Hello, this is Aftab and it isn’t my real name. If you’ve been reading the Indian blogosphere, you probably know my real name and have plans of hunting down and killing me, so I thought it prudent to post under an assumed name. So here’s my first post, where I wish to name a particular fallacy that guides much of government policy-making after Amartya Sen, the great economist, who committed it, but certainly did not originate it.
Amartya Sen’s logic ran somewhat like this:
1. We need government-run schools because private schools aren’t up to the task
2. But government schools aren’t doing a great job either, the reason is that competition from the private tuitions are taking resources away from them.
3. Hence we should ban private tuitions.
Of course, this style of argumentation has been used so often before that it is perhaps unfair to name it after Amartya Sen. There are many who defend Nehru’s investment in a massive and unproductive public sector on the grounds that the private sector wouldn’t have done all those things. But then why on earth did he then go and introduce industrial licensing that effectively prevented the private sector from setting up the factories that were so urgently needed? The Amartya Sen fallacy of course. Once the public sector was set up, it needs to be protected from ruinous competition. Therefore, the private sector had to be constricted.
I see this fallacy in operation time and again in the oddest of places. When I come out of my office late in the evenings, I see scenes that belong in a black market. A private bus comes near a BEST bus stop and an attendant peers out of the window and loudly whispers “Bhandup, Kanjurmarg” or some such thing, all the while looking around to check if there is a policeman around. People quickly get into the bus, which then speeds away.
What is happening? How did we get into a situation where it is illegal to provide public transport in a city that sorely lacks it? The Amartya Sen fallacy of course. Those buses are licensed to ferry employees for specific companies to a specific railway station. Once they finish their task, they have to go back to their resting place for the night, and of course, the enterprising drivers think that rather than go back empty, they might as well pick up some passengers. But they aren’t licensed to do so, because if they do, they’d be running a general bus service and hence competing with government-provided bus service. So they have to go back empty and a lot of tired commuters have to reach home late. And oh.. remember how the whole idea of planning is to avoid the wastefulness that competition entails?
So remember the Amartya Sen Fallacy the next time you have occasion to consider another harmless seeming government boondoggle. It won’t just waste money. It will also tend to expand to prevent i>others from doing any useful work. Remember that once it is set up, then the ban on private competition to said boondoggle will actually make sense.