How easily our worldview mutates. How quickly our hierarchy of ambition gets rehashed and reset. All it takes is an invisible microbe.
Not too long ago we were hurtling towards the promise of 'agelessness'; even questioning death, the cornerstone of faith that seeks to give meaning to death, not trying to escape it. Science made incredible advances and we saw life expectancy shoot up into the 80's.Scientists were now eying the 'Gilgamesh Project' - quest for immortality. Has this ambition now been laid low in one fell swoop?
Over time, Economics too developed pretensions of faith. It created its own pantheon of gods - supply and demand curves, macroeconomic fundamentals, savings and investments. Has that invisible microbe that thrives only within us shrouded the pantheon? Is the search for new gods on?
The developed world seems to be suddenly populated by apostates. Those who swore by the gospel of the market, and saw a visible hand of the government as evil, are today busy 'creating' money by the trillion, hoping it will protect jobs and save failing businesses. The penance for the sin of fiscal profligacy can wait. The guardians of Economic orthodoxy, IMF and International Development Banks, have fallen in line. Central Banks are jostling for space.
The world's largest economy is not paying much heed to nostrums of Chicago School. In a rare display of bipartisanship the two sides have come together to create stunning fiscal space - so far a full ten percent of GDP - to meet the pandemic's economic consequences. That most are keen to put business health before public health should come as no surprise. It is in the nature of the US.
The pretender to world's third largest economy (little down the road) has also upped the ante. Under the advice of such luminaries as Amartya Sen, Raghuram Rajan, and Abhijit Banerjee, India too has allocated 10 percent of its GDP to deal with the fallout effects of Covid-19. Where will the money come from? Printing notes? No one is asking, not even world's three top economists who guided Modi down this path.
They put their case simply: do what it takes to reassure the poor that society does care; that their minimum wellbeing shall be secured. Arguing that tackling a social calamity is not like fighting a war (top-down power), Sen pleaded for participatory governance for the rescue effort to succeed.
[As an aside, Banerjee's video-conversation with Rahul Gandhi makes for fascinating listening. Rahul was sedate and apolitical, Banerjee model of humility - ensuring nothing goes over Rahul's head. His brief was to let cash flow directly to the poor, without being afraid of inevitable 'leakages'; that cash to spend is more important than rations to counter the looming demand-collapse; and eschew centralization of disbursements - go 'local'(lowest level of government/community/NGOs)to identify the needy better]
Pakistan was quick to announce a 'package' to manage the pandemic fallout. It is said some 1.6 trillion rupees, close to 3% of GDP, has been allocated to the relief and recovery effort, despite our gaping fiscal deficit. Sadly, the bigger deficit is that of trust. Successive governments have fudged and dissembled so often. Can we be blamed for becoming a nation of doubting Thomases? Once bitten twice shy, we are hesitant to give government credit even where we should.
By being skimpy on details Government hasn't helped its case. It was alright for the PM to have given the overall numbers and the direction of their flow. But one would have expected someone down the line to provide fuller details: where exactly is this money coming from, and more importantly, where is it going. Will the funds really slake the need of the poor- or will there be more for the rich to partake of? Notice, since February EOBI pensions have been reduced from 8,500 to 6,500!
It is always in the name of the poor, of course, but relief funds have a mysterious way of slithering into fuller pockets. Among all the reasons given to the ECC for sugar and wheat export subsidies we have a feeling the interest of the poor cultivator figured prominently - the markets will collapse under the weight of surpluses, robbing the farmer of a fair price the next season!
Where will the pandemic-related funds and facilities allocated to agriculture, construction, industry etc. end up (bravely assuming Finance does release the entire amount)? It is not enough to say jobs will be saved, without quantifying the numbers and sharing the specific measures to ensure it doesn't remain a moving target.
If the government can't be more explicit we can be forgiven for suspecting money will get into the wrong pockets.
We like to think the PM's heart is in the right place, that he genuinely wants to better the lot of the disadvantaged. The recurring question is if he knows how. His advisors are too steeped in trickle-down theory to risk the road less travelled. To them economic prudence is the only choice and growth the only route to public welfare. To them the US, European, or Indian examples are not comparable; nor the experience of Kerala or Vietnam particularly relevant.
To one who is being showered with accolades, Jacinda Arden of New Zealand, economic growth is an unnecessary evil that needs to be deprioritised. She has put out a budget where spending is dictated by what best encourages wellbeing of citizens. She has clearly laid down five priorities - all centred around better lives - that will drive government spending.
We recognize Pakistan is not New Zealand but surely there are lessons there that Q block can benefit from. We may not be ready for 'Happiness' as the key metric but we should at least aim for reducing sufferings.
Arden is no Trump (thankfully) but still the PM should reach out to her, as he should to Richard Layard, world's leading expert on unemployment and inequality. They might well suggest that the first step has to be a cut in GST that will have a greater relief-impact for the poor than the 'package'.
To the Sir Humpheries who warn him of the dangers of fiscal slippages the PM should read out Article 3 of the Constitution: "from each according to his ability to each according to his work".
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