The Indian Economy Blog

November 25, 2005

The Best Livelihood Available

Filed under: Labour market,Miscellaneous,Regulatory reforms — Amit Varma @ 12:16 pm

Sanjeev Naik points me to a piece by Amelia Gentleman in the International Herald Tribune that speaks about the plans of the West Bengal government to ban hand-pulled rickshaws. Gentleman writes:

The mayor describes the job as “despicable”; the chief minister of the state of West Bengal, a Marxist, says it is “barbaric.” City officials point out that hand-pulled rickshaws are a colonial anachronism that have been outlawed almost everywhere else in the world and argue that it is an “abuse of human rights” to allow these “human horses” to continue working.

Well, I agree with their description, but not with their prescription, which will put an estimated 18000 men out of work. These rickshaw pullers do the job they do not out of coercion, because someone puts a gun to their head and forces them to pull a rickshaw, but because out of all the options available to them, this is the one they like most. In other words, if they were not allowed to work this way, they would be doing something they consider more “despicable,” more “barbaric,” even more of an “abuse of human rights.”

Gentleman quotes a rickshaw puller named Mohammed Nasim as saying:

I don’t feel any indignity. If I wasn’t pulling a rickshaw, then I’d have to work in a hotel, or start collecting up rubbish. I think rickshaw pulling is a better job.

Now, shouldn’t the choice be his to make?

So what is the correct prescription then? Clearly, to offer these people better options of livelihood, enough of them, so that they can move on to better jobs. The government cannot create these jobs, but it can enable their creation. It can do this by removing all the impediments it puts in front of entrepreneurs and businessmen, and by abolishing the license and inspector raj. The more enterprise you have, the more jobs you will create, and the more options rickshaw pullers will have. (I’d earlier written on these impediments over here.)

If we want people to move up in life, there is only way to do so: to increase their choices. What the West Bengal government is proposing to do will diminish the choices of the people concerned. Bad move.

15 Comments »

  1. Isn’t the immediate solution obvious? Instead of rendering the rickshaw pullers jobless, shouldn’t the government be exchanging hand-pulled rickshaws for cycle-rickshaws (preferably for free!)

    Comment by Nandz — November 25, 2005 @ 1:29 pm

  2. It wouldn’t be “for free,” Nandz. It would be with taxpayers’ money, and spending it here would mean not spending it somewhere else. The solution to this, as indeed to most things, does not lie in spending taxpayers’ money.

    Comment by Amit Varma — November 25, 2005 @ 2:22 pm

  3. Obviously it wouldn’t be for free! No one objects when the government announces a lakh of rupess each as compensation for disaster victims. Aren’t these rickshaw pullers ‘disaster victims’ in their own right? Is the money being wasted? And obviously cycle rickshaws would cost much lesser than the compensations!

    Comment by Nandz — November 25, 2005 @ 3:28 pm

  4. On the rickshaw issue, I can tell you how things have changed in Tamil Nadu.

    First the hand-pulled rickshaws were replaced with leg operated tri-cycle rikshaws, and all the advantages of the cycle chains.

    Subsequently these cycle rikshaws slowly gave way to auto rikshaws running on petrol/kerosine (in several small towns a mix of petrol and kerosine – really!)

    Several small towns still have cycle rikshaws but hand pulled rikshaws have completely been eliminated in Tamil Nadu.

    I am not exactly certain what was the role of the government in this, or whether some NGOs were involved in the process. However, I have heard about politicians making this a major issue.

    Similarly there were hand pulled carts for carrying sacks of grains and other goods. Now, across Tamil Nadu I don’t see these vehicles at all. Even in rural areas you either have carts pulled by bulls/horses etc. or motorised. Across Chennai you have what are called ‘fish carts’, which are mechanised local creations running mostly on kerosine with touch of petrol.

    So here is what I think West Bengal Government can offer. They can convert all the existing hand pulled rikshaws into cycle rikshaws, entirely free of cost to the rikshaw puller. My guess is, the cost of this conversion shouldn’t cost more than Rs. 1,000 per vehicle. The existing body is used as it is. Steel frames, cycle chain and ratchets, one extra wheel, pedals, handle bar, labour – that is all.

    So for 18,000 vehicles, the cost for the Government will be a mere Rs. 1.8 crores. That is a perfectly acceptable cost a state Government can take in order to provide dignity to a large group of workers and also a lot more comfort to the commuters who use these rikshaws.

    Even if you consider a government inefficiency factor of 50% – the cost will be only Rs. 3.6 crores, still a worthwhile spend.

    The added advantage is that this money goes into the economy. More steel bought, more entrepreneurs making money in welding the frames and working out the fixtures.

    Additional advantage: The rikshaw pullers will have to work relatively less hard, will now complete a trip much faster, and therefore can make more money. Can save more time for their customers. Traffic situation will improve, and so on, so forth.

    Comment by Badri Seshadri — November 25, 2005 @ 3:45 pm

  5. Nandz, in which case, here’s my question: why spend the money on those rickshaw pullers and why not millions of people who are even poorer and who don’t have even such a basic livelihood?

    My issue is simply this: there are better solutions that will lift the rickshaw pullers out of their mire, and they all lie in the government getting out of the way of entrepreneurs and businessmen everywhere. They would actually save taxpayers’ money doing that, instead of spending it, and the resultant growth in industry would create enough options for the rickshaw pullers.

    Badri, thanks for sharing your views. I completely agree that upgrading the rickshaws would make a huge difference, but the rationale for spending taxpayers’ money here instead of on more urgent needs eludes me, especially when a large amount of wastage is inevitable. And raising 1.8 crores, I’m sure, wouldn’t be too hard for many NGOs. In fact, I’m surprised no one has done this already.

    Regarding this:

    The added advantage is that this money goes into the economy. More steel bought, more entrepreneurs making money in welding the frames and working out the fixtures.

    The money, if it was spent on something else, would go into the economy anyway. So that can hardly be a factor.

    Comment by Amit Varma — November 25, 2005 @ 5:26 pm

  6. The pull of government driven solutions is amazingly strong, particularly in India.

    “I am not exactly certain what was the role of the government in this, or whether some NGOs were involved in the process. However, I have heard about politicians making this a major issue.”

    or

    “Isn’t the immediate solution obvious? Instead of rendering the rickshaw pullers jobless, shouldn’t the government be exchanging hand-pulled rickshaws for cycle-rickshaws (preferably for free!)”

    Intervention is just so much more seductive than leaving things alone and letting people make choices. Even a single rupee spent on giving these rickshaw-wallahs cycle rickshaws is a rupee not devoted to:

    - education spending
    - infrastructure
    - health care for those even poorer than the rickshaw-wallah
    - reduced taxes for individuals or corporations

    This list is certainly not exhaustive but gives a sense of how we’re ultimately talking about a resource allocation problem which on a national scale, is millions of times larger than the issue of hand pulled rickshaws in West Bengal.

    I guess politics is ultimately about gestures. Gestures typically carried out at the expense of the politically weak. As Amit said, these rickshaw pullers presumably feel that they’d prefer this work to any of the alternatives but their wishes are immaterial given their weakness. Dismantling the license raj, on the other hand, threatens people who have much more influence and hence is much less likely. Even though that’s the kind of step that really does increase widespread prosperity and reduce poverty. Perhaps the last two aren’t as widely shared goals as one would hope? (Yadev in Bihar anyone?)

    Comment by ramster — November 25, 2005 @ 7:24 pm

  7. What better can we expect from the communist government anyway?

    Moral posturing without credible solutions…

    I’m appalled to see these people suggest solutions like a free exchange with cycle rickshaws!

    And yet another case of the ‘broken window’ fallacy :

    added advantage is that this money goes into the economy

    And where would it go otherwise?? With this plan the money goes into the rickshaw makers’ profit and nowhere else.

    I can tell you a way to exploit this (and that’s what I’m going to do if it happens). Buy a hand pulled rickshaw and go to the government and get it exchanged. Sell cycle rickshaw in open market. Repeat process. This will surely prompt an underground market in the hand pulled ones.

    Comment by Abhinay — November 25, 2005 @ 8:50 pm

  8. Why is Govt. intervention in education or healthcare (alone!) considered infinitely superior to intervention in lifting specific clause of people from their currently pathetic work conditions to something marginally better?

    Government intervention is one solution here. An NGO inspired move is another, where instead of tax money, donations from a few foundations and individuals may be used.

    There is another model. Microfinancing. This could be a very good business opportunity. Lend Rs. 1,000 for refitting the vehicle and ensure that the chap pays Rs. 2,000 back over a 24 month period. That would be a bloody good return I suppose for the capital deployed.

    I do not however want to rule out Govt. intervention. Govt. intervention could speed things up especially when something seen as socially unacceptable – such as a poor man dragging another through horrible streets.

    Where an individual has not found a solution to his own problems, it is worthwhile for the society and the Govt. to look at sensible solutions.

    Comment by Badri Seshadri — November 25, 2005 @ 9:38 pm

  9. I remember when I was young ( I am talking of mid 70′s here), Bombay used to have “tonga’s” or horse carraiges. They however became extinct with the advent of the rikshaws (with internal combustion engines!). What is the economic reason that the hand-pulled rikshaw’s in Bengal have not gone the way of Tonga’s in Bombay?

    Can someone explain why hand-pulled rikshaws are prevalent in only certain states and not the rest of the country. If a hand-pulled rikshaw is the only occupation these men find in Bengal, why dont they migrate to Mumbai for example?

    Furthermore, why does Mr. Nasim (in the story above) consider pulling the rikshaw better than working in a hotel? I would prefer to be a waiter any day than pulling a rikshaw? Does pulling the rikshaw pay substantially more than the waiter’s job?

    Finally, what about the people who work in mines for example, or construction workers in India? Its back breaking work in repugnant working conditions and far riskier than pulling a rikshaw. Why is that considered morally acceptable?

    Comment by Vivek G — November 26, 2005 @ 9:27 am

  10. The CPI-M’s programme for the people’s democratic government guarantees freedom of occupation and right to work as the fundamental right of every citizen.For the sake of argument one can say that Rikshaw pulling is an anachronism of colonial era and barbaric etc.But the very fact that there are as many as 18000 people who are doing this job means there is a demand for the cheaper,more convinient and perhaps faster mode of transportation which these people are satisfying.So why ban them?

    Comment by aak — November 26, 2005 @ 1:16 pm

  11. I understand the fact that there are obvious concerns about the livelihood of Rickshaw pullers in West Bengal , but I would still support government move to ban hand pulled rickshaws. There is such thing as “inhuman working conditions” and there has to be a move towards removing them.

    Now, the argument against this move would say, “They are doing it voluntarily.” Or “the alternative to it would be even worse”

    Both arguments I feel are only partially correct.

    Though no one is forced into it at gun point, people are pushed into it. Pushed into it by compulsions of set economic order. And the establishment of this socioeconomic order took place in an era when there was total lack of social justice. I would compare it to early industrial age exploitation of the labor class when laws had to be made to ensure humane working conditions.

    The second argument I feel is only partially correct. You cannot let a practice continue for lack of alternative. People would not stop traveling because there are no rickshaw pullers. Surely, post-banning alternatives will be searched. These would present new opportunities. Government just needs to ensure that these opportunities go to people affected by the banning. Government can regulate Auto rickshaw registration. The cost will be born by the customers of course. But its only fair. Its quite similar to Banning of child labor and dance bars. What is wrong is wrong and cannot be justified by saying there are no alternatives. After the banning we would have to go through a period of unrest for say next 10 years max. Without it, 20000 people would be subjected to inhuman working conditions generation after generation.

    Comment by Swapmil — November 26, 2005 @ 1:51 pm

  12. Yeah, but the thing is, so we take care of the 20,000 rickshaw pullers. Many of my relatives have servants, aren’t their working conditions fairly delporable too? We can ‘rehumanize’ the plight of the hand-rickshaw pullers by giving them cycles, but what are we going to do with domestic servants, presumably the hundreds of thousands of them that are in India? There is no effective measure that could respond to their situations, so then wouldn’t they have a legitimate grievance? Not that I disagree with you, because I am all for the cycle-rickshaws. They aren’t exactly the most expensive things to manufacture, but eventually we are walking down a road where we will find that there are too many people working in inhumane working conditions and there is just not enough money to solve the problem. What then?

    Also, a question for anybody out there, but what progress has there been in developing cleaner-burning and more efficient auto-rickshaws? I’ve seen a few models in the papers on the internet that are supposed to “roll into the market” and repalce the current ones, but that doesn’t seem to have happened (since I last saw). Would it be a good idea for local governments to subsidize cleaner rickshaws to reduce pollution in the city?

    Comment by AK — November 26, 2005 @ 3:43 pm

  13. It is tiresome to attribute the solution of every problem under the Indian sun to removing license raj, free enterprise, impediments for entrepreneurism, so on. What ails an Amit Varma is not what ails a rickshawala. People are living in parallel universes, as it were.
    Hypothetically, I as an Amit Varma am bothered by impediments to free enterprise because I cannot open some shop/company/BPO/factory/mill/whatever without running around GoI officials to get electricity & water & construction permits & whatnot. But I as a rickshawala would not even think of these options. Yes, I as a Mira Road gareeb would perhaps be aware that such options exist, but in some other parallel universe of some Marine Drive ameer aadmi. One cannot conceive of what one has no idea about. I as a gareeb would be handicapped by sheer ignorance, of the mechanisms and the law of the land, lack of capital both financial & intellectual, of simply the rich life as it were. I as a rickshawala have chosen to pull a rickshaw, have settled into it as a lifestyle,call it sheer inertia if you will. It isn’t something I will change overnight, or even in a few years, simply because GoI removes “impediment to free enterprise”. It is like asking a software cubicle-wali to stop writing code & become a beer-bar dancer because she has a good figure and likes to drink & dance at parties. She would never even have thought such an option is available, let alone consider it. My software friend takes a lot of good pictures and posts them on flickr & such. One day I told him, see baba, you have a good feel for image composition, you have steady palm & produce good results whether with deep or shallow DoF, why not tender pink slip to this software ki naukri and do photography for a living ? He says did I go to IITB & study so hard so I can run around with one camera ? Photography is nice side hobby, stress relieving, creative etc., but end of the day software pays his bills, it is what he settled into, studied for, after making several painful time-consuming conscious choices. It isn’t something he will give up because GoI removes free enterprise impediment to photography career. Bottomline, one must get some insight into human psychology before attributing everything to economics. Just because Amit Varma wants artisans to start blogging because hand-crafted pots & pans are being replaced by manufactured steel vessels doesn’t mean artisan has thought about blogging as a viable career choice. Whether artisan or blogger or journo or rickshawala or call-center-wali or whatever, people make career choices & settle into it. They don’t jump up & do the next best thing because GoI is removing some perceived impediment. Kya bole to, thoda soch samajke blog likne ka.

    Comment by kya yaar tu bhi — November 27, 2005 @ 12:31 am

  14. Hi Kya yar tu bhi: I dont see where Amit Verma “wants” anyone to do anything. His only point seems to be that everyone should have the liberty to pursue their legitimate self-interest in any way they see fit and government ought to get out of their way. Then it is upto the individual to be a riksaw walla or an industrialist based on his talent, hard work and some luck.

    No one has the wisdom to know what a rikshaw-walla would do given greater liberty and economic opportunities or how such liberty would impact him. It is presumptous and unfair to assume that greater economic opportunities are of no use to a certain section of the society.

    Over the last century the free market has proven to be the best system to provide for the needs of the people. It is not perfect but it is the best.

    Comment by Vivek G — November 27, 2005 @ 2:55 am

  15. Kya yaar tu bhi,

    You’ve completely missed the point of what of what I was saying. The removal of the license raj and the reform of our labour laws will obviously not mean that the rickshaw wallah will run off to start a business, but that many others certainly will, and existing businessmen will be able to expand faster. That will lead to an increase in jobs, especially in labour-intensive manufacture. This will increase the choices of the rickshaw wallah, as demand for labour will go up while the supply stays the same. The rickshaw wallah will get a better job for more money, perhaps even in the same field (working for a cycle-rickshaw operating company, for example). It is as simple as that. Increasing the choices of people is what progress is all about.

    Comment by Amit Varma — November 27, 2005 @ 7:08 pm

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