Why state must cede power to communities

The general assumption that states must have a monopoly of power is fundamentally flawed. It is leading to broken societies

India is Broken is the dismal title of a book written by an Indian economist at Princeton, Ashoka Mody. Without going into the merits of this book, which I have only read in summary, two rhetorical questions need to be asked: One, which country isn’t “broken” in some way or the other? And, two, will the “liberal” solutions most people proffer as correctives make them less “broken”?

Depending on which parameters you choose to decide on the extent of India’s “brokenness”, one can probably say the same about gun-toting America, post-Brexit “Little” Britain, Vladimir Putin’s post-Ukraine Russia, and belligerent Xi Jinping’s “Zero-Covid” China, most of warring Africa, West Asia, Latin America, and South Asia outside India, Nepal and Bhutan.

Large parts of the blame should devolve on two types of liberalism —classic liberalism and left liberalism. Classic liberalism charted its own demise with its excessive advocacy of individual rights and freedoms, free markets and a limited state. This led to the rise of inequality and the concentration of wealth and power. This, in turn, helped the rise of left liberalism, or progressive liberalism, which ended up expanding the power and role of the state even more. We now expect the state to guarantee everything, from lives to livelihoods. What is really “broken” is the idea of the liberal state.

In India’s case, our politics, the justice system, and administrative structures are dysfunctional, but you cannot fix what is “broken” by trying to repair it on the go. You have to use the parts that are not broken and build on strengths. The way to improvement is always focusing on strengths, not eliminating weaknesses. India’s strengths are our strong family, caste and tribal values and affiliations. With reform and empowerment, they can deliver better social and economic outcomes.

Illustration: Binay Sinha

Outside Europe and America, which thrived on colonial loot and violent dispossession of the natives, the countries that actually managed to address issues like jobs, quality primary education and healthcare — the key Indian failures mentioned by Dr Mody in his book — were “illiberal” and largely monocultural countries in Asia, including Japan, Asean and China. In contrast, the list of “broken” countries now includes most of the developed West, where family, community and other social organisations have broken down to the point where we cannot but apportion a part of the blame to their “liberal” advocates.

Liberalism was built on the implicit assumption that traditional social institutions — family, tribe, caste, and religion — were oppressive and thus needed dismantling. The short rebuttal to this argument is this: Yes, these institutions did become oppressive, but that is the result of giving any institution excessive power. Currently, it is the “liberal” state that is the most oppressive institution known to our species, and it is leading to “broken” societies. The almighty state is the direct creation of the “progressive liberal” state, for it has given unto itself a monopoly of all power. The way out is to re-empower older and newer institutions that build community in whatever way it is now possible.

If you are failing with primary education and healthcare, should you be pouring more money into mercenary private education and elite hospitals or community-based home schooling and low-cost collective health insurance? Devi Shetty of Narayana Health has proposed that instead of state and private insurers offering health insurance, hospitals themselves should insure the communities they serve, so that the interests of the insurer and the insured are aligned. And if your law and order is in a shambles, should you be creating more powerful police forces and alienating more people or asking communities themselves to police their people? Communities are in a better position to know who among them are likely to become violent than the police.

A Budget is due in India today, and it probably won’t do anything to rebalance state power by empowering communities, but at some point we have to make this conscious choice to prevent further ruptures in society. I would like to offer two suggestions to make a beginning in this direction.

One, just as many states in Europe (Germany, Austria, etc) collect church taxes on behalf of recognised churches, taxpayers (including goods and services tax payers) can be encouraged to automatically and regularly contribute a specific proportion of their post-tax incomes to a community organisation of their choice (it could be a temple, a caste- or tribe-based charity, and the like ). These contributions will surely need social audits, but as long as the money is used for the purposes they were meant, it would be fine. In due course, members of these communities will get an additional social security net, either in cash or kind (free schooling or healthcare, for example), thus augmenting (or even supplanting) the state in some cases. In a situation where jobs are hard to come by and technology is replacing the need for human labour, community organisations will expand livelihood opportunities at a far lower cost and with greater alignment with community objectives than if we had to do the same thing by expanding the government. The current system of contributions under the head “corporate social responsibility” is not the ideal way to make society better. Security nets will be better and cheaper if every citizen is encouraged to contribute.

Two, there is a good case for India to institute an inheritance tax on any wealthy person who does not leave at least 50 per cent of his posthumous wealth for charitable or social purposes. This, incidentally, is the core principle of the Giving Pledge that US billionaires are promoting. It should work in India too, provided voting powers are substantially left with the owners of companies. What the Oxfam report on the wealth gap gets wrong is the idea that paper shareholding wealth is equal to personal net worth, when a large part of this wealth cannot be encashed without diminishing the value of the underlying shareholding itself. There is no case whatsoever for an annual wealth tax, for it will just encourage the wealthy to evade and shift to tax havens. An inheritance tax, with generous exemptions for property and cash left for family, will offer fewer incentives to suppress every human being’s urge to contribute to the betterment of society.

The big question is this: How do we revitalise communities, and how can state power be shared with responsible communities that can supplement its own efforts to provide jobs, education, healthcare and safety nets? Liberalism cannot survive if it marks itself out as an enemy of traditional or new social institutions. Homo sapiens is a social animal; it is time to put “social” back into the idea of state power. Liberalism is often anti-social.

The writer is editorial director of Swarajya magazine