Regional Variations in Rent Seeking

March 25, 2010

In my post about lollipops and backup dancers, I made an offhand comment about the MNS trying to ensure that the Marathi manoos wasn’t done out of a fuckall low-paying job. But then I remembered Ravikiran’s point about the opportunities for graft in otherwise fuckall jobs; and how these are actually awesome gifts to give out. This then made me think about the different approaches our political parties take to economic development and corruption.

The MNS/ Shiv Sena: Demand low-skilled, low-wage jobs with scope for lots of black money for its votebank. Beat up North Indians who try to get in on the racket. They never even talk about opportunities to make really big money.

The BSP: Never talks about how its votebank will get money. Does not necessarily care. Never talks about how businesses will make money. Again, does not necessarily care. Makes sure that the party fund and Mayawati get money.

The Congress and BJP: The national parties have multiple approaches. First, they talk about and/ or implement fee cut in IITs and IIMs, reservation in central universities, or employment guarantee schemes that supposedly give the great unwashed masses access to the joys of yuppiedom. However given the incredibly small number of education seats, and the challenges in actually making it to Class 12 if you’re not above a certain wealth-level already, this basically works out to a lottery for the well-off-but-not-filthy-rich. Given the level of corruption in the NREGA, that’s a lottery for the poor as well. Meanwhile the finance minister will keep talking about reform without actually implementing any of the reports he commissioned. I’m talking Mistry, Rajan, and Kelkar here. In this atmosphere of talking reform but doing nothing, businesses bribe at the ministerial level and carry on. As a result, prosperity slowly trickles down.

The Akali Dal: It’s been a while since I was in Punjab, but ten years ago they were doing with water what America has only now started doing with finance: privatising gains and socialising losses. They announce free electricity for farmers, which basically means that the biggest and most politically well-connected farmers pump massive amounts of water, and get massive crops in the short-term. The water table drops and everyone gets fucked in the long-term. Industry dies because of power shortage. Instead of doing anything about this, sardars migrate to Canada and Australia.

The Janata Dal (Gowda version): Talk about farmers. Meanwhile, get your party members to buy up all their land. Get industrialists or real estate developers interested in said land. When they’ve committed to buying it, unleash a farmer’s agitation. Continue until said industrialists/ developers cough up the amount that will avoid breaking them. Simultaneously, give away iron ore mines in return for truckloads of money.

The DMK: Announce free bicycles, TV sets, stoves, and suchlike for everyone. Make sure everyone actually gets it. Collect a kickback on every such bicycle, TV set, stove, etc. Make your bureaucracy an efficient machine for acquiring land, developing industrial parks, and getting big ticket manufacturers and all their suppliers down south. Live off the the VAT generated by these people, while simultaneously ensuring that they buy their construction material, boiler fuel, and so on only from your party members at high prices. Bask in the manufacturing boom and the wealth and employment this generates.

Amazingly the DMK has managed to come up with rent-seeking behaviour that actually benefits both the people who vote for it and the people who finance it. It has become a perfect stationary bandit. Things are so good now that Tamland has high employment, and guest workers from North India have to be hired to to build Tamizh monuments, as long as they keep Hindi only for film songs and not to dominate other languages.

The implication is that Chennai is not, as writers of puff pieces would have it, the Detroit of India – after all Detroit is depopulating and its neighbourhoods are being taken over by wilderness – but the Dubai. Soon remittances shall flow out from Chennai. Soon, it will have a really big tower. The difference is, Chennai’s tower will have a cut-out on top of it.