Thursday, July 31, 2014

Free Market and Basic Needs- Lessons from Haiti

I’ve long held the view that ideologies trump solutions every time but the kernel of truth contained in most ideologies could be opportunistically applied to find solutions and to placate those baying for blood at the mention of a worldview he/she opposes.

In my view the “free” market, the laissez faire industry, a social safety net, government control and accountability for the frameworks and infrastructure that constitute the basic needs of people are not contradictory. Moreover what is meant by government control and accountability is situational- it is different in different places, times and situations, and needs constant revision based on equitable principles. Elsewhere I have argued that economic progress as measured in macro terms such as GDP, NNP-MP, Per Capita GDP adjusted for purchasing power parity and so on is insufficient and even counter-productive.
In Haiti, Tom and I had a conversation on how India compares to Haiti. Tom offered the view that India was in worse shape. This is true if you took absolute numbers into consideration- such as the number of HIV/AIDS patients, the number of people below the poverty line, the number of people without access to clean water and sanitation, etc. 

But when I suggested this to a colleague in our company (a white collar professional who is paid highly and would be considered among India’s 1%), he was visibly upset- he mentioned that the per capita figures told a vastly different story. The per capita GDP with or without adjusting for purchasing power is way above Haiti’s. In nearly every social, political and economic indicator, this would appear to be true- from his perspective. In office a few weeks ago, after Mr. Modi became India’s prime minister, my boss and an American colleague were discussing the social challenges in India. The American colleague mentioned the caste system to be at the root of these problems. My boss was not pleased about this and claimed that the caste system had long been abolished and was not operational any longer. He is a Brahmin, and if one allows for some wiggle room, maybe he is just plain ignorant of the realities faced by Indians at the other end of the spectrum. But he too was right in a way- from his perspective.

I think it is important to note that both these points of view are right. I would like to add another view, which I think is the most important among them all. If one were to use the “per capita” point of  view and list every individual in the lowest third of the population (or lowest strata; the exact percentage does not matter in our current consideration), and tried to understand how many of them have access to resources that would be considered basic needs- clean water, equal and real opportunity to jobs, access to those jobs, good education (in the business language of the community), safety from structural violence, punitive justice, roads, sanitation, healthcare, communications, nutrition, shelter and other indicators to be revised as they are added to the list of essentials- one would find that each country would need to aggressively treat the conditions as if they would a dangerous pathology.

Such treatment would need to be initiated first and foremost by the public sector. We entrust some of these duties- such as the machinery for law and order (police, lawyers and the judiciary) to the public sector (lawyers being overseen by the Bar) because we believe it is the fairest method to govern them effectively. The police is the only monopoly on coercion we allow in any country, except in extraordinary circumstances when the military or peacekeepers take on that role. This is because we fear that coercion can and will be abused by any other party. In fact, of course, even the police forces in many countries routinely abuse their authority. This is another reason why the people in the lowest strata in third world countries need protection. Private security is among the most booming businesses in these countries, and with a combination of private security, bribed officers, lawyers and judges, the rich can and often do get away with crimes- while the poor are often mistreated for crimes they may not have committed. So says Gary Haugen in ‘The Locust Effect.’
In ‘Haiti after the Earthquake’, Paul Farmer makes the point that international aid, social workers, short missionaries (like ourselves at HART) and organizations like the UN have bypassed the public sector and set up NGOs, international political outfits, church-based charities and for-profit organizations to do what the public sector should have done. They are both effective at what they do and ultimately destructive in waylaying the foundations that make for good governance- the lasting and self-sustaining institutions in every country that is driven by local leaders and participation.

In India, institutions like the Christian Medical College with campuses in Vellore and Ludhiana were initiated by American missionaries, in particular by the founder, Ida Scudder who arrived in India as a short term (for those days) medical missionary. Today it is among Asia’s largest teaching hospitals, and though it received oversight from a New York charity, it is very local and self-sustaining. There are several such stories in India of institutions that have been created by others, but nurtured by Indians- my own alma mater, Madras Christian College and other such as St. Stephen’s College and Stanley Medical College being examples.
Without local leadership, they will perish- just like the abandoned windmills described by the anthropologist Tim Schwartz in his book ‘Travesty in Haiti’. Noone knew where those windmills came from, who built them or when. Some missionaries let him know that an unremembered foreign aid organization had built them in the early 1990s and the US military personnel helped maintain them during the occupation, but after they left had fallen into disuse and abuse- some people had ripped out their guts. To Schwartz this was an accurate picture of foreign aid in Haiti- its rips gutted by people who had other uses for it.

In Mountains beyond Mountains, Tracey Kidder describes when he first met Paul Farmer during the occupation in the 1990s. Farmer had gone into the US military compound to speak to a captain about apprehending a murderer who was running amok. People were losing faith in the military because they had failed to bring him to justice. The captain replied that he would love more than anything else to slam him, but he did not as yet have enough evidence that it was he who committed the crimes, though everyone in the village knew for sure. He said he had to follow due process, and without it the military leadership would lose all credibility and would jeopardize its own integrity. Farmer argued back that in a country which (at the time) had no constitutional law, arguing for due process was not logical. Kidder states it was an unusual sight- Farmer who clearly considered himself a champion of human rights arguing for penalty without trial and the captain who had come to Haiti as an occupier arguing for due process.

This highlights the tension between providing direct assistance and building systems which support lasting changes. Both are necessary- and indeed people like Farmer have been doing both. Haugen and his organization have been successful in working with local law enforcement- in spite of widespread corruption and different motives- in creating such lasting change.

In the end local leadership- represented by the public sector- must be responsible for the basic needs of the people. All else is icing on the cake and must be subject to the vagaries of the free market. This is true for India, China, Brazil, Haiti and even the US. If there are 2 million HIV/AIDS affected Indians while the economy has been among the fastest  growing and the third largest in GDP by purchasing power parity ($5.42 trillion) terms in the world, is India really in better shape than Haiti? Ask me another.

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