Incompatible institutions: socialism versus constitutionalism in India

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Despite trade liberalization, industrial delicensing, and deregulation in other sectors of the Indian economy since 1991, the agricultural sector is stifled by arbitrary, complex, and ever-increasing regulation in both input and product markets. This article resolves this puzzle of the Indian economy and, using Mises's theory of interventionism, explains the growth of regulation and subsidies in Indian agriculture. I argue that each intervention in agriculture created distortions in the market, necessitating the subsequent intervention in agricultural inputs and/or outputs. Land ceiling policies led to a large number of farmers with small and marginal landholdings. Attempts to increase agricultural productivity and income on small holdings led to interventions, and consequent distortions, in factor markets for seeds, fertilizer, electricity, water, credit, insurance, as well as in output markets in the form of minimum support prices. Indian agriculture policy serves as a cautionary tale of interventionism and needs systematic and comprehensive reforms.

Section: Land Ceiling Policy In Indiamentioning

confidence: 99%

Mises's dynamics of interventionism: Lessons from Indian agriculture

Rajagopalan

2023

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“…The socialist experiment with collectivization explains about half of the body count from the 1933 Ukraine famine (Naumenko, 2021, p. 156). Socialist experimentation eroded the rule of law and undermined the constitution in India because every new circumstance “required” additional power that was not constitutionally authorized (Rajagopalan, 2015). Socialism's failure notwithstanding, the citizens of formerly communist central and eastern European countries were more skeptical of capitalism than people elsewhere (Padelford & White, 2010, p. 114).…”

Section: Monocentric Economic Planning: Constructivist Rationalitymentioning

confidence: 99%

Economic planning must be polycentric, not monocentric: Introduction to a symposium on Mises and Hayek on socialism and knowledge

Carden

2022

The roaring (20-) 20s are a decade of anniversaries and milestones. 2020 was the 100th anniversary of Ludwig von Mises's seminal article "Economic Calculation in the Socialist Commonwealth" and the 75th anniversary of F.A. Hayek's seminal article "The Use of Knowledge in Society." 2022 brought a series of significant anniversaries: the 100th anniversary of Mises's Socialism: An Economic and Sociological Analysis as well as the 60th anniversary of James M. Buchanan and Gordon Tullock's The Calculus of Consent: Logical Foundations of Constitutional Democracy, Milton Friedman's Capitalism and Freedom, and Murray Rothbard's Man, Economy, and State. It was also the 20th anniversary of Vernon Smith's Nobel Prize. The works and milestones celebrating anniversaries in 2022 owe much to Mises's and Hayek's pathbreaking contributions. This paper summarizes and contextualizes Mises's and Hayek's arguments about socialism and knowledge and introduces a Southern Economic Journal symposium on the anniversaries of "Economic Calculation in the Socialist Commonwealth" and "The Use of Knowledge in Society."

“…This kind of constitutional structure has enabled the Union government to legislate widely in areas originally reserved for the states. In the fifties and sixties this was to enable socialist planning, which was partly done in tandem with the states, but also in a highly centralized manner through Parliamentary legislation (Rajagopalan, 2015, 2017). In recent times, any reforms or other measures are typically forced through the central government to ensure state compliance and prevent deadlocks (Hari, 2018).…”

Section: Why Did India Impose Such a Centripetal Lockdown?mentioning

confidence: 99%

Battling COVID‐19 with dysfunctional federalism: Lessons from India

Choutagunta

Manish

Rajagopalan

2021

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The Indian federation is highly centripetal, and historically, this has left states without the requisite legislative and fiscal authority to take independent action and initiate policies of significance. Consequently, India's response to the global COVID‐19 pandemic was to impose a very severe countrywide lockdown using the mandate of the Union (federal) government. This centralized one‐size‐fits‐all diktat was imposed despite high variations across states in resources, healthcare capacity, and incidence of COVID‐19 cases. We argue that India's dysfunctional federalism is the reason for the centralized lockdown, preventing state and local governments from tailoring a policy response to suit local needs. Using mobility data, we demonstrate the high variation in curtailing mobility in different states through the centralized lockdown. We find that India's centralized lockdown was at best a partial success in a handful of states, while imposing enormous economic costs even in areas where few were affected by the pandemic.