Sainath is one of India’s most well known Journalists. He was the winner of the Ramon Magsaysay award for journalism, literature, and creative communication arts. Amartya Sen once said that he is “one of the world’s great experts on famine and hunger”. He is a passionate defender of the “little man”. Even his libertarian critics admit that he does a wonderful job in point out facts which most libertarians would readily concede. However, the conclusions he derive from the facts he present are worse than absurd.
In his latest article in The Hindu, Sainath makes a case against fuel price decontrol. At the same time he points out that the “food price inflation” is at seventeen percentage. This is the typical collectivist attitude, Ayn Rand had in mind when she criticized people who desire cheap gasoline and at the same time want the industry to be taxed out of existence. They see no connection between these two positions. They are unable to perceive beyond the proximate benefits. Governments have been unsuccessfully trying to control prices for at least four thousand years. It was a disaster everywhere. It leads to shortages, black-markets, long queues, wasted time, poor quality products, expensive methods of production, and in the long run, higher prices. It might even breed further controls and take us straight to a socialist totalitarian cage. Sainath’s argument that “fuel price decontrol will profoundly affect the prices of just about everything.” is true in a sense Sainath didn’t intend it to be. Contrary to his belief there won’t be a general rise in prices if fuel prices are decontrolled. If the prices of fuel are high, people will cut down their purchase of other goods and its prices will fall. Only an expansion of money supply can cause a general price rise.
Sainath is worried that the “government seeks ways to spend less and less on the very food security it talks about.” In his eyes Government has unlimited funds from which it can draw for his pet welfare projects. It is forgotten that one of the fundamental economic principles is that scarcity exists, and always will, short of the Garden of Eden. Government, he points out, is endlessly searching for a low BPL figure. I doubt whether it can be supported by facts. There were several reports which made evident that so many people want to come under the BPL label. The Government, he proposes, should make sure that access to food, healthcare, education and decent work are universal. To paraphrase Ayn Rand:”At whose expense? “How are positive rights universal? Positive rights miserably fail the universalization test. When some people are provided with food, healthcare, education and work, some unfortunate beings are forced to provide for them. Nothing is more unjust than that.
Another logical fallacy is that the tax write-offs for the rich are morally wrong. To claim so, one would have to assume that all the wealth belongs to the state. A tax write off is not a subsidy, by any normal definition of the term. If X is subsidized at the expense of Y, money should be mulcted from Y to support X. Nothing of that sort happens here. The wealth of the rich should belong to them, as long as they earn it rightfully. The Government has no legitimate rights over the property of the citizens of the country over which it governs.