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Reply to Parr: Schultz got the 1979 Nobel for Human Capital

Please help make the Manifesto better, or accept it, and propagate it!
This was published one year ago in The Statesman and on IPI.
Mr. Rochard Parr may find it of interest, as may others regarding education
and health as goals of economic policy.

Editor , The Statesman
Statesman House, Chowringhee Place

January 12 1999.

Dear Sir,

In regard to your leader of January 10, advocacy of public primary education
and public health – or investment in ‘human capital’ – has been a constant
theme among all economists from Adam Smith in the 18th Century, to John
Stuart Mill in the 19th to Alfred Marshall in the early 20th.    The
Economics Prize in memory of Alfred Nobel was awarded in 1979 to the late
Theodore W. Schultz (1902-1998) of the University of Chicago recognising his
contributions to the economics of human capital and agricultural economics.
Schultz had led the American Famine Mission to India in 1946, and his 1964
book Transforming Traditional Agriculture was instrumental in altering
policy-thinking in favour of the Green Revolution which followed.   Schultz
also made the formal concept of human capital popular among economists in
1960 in his Presidential address to the American Economic Association, and a
large amount of work has been done since then in the field by many of his
colleagues and students, including Milton Friedman, Gary Becker and Sherwin
Rosen.    It would be highly salutary if, thanks to Professor Sen’s receipt
of the Prize,  our Union and State legislatures in India finally wake up to
the importance of investments in human capital, even though Professor Sen
has been recognised, as he emphasised himself, mostly for his work in the
area of  social choice, a theory originating in the work of Professor
Kenneth J. Arrow of Stanford University.

Yours faithfully

Subroto Roy, PhD(Cantab.)
Vinod Gupta School of Management
IIT Kharagpur
India 721 302.
Email: sroy@vgsom.iitkgp.ernet.in
Phone:  03222 55221 ext 4273.

-----Original Message-----
From: Richard Parr <rjparr@hotmail.com>
To: debate@indiapolicy.org <debate@indiapolicy.org>
Date: Monday, February 07, 2000 2:39 PM
Subject: Re: Some Home Truths

>Please help make the Manifesto better, or accept it, and propagate it!
>You misunderstand. The point I was trying to make is that the social
gains -
>in terms of schooling and healthcare provision - had been made before
>liberal economic policies were introduced. A. Sen discusses this at length
>in 'India: Economic Development and Social Opportunity'. The point is that,
>whilst economic growth may certainly *facilitate* higer social spending,
>political will is still required to ensure the poorest benefit. Sen argues
>for less government intervention in economic areas, but *radical* increases
>in health and education spending, particularly primary services.
>Sorry for not being clearer originaly.
>Richard Parr
>>From: VPanicker@aol.com
>>Reply-To: debate@indiapolicy.org
>>To: debate@indiapolicy.org
>>Subject: Re: Some Home Truths
>>Date: Tue, 1 Feb 2000 10:20:51 -0800 (PST)
>>Please help make the Manifesto better, or accept it, and propagate it!
>>I'd appreciate some evidence to back up your claim that Thailand, Korea
>>Singapore have experienced decreases in life expectancy and literacy since
>>they liberalised their economies.
>>  ---------------------------------------------------------------------
>>  "Left-wing intellectuals, among whom you
>>  are counted, failed to see that outward-looking policies
>>  would soon make Thailand 10-times richer than India,
>>  Korea 30-times, and Singapore almost a hundred-times
>>  richer. You leftists sneered at these countries for being
>>  neo-colonial puppets. The supposed puppets have become
>>  prosperous, literate and healthy, while the system you
>>  espoused has failed on all three counts."
>>  Actualy, these three examples all had far higher literacy levels and
>>  expectancy *before* liberalisation. Only liberalisation accompanied with
>>  higher spending on primary education and basic, preventative healthcare
>>  alow the Indian population to take advantage of the opportunities
>>  globalisation.
>>  >From: Atul Kumar Gupta <atulg@rcf-fs.usc.edu>
>>  >Reply-To: debate@indiapolicy.org
>>  >To: debate@indiapolicy.org
>>  >Subject: Some Home Truths
>>  >Date: Sun, 30 Jan 2000 18:42:57 -0800 (PST)
>>  >
>>  >---------------------------------------------------------------------
>>  >Please help make the Manifesto better, or accept it, and propagate it!
>>  >---------------------------------------------------------------------
>>  >[from moderator: usually, only authors should send in their articles.
>>  >you send in another person's article, pl. send in your comments on the
>>  >article ALONG with the article. This article, however, is superb and a
>>  >read. So it goes thro'. ]
>>  >
>>  >SWAMINOMICS: Home truths for the President
>>  >
>>  >Swaminathan S Anklesaria Aiyar
>>  >
>>  >Dear President Narayanan, Congratulations for telling us
>>  >some home truths in your address on the 50th anniversary
>>  >of the Indian republic. You rightly say that our moth-eaten
>>  >republic has fallen far short of the ideals set by its framers.
>>  >Forgive my rudeness if I point out that you yourself are a
>>  >prominent member of the system that has let us down so
>>  >badly.
>>  >
>>  >You rightly say that 50 years after becoming a republic, we
>>  >should be ashamed of our appalling poverty and illiteracy,
>>  >our mistreatment of women and social and religious
>>  >minorities, the erosion of accountability and criminalisation
>>  >of politics, the sad lack of justice or voice for the common
>>  >man. I agree wholeheartedly with you that the way public
>>  >servants treat the public, the manner in which we squander
>>  >or pollute precious reserves like water, the way we allow
>>  >children to be exploited and the disabled to be passed by,
>>  >all speak of a stony-hearted society, not a compassionate
>>  >one.
>>  >
>>  >But who is responsible for this state of affairs? On this you
>>  >have little to say, and what little you say is incomplete or
>>  >false. Many people, many political parties, many sections of
>>  >society are responsible for the mess we are in. But the
>>  >Congress Party has been at the helm of the country's affairs
>>  >for the overwhelming part of the last half-century, and must
>>  >bear the overwhelming share of the blame for the mess.
>>  >
>>  >You knew this when you retired from the foreign service.
>>  >Yet you joined the Congress. It was a passport to power.
>>  >You rose fast in its ranks, and this helped ultimately elevate
>>  >you to the Presidency. So you have done rather well by
>>  >joining a party which bears the most responsibility for the
>>  >stony- hearted mess that you decry in your Republic Day
>>  >address.
>>  >
>>  >This is a time for home truths. Too many of us have done
>>  >well by joining the existing system instead of opposing it
>>  >from outside; too many of us have compromised with
>>  >corruption, banditry and injustice because it helps us get
>>  >ahead. You are not the only one; I and many fellow
>>  >journalists are also guilty of making too many compromises.
>>  >But you are the President and we are not, so excuse me for
>>  >focusing on you in this column.
>>  >
>>  >You say the three-way fast lane of liberalisation,
>>  >privatisation and globalisation must provide a safe
>>  >pedestrian crossing for the unempowered. Fair enough. But
>>  >why do you not say that this very scepticism about
>>  >economic freedom was the excuse for imposing the neta-
>>  >babu raj which has ruined us? Or that you yourself were
>>  >part of and supportive of that same neta-babu raj which
>>  >castrated economic freedom? You fail to mention that
>>  >poverty and illiteracy dropped much faster in neighbouring
>>  >Asian countries that emphasised the very policies which you
>>  >now warn against. Left-wing intellectuals, among whom you
>>  >are counted, failed to see that outward-looking policies
>>  >would soon make Thailand 10-times richer than India,
>>  >Korea 30-times, and Singapore almost a hundred-times
>>  >richer. You leftists sneered at these countries for being
>>  >neo-colonial puppets. The supposed puppets have become
>>  >prosperous, literate and healthy, while the system you
>>  >espoused has failed on all three counts. I wish you had
>>  >talked about this home truth too.
>>  >
>>  >India today is a land without justice. Nobody is convicted
>>  >for corruption although it is omnipresent. Murderers and
>>  >thieves are not in jail, they are in Parliament. Law-breakers
>>  >have become law- makers. Why? For many reasons, but
>>  >one stands out: The dissipation of government energy on
>>  >issues other than the ones crucial for good governance. You
>>  >socialists saw the prime role of government as being the
>>  >ownership and control of industry and commerce. In your
>>  >eagerness to snatch economic control, you neglected
>>  >primary education and health, administrative fairness, legal
>>  >fairness, and all systems of accountability. Indeed, in the
>>  >name of protecting workers, you created a system where
>>  >no government employee could be sacked for
>>  >incompetence or corruption, thus encouraging both.
>>  >
>>  >In the holy name of socialism, Left-wing politicians imposed
>>  >a thousand controls, and then used these to line their
>>  >pockets and create patronage networks. In the name of
>>  >democracy, ministers obtained the power to transfer any
>>  >official at will, and then used this power to literally sell
>>  >lucrative transfers and make officials accomplices in political
>>  >crimes.
>>  >
>>  >All this was supposed to strengthen socialism and the
>>  >power of the state to do good. In fact it created the callous,
>>  >stone-hearted mess you now complain of. Merit and
>>  >excellence today do not count for much. Money, muscle
>>  >and influence count for much more. This has caused glaring
>>  >inequalities and injustice, not economic freedom. Bihar is
>>  >poor today not because it was neglected in Plan allocations,
>>  >not because it had insufficient quotas for dalits or tribals,
>>  >not because of liberalisation or globalisation, but because
>>  >governance there collapsed long ago and shows no sign of
>>  >reviving.
>>  >
>>  >This is the root cause of injustice, Mr Narayanan, and it
>>  >cannot be tackled just by quotas for dalits, tribals or
>>  >backward classes. Justice rests ultimately on good
>>  >governance, not on giving every community a quota in bad
>>  >governance and banditry. There is indeed a case for reverse
>>  >discrimination as a temporary measure, but there is a much
>>  >stronger case for meritocracy and good governance.
>>  >
>>  >Consider two prominent dalits, Mayawati and you.
>>  >Mayawati represents dalit power through quotas,
>>  >maladministration and a division of spoils. You represent
>>  >honesty, meritocracy and dignity. Which of you two
>>  >constitutes the better route to social justice? Your speech,
>>  >surprisingly, suggests that Mayawati is the superior route. I
>>  >much prefer you. I may criticise your policies, but cannot
>>  >fault your professionalism. You have risen to the top not
>>  >through quotas or reservations, but through professional
>>  >excellence. We badly need social justice, but this must
>>  >ultimately be achieved through good governance for all, not
>>  >a division of spoils among rogues of all communities. That is
>>  >a home truth I sorely missed in your Republic Day speech.
>>  >
>>  >
>>  >
>>  >
>>  >
>>  >This is the National Debate on System Reform.
>>  >Rules, Procedures, Archives:

This is the National Debate on System Reform.       debate@indiapolicy.org
Rules, Procedures, Archives:            http://www.indiapolicy.org/debate/