Difficulties of being Rich

Extracted from The Soul of Money by Lynne Twist

Extracted by Girish Menon

This was a shocking idea to me. Of course the rich were human and had their woes, but I never thought of them as needy.I could begin to see it now. Their money had brought them material comforts and some level of protection from the inconveniences and impositions of more ordinary everyday life. But their money and the lifestyle of privilege also cut them off from the richness of ordinary everyday life, the more normal and healthy give and take of relationships and useful work, the best of the human experience. Often their wealth distorted their relationship with money and only widened the gap between their soulful life and their interactions around money. Sexual abuse, psychological abuse, addictions, alcoholism, abandonment and brutality are part of the dysfunctional world that hides behind walled communities, mansions and darkened car windows. Hurtful rejections, custody suits, legal battles for the purpose of attaining more and more money harden family members and shut them down from each other. The access to money and power at high levels can amplify these situations and make them even more lethal and unbearably cruel.
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The Toxic Myths of Scarcity

Myths and superstitions have power over us only to the extent that we believe them., but when we believe, we live completely under their spell and in that fiction. Scarcity is a lie, but it has been passed down as truth and with a powerful mythology that insists on itself, demands compliance and discourages doubt or questioning.

Toxic Myth # 1: There's Not Enough

There's not enough becomes the reason we do work that brings us down or the reason we do things to each other that we're not proud of. There's not enough generates a fear that drives us to make sure that we're not the the person, or our loved ones aren't the people, who get crushed, marginalised or left out

Once we define our world as deficient, the total of our life energy, everything we think, everything we say and everything we do - particularly with money - becomes an expression of an effort to overcome this sense of lack and the fear of losing to others or being left out. It becomes noble and responsible to make sure we take care of our own, whoever we deem them to be. If there's not enough for everyone, then taking care of yourself and your own, even at the others' expense, seems unfortunate but unavoidable and somehow valid. It's like the game of musical chairs. With one seat short of the number of people playing, your focus is on not losing and not being the one who ends up at the end of the scramble without a seat. We don't want to be the poor suckers without, so we compete to get more than the other guy, determined to stay ahead of some impending doom.

...As members of the global community, our fear based responses lead us at times - in the demand for foreign oil, for instance - to put our own material desires above the health, safety and well being of other people and other nations. In our own communities, we respond to the fear that there's not enough by creating systems that favor us or exclude others from access to basic resources such as clean water, good schools, adequate health care or safe housing. And in our families, there's not enough drives us to buy more than we need or even want of some things to value, favour or curry favour with people on the basis of their value to us in relation to money, rather than qualities of character.

Toxic Myth # 2: More is Better

More of anything is better than what we have. It's the logical response if you fear there's not enough,  but more is better drives a competitive culture of accumulation, acquisition and greed that only heightens fears and quickens the pace of the race. And none of it makes life more valuable. In truth, the rush for more distances us from  experiencing the deeper value of what we acquire or already have. When we eat too fast or too much, we cannot savour any single bite of food. When we are focussed constantly on the next thing - the next dress, the next car, the next job, the next vacation, the next home improvement - we hardly experience the gifts of that which we have now. In our relationship with money, more is better distances us from living more mindfully and richly with what we have.

More is better is a chase with no end and a race without winners. It's like a hamster wheel that we hop onto, get going, and then forget how to stop. Eventually, the chase for more becomes an addictive exercise, and as with any addiction, it's almost impossible to stop the process when you're in its grip. But no matter how far you go, or how fast, or how many other people you pass up, you can't win. In the mind-set of scarcity, even too much is not enough.

It doesn't make sense to someone who makes forty thousand dollars a year that someone who makes five million dollars a year would be arguing over their golden parachute package and need at least fifteen million dollars more. Some of the people with fortunes enough to last three lifetimes spend their days and nights worrying about losing money on the stock market, about being ripped off or conned or not having enough for their retirement. Any genuine fulfilment in their life of financial privilege can be completely eclipsed by these money fears and stresses. How could people who have millions of dollars think they need more? They think they need more because that is the prevailing myth. We all think that, so they think that too. Even those who have plenty cannot quit the chase. The chase of more is better no matter what our money circumstances demands our attention, saps our energy and erodes our opportunities for fulfilment. When we buy into the premise that more is better we can never arrive. People who follow that credo, consciously or unconsciously, which is all of us to some degree - are doomed to a life that is never fulfilled; we lose the capacity to reach a destination. So even those who have plenty, in this scarcity culture, cannot quit the chase.

More is better misguides us in a deeper way. It leads us to define ourselves by financial success and external achievements. We judge others based on what they have and how much they have, and miss the immeasurable inner gifts they bring to life. all the great spiritual teachings tell us to look inside to find the wholeness we crave, but the scarcity chase allows no time or psychic space for that kind of introspection. In the pursuit of more we overlook the fullness and completeness that are already within us waiting to be discovered. Our drive to enlarge our net worth turns us away from discovering and deepening our self worth.

The belief that we need to possess, and possess more than the other person or company or nation, is the driving force for much of the violence and war, corruption and exploitation on earth. In the condition of scarcity, we believe we must have more - more oil, more land, more military might, more market share, more profits....more money. In the campaign to gain, we often pursue our goals at all costs, even at the risk of destroying whole cultures and peoples.

.... Do we need or even really want all the clothing, cars, groceries and gadgets we bring home from our shopping trips; or are we acting on impulse, responding to the call of the consumer culture and the steady, calculated seduction by fashion, food and consumer product advertising?...

Toxic Myth #3: That's Just The Way It Is

The third toxic myth is that that's just the way it is, and there's no way out. There's not enough to go around, more is definitely better, and the people who have more are always people who are other than us. It's not fair, but we'd better play the game because that's just the way it is and it's a hopeless, helpless, unequal, unfair world where you can never get out of this trap.

That's just the way it is is just another myth, but it's probably the one with the most grip, because you can always make a case for it. When something has always been a certain way and tradition, assumptions or habits make it resistant to change, then it seems logical, just commonsensical, that the way it is is the way it will stay. This is when and where the blindness, the numbness, the trance and underneath it all the the resignation of scarcity sets in. Resignation makes us feel hopeless, helpless and cynical. Resignation also keeps us in line, even at the end of the line, where a lack of money becomes an excuse for holding back from commitment and contributing what we do have - time, energy and creativity - to making a difference. Resignation keeps us from questioning how much we'll compromise ourselves or exploit others for the money available to us in a job or career, a personal relationship or a business opportunity.

That's just the way it is justifies the greed, prejudice and inaction that scarcity fosters in our relationship with money and the rest of the human race. For generations, it protected the early American slave trade (The Indian caste system) from which the privileged majority built farms, towns, business empires and family fortunes many of which survive today. For more generations it protected and emboldened institutionalised racism, sex discrimination and social and economic discrimination against other ethnic and religious minorities. It has throughout history, and still today, enabled dishonest business and political leaders to exploit others for their own financial gain.

Globally, the myth of that's just the way it is makes it so that those with the most money wield the most power and feel encouraged and entitled to do so. For instance, the United States with 4 % of the world's population produces 25% of the pollution that contributes to global warming......  Meanwhile, developing countries adopting Western economic models are replicating patterns that, even in political democracies, place inordinate power in the hands of the wealthy few, design social institutions and systems that favour them and fail to adequately address the inherent inequities and consequences that undermine health, education and safety for all.

We say we feel bad about these and other inequities in the world, but the problems seem so deeply rooted as to be insurmountable and we resign ourselves to that's just the way it is, declaring ourselves helpless to change things. In that resignation, we abandon our own human potential, and the possibility of contributing to a thriving, equitable and healthy world.

That's just the way it is presents one of the toughest pieces of transforming our relationship with money, because if you can't let go of the chase and shake off the helplessness and cynicism it eventually generates then you're stuck. If you are not willing to question that, then it is hard to dislodge the thinking that got you stuck. We have to be willing to let go of that's just the way it is, even if just for a moment, to consider the possibility that there isn't a way it is or way it isn't. There is the way we choose to act and what we choose to make of circumstances.

Fasting for three days can regenerate entire immune system, study finds

By Sarah Knapton, Science Correspondent in The Telegraph

Fasting for as little as three days can regenerate the entire immune system, even in the elderly, scientists have found in a breakthrough described as "remarkable".

Although fasting diets have been criticised by nutritionists for being unhealthy, new research suggests starving the body kick-starts stem cells into producing new white blood cells, which fight off infection.

Scientists at the University of Southern California say the discovery could be particularly beneficial for people suffering from damaged immune systems, such as cancer patients on chemotherapy.

It could also help the elderly whose immune system becomes less effective as they age, making it harder for them to fight off even common diseases.

The researchers say fasting "flips a regenerative switch" which prompts stem cells to create brand new white blood cells, essentially regenerating the entire immune system.

"It gives the 'OK' for stem cells to go ahead and begin proliferating and rebuild the entire system," said Prof Valter Longo, Professor of Gerontology and the Biological Sciences at the University of California.

"And the good news is that the body got rid of the parts of the system that might be damaged or old, the inefficient parts, during the fasting.

“Now, if you start with a system heavily damaged by chemotherapy or ageing, fasting cycles can generate, literally, a new immune system."

Prolonged fasting forces the body to use stores of glucose and fat but also breaks down a significant portion of white blood cells.

During each cycle of fasting, this depletion of white blood cells induces changes that trigger stem cell-based regeneration of new immune system cells.

In trials humans were asked to regularly fast for between two and four days over a six-month period.

Scientists found that prolonged fasting also reduced the enzyme PKA, which is linked to ageing and a hormone which increases cancer risk and tumour growth.

"We could not predict that prolonged fasting would have such a remarkable effect in promoting stem cell-based regeneration of the hematopoietic system," added Prof Longo.

"When you starve, the system tries to save energy, and one of the things it can do to save energy is to recycle a lot of the immune cells that are not needed, especially those that may be damaged," Dr Longo said.

"What we started noticing in both our human work and animal work is that the white blood cell count goes down with prolonged fasting. Then when you re-feed, the blood cells come back. So we started thinking, well, where does it come from?"

Fasting for 72 hours also protected cancer patients against the toxic impact of chemotherapy.

"While chemotherapy saves lives, it causes significant collateral damage to the immune system. The results of this study suggest that fasting may mitigate some of the harmful effects of chemotherapy," said co-author Tanya Dorff, assistant professor of clinical medicine at the USC Norris Comprehensive Cancer Center and Hospital.

"More clinical studies are needed, and any such dietary intervention should be undertaken only under the guidance of a physician.”

"We are investigating the possibility that these effects are applicable to many different systems and organs, not just the immune system," added Prof Longo.

However, some British experts were sceptical of the research.

Dr Graham Rook, emeritus professor of immunology at University College London, said the study sounded "improbable".

Chris Mason, Professor of Regenerative Medicine at UCL, said: “There is some interesting data here. It sees that fasting reduces the number and size of cells and then re-feeding at 72 hours saw a rebound.

“That could be potentially useful because that is not such a long time that it would be terribly harmful to someone with cancer.

“But I think the most sensible way forward would be to synthesize this effect with drugs. I am not sure fasting is the best idea. People are better eating on a regular basis.”

Dr Longo added: “There is no evidence at all that fasting would be dangerous while there is strong evidence that it is beneficial.

“I have received emails from hundreds of cancer patients who have combined chemo with fasting, many with the assistance of the oncologists.

“Thus far the great majority have reported doing very well and only a few have reported some side effects including fainting and a temporary increase in liver markers. Clearly we need to finish the clinical trials, but it looks very promising.”

The Indian Pharmaceutical Sector

 

By Jill E. Sackman, PhD,Michael Kuchenreuther

Biopharma companies should not overlook India's growing market.

ABHIJITMORE/ROOM/GETTY IMAGES

Recognizing that emerging markets continue to play a significant role in terms of future growth, most major pharmaceutical companies have accelerated efforts to strengthen their presence within these markets through R&D investment, licensing deals, acquisitions, or other partnerships. However, with global markets facing dynamic demographic and disease trends, changing market demands, and evolving regulatory requirements, it has been hard for manufacturers to devise the strategies needed for success in each of these areas.


India, a member of the BRIC nations (Brazil, Russia, India, and China), is much more comparable to the United States in terms of market size and must be included in this list of promising potential markets for global pharmaceutical manufacturers. Recent changes in India’s population and economy have contributed to a shift in the country’s epidemiological profile towards ‘lifestyle’ diseases that are more prevalent in Western markets. Such changes have increased the demand for better healthcare and for medications that address chronic diseases. Furthermore, India’s own pharmaceutical industry, a recognized world leader in the production of generic drugs, offers manufacturing expertise to organizations looking to outsource or create networks of collaboration and discovery. However, a more granular assessment of India’s pharmaceutical market reveals growing concerns over patent protection, price capping, quality, and safety. Understanding this country’s complex market dynamics will be crucial for manufacturers exploring new opportunities for growth in India.

India health and pharmaceutical market overview

India is the second most populous country in the world with about 1.27 billion people, and is projected to surpass China by 2028 (1). As the Indian population has continued to grow in recent years, so too has the country’s economy. Over the past decade, India’s economy grew above the Organization for Economic Co-operation and Development (OECD) average, which can be attributed to rising average income levels, an expanding middle class, and a drive toward urbanization (2). These socio-economic changes are contributing to a significant shift in India’s epidemiological profile. With working-age adults accounting for the majority of the overall population and more people becoming affluent and living longer, Indian health service users are facing increasing challenges associated with the prevention and treatment of chronic diseases such as obesity, heart disease, stroke, cancer, and diabetes (3).

At the same time, India continues to be challenged by a range of infectious disorders. Despite economic advancements, significant income inequality still exists throughout the country. In fact, per capita gross national income in India was only $3,391 in 2012 when adjusted by purchasing power parity (compared to $50,000 in US) (4).  In rural areas, where two-thirds of the nation’s citizens are located, hundreds of millions of people are still living in severe poverty, and vaccination coverage for children remains poor.

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Taken together, this high incidence of infectious and chronic disease and the large number of disadvantaged communities have created an even greater need for patient access to quality healthcare delivery as well as new and innovative therapeutic products. Historically, India has had one of the world’s lowest levels of health spending as a proportion of gross domestic product (GDP). In 2011, India’s total health expenditure was 3.9% of GDP (public expenditure was only 1.2% of GDP) compared to 10.1% of GDP, an average across all G-5 countries (4). The lack of government funding in healthcare has led to significant gaps in the quality and availability of public facilities and has pushed an increasing proportion of Indian patients to use private healthcare facilities that are associated with high costs. Where other countries have a well-established insurance sector that seeks to reduce this economic burden, health insurance in India is still in its infancy.

Approximately 243 million people are covered by different forms of government-sponsored insurance schemes while approximately 55 million rely on commercial insurers (5). With the vast majority of people in India uninsured, out-of-pocket payments are among the highest in the world. According to the World Health Organization (WHO), 70% of Indians are spending their entire out-of-pocket income on medicines and healthcare services (6). On top of this, most insurance plans only provide coverage for inpatient healthcare services and do not include coverage for outpatient treatments, including prescription medicines. Thus, it is no surprise that approximately 90% of India’s pharmaceutical market is currently made up of branded generic drugs (7).

Against this backdrop, India’s Ministry of Health has been focused on improving access to healthcare facilities, increasing population coverage by way of healthcare insurance, and creating initiatives for the prevention and early stage management of chronic diseases. In 2012, as part of the country’s 12th Five-Year Plan, the government proposed to double its public expenditure on healthcare to 2-3% of GDP in an effort to boost local access and affordability to quality healthcare. In light of these efforts, the Indian healthcare industry as a whole is expected to reach $158 billion by 2017 (8).
India’s pharmaceutical market accounts for about 10% of the global pharmaceutical industry in terms of volume and represents a major component of growth for the country’s healthcare industry (9). The Indian pharmaceutical market was estimated at $18.4 billion in 2012 and is expected to almost double by 2016. Although India’s market is currently dominated by generic drugs, rising incomes, enhanced medical infrastructure, and insurance coverage could provide a valuable opportunity for manufacturers’ higher-priced branded healthcare products moving forward.  

Key market challenges and considerations

Regulatory. Similar to many other countries, India’s medical regulatory structure is divided between national and state authorities. The Drug Controller General of India (DCGI) is the national authority responsible for the regulation of pharmaceuticals. The DCGI registers all imported drugs, new drugs, and biologicals in selected categories and has responsibility for approving clinical trials and quality standards in the country. Recently, these standards have come under question by FDA, citing quality-control problems ranging from data manipulation to sanitation. While FDA and regulatory bodies in other countries step up inspections of Indian plants in response to these developments, global manufacturers have had to reassess their contracted relations with these plants and give careful consideration to developing new strategic partnerships in this country moving forward (10).  

Concerns over quality and data integrity have also impacted manufacturers’ perception of India’s clinical trials system. India’s large and diverse patient pool and low drug trial costs have made the country an attractive destination for multinational pharmaceutical clinical trials. However, India has recently seen the number of clinical trials fall dramatically among allegations that protocols were not being conducted properly and that companies were taking advantage of disadvantaged patients (11). In response to these developments, manufacturers have been forced to either shift their trials to another country or encounter significant delays in clinical trial approval--both of which are holding their organizations back.

Market access and pricing. The high prevalence of self-pay generic drugs throughout the country has created little incentive for the development of certain market access disciplines such as health economics and outcome research (HEOR) and reimbursement. Government affairs and pricing functions, on the other hand, play an important role and have been broadly cited as the most crucial challenges global manufacturers face in the Indian marketplace.

India’s National Pharmaceutical Pricing Authority (NPPA) controls product pricing throughout the country. In 2013, the NPPA expanded the National List of Essential Medicines (NLEM) to include 652 drugs, a substantial increase over the 74 drugs previously listed. These products will now be subject to price controls that are projected to reduce prices by more than 20% for half the drugs (12). As if this did not challenge manufacturers enough, the Indian government recently decided to revise the NLEM later this year in response to complaints that the list should include all dosages, strengths, delivery mechanisms, and combinations of these previously identified drugs (13). The NPPA is also allowed to control prices of patented drugs that lie outside this list, and last month the government began exploring the possibility of using a reference pricing system for these products (14).  With intense generic competition already driving down drug prices in India, these additional controls pose a significant threat to international manufacturers’ ability to generate revenue.

Intellectual property. Aside from pricing, patent protection has also come under the microscope as of late. In an effort to ensure greater accessibility to higher-cost, branded drugs, India, as well as other BRIC countries, has begun to allow generic-drug manufacturers to market these drugs at dramatically reduced costs without consequence through compulsory licenses.  While only one compulsory license has been approved by India’s government to date (Bayer’s Nexavar), other manufacturers have recently had their patents weakened, revoked, or rejected. While appeals to some of these rulings are still in process, precedents have been set, leading manufacturers to question their future investment in India.

Implications for successful market entry 

Despite the aforementioned challenges, major pharmaceutical companies recognize the long-term prospects of this market and continue launching new patented drugs and pursuing unique business opportunities in India. To encourage future investment, the government has made tax breaks available to the pharmaceutical sector, including a weighted tax deduction of 150% for any R&D expenditure incurred. In addition, the government recently declared that all drugs that offer some form of innovation would be exempt from price regulation for the first five years following approval. Here, innovation refers to drugs or drug delivery systems that arise from native R&D efforts or existing drugs that are improved upon by an Indian company. This measure is aimed to spur growth in the domestic pharmaceutical market and to ensure that pricing regulations do not turn global manufacturers away from India. Thus, companies that develop strategic partnerships with local businesses and outsource some of their R&D and manufacturing activities will be well-positioned to maximize revenue by avoiding steep price cuts. This opportunity for manufacturers will only apply, however, for those products that offer true innovation by providing economic and/or clinical value.

Uncertainty over patent security and obstacles to clinical trials are discouraging Western companies from conducting drug research in India. With that said, the government has already initiated clinical research reform efforts through new amendments and regulations that could quickly restore the growth of clinical trials throughout the country.  At the same time, there is speculation that a transfer of power in India’s upcoming election could dampen fears of additional compulsory licenses (15). Manufacturers should closely monitor these internal developments and react accordingly.

Moving forward

A growing middle class that is projected to see a significant rise in noncommunicable diseases provides an excellent opportunity for global companies to launch their premium products and expand their market share. India’s underdeveloped insurance industry and high poverty rates, however, require that manufacturers first develop a careful pricing strategy. Pricing products appropriately can go a long way towards ensuring future growth as well as avoiding disputes over patent protection and licensing agreements.  In a country that holds about one-fifth of the world’s population, India’s market is too big for pharmaceutical companies to shy away from, despite all of the hurdles placed in front of them.  

Give and take in the EU-US trade deal? Sure. We give, the corporations take

 

I have three challenges for the architects of a proposed transatlantic trade deal. If they reject them, they reject democracy

• 
• • George Monbiot
  • The Guardian, Monday 10 March 2014 20.30 GMT

Illustration by Daniel Pudles

Nothing threatens democracy as much as corporate power. Nowhere do corporations operate with greater freedom than between nations, for here there is no competition. With the exception of the European parliament, there is no transnational democracy, anywhere. All other supranational bodies – the International Monetary Fund, the World Bank, the United Nations, trade organisations and the rest – work on the principle of photocopy democracy (presumed consent is transferred, copy by copy, to ever-greyer and more remote institutions) or no democracy at all.

When everything has been globalised except our consent, corporations fill the void. In a system that governments have shown no interest in reforming, global power is often scarcely distinguishable from corporate power. It is exercised through backroom deals between bureaucrats and lobbyists.

This is how negotiations over the Transatlantic Trade and Investment Partnership(TTIP) began. The TTIP is a proposed single market between the United States and the European Union, described as "the biggest trade deal in the world". Corporate lobbyists secretly boasted that they would "essentially co-write regulation". But, after some of their plans were leaked and people responded with outrage, democracy campaigners have begun to extract a few concessions. The talks have just resumed, and there's a sense that we cannot remain shut out.

This trade deal has little to do with removing trade taxes (tariffs). As the EU's chief negotiator says, about 80% of it involves "discussions on regulations which protect people from risks to their health, safety, environment, financial and data security". Discussions on regulations means aligning the rules in the EU with those in the US. But Karel De Gucht, the European trade commissioner, maintains that European standards "are not up for negotiation. There is no 'give and take'." An international treaty without give and take? That is a novel concept. A treaty with the US without negotiation? That's not just novel, that's nuts.

You cannot align regulations on both sides of the Atlantic without negotiation. The idea that the rules governing the relationship between business, citizens and the natural world will be negotiated upwards, ensuring that the strongest protections anywhere in the trading bloc will be applied universally, is simply not credible when governments on both sides of the Atlantic have promised to shred what they dismissively call red tape. There will be negotiation. There will be give and take. The result is that regulations are likely to be levelled down. To believe otherwise is to live in fairyland.

Last month, the Financial Times reported that the US is using these negotiations "to push for a fundamental change in the way business regulations are drafted in the EU to allow business groups greater input earlier in the process". At first, De Gucht said that this was "impossible". Then he said he is "ready to work in that direction". So much for no give and take.

But this is not all that democracy must give so that corporations can take. The most dangerous aspect of the talks is the insistence on both sides on a mechanism called investor-state dispute settlement (ISDS). ISDS allows corporations to sue governments at offshore arbitration panels of corporate lawyers, bypassing domestic courts. Inserted into other trade treaties, it has been used by big business to strike down laws that impinge on its profits: the plain packaging of cigarettes; tougher financial rules; stronger standards on water pollution and public health; attempts to leave fossil fuels in the ground.

At first, De Gucht told us there was nothing to see here. But in January the man who doesn't do give and take performed a handbrake turn and promised that there would be a three-month public consultation on ISDS, beginning in "early March". The transatlantic talks resumed on Monday. So far there's no sign of the consultation.

And still there remains that howling absence: a credible explanation of why ISDS is necessary. As Kenneth Clarke, the British minister promoting the TTIP, admits: "It was designed to support businesses investing in countries where the rule of law is unpredictable, to say the least." So what is it doing in a US-EU treaty? A report commissioned by the UK government found that ISDS "is highly unlikely to encourage investment" and is "likely to provide the UK with few or no benefits". But it could allow corporations on both sides of the ocean to sue the living daylights out of governments that stand in their way.

Unlike Karel De Gucht, I believe in give and take. So instead of rejecting the whole idea, here are some basic tests which would determine whether or not the negotiators give a fig about democracy.

First, all negotiating positions, on both sides, would be released to the public as soon as they are tabled. Then, instead of being treated like patronised morons, we could debate these positions and consider their impacts.

Second, every chapter of the agreement would be subject to a separate vote in the European parliament. At present the parliament will be invited only to adopt or reject the whole package: when faced with such complexity, that's a meaningless choice.

Third, the TTIP would contain a sunset clause. After five years it would be reconsidered. If it has failed to live up to its promise of enhanced economic performance, or if it reduces public safety or public welfare, it could then be scrapped. I accept that this would be almost unprecedented: most such treaties, unlike elected governments, are "valid indefinitely". How democratic does that sound?

So here's my challenge to Mr De Gucht and Mr Clarke and the others who want us to shut up and take our medicine: why not make these changes? If you reject them, how does that square with your claims about safeguarding democracy and the public interest? How about a little give and take?

Obamacare begins – and the right is terrified that it will work

Rupert Cornwell in The Independent

In a week in which all the talk was of shutdown, the most notable development here in Washington was something that opened up. I refer to the launch of the online federal and state health exchanges that are a key feature of Obamacare, allowing those without health insurance to shop around for the best plan.

Readers who have managed to keep up with the latest antics of what passes as the United States Congress will be aware that the reason Republican hardliners shut down the government was to force the President to delay – or to put it less politely, dismantle – his signature legislative achievement. Yet in a splendid two-finger gesture by fate, on the very day that veterans' services, national parks and a host of other government functions were closing, the health exchanges, symbol of everything those Republicans detest about Obamacare, were opening for business.

True, the moment was pretty shambolic. Overwhelmed by visitors, the websites virtually seized up on day one, though things seemed to improve slightly as the week wore on. But it was a start, and let it never be forgotten what Obamacare is attempting: to bring the US in line with every other advanced industrial country and provide healthcare for all its citizens, irrespective of their means.

Others had tried it before. Harry Truman called for universal health insurance in the late 1940s, only to be described by Republican adversaries as a crypto-communist. Two decades later, Lyndon Johnson did push through Medicare and Medicaid for elderly and poor Americans. Not, however, before a certain aspiring conservative politician named Ronald Reagan predicted that Medicare would see Americans "spending their sunset years telling our children and our children's children what it was like when men were free".

Then came Bill Clinton. Alas, he created the impression that a coterie of White House officials, led by his wife, Hillary, was trying to foist its pet ideas upon a suspicious country and he, too, failed. But in 2010, after a monumental fight, Obama's plan was finally approved by Congress.

Yet still Republicans continue their Canute-like refusal to accept the rules of democracy. No matter that the measure was signed by the President and ratified by the Supreme Court, or that Republicans resoundingly lost the 2012 presidential election in which Obamacare was a prime issue. The law, their leaders say, is a "monstrosity," a "trainwreck" that must be fought by every means, even if that means closing down the government.

Now, no one would argue that the reform is perfect. Even without the distortions and abuse peddled by the right- and left-wing media alike, it is extremely hard to understand. Nor will it cover absolutely everyone. If you started from scratch, you would almost certainly go for some form of single-payer system, a universal, government-funded scheme of the sort that Truman advocated.

Determined not to make the Clintons' mistake, Obama consulted with every interested party: Democrats and Republicans, hospitals, private insurers, doctors and the pharmaceutical companies. He bent over backwards to retain the existing structure of employer-based coverage, even dropping proposals for a "public option" favoured by the left as a way of keeping the private insurers honest. In doing so, he bowed, in effect, to the conservatives' argument that an alternative state-run insurance scheme would pave the way for a single-payer system.

But, as Obama has painfully discovered, offer Republicans an olive branch and they'll use it to whip you. Since 2010, the Republican-controlled House has passed no fewer than 42 resolutions seeking to overturn Obamacare (albeit knowing that the Senate would reject every one.) Now it has shut down the government, even though 70 per cent of the US public disapproves of the tactic, and even right-wing commentators argue that the way to get rid of Obamacare is via the ballot box, not blackmail. Elect a Republican president and a Republican Congress, they say, then repeal the thing.

At state level, where Republicans dominate, the sabotage of Obamacare is endless. Many states have failed to set up health exchanges. Citizens are being urged to flout the law and pay a fine rather than obey the individual mandate that requires them to buy insurance. Most inexcusable of all, a swathe of red states is refusing to expand Medicaid, which helps the poor. That will be critical for the success of Obamacare – even though the federal government is picking up 100 per cent of the cost for the first three years, and 90 per cent thereafter.

Why this scorched-earth opposition? After all, the mandate was originally a Republican idea, put forward by the impeccably conservative Heritage Foundation some two decades ago. Obamacare, moreover, is based on the healthcare reform enacted in Massachusetts in 2006 under the state's then governor, Mitt Romney – the Republicans' White House candidate in 2012. And at a simple human level, why oppose a law providing cover for 28 million people who don't have it?

One reason is Republicans' visceral dislike of Obama, on political, personal or racist grounds – or a blend of all three. Ideologically, they are terrified not that healthcare reform will fail, with the dire consequences they predict, but that it will succeed.

Success would strike at the very core of Republican belief, that government is bad for you and should be reduced to the bare minimum to sustain a functioning state. Despite public wariness of the law as a whole, several of its main provisions are extremely popular (as the once reviled Medicare now is.) If Obamacare works, Americans would feel better about government in general; the terrible monster erected by Republican demonology would be seen to be benign, after all. What price the party's electoral prospects then?

Prospect interviews Amartya Sen

 

The full transcript of Jonathan Derbyshire’s interview with renowned Nobel Prize-winning economist Amartya Sen 

Amartya Sen

Jonathan Derbyshire: We first met four years ago. You said something to me then that I think bears on the preoccupations of your new book, co-written with Jean Drèze, An Uncertain Glory. We were talking about the Indian left. You said: “I’ve been very critical of the political balance of the left in India in recent years. A party which has a real commitment to the underdogs of society should be much more worried than it seems to be that India has a higher proportion of undernourished kids than anywhere else in the world.” That insight is, more or less, the point of departure for your new book isn’t it? You’re interested, in other words, in what you call the “two-way relationship” between “social justice” (your term) and economic growth, which of course has been spectacular in India over the past 15-20 years.

Amartya Sen: That’s exactly right. At the time, I hadn’t done the systematic work to see what the other indicators looked like, but I knew that on the undernourishment index we [ie India] were very low. But then when I found that this was true in other many other aspects – having a stable and secure medical arrangement for all; having a well functioning school system to which every child has actual access; universal coverage of immunisation  – in all these areas India seemed to be doing worse than many countries which it has overtaken in terms of per capita income- for example, Bangladesh. So this, four years ago, was a thought that was bothering me which I always wanted to follow up. As I looked through it with my friend and collaborator Jean Drèze, it became clear that systematically India was underperforming in these respects, even when it was outperforming other large economies, with the exception of China (today, despite its fall in growth rate, it still has the third highest rate of growth among large economies, after China and Indonesia).

JD: That context – the competition with China and the other BRIC nations, India’s sense of itself as punching its weight on the global stage – matters doesn’t it?

AS: Yes. Economic growth is important precisely because it can help people to lead better lives, but to take growth itself to be a fetishistic object of admiration is part of the problem.  We may legitimately worry about the slowing of Indian growth that is happening compared to, say, Indonesia.  But we have to ask the right questions and note, for example, the importance of the fact that Indonesia has a higher ratio of literacy, education, higher ratio of secure healthcare. I think we have to understand  that ultimately not having an educated, healthy population is not only bad for well-being but also bad in the long run for sustaining our economic growth.

JD: A question about the theoretical framework of the book. You said you started from a number of empirical observations about these indices (healthcare, literacy and so on) in which India was doing much worse than countries that it was outstripping in terms of GDP growth. I wondered whether your notion of “capabilities” is shaping your approach here (access to healthcare, education etc being “capabilities” that make human lives go better rather than worse).

AS: Yes, it’s very important for two different reasons. The first reason is that in order to judge how a country is doing you can’t just talk about per capita income. India used to be 50 per cent richer than Bangladesh in per capita income terms but is now 100 per cent richer. Yet, in the same period … when, in the early 1990s, India was three years ahead of Bangladesh in life expectancy, it is now three or four years behind. In India it is 65 or 66, in Bangladesh it’s 69. Similarly, immunisation: India is 72 per cent, Bangladesh is more like 95 per cent. Similarly, the ratio of girls to boys in school. So in all these respects, we are looking at capability. We’re looking at the capability to lead a healthy life, an educated life, to lead a secure life (with immunization making people immune to some preventable illnesses), having the capability to read and write, for girls as well as boys.

Expanding and safeguarding human capability is central to thinking about policy making.  That understanding informs our work. But what plays a more dialectical role in this book is  the insight that many Indian policy analysts may have missed is that human capability is not only important in itself, but that human capability expansion is also a kind of classic Asian way of having sustained economic growth. It started in Japan, just after the Meiji restoration, where the Japanese said: “We Japanese are no different from the Europeans or the Americans; the only reason we’re behind is that they are educated and we are not.” They then had this dramatic expansion in universal education and then, later, widespread enhancement of healthcare. They found that a healthy, educated population served the purpose of economic growth very well. That lesson was later picked up in South Korea. Korea had quite a low educational base at the end of the Second World War. But following Japan, they went in the same direction. The same happened in Singapore, Hong Kong, Taiwan and, to some extent, even Thailand. And gradually, in a smaller way, in Indonesia. Of course, they reaped as they had sown. So human capability expansion is very important for Asian economic growth.

This can be seen to be closely related,  to use the terms economists seem to prefer, to the importance of “human capital”.  I don’t like the term “human capital” very much. Adam Smith says somewhere – it may have been in a letter to Hume – that in this way of talking about human beings, there’s a danger you won’t be able to distinguish between a good human being and a good chest of drawers!

JD: The other central part of the argument in this book concerns democracy and the state of public discourse in India. I think it’s your view that democratic participation is part of the capability set required to live a flourishing human life. Of course, one of the things about the Asian market economies you’ve just discussed, certainly in the 1980s when they experienced the most dramatic growth, is that although they had flourishing civil societies, political participation was actually limited – this is certainly true of Singapore, say, and I think South Korea in that period. How does that sit with the claims you’re making in the book about democracy?

AS: The choice those Asian economies made [to extend healthcare, education etc] wasn’t a democratic choice, but it was a very smart choice. You can be smart without being democratic.  However, good practice of democracy – well informed and vigorous – can help to select smart governments, humane governments, and can make those qualities be less fragile and transitory. For this the quality and force of media discussion are important.  But if you are lucky enough to  have a friendly authoritarian government, they can take  smart decisions without having to rely on forceful media discussion. That’s what they did in South Korea and in Taiwan.  But North Korea did not.  Nor did Cambodia in the 1970s.  Democracy can help to make the choice of government not a matter of luck, but of conscious and reasoned public choice.  For this to be ensured the opportunities offered by democracy have to be strongly seized.  This is where India’s record is divided – excellent use in some areas and very slack use in others.  We have to make democratic practice more comprehensive.

Over the decades China has presented examples of good and smart as well as weak and confused authoritarian rule.  The gigantic famines of 1958-61 resulted from terrible policy choices that could not be changed for three years despite tens of millions dying each year- no political party could criticize the terrible policies, and newspapers could not even cover the bad news.  But after that, despite many other problems, China did remarkably fast progress in education and healthcare for all – an example of good authoritarianism.  But they were irrationally prejudiced about the use of markets, which they shunned until the reforms of 1979.  With the reforms there were some smart moves (with marketization China did brilliantly in manufacturing and agriculture) but also a big mistake when they marketised health insurance, so you had to buy health insurance rather than being insured by the state or the commune; the Chinese were not alert to the terrible consequences of marketizing everything. The percentage of health coverage went down after 1979 from 100 per cent to 10 or 12 per cent, with downward effects on the high pace of China’s progress in life expectancy.  Again, it took them many years to recognise that they had made a mistake, and went about un-doing the harm, a correction that became full speed only in 2004 – a quarter century after the error of marketizing health insurance in 1979.  Now they have nearly a hundred percent coverage – and with much better quality health care thanks to China’s economic prosperity.

An authoritarian system, if it is intelligently and humanely led (but there is no guarantee of that), can get its way quickly. A democratic system is somewhat slower, because you have to convince everyone. In the case of India, the question is which issues get dramatised and politicised. Famine was instantly politicised, because it is so central to the Indian view of the British Raj. The Raj began with a famine [in 1769] and ended with a famine [in 1943].  The elimination of famines was an immediate success of democratic India.  There have been other successes, particularly when there have been crises – with HIV, for example – when there has been a real sense of urgency, which the media discussion and democratic pressure reflected. Five or ten years ago, people were saying that India was going to have more cases of HIV than anywhere else in the world – not only as an absolute number, but as a proportion. But it hasn’t happened. That challenge was met and things were done to reduce the vulnerability of the population.  These challenges received public attention and advocacy, and a democratic success followed.

Unfortunately, the challenge has not been seized in the case of general healthcare, not even general immunisation. And nor has it happened with general education. So I think there is no guarantee that democracy will get there immediately, but it depends on the people to make it happen. And of course the foundational  reason for wanting democracy isn’t that. The basic reason for wanting democracy is that it  gives people dignity, political freedom, and voice – democracy has its own value. If that is compatible with doing good things, and if what happened with famine and HIV crisis could be translated to general healthcare and chronic undernourishment, then that would be a wonderful combination.  There is no reason at all why we- and here I speak as an Indian citizen – cannot make that happen.

JD: You argue that there is a “two-way relationship” between growth, on the one hand, and the expansion of human capability on the other. It’s easy to grasp that point from the side of growth. Could you explain the other side of the argument? How does the expansion of capability enhance growth?

AS: Well, I think the basic insight is that of the Meiji restoration I mentioned earlier – namely that an educated, healthy workforce is very productive. And ultimately it is productivity and skill-formation on which economic and social progress depends. That is the Adam Smithian point. Smith asked “why is trade good?” Trade is good because it allows you to specialise and specialisation allows you to develop skills. He didn’t take the view which can be associated with David Ricardo, that trade is important because of comparative advantage. Smith’s view was that any country could typically produce any good (unless they are unusually geography-dependent). But if you specialise in something you become frightfully good at it – like the Swiss, making chocolate, watches or running banks. Once that happens, then your productivity rises, while in other countries’ productivity rises in other things. Smith also emphasised that general education is something that the state ought to do. He thought it’s a good thing to have an educated population but also that it would help skill-formation.

I think that connection the Asian economies saw, and they also saw the central role of skill-formation. Are there studies showing how productivity responds to nourishment, education, healthcare? There are indeed such studies, though we don’t go into a great deal of detail on this in the book. We were going more by the experiences of different countries which have adopted the human development strategy and have all done well. Similarly, states within India – Kerala, for example, which has a faster rate of growth than most others. Every state in India which went in the direction of human capability-formation typically led by the state – think of Tamil Nadu or Himachal Pradesh in addition to Kerala – ended up having a faster rate of economic growth and being ahead. Now some people who earlier were saying that Kerala’s early focus on state-financed education and healthcare could not be sustained now seem to be saying there is nothing to explain! Keralans are rich and therefore have high human capabilities. But that overlooks how they became rich.

JD: So what the other Asian economies show us is that you don’t have to have liberal democratic political institutions in order to have human capability growth?

AS: Yes. But I’ve never denied that.

JD: So what’s the claim about democracy being in this book then?

AS: There are in fact three claims being made. One, that democracy is important in itself, and it is compatible with human capability-based expansion. Two, democratic practice would be deeply favourable to human capability expansion, through good and forceful use.  What has been done in the case famine-prevention or HIV-handling can be done more generally through the same practice of democratic pressure.  Three, there is no guarantee that you will have human capability expansion with authoritarianism any more than we can be sure about a democracy, except that in the case of a democracy we know how to correct that neglect – in fact through more forceful and informed democratic practice.   As the examples I discussed earlier illustrates, while human capability expansion may be well pursued by some authoritarian governments, it may be entirely neglected by other authoritarian rule.  With authoritarianism, we do not know whether we would be South Korea or North Korea.

And even when things go well in many ways in an authoritarian state, there is always a fragility [in authoritarian states]: under good rulers you go one way, under bad rulers another. In many ways, Akbar’s India was a benign state, but it depended on the authoritarian rulers having these values. There was nothing in the system that guaranteed it. Democracy doesn’t have that fragility, though it may be harder to get there, slower to get there. For example, consider the fact that one morning in 1979 China abolished universal healthcare – if there had already been universal healthcare in India in 1979, as there was in China, I don’t think any government in India would have been able to abolish that.

JD: How robust do you think Indian democracy is?

AS: Its institutions are robust enough, but its practice is still quite limited. We have to be more vigilant. Gender inequality, long neglected, is a subject that is being taken up much more  now, partly because of the terrible incident of rape on 16 December (leading to mass protests). Democracy itself is quite stable in India, but the practice of democracy has been partially vigorous and partially very lethargic. Can we be sure of its vigour?  It depends on us – the citizens of the country.  Like liberty, democracy requires eternal vigilance.

JD: You distinguish, it seems to me, two questions about democracy. First there’s a question about the compatibility between democracy and growth and you say that question has been definitively settled – we know the two are compatible. The second question is more interesting and difficult to answer and has to do with democracy, on the one hand, and what you call “the use of the fruits of growth for social advancement” on the other. And here the picture is much less clear isn’t it?

AS: Indeed, much less clear. Democracy’s difficulty is that the vocal and the active can influence the agenda in a way that the inactive and unvocal cannot. And the active ones have been the relatively poor among the rich – the bottom 40 per cent of the top 20 per cent (though they’re still part of the top 20 per cent). So, for example, they have asked for a diesel subsidy, and got it; they asked for a cooking gas subsidy and got it; they insisted on electricity being sold to urban consumers at below cost. There have been many other concessions which have cost money. The surplus has gone in their direction because they’ve been more vocal. And what is pernicious, or at least disturbing, is that they speak in the name of “ordinary people”. But ordinary people don’t drive diesel vehicles. Ordinary people don’t have cooking arrangements to which gas cylinders can be attached. And many ordinary people don’t have electricity. Democracy is a guarantee of process. But offers no guarantee as to how that that process will be pursued and what will come of it. If you don’t do anything, you won’t get anything.

JD: Another preoccupation of the book is the contrast between capability growth in India and in China. Presumably that’s a central preoccupation of the India elite? The race with China.

AS: For some parts of the elite. The media gives the impression that the number of people preoccupied with the comparison with China is very large. But it is a relatively small part of the population who read the “pink papers” (the local equivalents of the Financial Times). They are very concerned about this. But I’m not sure it’s an obsessive concern of the Indian elite generally. The literary elite is not very aware of how … they’re quite happy that India is a big player now in literature, in film and in technology. The Indian elite is often under-informed, which is why this book is so information-focused. The business elite is certainly very concerned with the horse race with China without ever asking how India can catch up with China in life expectancy, in literacy, in immunisation. And that’s a bizarre focus.

JD: One aspect of the way India lags behind China is that wage growth in China has far outstripped wage growth in India. Why do you think that is?

AS: First, the bargaining power of workers has been relatively small in India. Also, India has had a high growth rate but based on highly skilled labour – pharmaceuticals, information technology and car parts. But these don’t provide as much employment as you would expect from other industries. As a result, the general competition for labour hasn’t actually occurred. By contrast, a lot of American and European investors in China complain that wages have been rising very fast there. But that’s a sign of success. An economy that’s growing at six, seven or eight per cent a year should not be experiencing wage stagnation of the kind we have in India.

JD: But surely the bargaining power of labour in China is not significantly better in authoritarian China than it is in democratic India?

AS: The bargaining power of labour is better there, definitely. They don’t have unions, certainly, but the unions in India often serve those already relatively better-placed, rather than landless labourers in agriculture or those engaged in other basic unskilled labour. There was a time when the left parties did do that. But since then the more middle-class oriented left parties have been concerned with skilled labour. Skilled labourers’ wages have sometimes risen, but it’s the basic wages of the common labourer which have stagnated. And at that level I think that China does have more competition. But it doesn’t come from the unions – they don’t tolerate unions!

JD: Back to this question about the relationship between GDP growth and capability growth. You know that there is a competing view to yours which says that successful economic development necessarily occurs in two stages – this is a “two-track” account according to which “Track 1” reforms are designed to increase GDP and pull up the poor; healthcare and educational reforms belong to “Track 2”. And that it’s only Track 1 which makes Track 2 possible. You reject that model don’t you?

AS: Well, there’s no historical illustration of that. Japan isn’t. China isn’t. Korea isn’t. Hong Kong isn’t. Taiwan isn’t. Thailand isn’t. Europe isn’t. America isn’t. Brazil isn’t. So what are we drawing that model from? That’s not how things have happened in the world. They’ve all done it through increasing capability. I know of no example of unhealthy, uneducated labour producing memorable growth rates!

JD: What about the charge that you don’t pay as much attention in the book as you might to what one might call the negative externalities of growth and development – principally, the environment and population growth.

AS: On the environment, we do say quite a bit about that in the book, but maybe it’s not adequate – our primary battle was on a different front. Is growth inescapably damaging to the environment? I don’t think so. The biggest influence in reducing the fertility rate, for example, is women’s literacy. The best way of cutting population growth is women’s education, women’s gainful employment. Even in China, the low fertility rate they’ve achieved is explicable entirely by the good things China has done – widespread education of girls, widespread economic independence of women. Anything that increases the voice of young women tends to cut down the fertility rate because the lives that are battered most by the continuous bearing of children are those of young women. So human capability-expansion in the form of education is very environment-friendly in that respect. Now if you want just growth and nothing else, then you may have a clashing course. But if you are concerned with growth and human capability, that’s part of your calculation as to how you can make growth better oriented. It’s a point that Adam Smith makes: we are not concerned commodities themselves; we want them because they allow us to do certain things. If you want to be able to take part in the life of the community and appear in public without shame, then you have to have clothes like those of others. Similarly, if you live in California, you have to have a car to drive around. But what is the point of public reasoning if it doesn’t engage the fact that by having good public transport you can cut down the need for having cars, for example? There is no automatic process by means of which growth itself becomes sustainable without giving thought to it.

JD: We’ve spoken a lot about China. But the book also spends some time on the comparisons between India and another of the BRIC countries, namely Brazil. The account you give of the recent history of Brazil says that what the Brazilians have done in the last 20 years, say, is to correct for what you called “unaimed opulence” with active social policies. Obviously, the book was finished before the current unrest in Brazil began. How are we to understand what is happening in Brazil today? Are we to blame it on sluggish social reform? Probably not, because as you point out, these have been far-reaching. Or do the causes lie elsewhere? Do they lie, for example, in something else you discuss, that is in failures of accountability and corruption in the system?

AS: Yes. Most popular agitations in the world have not been about capability issues. That is the problem we have been discussing in the case of India, too – the cause of the basic education of the common man is not easy to translate into democratic agitation. On the other hand, corruption is; the specific deprivation or organised groups is. Many countries suffer from corruption, including China. Incidentally, those who think India is not growing as fast as China because it’s more corrupt, we don’t know that this is the case. As I’ve said, I think the reason is that they’re dealing with a healthier and better educated population. In the case of Brazil, they are also dealing with a healthier and more educated population. But that’s not what the agitation is about – the protestors aren’t calling for universal healthcare or education. They are talking about corruption and other issues. I think it’s very difficult to judge what’s really going on. Take the Falklands War, which changed the fortunes of Mrs Thatcher completely. It was a minor issue when you think about it. Similarly, there was a kind of massive groundswell to intervene in Iraq in 2002-03, into which initially even very sane voices moved. So I wouldn’t draw any big conclusions on the basis of what is going on in Brazil. By the way, mine isn’t a theory of public agitation. I don’t have a general theory of public discomfort!

JD: Chapter 8 of the book is devoted to the question of inequality. Could you say something about how in India caste aggravates and exacerbates the economic inequalities that are a feature of all advanced market economies?

AS: It does this in a very big way. First, it is stratification. Second, it is stratification on very hardened lines – it’s not like becoming rich. It’s easier to become bourgeois than it is to become a high-caste Brahmin! Third, there is a kind of approach that has gone along with the caste system, which is that it is a natural order and you can’t change it, and that the alternative is chaos. And that’s quite important to recognise. There are a lot of people who tend to think that undoing the caste system now would be a destabilising course of action. I think caste is about the worst form of inequality you can think of. And the fact that it has gone on for 2,500 years indicates how much of a historical background it has. Class and gender also play a part in Indian inequality. The idea that you need a good school, basic healthcare with a medical unit near where you live, that everyone needs a toilet in their home – these have become more ingrained in many societies, even poor ones, than has been the case in India. You can still build a large condo complex where, given Indian social structures, there will be many servants, without constructing toilets for them. And I think this is a ridiculous failure of vision. So, in that respect, inequality in China, though it is high, is quite different to that in India.

JD: It’s a failure of vision, but not an insuperable obstacle to change? After all, the book ends on an optimistic note.

AS: Yes. In order to get there in a democracy you have to fight for it. There is no way that democracy automatically guarantees that. I first argued that functioning democracies prevent famine in around 1979/80. I think today I would put it slightly differently and say that human beings in a functioning democracy prevent famine. The system in itself wouldn’t do it unless there was activity along with it. In the case of famine, it’s very easy to generate activity. In the case of under-nourishment, less so. We could only make a difference by trying harder.

JD: This invites the question what you mean by “democracy”. As you point out, democracy is about more than free elections. So what’s the ramified notion of democracy at work here?

AS: There are three aspects to it. At some level democracy was to involve majority rule and free voting. That’s the point at which someone like Samuel Huntington would like to stop. I would like to go further. It must also include minority rights, which are part of the institutional structure, and the protection of public discussion – free public discussion, free media and so on. Now, these two requirements are institutional. But the third aspect is not purely institutional – it’s the requirement that people use public reasoning; democracy would be more active the more we use public reasoning in an open way. Now, if the latter doesn’t obtain but the first two do, is it a democracy or not? I won’t go into that debate. I’d say, it is a democracy but it’s not doing very well. That’s what I’d say about India today. When you think about it more widely – America had Iraq; also Americans don’t necessarily quickly vote for healthcare (even those without health insurance don’t seem to see the merit of it) – there are all kinds of ways in which democratic debate doesn’t proceed well. And I’m really amazed that there is so little discontent in this country about the intellectually inadequate idea of “austerity”. It can’t be a tribute to democracy in Britain that Labour leaders should be tempted to endorse austerity just as most of the best economists in the world have rejected it. That the Labour Party thinks that by embracing the “wisdom” of austerity it can capture votes is not a tribute to the functioning and practice of democracy in the United Kingdom. That should not be the case. So all democracies have limitations. But the limitation in India is much more detrimental to the good life of the people than even the eccentricity of the opposition party backing austerity today. And that’s bloody eccentric!

JD: There’s another aspect of your views about democracy and democratic participation that intrigues me. There are moments where you come close to holding that democratic participation itself is part of what it is to live a flourishing human life – that’s an almost neo-Roman or republican view. Is that your view?

AS: I regard the advocates of that kind of view to be saying something important – namely that participation is important in our lives. But it can’t be the only thing that we value. You cannot say that if I lived in an authoritarian system, that had happened to generate for me a better level of education, healthcare and immunisation, that that isn’t an achievement because it wasn’t achieved through republican methods, I won’t accept that! You’ve achieved something. It would have been better if it had better had it been achieved through neo-Roman self-government, but it is better to have achieved it than not at all.

JD: And this is an insight that is derived from the example of the Asian economies that we discussed earlier, because one of the things they show is that having a market economy doesn’t entail having a particular set of political institutions. Market economies, in other words, flourish in a variety of institutional contexts.

AS: Yes, but it would difficult to think of any successful market economy in which the state doesn’t play an important part. And that was a point that was made already by Adam Smith in 1776! It’s true of Germany, of the United States, it’s true of Britain when it was doing very well, it’s true of Japan, China, Korea, Taiwan and so on. So I think, there could be variations, but a certain there is a certain necessity for the state to play its part, along with people having the freedom to pursue market opportunities.

JD: I was thinking more of the fact that Singapore and Korea in the 1980s were authoritarian market states, in which individuals had the freedom to pursue market opportunities but political freedoms were curtailed. So civil society flourished alongside authoritarian political institutions.

AS: I think that’s right. Historically, democracy was a big change that occurred in the 19^th and 20^th centuries in the West. But there had been degrees of democratic participation in authoritarian states. The point was made very clearly in the 7^th century AD by Shotoku, the prince of Japan. He said that in order to have good governance we have to talk and consult with people. This was 600 years before Magna Carta. In some ways there has to be consultation. Magna Carta was just about that – it wasn’t about making Britain a democratic state. But it was a contribution to that Millian perspective according to which democracy is government by discussion. Look at China. I happen to be closely associated with two Chinese universities, Peking University and the People’s University. On the subject of healthcare, which interested a number of economists in Peking University, these economists were not being listened to. But eventually the Chinese government saw fit to hear their technical arguments, including about inequality, that they had to rein in inequality. So the point is this: would I prefer have the Chinese form of government rather than the Indian? No I wouldn’t. On the other hand, would I say that it’s authoritarian in the sense that it’s like Genghis Khan deciding what he wants to do? No. It isn’t like that.

JD: I find this fascinating. For it seems to me that our vocabulary is rather impoverished when it comes to trying to describe what it is, exactly, that the Chinese have. We reach for a shorthand such as “authoritarian market state” which, if you’re right, doesn’t come close to capturing the reality of things there.

AS: The point is that China is successful. And that success is based on enlightenment. Listen, democracy or government by discussion is a very important contribution to enlightenment. But enlightened decisions make a contribution even if they don’t happen to have been arrived at through democratic means. I irritated some people when I said once that I believe Keynes had the right things to say on austerity but that, on the other hand, he does not sufficiently defend the role of the state – namely that it has to do things like healthcare, social services and the basic welfare state. And I irritated some of my friends when I said that on this subject, Keynes had less to say than Bismarck did. Now Bismarck was not a democrat, but he was enlightened on this subject. I don’t see anything puzzling about China. Can I give an example of their making a mistake? Of course. I can mention famine. I can mention their abandonment of universal healthcare in 1979. That was a huge mistake.

So it’s fragile, but right now they’re in terrific shape and we have a lot to learn – about what they’re doing rather than the undemocratic procedures that lie behind it. I think we should be able to distinguish between why a policy is right and whether it was arrived at by the right procedure. My hope is that because the intellectuals in China are quite strong and because the commitment to government by discussion (this is actually a term of Bagehot’s) is very strong, it won’t be easy for the Communist Party to change things, even if they wanted to. So I’m completely at peace. I don’t see any contradiction there. I don’t see that I have anything to explain. It’s not as if I’ve said that China has an authoritarian system and they’ve never had any problems. I didn’t. Democracy is not the only thing we should be looking at. After all, the Soviet record in education was extraordinarily good. Look at those bits of Asia today that were part of the Soviet Union. They have enormously better levels of education than the neighbouring states. The Soviets did know something. And in this case communist ideology and Marxism made a major contribution. It had nothing to do with democracy.