Ever since the United Progressive Alliance government came to power riding on the shoulders of the Communists, a frequently asked question is: what is their appeal, why do people still get taken in by them?
It turns out that Indians are not the only ones to be thus puzzled. Two Harvard economists -- one of them, the redoubtable Alberto Alesina -- were struck by the same question. So they decided to find out.
In a recent paper*, he and Nicola Fuchs-Schündeln have studied the case of Germany. Specifically, they tested the proposition that economic regimes have a feedback effect on individual preferences.
That is, the political rhetoric you have been subjected to and the economic policies under which you have lived will affect your preferences in respect of policies.
They have examined Germany between 1945 and 1990, when East Germany was Communist, with heavy state intervention and extensive redistribution. They find that "after German reunification, East Germans are more in favor of redistribution and state intervention than West Germans, even after controlling for economic incentives.... We find that East Germans are much more pro-state than West Germans."
What's more, this is even more of the older East Germans, who lived for a longer time under Communism. They also found that in spite of this, there was a convergence of opinion taking place between the East and West Germans.
"We calculate that it will take one to two generations for preferences to converge completely. According to our results, it will take 20 to 40 years for an average East German to have the same views on state intervention as an average West German."
Why is this so? Because, they say, people simply become used to certain things such as "an intrusive public sector". Pavlov called it conditioning.
But their second explanation is even more striking. "A second, indirect effect of Communism is that by making former East Germany poorer than West Germany, it has made the former more dependent on redistribution and therefore more favorable to it."
Now we know what the Indian Communists (and even the Congress) are up to when they try and keep everyone poor. It serves to increase the appeal of the redistributive policies that they espouse.
The authors are aware that survey answers do not always reveal what people actually believe.
But, they say, they are convinced of their results because "first, the basic correlations of the answers with variables like income, wealth, and labor force status are consistent with obvious individual cost/benefit analyses. Second, evidence on voting behavior in East and West over the observation period is consistent with the picture emerging from this survey."
They have a table that shows vote shares have differed across East and West Germany. It shows the Eastern vote shares of the socialists being consistently higher than the Western. But it also begins to converge over time.
They say, "We provide evidence that individuals' preferences are rather deeply shaped by the political regime in which they live."
If we extend this it means that, say, American and British preferences will be different from French and German ones. The latter have a higher revealed preference for re-distributive policies compared to the former.
In terms of preferences, there is no reason to believe that this is not true of India as well. The 2004 elections stand testimony to the fact, as do the election outcomes in West Bengal and Kerala.
But there is one important issue that the authors have not tackled. This is that while in democracies like India there is a political pressure to redistribute, no such pressure exists in Communist dictatorships, for instance, China.
So why then did the USSR and its eastern European satellites choose redistribution over growth? The answer is blind faith in ideology, presumably.
It dragged them down. It will drag us down, too.
*Good bye Lenin (or not?): The Effect of Communism on People's Preferences, NBER Working Paper No. 11700, October 2005
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