This is a link to an erudite article on Nehru's Economic Policy which is misleading precisely because it is erudite; erudition being, as our folk wisdom has it, the thing that most makes one stupid and blind.
Mathematical Growth theory and Capital theory are inherently silly. Let that Silliness feed into how National Income is calculated and you have permanently increased the noise to signal ratio for Everybody in the Economy- i.e. a bunch of eggheads, who should have stayed in Cambridge buggering with each other's brains to get into Wittgenstein's good books, manage to permanently harm the Economy by at least a couple of percentage points of GDP.
It's simply crazy to let a Physicist like Mahanalobis, or a Cambridge graduate of any description, near Econ policy. Vishveshvarayya was an old fashioned engineer turned Diwan. His thinking was simple. Govt. picks a smart guy- like Kurien for Amul- who has an engineering or similar qualification and puts him in charge of a project- be it irrigation or Milk production or whatever. The technocrat gets a pragmatic grass-roots type political backer who can broker deals with stakeholders. Finance Ministry commits money. Those guys who do well get more money. Other who talk who a good game but can't deliver are quietly shunted off to Academia.
I suppose you can call this 'Industrial Policy'. Why bother? Just let it happen and don't give it any fancy name because ordinary blokes understand it immediately. It's Nation building is what it is.
Like the pre-war U.S. Dept of Agriculture which did a truly spectacular job just by keeping a low profile and acting locally; under this informal rubric, you have a lot of local initiatives and innovations being supported by a decentralised Govt. bodies- so this is a type of Public Sector entrepreneurship whose gains remain in private hands- and thus which entails no bureaucratic rent contestation. The wider co-ordination and Capital allocation problems can increasingly be left to the market with the Govt reserving a signalling functioning to itself and only stepping in if there is Market failure.
Vishveshvarayya wanted 10 per cent growth. That was back in the the mid Thirties. He saw there was no bottleneck in terms of educated youth or Social Mores of the sort that had existed when he himself was a young man. Furthermore it wasn't really the case that India had stagnated. Parts had sunk down, other had shot up- everything depended on Governance- but, perhaps foolishly, Vishveshvarayya and others of his generation thought that Independence would mean that the supposedly public spirited lawyers- Jinnah, Nehru, Patel etc- would fix the Criminal Justice system, fix lacunae in the Law relating to Property and Inheritance, impose equitable Taxes and thus improve Governance.
The industrialists behind the Bombay Plan, which wasn't really a Plan at all, scaled down the target to 7.5 percent so as not to attract the wrath of the Socialist/Gandhian nutjobs but still got a bad scare from Liaqat's alliance with the Left- which Indira Gandhi was to repeat so as to cut her opponents down to size.
The author mentions the charismatic charlatan, Alexander Gerschenkron, and calls him Russian. True, he was Russian born. So were a lot of other smart Americans, like Nabakov, who moved on from Germany or Austria after the rise of Hitler. Like Polanyi who, being a foreigner, didn't understand England and so got the Speenhamland system wrong, Gerschenkron wasn't German and got German industrialisation wrong. Investment Banks didn't just emerge out of nothingness. There was a long history of Princes working with Bankers, including Jewish Bankers, to develop their demesnes employing Technocrats like Count Rumford and Actuaries like Novalis to get the job down. Finanzkapital is Commie bullshit- actually Wikipedia says Gerschenkron might have joined the Austrian Commie party at some point- but, thank's be to God, a charismatic charlatan he remained.
Nothing wrong with that. Bruno Betthelheim was a charlatan. But, because Medicine is Scientific and has advanced for that reason, no great harm is currently done by his foolish theory of Autism. Indeed, it was just a restatement of the then popular thesis that 'Momism' was destroying America. If Mummy kisses you- you turn homo. If she doesn't- you go Autistic.
Betthelheim escaped from the Nazis by pretending his PhD in Aesthetics (which he'd only got so as to marry his sweet-heart who found him too ugly and rich to marry without this High Culture Credential) was actually a Medical Degree in Psychoanalysis. He stumbled on 'Autism'- actually he didn't treat any really Autistic kids; he just set up a Concentration Camp for 'difficult' Trustafarians- i.e. Rich people sent their kids to his School as a form of Punishment- and his own Charisma and Capriciousness, at least in some cases, turned out to be a good thing.
Similarly Gerschenkron discovered 'Backwardness' and used it as a means to turn his favourite corn fed Mid Westerners barbarians into Mitteleuropean, Karl Kraus type, assholes. BUT, HE DIDN'T OPPOSE DROPPING ECON HISTORY AND KNOWLEDGE OF FOREIGN LANGUAGES AS A REQUIREMENT FOR AN ECON PhD from Harvard- i.e. he wasn't genuinely shit. Just lonely.
So Gerschenkron never had anything to do with Economics or 'Development' or whatever. While he was in Academia, the guys who did have power w.r.t Econ and Development hadn't heard of him, and the same thing was true after he faded into obscurity. He may feature in some worthless Academic 'Availability Cascade'. But he had no influence. Everybody knows this. Yet the author of this piece on Nehru pretends otherwise.
This is what he writes-
It is completely fucked that India lost its place in the top ten manufacturing nations after Independence just because Growth theory which ignores International Trade is easier to do. It is even more crazy that Indian people- natives, guys who could speak Indian languages- didn't get that 'disguised unemployment' in Agriculture doesn't mean there's workers there who can be costlessly transferred to Industry. People still need to eat and migrants will change their dietary preference to things like rice and wheat rather than the subaltern rustic alternative. Of course, Sen's theory that they will eat five times more than they did before is stupid. Still, the kind of stupid simplyfing assumiptions you make in the class room- and Sen, to his credit, never left the class room- simply oughtn't to be made when you're playing with people's lives.
If there's one lesson from the Nehru-Gandhi years, hopefully now behind us, it is that you must first shoot all the Economists. If you want to fix Agriculture, hire agronomists and Agricultural Scientists- like Borlaug. Shoot Amartya Sen. If you want sound Money- shoot Raghuram Rajan and put in some fat bloke called Jain or Shah who has a lot of diamond rings on his fingers.
Smriti Irani for HRD, however, is fine. Nejma Heptullah has a PhD from America so keep her in Minorities even though she is now threatening to make the Parsi community embrace their bahu, Smriti, so as to boost their numbers. Don't forget, Indira was also a Parsi bahu. Give Rahul minority status. He is an educational institution in himself showing the stupidity of studying Development Economics at Cambridge.