Jawan- a critique

This is a guest article by College Kumaran

In his 'Use of Information in Society' published in 1945, Friedrich Hayek gave us the seminal insight that information in any economy is bound to be scattered and decentralized. This ignorance about the exact costs of resources is why profits and losses exist in the first place. As Gary North explains, 'No one knows for sure what anything is worth, that is, what the rational, market-clearing price of anything ought to be. It is the continual quest for better information about the proper pricing of factors of production that is the driving force of the capitalist system. It is not just goods and services that are for sale in the free market; it is also accurate information about the prices'.

Now why doesn't the government just subsidize certain resources (as in the case of farmers as depicted in the film) ? It can, but a cost will be incurred. If debts are written off at government fiat, it would mean not only that banks will hesitate before giving loans to farmers (since the government can write the loan off at any time), it would also mean higher inflation rates since government has to print more money to spend on this additional expenditure. As Rose Friedman points out, 'One of the major adverse effects of erratic inflation is the introduction of static into the transmission of information through prices. If the price of wood goes up, for example, producers of wood cannot know whether that is because inflation is raising all prices or because wood is now in greater demand or lower supply relative to other products than it was before the price hike. The information that is important for the organization of production is primarily about relative prices - the price of one item compared with the price of another. High inflation, and particularly highly variable inflation, drowns that information in meaningless static'. So the citizen has to pay for this governmental munificence by higher taxation (needed so as to pay for this relief programs), and also by seeing the costs of all products rise due to inflation (which again, affects the lower sections of the society most).

Healthcare too faces the same dire effects under government. Healthcare is a man-made resource, and like all man-made resources, it is scarce by default. Trade-offs have to be inevitably made when scarce resources are in question. To institute a governmental right to healthcare is to presume that there is an infinite supply to provide for the infinite demand for care that will inevitably follow, which is an economic impossibility. As NU professor Craig Garthwaite points out in his interview with Vox: ‘If I consume health services, someone else cannot’.

Why not just institute price ceiling measures ? The first consequence of price ceiling measures, as evinced from evidence all round the world, is that the production of the good in question reduces drastically, since the incentives for the producer to cover up costs and reap profits is drastically reduced. When resources are allocated from the medical sector to others by the producers, this results in a shortage of medical products and less innovation in the sector, which puts the lives of millions of people at risk. Moreover, since price rationing measures do not let the producer recuperate his invested amount and gain profits, the producer starts to practice non-price rationing: that is, the price of other equipments related to the product in question are raised (for example raising the costs of balloons and catheters when the price of heart stent is fixed). Moreover, there will be a quality drip in the products so as to compensate for the drop in revenue. This quality deterioration will have adverse effects on the life chances of millions of patients. As Thomas Sowell points out, 'It is amazing that people who think we cannot afford to pay for doctors, hospitals, and medication somehow think we can afford to pay for doctors, hospitals, medication, and a government bureaucracy to administer it'.

Herein we must confront the nature of governmental institutions itself. As Max Gammon has pointed out: ‘In a bureaucratic system, increase in expenditure will be matched by fall in production. Such systems will act rather like ‘black holes’ in the economic universe, simultaneously sucking in resources, and shrinking in terms of ‘emitted production’. Government and all governmental associations, even if acting in the best interest, cannot face up to the information problem raised by James Buchanan, 'Individuals do not act so as to maximize utilities described in independently-existing functions. They confront genuine choices, and the sequence of decisions taken may be conceptualized, ex post (after the choices), in terms of “as if” functions that are maximized. But these “as if” functions are, themselves, generated in the choosing process, not separately from such process. If viewed in this perspective, there is no means by which even the most idealized omniscient designer could duplicate the results of voluntary interchange. The potential participants do not know until they enter the process what their own choices will be. From this it follows that it is logically impossible for an omniscient designer to know, unless, of course, we are to preclude individual freedom of will.'

Hence it is not bureaucratic laxity or corruption that has caused governmental inefficiency; the nature of information in an economy itself renders government helpless. Moreover, it is plain naiveness regarding human nature which lets someone believe that people will act in complete honesty. Buchanan again, 'People share a universal behavioural trait : if there are profits to be made, the effort to get that money will attract investment. This is true in the private sector, the market sector, as well as the public sector. Politicians and bureaucrats are no different from the rest of us. They will maximize their incentives just like everybody else'. The solution here is not to take out the money from politics, but to take out the politics from money. The scope of the government needs to be drastically cut down, so that all sectors work under the demand-supply paradigm. This has shown to improve the lot of people and create greater efficiency all over the world. (Even the movie acknowledges this, with the old man saying that it would take government at least another generation to make simple EVM machines)

But then what about the poor? Regardless of whether you agree with my support for a freer market, you can agree that government generally runs for the rich. Who is it that gives contracts for ammunition to Kalee and lets him get away with substandard goods ? The government. Who is it that lets Kalee harm Aishwarya and Vikram, and helps to disgrace the latter ? The police, under government. Who is it that lets Dr. Eeram be falsely implicated? The police again, under government. Who is it that allows Kalee's crores of loan to be underwritten ? Governmental influence. Who is that incentivizes farmers to kill themselves to get reparations ? Again, the government. The last example proves that even with the best of intentions, governments actively end up harming people.

But what does this movie promote at the end? More trust and belief in government. Just vote vigilantly, and you will have a better life (the insulting implication being that Indians have never thought of this idea in the past 75 years). This is the approach of someone who thinks that with enough time, a wolf can be taught to love and play with the goats, despite the wolf killing the goats since time immemorial.

In its canard against the 'market forces' (which is free people engaging in their preferred economic transactions), against 'ruthless capitalists' (who are a product of the state, which gives them contracts and monopolies and underwrites their loans), Jawan shows that for a government to work efficiently, it requires outlaw vigilantes to take people hostage and threaten to do collateral destruction. This was predicted by Leszek Kolakowski : 'The abolition of the market means not only that the consumers — that is all members of society — are robbed of virtually all choice of consumption and all influence over production; it also means that the information and communication are monopolized by the State, as they too need a vast material base in order to operate. The abolition of the market means, then, that both material and intellectual assets would be totally rationed. To say nothing of the inefficiency of production convincingly demonstrated in the history of communism, this economy requires an omnipotent police state. Briefly : the abolition of the market means a gulag society'.

What this movie boils down to with its endorsement of higher governmental interference is just two choices : either support vigilante justice (which means we forsake law and order), or support totalitarianism (which means we forsake all our freedom). That critics have sanctified this movie as an effective political polemic shows either this enormous doltishness, or their rabid hatred towards the BJP government which lets them propose leftist totalitarianism as an alternative, or their blind adoration of Shah Rukh Khan. All three spell doom for an intelligent film culture