In 1974, the Nobel Prize for Economics was shared by Hayek & Myrdal. The latter had called India a 'soft state'. In 1975, Indira showed it was well hard. In the UK, Heath's Emergency failed. The head of the Civil Service had a nervous breakdown. There was the 'three day week'. India's Emergency succeeded. Economic growth went up.
In 'Asian drama' Myrdal wrote-
If in a country like India the government were really determined to change the prevailing attitudes and institutions,
it would try to kill or incarcerate or chase away those with attitudes or institutions it didn't like. Where now was the White Sahib who refused to permit darkies to enter his Club or Railway Compartment? Gone never to return. Why? Their Government didn't have the means or the motive to shoot darkies and get rid of any political parties or other institutions which the Viceroy didn't like. That is why Wavell insisted the British evacuate the place.
What about the Muslim League clamouring for reserved seats? They too were gone or cowed into submission. The ethnic cleansing that accompanied Partition had shown the Government was determined not to tolerate any such shenanigans. Communists were dealt with the same way till they learnt to play nice.
Once Indira showed she was determined to perpetuate a dynastic autocracy, even if it meant locking up lots of people, she got her way because it turned out none of her rivals could hold down her job without being stabbed in the back by a colleague.
It may be asked why Hindus like elections even if political parties turn dynastic. The answer is that Hindus don't like having to kill Daddy or Uncle to inherit power. Anyway, who is to say some cousin mightn't kill you? Elections are a non-violent way of solving such problems. Also when there are two rivals from the same caste group, rather than their being internecine war disastrous for the community, the matter can be resolved by seeing who gets more votes.
and had the courage to take the necessary steps and accept the consequences, then these would include the effective abolition of caste,
It had been abolished. Perhaps Myrdal meant 'make inter-caste marriage compulsory'. The problem was that your own body-guard might shoot you if you were making him marry some ugly slut.
prescribed by the constitution, […] land reform and tenancy legislation, […] the eradication of corruption at all levels [,] forceful attack on the problem of the educated unemployed and their refusal to do manual work, and so on. (Myrdal 1968: 3681 ).
Myrdal was clearly a nutter. Nobody 'refused to do manual work' and starved to death in consequence. Either they got fed without doing it, or their sort disappeared from our branch of evolutionary history. Still, Myrdal and his wife did believe in sterilizing disabled people. There was a eugenic as well as an autarkic aspect to Swedish Welfarism.
Kaushik Basu, in a paper titled ' A short history of India's economy A chapter in the Asian drama', comments on Myrdal's observation.
One senses in this a pessimism that is deep. It is a concerned pessimism,
it is a rancid Swedish meatball
one that stems almost from a frustration with a test case of a nation—in this case India—breaking out of the stranglehold of colonialism,
Colonialism wasn't economically viable. It couldn't strangle shit. That's why it disappeared.
and one he wishes would succeed and become a prototype for others.
Nonsense! He chose to write about a shit-hole country only because it was a shit-hole country.
This commitment deserves appreciation,
No. It deserved derision.
but the remark also suggests an inadequate understanding of the complexity of interaction between economics and politics and the troublesome idea of the endogeneity of institutions.
Meaningless jibber-jabber. The feedback loop between policy decisions and economic outcomes is simple, not complex. Either an institution is indigenous or it isn't. The East India Company wasn't. The Indian Parliament is. What's so fucking troublesome about that?
His questioning ‘If […] the government were really determined’ and suggestion that the ‘abolition of caste’ and ‘eradication of corruption’ are matters of choice by an agent called government or by individuals that constitute the government reveals a rather simplistic view of government as an exogenous institution.
No. His question was simply stupid. It was like saying 'if the Swedish Government were really determined to enforce 'solidarity wages' then they would have reduced the 'apanage' to the Royal Family to the same level as the welfare benefit to a unemployed couple with the same number of children.' In other words, it is mere rhetoric of a virtue signalling sort.
This is a common presumption in economics.
Basu means that Government spending is exogenous in some economic models. But it isn't in reality. It is endogenous. That is why the Royal Government of Iyerland can't exogenously spend a single dollar. It has no tax revenue and can't borrow for that reason. Also, the currency I issue is not accepted in payment for goods and services by anybody. Why? My Kingdom of Iyerland is endogenously shit which is why its Government too is endogenously shit.
We would not, for instance, say that the market’s failure shows that consumers are not determined.
Yes we would. If consumers were determined that the market failure should not occur, then it won't. Nobody would buy from the monopolist till he puts the price down to the free market equilibrium.
It is arguable that the level of determination a government exhibits is not an exogenous variable.
unless the place is a colony. Even then determination is a function of cost vs. benefit. The higher the cost or the lower the benefit, the less determination will be shown.
and, even if it were, it is not clear that governments have within their wherewithal the ability to control many of the social ills like discrimination and corruption.
Nor is it clear that they don't. What matters is resources. There we are on firmer ground. What resources can the Government command? What is the associated opportunity cost? These are questions for economists to answer.
The persistence of these ills is not necessarily evidence of political leaders condoning them, even though it often is.
The problem may lie with the judiciary or the police etc. But, again, this is a question of resources and costs and benefits.
We have to use more sophisticated analysis to separate out the cases where the corruption is being condoned or even encouraged, and where it is being haplessly suffered because its mitigation is beyond the leader’s reach—or any individual’s reach, for that matter.
I suppose Basu means corruption which 'greases the wheels' vs. pure rent extraction.
Many of our worst social ills are collective traps.
No. They are a matter of perspective. The public visibility of immigrants or homosexuals or even unveiled women may be considered a 'social ill' as may the fact that the King of Sweden doesn't have to mop floors for a living. Also, how come Trump hasn't undergone compulsory gender reassignment surgery? Is it because he is a misogynist?
Fortunately, economics has moved on since then and even taken some small steps to reach out to the neighbouring disciplines of politics, psychology, and sociology by trying to conceptualize institutions as endogenous structures.
There has long been an 'Institutionalist' school of Econ dating back to Veblen & Commons. The German Historical school could be considered its precursor.
While Myrdal deserves credit for venturing out to some of these, rather treacherous, multi-disciplinary terrains so early,
it was old when he was young
the social sciences at that time did not have the tools and theoretical constructs to do justice to such inter-disciplinary trespassing.
Myrdal & Ostrom were from the Institutionalist school and got Nobel prizes. Galbraith too could be said to be in that tradition. These weren't 'trespassers'.
As a consequence, we can now share the concern that Myrdal had for the theatre of Asia and at the same time bring some of the more contemporary, multi-disciplinary social science methods to bear on the project.
Basu can do no such thing. He is too stupid and ignorant.
From the vantage point of hindsight, it seems quite remarkable that India did what no other newly independent developing country did. It invested in politics first—establishing democracy, free speech, independent media, and equal rights for all citizens.
The Brits did that, in so far as it was done at all, in all its South and South East Asian colonies. Sri Lanka had universal suffrage since 1931. India could have got it too if minorities had permitted it.
At one level all progressive leaders around the world tried this.
Nonsense! Either the Brits had bequeathed a system which worked and continued to work or Big Men went in for one-party rule or 'guided democracy' or something of that sort.
After the end of World War II, as nations broke from the yoke of imperialism and became independent, we had not just Jawaharlal Nehru in India,
who kept winning elections from 1937 till his death. After that his daughter won elections till 1977. The British system worked well for them.
but Bung Karno Sukarno in Indonesia,
He held one election in 1955 but within two years he decided 'guided democracy' was better.
Mohammad Ali Jinnah in Pakistan,
who died soon after taking office. A full and fair election was only held in 1970 with the result that the country split in two.
Kwame Nkrumah in Ghana,
The Brits held election in 1951. Nkrumah won. Another election in 1954 was held on the principle of direct representation and yet another in 1957 to signify approval of the new constitution and complete independence. The last election was in 1960 for the Presidency after which the country was completely sovereign. But there were no more elections till 1979. Nkrumah was deposed by a coup in 1966.
Julius Nyerere in Tanzania,
it was a one-party state till 1992 when the constitution was amended.
and several other leaders trying to put their nation on an even keel politically, and build political institutions to promote inclusive economic development.
With the exception of Indonesia, which was ruled by the Dutch, these countries had multi-party elections under the Brits. India and Sri Lanka kept that system. Many other ex-British colonies did not.
But in most cases it did not last.
Nehru was cool with multi-party democracy. The others were not. But Nehru's dynasty was more successful. Dynasticism isn't exactly a characteristic feature
of parliamentary democracy.
Coups, chaotic responses, and the lust for power caused democracy to collapse in one nation after another, bringing in military rule and conflict.
No. It was the preference of the leader. Nkrumah and Nyrere probably would have been re-elected.
A map of democracy around the world 3 in 1985 would show a bleak landscape in virtually all developing and emerging nations. India was the exception.
A bad one. The new PM was a pilot who had inherited office from his Mummy. She had only become PM because her Daddy had been PM.
While a large part of the credit for this does go to the early political leaders, Mahatma Gandhi, Nehru, and Ambedkar,
none does. They never intended the house of Nehru to replace the house of Windsor. I personally give much of the credit to piss-drinker Morarji Desai. He was so hated that Indira was made PM in 1966. At the age of 80, he did achieve his ambition and became PM. But he was so hated that his coalition could not last. Mrs Gandhi returned to power in 1980. After she was killed, the throne passed to her son. After he was killed it could have gone to his widow. Rahul says he could have become PM in 1995, when he turned 25 and thus could get elected to Parliament.
and to progressive writers and intellectuals like Rabindranath Tagore, Periyar E.V. Ramaswamy, and Sarojini Naidu, as in all matters of history, luck also plays a role.
The Brits created the institutions which Nehru and his descendants found it worth their while to keep up. Credit goes to the Brits not Mahatma Periyar or Sarojini Tagore.
And India had it in ample measure. In any case, the upshot was that in terms of political design and structure, with regular elections, a progressive constitution, secularism, free media, and an empowered supreme court, India resembled an advanced nation, and in this respect had very few peers in the developing world.
Very true. The current leader of the Tory party in the UK is the heir, by primogeniture, to Sir Robert Walpole. The Labour Party is headed by the descendant of Keir Hardie.
India’s downside turned out to be its economy.
not to mention its Bengali economists
With growth sluggish, large swathes of population living in abject poverty, and widespread illiteracy, the country trudged along decade after decade, while several other nations, like South Korea, Taiwan,
which rose under military dictatorship
Singapore,
which rose under an authoritarian leader
and Hong Kong,
which rose under a Hayekian Governor
starting from roughly the same level of economic prosperity in the 1950s, took off in spectacular ways. Some would argue that this sluggishness was in part caused by India’s democracy and progressive politics,
No. They would say 'import substitution' is stooooopid. Export led growth is the way to go. Also tell Leftists to go fuck themselves. Look at what Mrs. Bandarnaike did to Ceylon.
and that, if there had been a dictator, he or she would have pulled the economy out of the vicious circle of poverty.
Suharto was a dictator. I suppose Indonesia did better under him but it has done even better as a democracy.
I will comment on this later. But the fact remains that whether or not this causal explanation from politics to economics has any merit, two things do stand out: early India’s remarkable political achievements
based entirely on British creations. Even the Indian National Congress was launched by a British Civil Servant.
and the persistent economic stagnation for at least three decades after its independence.
Because of stupid Socialists aided and abetted by Bengali economists like Sukhomoy Chakrabarty.
Luckily, the Emergency lasted just under two years and, unlike most dictatorships, it was brought to an end by an election, called by Indira Gandhi herself, in 1977, when she was roundly defeated. It remains a mystery why she behaved so differently from other dictators—namely, calling an election and then not rigging it.
Because the opposition wasn't a threat to her life. Her son's chums might be.
One theory, to which I subscribe, is that she was troubled by the fact of having destroyed her father’s legacy of a vibrant democracy,
where sonny boy takes over from Mummy?
wanted the legitimacy of an election, and was prepared to (and some have argued that she even expected to) lose.
Sanjay had given a magazine interview denouncing Socialism. What if the CIA bumped her off, so Sanjay could take over? No doubt, they could get one of his pals to arrange matters. Would he himself be tipped the wink? Perhaps. That's how Imperial Delhi had always worked- save under the rule of British Viceroys.
The other hypothesis is hubris, namely, that she was confident that, though the opposition and much of the media cried foul, she would win and then she would consolidate her power.
Or the opposition would come to power and prove utterly shit. Then, she could return with Sanjay old enough to take a seat in parliament.
In any case, fortunately for all supporters of democracy,
provided they also supported Dynasty
she was defeated. When Indira Gandhi returned to power in the 1980s, India’s policies began to change. I would argue that unlike her father, Jawaharlal Nehru, she did not have an innate economic ideology.
She was a Socialist but not doctrinaire enough to enjoy watching millions starve to death
While she had strong political convictions, which she backed up with an enormous strength of personality, on matters of economics, she had few deep convictions.
All Indians were deeply convinced that Lefty Bengali mathematical economists had shit for brains. Punjabis like Minhas, Manmohan or Montek were fine.
Nehru’s own ideology was broadly Fabian socialist, with an instinctive internationalism. As he wrote to Amiya Chakravarty in a letter dated 29 November 1935, ‘I have far more in common with English and other non-Indian socialists than I have with non-socialists in India.’
This explains why Nehru stuck with parliamentary democracy. He saw his job as that of slowly persuading everybody in his party to become Socialist. If they didn't like it they could fuck off to some other party in which case they'd either lose their seat or be confined to the opposition benches.
And later, when he was Prime Minister of the country, he had joked with the US ambassador to India, John Kenneth Galbraith, that, to understand India, Galbraith ought to realize that Nehru was ‘the last Englishman to be ruling over India’.
in the English way- i.e. via parliament.
His socialist instinct—the belief that there should be vastly greater equality of income and wealth—was genuine. Commenting on what differentiates Western and Indian political thinking, Myrdal had written, ‘Another fact is South Asia’s commitment to egalitarianism, which is an integral part of their ideology of planning.’ (Myrdal 1968: 120).
This is mad. Because of World Wars, many Western countries had had to go in for genuine egalitarianism- including equal rations and equality of opportunity so merit might rise in vital STEM subjects. Indeed, even women had got the vote and were increasingly drafted into senior roles. India did not face an existential threat and thus didn't need to go in for egalitarianism. Talking about it, however, was fine. It was a nice change from having to talk about God and Spirituality.
Despite this, Nehru balked at the centralization of power that he saw in China and the Soviet Union.
So much so that he created a Planning Commission to centralize power.
Questions remain about whether these two instincts are compatible. In the end, the form of socialism India followed is best described as
nationalizing for the sake of nationalizing. This included the acquisition of 'sick' formerly British firms which Marwari speculators had, more or less fraudulently, acquired, and run into the ground either through stupidity or because they were misappropriating company money or a combination of both factors. Presumably, there were substantial pay-offs to concerned officials and the ruling party. There may also have been an element of 'capital flight'- i.e. turning a 'stranded asset' into a 'sick' unit by getting speculators involved was part and parcel of repatriating money while getting the fuck away from a Socialist shithole. But that desire was not confined to Whites.
state capitalism.
Capitalists have to make a profit. Nationalized industries can run at a loss. There were over 300,000 sick/weak units whose losses were being covered by the Government some 25 years ago. Nobody knows the number now.
A few large public sector firms and banks were established, there were lots of private firms and enterprises, with some polarization between the very large and very small (with a missing middle), the state tried to command and direct from the top, and, finally, all this was wrapped up in a profuse rhetoric of socialism.
When money is lacking, rhetoric must do.
It is interesting to note that Myrdal (1968) himself had toiled to make sense of India’s ‘socialism’ and observed how this effort involved a certain amount of ‘verbal jugglery’.
Lying? Not necessarily. Sometimes people said 'there is x' when the truth was that 'there is evidence that x obtains but verifiable information enabling us to reduce x through legal means does not exist.'
The evidence that much of it was verbal jugglery comes from the fact that enormous income and wealth inequality prevails in India.
Sadly, people may lie about their income or wealth. Also it is difficult to establish who owns what. Court cases regarding property title can drag on for decades. Thus, we may observe there is a lot of inequality but we may find that people who are clearly as rich as fuck are actually humble 'agriculturists' who are exempt from paying Income Tax.
India never practised socialism in the sense of having a centralized ownership of the means of production in the hands of the state,
it did and does in certain sectors. India is described as a Socialist Republic in its Constitution.
though using the term socialism had become mandatory in all government documents and declarations pertaining to the economy, well into the 1990s. What India meant by the term socialism (and pursued—that too without much success) was a kind of welfare state, in which there would be support for the poor in terms of healthcare, education, and basic food.
That was a British policy. Sadly elected politicians in Bengal weren't as diligent or honest as ICS men in dealing with Famine etc. A.O Hume, the founder of the Indian National Congress, had made very good provision for education, food etc. in Etawah where he was District Collector. Under Nehru, an American architect made a good contribution there. Sadly, the thing could not be scaled up by the bureaucracy.
But even this was more often present in writings emerging from the government than in actual action. In terms of the government owning the means of production, India was nowhere near a socialist state:
which is why it hadn't had a bigger famine than China
India had roughly 14 per cent of GDP coming from state-owned enterprises, whereas for China this was 40 per cent.
see above
These data are not easy to compute and there is indeed a big margin for error (see Basu 2009) but the large difference is significant. In her early years, Indira Gandhi pursued a policy similar to that of Nehru, the nationalization of banks in 1969 being the most aggressive move along those lines. By the time she returned to power in the 1980s,
everybody around the world understood that nationalization meant inefficiency and accumulated losses. Bangladesh was in such poor shape it even had to do a bit of privatization. In India, shutting down loss making public sector units, even if they don't produce anything, is difficult because of strong labour laws.
three years after her electoral defeat in 1977, her strategy had shifted, this time under the influence of, primarily, her younger son, Sanjay Gandhi, and later of Rajiv Gandhi, which would have large implications for India’s economic trajectory, the story of the next section.
Rajiv, as PM, would soon realize exactly why Mummy and Grandpa had created this corrupt system. Company owners had minimal equity stakes in their enterprises. Government owned institutions provided the Capital. This meant, on the one hand, the risk of hostile takeover- e.g. the one Swaraj Paul launched against two prominent companies. It is said that R.K Dhawan was helping Paul because he had some family grievance of his own against one of the promoters. However, after Indira's assassination, Rajiv side-lined Dhawan on the basis of gossip. Perhaps, if he had kept Dhawan, he wouldn't have fallen victim to his own cabinet colleagues. Still, my point is, Socialism may suck ass but it increases the power of the PM. This is particularly important if you have an otherwise unemployable son and thus must make arrangements for him to inherit your office.
Indira Gandhi was also a deep influence on India’s politics and the nature of the state. Even leaving aside the Emergency, she had centralized power, often in her own hands, much more than Nehru.
He set the ball rolling. What is interesting is that the Janata Morcha did nothing to reverse this.
As Kothari (1977) argued, this in turn tended to take away power and initiative from the grassroots level,
Kothari had seen for himself, as a boy, how much power and initiative there was at the grassroots level- viz. none at all. That is why foreigners ruled the country.
and resulted in a centralization of power that Nehru had resisted.
No. His claim to fame is that he reversed the British policy of devolving power first to Municipalities and Districts and then granting Provincial Autonomy to be followed by the creation of a Federation with a relatively weak centre. The first step was the integration of the Princely States and then the setting up of a Planning Commission etc.
According to Kothari (though there is scope to contest his view), this had a negative effect on economic growth. Similar issues arise in evaluating India’s democracy. Thanks to the adoption of the principle of ‘one person, one vote’, independent India established representative government right from the start,
Ceylon got it from the Brits 20 years previously. The price was strong minority protection (which turned out to be meaningless).
but questions remain about how ‘responsive’ India’s ‘representative’ state is.
Very- to the majority of the elected representatives. That's how Parliamentary Democracy works.
In a compelling essay, Mehta (2012) examines these questions.
He is a cretin.
Echoing Myrdal’s view that distant histories can have deep influences on the nature of contemporary politics and institutions, Mehta points to the social inequalities that go far back into Indian history, having legacy effects on the nature of democracy.
The cretin doesn't get that such 'legacy effects' existed in England and France etc.
One of the principal historical sources of social inequality in India is its caste system.
How? The Brits didn't give a fuck what caste you were. Under their rule, darkies were lower than Europeans. True, in a village or a Princely State, the dominant group might mistreat weaker groups, but this had to do with differences in power and wealth.
While in itself caste is a deplorable inheritance
In which case, endogamy should be banned the same way brother sister incest is banned.
—and, at least in speech, most founding political leaders of India spoke out against it—it has been argued by some that the castes have played a role in nurturing India’s democracy by providing focal points of coalition and political mobilization for disadvantaged groups (see Varshney 2013).
Religion trumps caste. Pakistan was formed on that basis. They have caste (biradari) but don't seem to have caste based politics. Perhaps, this is because Islam is a unifying factor- like 'Hindutva'.
What complicates the story is that many of these caste identities are local and regional, which has thwarted mobilization across the nation—an outcome that has both plusses and minuses.
Brahmins are found pretty much everywhere.
It must also be recorded that the nature of India’s politics has changed much since the mid-1970s.
Not really. The one difference is that Rahul is a mooncalf.
The domination of a few big parties and in particular the Congress has diminished vastly. Regional parties have sprung up all over the nation and India has seen the rise of coalition politics also on the national stage,
This happened in 1969, when- after Congress split- Indira ruled with the help of the Communists and the DMK (a Tamil Nadu based party).
as parties have had to reach out to others to make sure they have the majority necessary to form a government.
Indira had to do that.
This has put a new set of brakes and challenges on policy experimentation,
No. It has increased scope for it.
and, at the same time, brought a certain agility to politics, as all parties that matter have had to master the art of accommodation and compromise.
Nobody needs to do so. Sharing spoils- i.e. allocating money making portfolios- is a bargaining problem. The solution concept was supplied by Shapley etc.
Despite all these caveats, despite the two-year retreat from 1975 to 1977 caused by the Emergency, and despite its complicated and many-splendored manifestation, democracy is a remarkable achievement for India.
It really isn't. As in Sri Lanka, the Army could not take power though able to deal with Commie or other insurrections. One might say India was an elective autocracy. Sadly, autocracy can be tempered by assassination.
While research and activism must persist in analysing and correcting the weaknesses of India’s democracy,
both are utterly useless
it needs to be appreciated that this, like good infrastructure, is an institutional and political investment that modern India has inherited
from the Brits
and it would be folly to damage it just when the nation has reached a stage where it is able to take advantage of and build on it to power its economy, promote development, and even step up the GDP growth rate.
This involved judicial reform from the grassroots upward. An autocracy can have a better judiciary than a democracy. The two things aren't connected in any way.
While this is not the central concern of this paper, the political story that I have laid out in this section is of considerable relevance. There is a small but undeniable build-up of opinion in India that is questioning the value of India’s early commitment to cultural and political openness,
the First Amendment shows the reverse was the case
secularism,
Which is why there is no such thing as Pakistan. Also, Punjab was created purely so as to give Sikhs a State where they were the majority.
and commitment to freedom of speech, for the media and also for individuals—from university campuses to the street-corner coffee house.
even Rahul Gandhi could be sentenced to two years in jail for saying 'why are all the crooks named Modi?'
It is regrettable that there are now forces that would like to reverse this.
This cretin thinks such 'forces' didn't previously exist. Still, we understand that he served the Dynasty and is angry they are no longer in charge.
I believe that democracy, cultural openness, and secularism are traits that
make it obvious that Soniaji should rule due to she is nice Italian lady.
make for a better society and also more growth, at least of a sustainable kind.
Rahul should have a baby so succession is ensured. This is called 'sustainability'.
Whether or not India’s early investment in this kind of politics was the right choice at that time
or whether the Brits got it wrong
(I believe it was but am aware that this is not beyond contestation), to squander this social and political capital just as the economy is taking off would be a mistake of enormous proportions, akin to making early investment in large ports, roadways, and railways, and then deciding not to use them.
because cheaper transport is available? This is the sort of stupidity which caused the Government to takeover sick/weak units and keep them running even when they produced nothing.
Basu explains the low 'Hindu rate of growth' not by the need to ensure that the ruling party got the lion's share of donations from industrialists and that dominant agricultural castes didn't become prosperous and thus too big for their boots, thus-
I believe this initial sluggishness was, in part, a consequence of the nature of Indian politics. Democracy with a vibrant media and regular elections makes governments wary of policy experiments, because the politicians are likely to be out of office if the policies backfire.
Congress really wasn't worried about 'being out of office'. If either the Left or the Right started gaining traction, it could always itself go in that direction. Indeed, that is what Indira did when the Third Plan produced only 2.5 percent growth. She split off the supposed 'right wing' of her party and stayed in power with the help of the Left and the Dravidian parties (her Tamil opponent, Kamaraj, had supported adoption of Hindi, even though he didn't speak it!)
So what Park Chung Hi could do in South Korea, or Mao Zedong could in China, or Lee Kuan Yew in Singapore was not feasible for leaders in India’s democratic setting.
The Army had shown it was happy to kill Commies or other insurgents. India could do what Park did. Nobody could do what Mao or Stalin did because the soldiers were the sons of 'kulaks'. Any notion of collectivizing land was quietly dropped.
All this is well reflected in the anecdotes of history and comparative statistics. In the 1950s, South Korea and India were almost equally poor and, in fact, most advanced nations treated South Korea as the basket case that would need support and aid to prevent major suffering but there was not much hope of a growth surge, whereas India was treated as ready to take off. However, Park Chung Hi took commanding control of the economy and made some daring policy decisions, some of which backfired massively and had to be retracted (see Krueger 1998).
Park devalued and went for export led growth in the Taiwanese manner. He forced the corrupt to invest their wealth in the new conglomerates. One reason he prevailed was that the US might abandon the country. There was an existential threat. That's also the reason the Koreans sent so many troops to Vietnam. Incidentally, the New Village Campaign was a direct response to the Cultural Revolution.
Maybe because of this policy agility, the economy stumbled a few times but also grew at a remarkable clip.
Trade Unions were brutally treated. Teenagers caught on the streets could be caught and transported to an island prison camp. This was a police state. Could India have gone down this road? In places, yes. If the workers were lower caste or from another state, nobody would have cared. But, that's what happens anyway with migrant labour. That's why you don't need a police state. This is spontaneous order. But it is also the reason India could have done export led growth. The problem is that the businessmen getting rich might have given their money to 'communal' parties. Indeed, they might themselves have joined the RSS. That's why the Dynasty was against the country rising up through commerce.
As Table 1 shows, South Koreans are now a little more than 17 times as rich as Indians, in per capita income terms, which shows what a combination of good policies and institutions can do.
Dictatorship is not a good institution. Anyway, Park was killed by his own Intelligence Chief.
Turning to China, in contrast to India, we find it, all the way up to 1976, experiencing fluctuations in growth that would have been unimaginable, and also intolerable, in India.
Those 'fluctuations' and famines were what enabled Mao to tighten his grip on power. His party owes everything to his ruthlessness.
The broad picture of India’s growth captured in Table 2 reflects this relative tranquillity, which is in sharp contrast to the situation in China.
Why wait for a famine which triggers a peasant uprising as previous Emperor's had done? Create a man-made famine and you have taught the peasants their place. Apparently the villages did start rising in productivity by the end of the Sixties. But, politically, they were as quiet as Church mice.
In 1961, following the Great Leap Forward and the famine it unleashed— arguably the biggest famine in world history—China had a negative growth of 27 per cent. That is, more than a quarter of its GDP disappeared. The Cultural Revolution would again result in a drop in growth much greater than India ever saw. On the other hand, China had several years of double-digit growth during the 1960s and 1970s.
Malthusian solutions can be very effective. Kill off the less productive. The rest will get the message. China still has a very high savings rate.
India could have had higher growth over the last thirty years. Democracy really isn't about doing stupid shit endlessly PROVIDED you have a quick, effective, judicial system and a capacious doctrine of political question. That way the Govt. can arrange to compensate losers out of the expected value of the tax take on 'winners' and thus permit Hicks/Kaldor improvements. Sadly, the lethargic justice system creates hold out problems and the Supreme Court might decide that the policy is itself against the 'basic structure' of the Constitution. Lawfare- i.e. Public Interest Litigation launched by crazy people who think Neo-Liberalism is very evil and the World Bank is Satan himself can gain fame and fortune by preventing infrastructure projects. In Gujarat, a mass agitation against Medha Patkar drove her out of the state. The Narmada dam went ahead. The farmers got their water. Modi also got them to give up 'free electricity' for actual, usable, electricity at a decent price.
Myrdal's first degree was in the Law. Perhaps Swedish law, back then, was straightforward and quick to dispose of cases. Indian law, even under the Brits, was dilatory and relied extensively on 'professional' witnesses- i.e. liars. Indeed, not to lie your head off in the witness box was considered irreligious. Gandhi had some idea of setting up a parallel court system on the Sinn Fein pattern. Perhaps, if the scheme had taken off, the lawyer politicians of India would have focused their minds on streamlining judicial administration and increasing the utility of the courts. My impression is that the Bench itself has been open to such ideas but has always had too much on its plate. Perhaps, reform will come through new technology and local initiatives. Perhaps not. What is truly important, as Prof Basu points out is to celebrate magic properties of Democracyji and Secularismji and pray to Socialismji to speed the day when the boy Rahul finally consents to become Prime Minister. Then and only then will our cup of joy overflow.
