ.

Welfare schemes and the argument of Sociology vs Economics

India, like many emerging countries with poor being majority population, doles out many populist welfare schemes. Govt. subsidizes many services from education to healthcare to transportation so poor can afford and the burden on them reduces. It is not just the Central Govt. who regularly launches new schemes; State Govt.’s too do not fall behind in this race. One such scheme offered by State Govt. of Karnataka, distributing Rice at Rs.1 per kg, has become a hot topic of discussion. A noted writer in Karnataka opined that, Govt. should rather provide jobs to its people than subsidizing food grains. Few others hit back saying that those who oppose this scheme do not understand what poverty is and have not suffered the hunger like poor. While everyone agrees ‘teaching how to fish’ is better, supporters of the scheme ask how do you protect the poor from going hungry? They want ‘Sociology’ to be made a priority over ‘Economics’. So is the subject of ‘Sociology’ works against ‘Economics’?

Definitely not as both subjects are completely interwoven and influence each other heavily. Social progress always comes with economic prosperity. And you spoil the economy, there will be social unrest. In statistical terms, they are positively correlated. They do not work against each other. Then why do some people argue of Sociology vs Economics? It is their myopia. They only see immediate impact but fail to see (or rather not interested in) what lies ahead. Promoters of welfare schemes which appear extreme have some other agenda. Political parties who announce such schemes are more interested in shaping the opinions of public in the short term to win elections.

Let us see why many welfare schemes (which are extreme) do not achieve their intention though they seem to be working in the short term. For that we need to see how Govt. finances the subsidies. Govt.’s have incomes in the form of tax collection primarily but there are other incomes such as divestment, profits from the Govt. owned enterprises etc. There would be no problem if a Govt. balances its income with expenditure. Then there is no fiscal deficit. But with the new populist schemes they come up with, they would need additional funds that would demand raising taxes. Any populist Govt. would not raise taxes as it affects their image so they choose to borrow to spend on subsidies. You very well know borrowing and donating would make any super rich a beggar in no time. The same applies to Govt.’s too. For the borrowed money, Govt. will have to pay interest the next year. That would mean effective money available to spend in the next year’s budget will reduce. But Govt.’s will not reduce subsidies. So they will require more funds to be borrowed to keep the schemes going. When our leaders think politics is more about managing in the short term, they do not care about the increasing debt load. They simply roll it over, year after year. But a time will come to repay the debt and if Govt. finds it tough to get new loans, it will go bankrupt. This is what is happening in Greece. When Govt.’s default, disaster strikes their economy. Govt.’s assets will be put for sale at bargain prices but there will be no takers. There will be no more subsidies and unemployment starts bothering even those who work hard. All citizens end up paying the price for the subsidies they had availed. They cannot blame their Govt. as they only elected them to power. After all Govt. is representation of its citizens in a democracy. Now you tell me, do you still think you can achieve social progress by borrowing and funding subsidies?

Let us assume we Indians are sensible than Greeks (in fact we are). And the public debt remains at manageable levels. But yet these subsidies hurt everyone in the form of an invisible tax which haunts the poor more than the rich. It is termed ‘Inflation’. When any money is spent, it should produce the economical equivalent in the form labor, service or physical capital. If those subsidies do not pay back the Govt. in equal measure, it causes deficit. All wasteful expenditures of Govt. causes inflation. As Govt. goes on borrowing spree, it reduces the monetary liquidity in the banking system. When Govt. borrows the most money available in the money market or from banks, there will be less money available in banks to lend to private. Capital costs (interest rates) raise when the demand for capital increases. To ease the liquidity situation, central banks will have to run printing presses. When new money is created without equivalent economic value-add, it increases inflation. If Govt. borrows for foreign land, it affects Rupee that makes imports costlier and flaring up inflation again. Higher inflation coupled with higher capital costs ruins any economy, see how India fared during 2010-2014. Our GDP growth rates halved in that time frame and bad assets increased.

Higher inflation in the last five years has taken the prices up of all commodities, food grains and vegetables. Inflation had supply side problems too but monetary expansion (increasing money supply) had its role as well. Rice which was available at Rs.15-20 a kg five years ago went up to Rs.35-40 a kg by 2015. Now Govt.’s subsidizes rice. But inflation will not spare us. It will make other things expensive. You press a balloon on one side, air moves to the other side. Similarly subsidies funded with debt offer temporary relief but they do not solve the problem entirely. If our house rents go up, will Govt. subsidize it? Is not it better for market forces to take control than Govt. intervention?

Subsidies are for those who are extremely poor and aged who either don’t have means or ability to work. Definitely they are not for those who have affordability. If you have read this post till here, I expect that you would join with me in avoiding buying in subsidized market but rather pay the full price in the open market wherever possible, be it cooking gas cylinders or solar panels. And we would elect those who are sensible with subsidy spending. Poor need not just survive today. They need to live longer too.