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Last Updated: Friday, 27 August, 2004, 16:11 GMT 17:11 UK
Queues and capitalism

By Kaushik Basu
Professor of economics, Cornell University

Some years ago, as I drove into Calcutta from the city's airport, I noticed an initiative to make people stand in queues when waiting for something.

I do not know if the initiative came from government or some citizen's group, but there were volunteers with loudspeakers, urging anarchic gatherings of men and women at bus stops to "stand in a line".

I wondered if these Samaritans knew that the attempt to make the citizens of this great city stand in queues had started in earnest from the time of Robert Clive in the mid-18th century.

The British were roundly defeated.

One reason why queues are important to economics is that they provide an alternative to the price mechanism

The "Indian queue" is indeed a fascinating subject for sociological analysis.

Arriving in Delhi this July, my wife and I discovered that our Indian driving licences had expired.

The last time I renewed my licence in Delhi, in 1989, there were jostling touts everywhere.

"Doctors" by the dozen accosted you, promising certificates for good eyesight for a fee and "irrespective of your eye condition" as a particularly kind "ophthalmologist" assured me.

Anybody curious about how a completely free market, with no trace of governance, works should have been there.

Dodging the paunch

Now, more than a decade later, we mustered up courage and went to the Road Transport Office in Anand Vihar.

Voters queuing in Arunachal Pradesh
Talk in Indian queues can be interesting - even philosophical

The first sight was not reassuring.

The sky was ablaze with a copper sun, though the weather office had forecast "the possibility of rain", with the further, completely-unnecessary, qualifier "in some areas".

There was a small courtyard, around which were barrack-like rooms, with awnings, cleverly made of asbestos to draw all the available sun and make the throngs in the courtyard look like characters in a Hieronymus Bosch painting.

However, I was glad to see that there were proper queues.

We were directed to the ones at window 17A for "ladies and senior citizens" and 17B for "men".

My queue was long but there was never a dull moment for me, as I had to keep busy dodging the paunch of the man behind me.

I was irked initially, but reminded myself that many people pay to have their lumbar massaged.

Moreover, one had to understand that the "paunch to lumbar" queue (the analogue of what in the automotive world constitutes "bumper to bumper" traffic) has evolved over the ages to keep at bay transgressors, looking for breaks in the queue.

An auditorium
A queuing system can allocate the limited number of best seats

There is always interesting conversation to overhear in queues.

But in this case it quickly turned to moral philosophy.

A man behind me noticed that my wife was in the adjacent, faster-moving queue and remarked: "If your wife is there, it is lawful for you to join her in that queue" as if he was quoting from some ancient treatise.

Others behind me joined in, some going so far as to assert that it was incumbent on a man to be in a "ladies' queue" whenever accompanied by a woman.

As I was about to give in to the temptation of crossing over to 17A, a murmur of protest started up among the women and elderly behind my wife.

They were of the view that I should be in 17B. One of them even wondered if my wife had not forfeited her right to be in 17A by virtue of having her husband in 17B.

The one wisdom I gained from this colloquium on rights and obligations was that individual rationality was alive and well in India.

In any case we were out of there in less than two hours with our renewed licences, which seemed an improvement on my previous experience.

Impressive delay

There has also been some improvement in the "virtual queues" that were such a part of Indian life.

When, after completing my studies in London, I returned to India in 1977, I joined two virtual queues.

I applied for a telephone connection and for accommodation in Delhi University housing.

Telephone
Delays in 'virtual' queues, such as for phone lines, can be frustrating

There were long queues for both and I, partly out of sloth and partly not knowing otherwise, did nothing to hasten my turn.

It was impressive when six years later I got a letter from the telephone authorities, thanking me matter-of-factly for my application and telling me that my phone line had been sanctioned.

Even more impressive, in 1994, a few weeks after I had left India for my present job in the US, a letter came from Delhi University informing me that an apartment was ready for my use.

One reason why queues are important to economics is that they provide an alternative to the price mechanism.

Suppose an organisation owns a limited number of good seats for a concert, for instance.

How does it allocate these to the large number of people wanting them?

One way is to raise the price of the goods to the point where the number of people still demanding the product is equal to the number of units available.

The widespread resort to allocation by queuing that the bureaucracy tends to do, is not in general a good idea

The other is to allow a queue to form.

As the queue becomes longer, the cost of waiting will deter more and more people from wanting the good and a point is eventually reached where demand equals supply.

Many observers therefore consider prices and queues as alternatives.

But they miss out on one crucial difference.

Both methods use "cost" to curtail demand.

In a price- or market-based system, the cost borne by the buyer is, however, not a cost to society because it consists of a transfer of money from him to the seller.

But in the queue-based system, the cost is a loss to society, since the time spent in a queue is no one's gain.

This is the essence of why markets are considered efficient.

Of course, one cannot be unmindful of the fact that markets can exacerbate poverty and so we may have to design controls for this.

But the widespread resort to allocation by queuing that the bureaucracy tends to do, is not in general a good idea.

To read Kaushik Basu's future columns, bookmark bbcnews.com/southasia

Here are a selection of comments you sent in response to this column.


I was in a New Jersey driving license office last week, waiting from about 5.30 in the morning to take my written test. It was just a matter of 30 minutes, but when I finally finished it, the time was 1.30pm. So I would like to suggest to the author that waiting in the queues happens not only in India but everywhere. Please do not write articles which say "this only happens in India."
Suresh, USA

I really believe economists should not waste their wonderful talent and intelligence on obscure and academic issues. This was a great column for reading but it offers absolutely no policy level insights. Economists tend to get mired with theoretical detail. I wish they would participate actively in effectively communicating and participating in the political process and policy formulation. Someone needs to bridge the gap between economists and politicians.
SURJIT TINAIKAR, INDIA

Good and balanced perspective. Your sense of humour adds just the right touch and prevents the 'deadly serious' comments which so many include to enhance the 'weight' of their writings. Please continue--you see clearly.
C. S. Khalsa, USA

As a child growing up in Chennai (then Madras), I used to get paid a handsome 5 bucks for standing in the queue at the "ration shop" (public distribution system store) to buy "palm oil"/ kerosene. It is an interesting way of socialising - getting to know people in your neighbourhood and venting frustrations about govt. mismanagement
Shikari Shambu, US

I really believe economists should not waste their wonderful talent and intelligence on obscure and academic issues. This was a great column for reading but it offers absolutely no policy level insights. Economists tend to get mired with theoretical detail. I wish they would participate actively in effectively communicating and participating in the political process and policy formulation. Someone needs to bridge the gap between economists and politicians.
Surjit Tinaikar, India

If at all good governance is going to become a reality in India, it should be through computerisation and effective delivery mechanisms. But the officers only seem to be interested in increasing the rent seeking holes.
Malolan Cadambi, USA

Kuashik Basu raises the problem but doesn't offer any solutions. It is widely known the delivery system in India is flawed but looking at the scale of the operation any system is bound to develop flaws. Therefore the important question is what is the optimal solution and in the present case the delivery system used seems to be below optimal unless and until Mr Basu has some alternative solution.
Dinesh, UK

Queuing is an absolute requirement to facilitate a process where there is a finite number of resources to serve a large population.
Chanjith, NJ,USA

This article seems quite interesting but I just had a question; this theory makes sense when there is a capacity utilization, which is not true keeping India in mind. There are so many unemployed for whom you cannot attribute a cost of waiting, in terms of opportunity cost. I as an individual can always hire one such person to stand in the queue, which I think is not a loss to the society.
Shyam, India

I was once in a queue for a cinema ticket in Jaipur, India. It was 'murder' to say the least. With people pushing, shouting, fighting and the security guards beating offenders with sticks, I had to bail out of the queue. I noticed that when people got near the ticket booth, they had to enter a metal canopy in the form of a tunnel with was very frightening to me. With all that pushing, you could easily end up on the floor and get trampled.
H Akkers, UK

Surely, the time spent in virtual queues or paper queues is no loss to anybody as nobody is physically in a queue. Waiting for a house or a phone is not done by physically queuing for them - most of the limited resources in India are allocated using paper queues. The relative welfare costs of a market system relative to a queue system cannot turn on the inefficiency of waiting in paper queues.
H M Thomas, UK

In our dining halls at university, one is expected to stand in a queue while being served. The queue can be long, 300 people if all are present! Sometimes that deterred me from eating.
Rohan, India

You make an excellent point. That is, cost of waiting in line is born by the society. However, that is only true if the time spent in the line can be used for productive activities. I grant you the people in line to renew the license had other activities which could have been more economically beneficial to society. My father sends his driver to wait in line for him. In this case, waiting in line is actually a form of employment!! Leave it to India to defy economic and social models!!
Pragnesh Patel, USA

I didn't realise the BBC was paying Kaushik Basu to relate personal anecdotes! And considering that he is an economic professor I am surprised by his "economic" observations. In any aspect of daily life queuing is a reality - even if regulated by market forces queues will still form but may be significantly shorter. Is Basu advocating that all goods be distributed through market forces - even public goods which all people have a right to and the government a duty to provide? I think he is confusing the issue of queuing and organisational efficiency in his mind. Finally in my experience I have experienced long queues the world over - I don't think they are a phenomena specific to India.
Kartik, London, UK




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