Two weeks ago the Government of India launched the National Rural Livelihoods Mission (NRLM), from a policy point of view not very different from the NREGA. Mint wrote a wise editorial on the NRLM on Thursday 16 June, read here.

 

Imagine Frederic Bastiat were invited to the parliament in Delhi to a deliver a lecture on NREGA-NRLM. We leave you with a quote from Economic Sophisms, perhaps this is how Bastiat would have began the talk:

 

 

We have just seen that there are obstacles between our wants and their satisfaction. We succeed in eliminating these obstacles or in lessening them by employing our productive capacities to overcome them. Thus, it may be said, in a very general way, that industry is an effort followed by a result.

But what constitutes the measure of our well-being, that is, of our wealth? Is it the result of the effort? Or is it the effort itself? There is always a ratio between the effort applied and the result obtained. Does progress consist in the relative increase in the first or in the second term of this ratio?
Both theses have had their defenders, and political economists are divided in their opinions about them.
According to the first thesis, wealth is the result of labor. It increases proportionately to the increase to the ratio of result to effort. Absolute perfection, whose archetype is God, consists in the widest possible distance between the two terms, that is, a situation in which no effort at all yields infinite results.
The second contends that effort itself constitutes and measures wealth. To progress is to increase the ratio of effort to result. Its ideal may be represented by the toil of Sisyphus—at once barren and eternal.
Naturally, the proponents of the first doctrine welcome everything that tends to diminish exertion and to increase output: the powerful machines that add to the strength of man; exchange, which permits him to get a better share of the natural resources that are distributed in varying amounts on the face of the earth; intelligence, which makes discoveries; experience, which confirms hypotheses; competition, which stimulates production; etc.
Just as logically, the proponents of the second doctrine welcome everything that has the effect of increasing exertion and of diminishing output: privileges, monopolies, restrictions, interdictions, the suppression of machinery, infertility, etc.
It is well to note that the universal practice of mankind is always guided by the principle on which the first doctrine is founded. No one has ever seen, and no one ever will see, any person who works, whether he be farmer, manufacturer, merchant, artisan, soldier, writer, or scholar, who does not devote all the powers of his mind to working better, more quickly, and more economically—in short, to doing more with less.
The opposite doctrine is the stock in trade of theorists, legislators, journalists, statesmen, and cabinet ministers—men, in brief, whose role in this world is to conduct experiments on the body of society.
Yet it is notable that, with respect to their personal concerns, they act on the same principle as everyone else; that is, they seek to obtain from their labor the greatest possible quantity of useful results.
People will perhaps think I am exaggerating, and that there are no real Sisyphists.
If this means that in practice no one carries the principle to its logical extreme, I willingly agree. This is always the case when one starts from a false premise. It soon leads to such absurd and injurious consequences that one is obliged to stop short. That is why it is never the practice of industry to permit Sisyphism; the penalty would follow the mistake too closely not to expose it. But in the realm of speculation, such as theorists and statesmen engage in, one can cling to a false principle for a long time before being made aware of its falsity by its complex practical consequences, especially in areas with which one is unfamiliar; and when these finally do reveal their origin, one adopts the opposite principle, thereby contradicting oneself, and seeks justification in that incomparably absurd modern axiom: In political economy there are no absolute principles