The Eternal Cycle
Gandhiji had said something about the four stages that an idea whose time has come goes through. “First they ignore you, then they laugh at you, then they fight you, and then you win”.
Dear friends, I too have four stages for you. But unlike Gandhiji, I do not offer any hope at the end, because I do not offer an end. Instead, the four stages form a cycle and this cycle is eternal. and there is no victory at any stage.
- First they say “X is a luxury that only the privileged can afford! The government is making a big mistake by allowing X. Instead, it should tax X and subsidize Y”.
This is true. If the government follows this advice and taxes or bans X, it will stay a luxury that only the privileged can afford. So in this, they are completely correct. - Then they say “The rich are wallowing in their enjoyment of X while the poor are being denied access to it and have to make do with Y. The government should take proactive steps to ensure that the poorest segments get access to X. We cannot wait forever while market forces take their own sweet time.” The proactive steps in question usually translate to a) taxing X in order to subsidise another provider of X who is supposed to provide X to the poor. Needless to say the taxes increase the cost of X keeping it out of the poor, and those who are supposed to provide X to the poor, actually do not manage to provide any X to the poor. But it is the thought that counts.
- Then they say “The rapid and unchecked increase in X is [destroying our culture/destroying the environment/putting a strain on other resources/fuelling consumerism/increasing greed]“
- Y gets replaced with X. A new X comes to threaten the old X and the cycle starts again.
What this actually means is that a lot of people now have access to X, which is why it has started destroying the environment. If only a few had access to X, there would have been no problem at all. So often at this stage, you find the champions of the poor being joined by the old rich who find that they are getting crowded out in their enjoyment of X
Beautiful! Sums it up perfectly. But I would say that step 3 is a victory of sorts. It demonstrates the ubiquity of X.
Comment by TTG — October 6, 2005 @ 8:10 am
Lovely post, Ravi. I’d question your contention, though, that there is no victory at any stage. By the time X replaces Y, the whole world is a little better off than before, despite the naysayers. Surely that’s progress.
Comment by Amit Varma — October 6, 2005 @ 1:01 pm
Nice - very Nice. And I agree with Amit and TTG. There is a victory of sorts.
Comment by sd — October 6, 2005 @ 1:17 pm
[...] 06.05 in Economics
Ravikiran writes a succinct and informative post on the eternal cycle in economics.
[...]
Pingback by DesiPundit » The Eternal Cycle — October 6, 2005 @ 5:06 pm
Interesting thought experiment re Step #2. What would happen if X = farmland? What if the indian government said to itself “why should only the privileged own farmland? why not re-distribute the land such that the tiller of land actually owns his own piece of land?”
How would the rest of the analysis play itself out?
Sanjay
Comment by Sanjay — October 6, 2005 @ 5:17 pm
An analogy for people who see victory in the completion of the cycle: Consider a marathon runner who is being beaten, spit upon, having things thrown at him. He somehow manages to trundle along and actually finish a lap. And those who spit at him and beat him actually gain from his finishing the lap (assume somehow). In his next lap, they continue to spit upon him and throw things upon him.
Would you call such running a victory for the marathon runner?
There is some victory at a material level perhaps, but morally, I see a great defeat.
Comment by seven_times_six — October 6, 2005 @ 5:50 pm
7*6, obviously you can never make the naysayers shut up, which is what makes it a cycle. But the world as a whole does get materially better off. Sure, if the naysayers weren’t there it would get better off faster, so relatively you could say that this victory is a defeat of sorts. But that way, everything would pale compared to its ideal.
Comment by Amit Varma — October 7, 2005 @ 1:22 am
Sanjay, that is an interesting question. The answer is that there would never be a green revolution then. Just remember that the green revolution depended on large landholdings and mechanisation of agriculture. The green revolution took place in Punjab, where land reforms hardly took place and not in West Bengal where it proceeded the most. And guess what they say about the green revolution? (Hint: See stage 3)
In fact agriculture was one of the examples I thought of while developing this cycle. Only problem is, I do not have evidence of stage 1. If there was a time when they opposed agriculture on the ground that most people depend on hunting and gathering for sustenance, evidence of that must have been lost to antiquity.
Comment by Ravikiran — October 7, 2005 @ 2:04 am
Folks, when I was talking of victory, I was referring to winning the argument. That never happens.
Comment by Ravikiran — October 7, 2005 @ 4:33 am
Two things:
1) You need the naysayers, as they will simply force you to ensure that your argument is valid and on solid foundations
2)Ravikiran, the argument is won! You say X is a good thing. X becomes ubiquitous. You are right, you win. It is BECAUSE you win that the complaints of “There is too much of X” begin. Asking people like communists to admit they were wrong just isn’t happening!
Comment by TTG — October 7, 2005 @ 4:39 am
Amit: But that way, everything would pale compared to its ideal.
Yes, I suppose that’s there. We can almost never have a complete moral victory for the ideal.
Reg. the farmland distribution thing, I’d say it does not fall into the ambit of this cycle analogy. X = commodity, not the means of manufacturing a commodity.
I’m not sure the means follow a cycle; but there are of course strong theoretical and empirical arguments against a wanton distribution of the means or even a nationalization of the means.
Comment by seven_times_six — October 7, 2005 @ 8:26 am
Pradeep, I think a parallel cycle can be made on the supply side.
Comment by Ravikiran Rao — October 7, 2005 @ 8:33 am