Billions of people share, interact and discuss issues on social networks and message boards. The great hope is that these sites will help spread knowledge, share different viewpoints, and make people better informed. However, academic research has repeatedly argued that this is a hollow promise. These sites balkanise people around similar beliefs and interests (i.e., homophily) who then look for information that confirms their prior beliefs or repeatedly consume information that reinforces their prior belief in information cocoons (i.e., consumption treadmill or echo chambers). Cass Sunstein, professor at Harvard University, argued that even democracy is now threatened, as people with different viewpoints are moving farther apart at an alarming rate. The majority opinions in each group drown out contrarian views — a phenomenon akin to the Tyranny of the Majority.
Divided by demonetisation
We now observe the phenomenon in full force with demonetisation. Those who support Prime Minister Narendra Modi vouch for its effectiveness and assume any report of a cash crunch is simply media hype. Evidence to the contrary is ignored. Those who dislike the current administration are also out in full force deriding this as draconian policy and pointing only to stories of hardship and economic challenges. They ignore how black money hoarders and corruption are being exposed and so many are coming forward to pay taxes and fines.
But what surprised me is when Nobel Laureate Professor Amartya Sen, my favourite economist, called demonetisation a “despotic action that has struck at the root of economy based on trust.” He said, as quoted in this newspaper: “It’s a disaster on economy of trust. In the last 20 years, the country has been growing very fast…” He appears to support the argument that economic development is fine irrespective of how it is achieved.
I couldn’t resist thinking Prof. Sen fell into the trap of confirmation bias since his prior bias about the policies of the current administration is somehow misplaced. The criticisms and praise on the Internet about his comments were exactly as predicted — depending on one’s prior belief about demonetisation.
I am a believer of the Human Development Index (HDI) that Prof. Sen championed and is now universally adopted. Indeed, economic development alone will not capture human well-being without paying attention to human development in terms of education, knowledge, income, and health. However, I believe HDI ignores something fundamental to economic development: ethics and moral judgment.
Prof. Sen used the term “trust”, but it should be a result of ethical and moral judgment of human actors in governmental or any economic transactions. If individuals and businesses engage in legal economic activity and pay taxes, the government has more resources to invest in education, health care, and infrastructure to improve human well-being and economic development possibly at a faster rate. When a majority of the actors conduct economic activity unethically and immorally, it hurts the people who want to engage in ethical means. For instance, I believe India has abundant latent entrepreneurs with ideas, but they drop out from pursuing the dream because they do not have the network, wherewithal, or the conviction to embrace unethical and immoral practices to get things done. As Hernando De Soto suggested in The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else , it is more expensive to be legal than illegal in many parts of the world. India is no exception.
A stitch in time
Unless there are drastic actions, corruption in India has reached a point of no return. According to Transparency International, India is ranked 76 out of 168 countries in corruption. However, this index ignores private-sector corruption, including in education and healthcare — sectors that should be a beacon of trust.
The HDI ignores the continued moral decay even when the index shows improvement in India. I will be surprised if citizens who run their life ethically say they are happier in their day-to-day life today than 30 years ago. In fact, most honest citizens have surrendered to the corruption cesspool that has permeated every aspect of our life.
A few well-known economists have rationalised that in a corrupt environment, “greasing the wheels” will help move things faster and may not be bad for economic development. This is specious — once people rationalise moral decay as beneficial, nothing will stop them from stealing public resources and revenues. Good people will leave the government and political system only for those to be occupied by the corrupt and criminals. There are daily reports of unearthing obscene amounts of ill-gotten wealth and stashed cash. When that happens, the true potential for improving HDI is only hindered.
The moral fabric is being torn apart in India. Demonetisation, I hope, is that effort to cleanse the cesspool of corruption or at least put brakes on the onslaught of the stink. There will be unavoidable pain. We hope the pain will be short-lived and it will pave the way for a better India. If it doesn’t, no political leader will ever have the courage and vision to take on this moral decay.
Some will argue that demonetisation is great but disruptive, and that the corruption cesspool will be back in new ways and different forms. We hope that Prime Minister Modi will take steps to bring charges against corrupt individuals, businesses, and politicians in a timely and legal manner to drain the cesspool. It may be perceived as draconian by some, but may be required to change the moral fabric for good.
Prabhudev Konana is William H. Seay Centennial Professor and distinguished teaching professor at the University of Texas at Austin.
