The Realpolitik of Economic Welfare: Observations on Democracy, Arrow’s Impossibility Theorem and The Paretian Liberal Paradox in the Indian Context

Abstract

This paper begins by painting the socio-political and economic map of Indian democracy in 2008. Accordingly, the paper posits six basic positions and six argumentative premises. Cataloguing a series of economic issues the paper clearly states that the twin evils of uneven distribution of income, wealth and opportunity on the one hand and the unequal development of peoples, sectors and regions on the other continued to plague Indian planners sixty one years after the country got rid of its colonial yolk. It attempts to explain the impossibility theorem of Arrow, the optimality issues of Pareto and Sen's liberal paradox. In the process, it tables a realpolitik of welfare in Indian conditions and takes the candid position that rational choice for voters in a multi-party parliamentary democracy is just not possible. Hence, the right candidates may never be elected. If the threshold of welfare is to be raised and the quality of life is to improve, the paper argues, India must ideally though not necessarily move from parliamentary system to a possible and preferred presidential form of democracy. However, for the greater good of the country the system must move from multi-party to a three party democracy. If not, regional and smaller parties will fragment people power and our democratic system will lack the muscle required to bring about sustained developmental growth. No claim of any epistemological breakthrough is made in the paper except that the author has taken well-accepted views of Arrow, Pareto, Sen and others to analyse the present form of democracy in India.

Keywords: Indian Democracy, Arrow, Sen, Impossibility, Pareto Optimality, Monotonicity