Shourie, Dhirubhai and the Rule of Law

Arun ShourieLast week, Arun Shourie spoke at the first Dhirubhai Ambani Memorial Lecture. Among the things he said, as later reported, was that his relationship with the Ambani’s had undergone a 180 degree turn; and that while he had earlier attacked Reliance, it turns out that the company was to be thanked, not castigated, for it paved the way for economic liberalisation.

The Economic Times carried a superb riposte by M K Venu today, which analyses Shourie’s remarks and their basis.

Mr Venu is completely right in his analysis of the effect of Arun Shourie’s remarks at the Dhirubhai Ambani Memorial Lecture and his U-turn (read, “a complete volte face”). He mentions his own battle, allied with S Gurumurthy, against Ambani but sanitizes what he said at the time. Now it is only that “Reliance had done something in excess of what it had been permitted to do”. At that time, if memory serves, the charge was that Reliance had smuggled in its entire Patalganga plant.

Whether he was right or wrong is irrelevant. The point is that Shourie is in now a bind: Reliance has survived Messrs Shourie and Gurumurthy. Shourie is therefore forced to explain his past (vis-à-vis Reliance) while conforming to the current political order. This is no easy thing, and Shourie quickly uses that technique beloved of all demagogues: if you begin with a startling confession, you can get away with the most outrageous things. Once he accused Reliance of breaking the law for its own gain. Now he quotes Friedrich A von Hayek and says this was a Good Thing, because it laid the groundwork for liberalisation.

von Hayek As Mr Venu’s article shows, this is actually a misreading of Hayek whose thesis argued against ad-hoc or arbitrary government action in stultifying business or a particular, singled-out business. Hayek did not say, as far as I know, that it is permissible to violate the Rule of Law, and for good reason. No such argument is tenable or even plausible in any civilised society. Hayek argues for greater not less certainty in law as one of the foundations of the Rule of Law. Everyone must know with sufficient precision what his limits are and government is not entitled to flex those limits against the interests of an individual. This is an argument against non-arbitrariness in government action which, I believe, is still a fundamental right in this country.

The Shourie iteration is that it is all right to subvert the Rule of Law if you are impelled by some higher purpose (however well concealed), and this nobility of intent must actually be assumed whenever you break the law and get away with it.

Presumably, his theory extends to everyone in the country and, if it does — and even if it doesn’t — we are in very serious trouble. Every individual should now feel free to engage in any illegality that takes his fancy, sanguine in the knowledge that an acquittal is a foregone conclusion, since he is driven by the purest of motives. In recognising this, the law will have ‘evolved’ and will sanctify an illegality as being meant for the greater social good. This is progress, Shourie-style. Except that it’s spelled a-n-a-r-c-h-y.

This appeared, severely edited, as a letter to the editor in the Economic Times of July 16, 2003.