Racism is not the major problem in the world today

In Durban, a “World Conference Against Racism” is coming to an end. In the past, racism was indeed a very serious matter, as nobody knows better than South Africans. It is right that it should not be forgotten, just as the evil of communism must not be forgotten; in both cases in order to make it less likely that these evils will come back. Nevertheless, it is important to realise that racism is not the major problem in the world today and it is very much to be feared that so far from being an attempt to address the world’s major problems, this conference is in fact part of those problems.

Let us consider by way of illustration the plight of the ‘untouchables’ in India, which is being canvassed at the conference. The very poor in India are very numerous and very poor indeed, certainly among the poorest people living on earth. A great many (but not all) of these people belong to the so-called ‘untouchable’ castes. So, is poverty caused by caste – or should we say by caste-ism? (Whether caste is the same thing as race is another question. To say it is, is certainly to give a highly original interpretation to the word ‘race’, but it is probably not the most original which we will hear at this conference. In any case, it does not matter. Race has never had a precise meaning. A race is whatever anybody chooses to call a race.)

We should note two points of fact. The first is that in Bangladesh, India’s neighbour, which is a Moslem state, where formal caste has never existed, the poor are every bit as poor as in India, and, relative to the total population, even more numerous. The second is that the status of ‘untouchability’, as a legal status carrying legal disabilities, was abolished in 1946, and ever since then untouchables have been the beneficiaries of affirmative action. Political action against untouchability has been in place for over 50 years. Apparently it has failed. So do we need more of it, or do we need something different?

The fact is that the poor in India are so poor because for forty years under the Congress government, India was the prime exponent of ‘The Third Way’ or “middle of the road socialism”. In consequence, like every other country that followed that way, it had a very low rate of economic growth (despite being the world’s largest recipient of aid) and the poor remained poor or grew poorer. In Hong Kong, Singapore, Malaysia, Taiwan and South Korea, the poor grew conspicuously less poor, and in Japan the formerly poor became affluent.

Middle of the road socialism is indeed a middle way between sound economic policies such as were followed in Japan, Hong Kong, etc, (and, earlier in the United States) and the recipe for total disaster which was communism as followed in the Soviet Union, Yugoslavia, and China under Mao Tse-dong. Thus, in China, twenty million people starved to death in two years as a direct result of the policies of Mao. Nothing like that happened in India.

What did happen in India was the policy known as “the permit raj’ – government by permits, whereby in a country of seven hundred million people no significant economic activity could be undertaken without a permit from the central government – a permit issued in the discretion of some authority. The purpose of this system (and of those resembling it which exist in Europe and elsewhere) is to protect various vested interests, some workers, some employers, against competition, while enabling those who constitute the government to give or withhold this very valuable gift as they see fit. Of course they do not give it for nothing. Some, especially officials, take straight bribes. Others take informal favours, which in the case of politicians includes political support. Of all the vested interests behind the permit raj by far the most important and the most powerful is the government itself.

The major problem in the world today is bad government, and the vested interest that those who constitute government have in keeping it bad, because bad government enables them to reap profit which good government would not.

These people are, it is to be feared, behind the racism conference. They will work to prove that poverty in India is caused by caste-ism and then say that it follows that the permit raj (which has been somewhat reduced since the fall of the Congress government with very good effect) must be strengthened so that every permit can carry an obligation to employ a quota of untouchables. In this way they will hope to deflect the demand that the permit raj should be swept away (and perhaps they with it), to make way for an economic system that will create jobs, not for a quota but for everybody; and allow the untouchables, all of them, to rise as the poor in Japan rose.

The most pressing problem in the world today is poverty. The solution to poverty is known and proved. It is economic growth. Why is there not a United Nations Conference for Economic Growth, and never has been in 50 years? The answer is that the pursuit of economic growth requires governments to do less, whereas those in bad government want to do more so that they can have more power and handle more money, some of which will stick to their fingers.

Perhaps from a practical point of view, the major problem in the world today is bad government. The United Nations, as a cartel of governments, can all too easily become part of that problem.

Source: Michael O’Dowd is the Chairman of the Free Market Foundation. This article may be republished without prior consent but with acknowledgement. The patrons, council and members of the Foundation do not necessarily agree with the views expressed by the author.

FMF Feature Article / 07 September 2001 - Policy Bulletin / 01 September 2009
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