Historical “what-if’s” are notoriously difficult to prove but also notoriously delicious to discuss. Would WWII have happened if Hitler had been killed in the trenches of WWI? [W]ith earlier reform, 14.5 million more children would have survived, 261 million more Indians would have become literate, and 109 million more people would have risen above the poverty line.Would there have been a WWI if Franz Ferdinand survived the assassination attempt? What if Al Gore got his Florida recount? What would have become of Sonam Kapoor’s career if she skipped the flop that was Saawariya?
Arguably, while many of the most famous what-if’s focus on chance events in history, prominent Indian econ journalist Swaminathan Aiyar, writing for the Cato Institute, decided to take on a far more considered, deliberate economic policy “what-if”. He asks “what if India liberalized its economy 10 yrs earlier
?” Put differently, what if 1970s India followed the economic path pursued by Korea, Japan, and Taiwan?
Until the 80s/90s rounds of liberalization, India followed a Soviet-inspired economic model resulting in stuff like this –
India’s per capita GNP growth was only 1.49 percent in the three decades from 1950 to 1980. In this period, socialism was the avowed policy of the government, the peak income-tax rate rose to a record 97.75 percent, several industries were nationalized, and the government sought to capture the commanding heights of the economy.
To answer his alternative history question, Aiyar does two interesting things. First, instead of trying to come up with a hypothetical “Korean policy mapped to India”, Aiyar simply remaps the growth rates across different decades within India itself –
This paper considers what would have happened if reforms had begun in 1971. It projects an early-reform, high-growth scenario in which the per capita GNP growth rate in each decade would have been as high as that actually achieved one decade later. That is, this scenario envisages that the trend per capita GNP growth rate actually achieved in the 1980s (2.89 percent per year) would have been achieved in the 1970s; the trend rate actually achieved in the 1990s (4.19 percent per year) would have been achieved in the 1980s; and the trend rate actually achieved in the early 21st century (6.78 percent per year) would have been achieved in the 1990s.
While there are a hundred possible issues with remapping growth rates like this, I think Aiyar’s approach is likely the “least bad hack” for estimating some numbers.
Second, while growth rates and their inherent compounding are important academic subjects, they leave the lay audience a little, shall we say, underwhelmed. So, Aiyar mapped those growth rates to a few classic human development indices – infant mortality, literacy, and poverty rates – to guesstimate what the India of today might look like –
…with earlier reform, 14.5 million more children would have survived, 261 million more Indians would have become literate, and 109 million more people would have risen above the poverty line.
As Aiyar notes, even if a later, more sophisticated model cuts his projections by half, these results are still in a league of their own. These numbers dwarf the proposed outcomes of even the most optimistic charity / foreign aid / econ development / govt-led initiative / NGO / UN program in existence and demonstrate just how pervasive & important bottoms-up GDP growth is for a population. As Aiyar concludes –
The delay in economic reform represents an enormous social tragedy. It drives home the point that India’s socialist era, which claimed it would deliver growth with social justice, delivered neither.
YogaFire: “”Education” is a fuzzy word. Every kid in India gets an “education.” They don’t learn to read or write, but they learn survival skills and the family trade. Before we can say “education” we need to actually define what that means. What goals are we pursuing, what kinds of citizens do we want to raise, and how are we going to distribute the responsibility of raising them to be what we want them to be?
In my book the minimum bar is basic literacy and numeracy. If we want to be ambitious we can ramp that up to literacy in at least 3 languages (Regional, official/standardized Hindi, and English), math skills up to algebra, and basic knowledge of how to use a computer and research things on the internet. From there, you can pursue an education in any other area you want through private teachers, thereby saving the country money.”
I think you brought this up before… yes it is important to define what education is… for me this means access to all the “tools” a person needs to be able to continue their education independently… so of course that would include the basics everyone needs to further access information: literacy, math, basic understanding of science, and so forth. I worked at a pilot school in Boston for awhile, we had what are called the “Habits of Mind” which I think are a very important part of education:
“Five Habits of Mind
The Habits of Mind are an approach to both the traditional academic disciplines (math, science, literature and history) and the interdisciplinary stuff of ordinary life. They are what lead us to ask good questions and seek solid answers. They are our definition of a well-educated person.
Evidence: How do we know what’s true and false? What evidence counts? How sure can we be? What makes it credible to us? This includes using the scientific method, and more.
Viewpoint: How else might this look like if we stepped into other shoes? If we were looking at it from a different direction? If we had a different history or expectation? This requires the exercise of informed “empathy†and imagination. It requires flexibility of mind.
Connections/Cause and Effect: Is there a pattern? Have we seen something like this before? What are the possible consequences?
Conjecture: Could it have been otherwise? Supposing that? What if…? This habit requires use of the imagination as well as knowledge of alternative possibilities. It includes the habits described above.
Relevance: Does it matter? Who cares?
None of these five habits stand separately. And the way we use such habits differ if we are studying a mathematical proof, a scientific hypothesis, an historical dispute, a debate over economics, the appreciation of a piece of art, a critique of a novel, the telling of a myth or narrative, or the settling of a playground dispute.”
So in my opinions, I would include the basic skills and something like the habits of mind as “education”. With that as a foundation, a person has the tools they need and the ability to access information that can allow them to simply make day-to-day life easier, or choose to take this knowledge to go further- with more education or independently.
Also, I just wanted to mention that I think the idea that “Every kid in India gets an “education.” They don’t learn to read or write, but they learn survival skills and the family trade.” is a bit of a romanticized notion of India (or anywhere). Yes, children who do not go to school learn survival skills. But that’s what they are. Survival skills. I think for every child who does not go to traditional “school” in India but learns a “family” trade there are many more children who spend their childhood surviving and working in an unskilled job that will not improve their livelihood as adults at all… if you check out any studies on child labor in India, you can see that the statistics show that children who go to work at a younger age as LESS likely to make more at the same job than an untrained person who comes to work at the same job after receiving more education (i.e. formal schooling) There are many who argue that children in India are learning “family trades” and there is actually a part of the child labor laws which allow for children to work in environments otherwise deemed harmful if they are working in a “family trade”. This has actual become a loophole for factory bosses to use to continue to use children in harmful work environments and also in splintering off factories into small, home-based work, but that’s another topic.
Honestly, I don’t think that in the changing India of this era that many families are really passing on these “family” trades in the same way as they did historically… traditional family trades like pottery are not as viable with the advent of plastics, unless the potters can adjust their products to an international audience, for example. Other “family” trades like Gem stone/Jewelry usually employ somebody else’s young children to do the unskilled labor, while their own children go to formal schooling and come back later to run the business. Industries like carpet weaving as passed as a family trade– but the carpet weaving industry prefers children, and the conditions are so harsh that most children as unable to work by the time they are adults– so yes the trade does get passed on in that sense– from children to children.
I would love to know some trades in the India of now where viable trades are passed on in that manner, does anyone know of any?
So if the Indian government is so corrupt/incompetent, etc… than what can people do about that? I mean I know a lot of people in India are turning to other forms of education in response to the pathetic-ness of the government schools– either private schools or non-profit run education. But honestly, is corruption just going to be like the two-party political system in the U.S.?– everyone is tired of it, but no one thinks they can change anything so they don’t try and then they feel depressed and despondent that is still the same… I mean, bleh. I wish both Indians and Americans would get sick of this and stand up and demand something…
Well said. People like Aiyar should be considered traitors. The “Ayn Rand loving assholes” have been thoroughly discredited by the global economic crisis brought about by the Washington Consensus. Anyone who still looks at Wall Street, unregulated markets, selfish greed etc as their Saviour is either a frickin brainwashed retard or upto no good.
After almost two decades of american style economic liberalization India ranks #134 in the Human Development Index. Below Laos, Botswana, Namibia, Gabon, Equatorial Guinea. It lags behind even subsaharan Africa in its inability or unwillingness to tackle the widespread hunger problem which kills millions of indian children every year. It is obscene to claim that the path India has taken is alleviating poverty and hunger. Frankly, unless the majority of desis are disgusted by the likes of Aiyar and the rest of the “India Shining” crowd there is no hope for fundamental change.
Self-serving casteist bullcrap. The banias of India are a selfish and greedy lot with little concern for India. Just look at the home states where these prominent bania businessmen come from (Gujarat and Rajasthan). By any standards they are as much backward, impoverished and hungry hellholes as the rest of India.
I don’t normally put myself in the position of defending the Indian government, but I think the charges of its incompentence are grossly overstated, particularly compared to wealthier countries without a history of being colonised (and thereby disfigured) and during a global recession.
It’s not just economic capacity – it’s also poltical capacity, social structure, historical conflict, and other factors, as well as the sheer difficulty of trying to make growth-creating industrial policy in a poor country. On the economics, there is the 1 trillion dollar+ GDP but there are also the billion+ citizens. = or $1,017 in income per person per year, when averaged, around the same as Krzygistan, Chad, and Pakistan. The top ten% in India have a per capita GDP of about 1800, from what I last read, which further exacerbates political problems which the government HAS to attend to if you don’t want the state to fall apart (which the Indian governm,ent doesn’t).
I’m not saying there’s not waste- there’s a ton of waste, corruption, and economically non-productive violence (not that economically productive violence is good). But that’st he case with virtually every poor country and is probably more of a effect than a cause.
Except when A-bombs were rained down upon and it it’s economy went to crap during WWII:
You can only take the comparison with Korea and Japan so far and it’s good to learn “lessons” from other countries experiences but let’s not simplify things too much.
Japan suffered an ignoble defeat after WWII and like Germany, US put millions and years of money rebuilding it. Japan’s constitution was written by its conquerors – the US and other Allies. Japan did not need to spend billions of dollars on an military to protect itself – the US readily did that for Japan and took the right away for Japan to even have a miliatry; Japan is a tiny country, very homogenous compared to the large South Asian countries. Britian didn’t spend billions rebuilding India, after it left the region depleted. Indians have had to spend to build their military and the country does reside in an unstable part of the world. So let’s take the comparisons with an understanding of the full history, geography of what’s been going on in the different regions of the world and understand the very real differences.
I represent generations of mistreated desi gals
Well you certainly don’t represent me being part of the diaspora.
Liberalization – doesn’t save a country from problems. In Paul Krugman’s book “Depression Economics” (latest edition) he discusses countries in Latin America and Asia that liberalized earlier and how they ended up crashing by the 1980s and 1990s. Their economies crashed around the same time India’s liberalized.
How you “liberalize” your economy matters, and what matters lot, just as much or even more, is how sound your country’s economic policies are since liberalization. Krugman’s book is far more useful in showing how this happened and what lessons to take from them – which the US and many developed countries did not. Lessons of other countries experiences that India would also benefit greatly.
Martyr much. Pulease! Go play your violin somewhere else. You represent YOU.
“Japan suffered an ignoble defeat after WWII and like Germany, US put millions and years of money rebuilding it. Japan’s constitution was written by its conquerors – the US and other Allies. Japan did not need to spend billions of dollars on an military to protect itself – the US readily did that for Japan and took the right away for Japan to even have a military; Japan is a tiny country, very homogenous compared to the large South Asian countries. Britain didn’t spend billions rebuilding India, after it left the region depleted. Indians have had to spend to build their military and the country does reside in an unstable part of the world. So let’s take the comparisons with an understanding of the full history, geography of what’s been going on in the different regions of the world and understand the very real differences.”
PS, that’s a very good point. Britain just up and ran, leaving everything to go nuts at partition. Plus, as colonists, they basically squeezed the land and people dry, and left behind a rigid system of inequality they used to divide and pacify the people. That left India in a much different situation than Japan, to be certain. I should not have made that comparison. There are a lot of other countries that Britain ‘de-colonized’ around the same time as it left India, Sudan for one:
“After gaining independence from the United Kingdom in 1956, Sudan suffered a civil war, lasting 17 years, subsequently followed by ethnic, religious, and economic conflicts between the Northern Sudanese (with Arab and Nubian roots), and the Christian and animist Nilotes of Southern Sudan.[10][11] Thus this led to the start of a second civil war in 1983, and due to continuing political and military struggles, Sudan was seized in a bloodless coup d’état by colonel Omar al-Bashir in 1989, who thereafter proclaimed himself President of Sudan.[12]”
The North and South parts of Sudan were really two completely different groups of people which were arbitrarily grouped into one country under British rule (who liked to use methods of inequality amongst groups to divide and rule the people). Interesting to see the long lasting affects of British colonialist policy there.
Another country it left around the same time: Palestine:
“The British Mandate of Palestine, where an Arab majority lived alongside a Jewish minority, presented the British with a similar problem to that of India.[136] The matter was complicated by large numbers of Jewish refugees seeking to be admitted to Palestine following Nazi oppression and genocide in the Second World War. Rather than deal with the issue, Britain announced in 1947 that it would withdraw in 1948 and leave the matter to the United Nations to solve,[137] which it did by voting for the partition of Palestine into a Jewish and Arab state.”
We all know what is happening there now….
Amazing when you put all the pieces together (though there are many more nations I did not mention that Britain pulled out of in the 19402-1060s era) and see how Britain up and ran, leaving so many nations in shambles with no help to rebuild the destruction they had caused. Comparing India to those countries, I would say India is doing great!
This is just ignorant. Gujarat is among the richest states in India and Rajasthan is a primarily a desert. Exactly what would you expect to grow there?
Washington Consensus? Your anti-capitalist boilerplate is about a decade out of date darling.
American style economic liberalization? India’s most right wing-parties would be Goddamn communists in the USA. There’s nothing “American” about India’s economy. If you want to know why India ranks so low in HDI look no further than the persistent problems of patronage politics, caste-baiting, and the thinly veiled socialists throughout its bureaucracy who continue to hew to outdated and disproven economic models because it lets them maintain their positions as overpaid paper-pushers.
The desert is blooming?
Come now – I expect better from you 🙂 You really think that ‘socialist’ politics in the bureaucracy is the problem? rather than the pre-existing poverty combined with a new collective self-interest by most of the bureaucracy and the larger capitalists in India based? India has always, since Indepdenence, been premised on expanding its capitalist sector at the cost of the ordinary people if need be – the latest war by your so-called ‘socialists’ on the poor – (see- war on ‘Maoists’, Nandigram, Gujarat, Lalgarh) – just like in Telangana in the early years or the war of Indira Gandhi and CPI(M) on leftwingers in the early 1970s.
The NREGA is extraordinary like Operation Barga because it is a slight break from the preexisting trend (whcih i hope will continue and blossom, while others might find use for only in maintaining political stability), and even that it is a minimal social welfare move compared to what COULD hypothetically be done (e.g. land reform) given political will – which is almost never there except in places like Kerala where there is active party competition and there HAS been significant social restructuring over a century.
So you’re saying that no true Scotsma- I mean, Socialist, would trample on the ordinary guy to line his own pockets?
The NREGA is a colossal waste of money that has produced negligible improvements in infrastructure, mere scraps for the people it’s meant to help, and a bonanza of ill-gotten graft from the government trough for bureaucrats and clerks. If you want a real social welfare move, make public school teachers show up to work. That would do 100 times more than any state-dependency inducing give-away you could ever imagine.
Najil said ‘India had been experiencing a negative growth rate during the last 50 years or so of the colonial rule. It is natural that it may take a while to give life to the economy and hence the’
Do you have any proof that India was experiencing negative economic growth from 1897 to 1947
TTCUSM said ‘LinZi, Japan didn’t exactly start out “struggling”. Unlike India, Japan was never colonized by another country.’
Persia (Iran) and Ethiopia were never colonised by any other nation, but what success stories have they been. They were conquered by Europeans and held for a short time. I believe Iran was conquered by the British and the Soviets for a short time to prevent the Iranians to go to Adolph Hitler’s side. Indeed Japan (and Germany) were completely devastated after the Third World war. Thailand which was never colonised did well but is not as prosperous as the heavily colonised Hongkong.
TTCUSM said ‘For that matter, I don’t think any of the Tiger countries were under foreign rule for as long as we were….’ Hongkong left the British Empire only in 1996. Indeed if I am not mistaken the per capita income of the people in Hongkong was greater than that of the U.K. during the 80s when it was part of the British Empire! Taiwan was colonised since 1544 by the Portuguese followed by the Dutch, Spanish and the Japanese. Today’s Taiwanese are mostly the descendants of Chinese immigrants. The original Taiwanese have become a minority just like the Native Americans and Aboriginal Australians. S.Korea faced Japanese colonial rule for about 40 years and then occupation and division of the country by the Americans and the Soviets. That was followed by a brutal devastating civil war. http://www.youtube.com/watch?v=Nnx2CjhHADM To realise how horrifying the war was check out this movie Singapore was a British colony since 1819 which is quite long and was conquered by the Japanese (the surrender of Singapore to the Imperial Japanese forces was the greatest defeat faced by the British ever).
Najil said ‘India had been experiencing a negative growth rate during the last 50 years or so of the colonial rule. It is natural that it may take a while to give life to the economy and hence the’
Do you have any proof that India was experiencing negative economic growth from 1897 to 1947
TTCUSM said ‘LinZi, Japan didn’t exactly start out “struggling”. Unlike India, Japan was never colonized by another country.’
Persia (Iran) and Ethiopia were never colonised by any other nation, but what success stories have they been. They were conquered by Europeans and held for a short time. I believe Iran was conquered by the British and the Soviets for a short time to prevent the Iranians to go to Adolph Hitler’s side. Indeed Japan (and Germany) were completely devastated after the Third World war. Thailand which was never colonised did well but is not as prosperous as the heavily colonised Hongkong.
TTCUSM said ‘For that matter, I don’t think any of the Tiger countries were under foreign rule for as long as we were….’ Hongkong left the British Empire only in 1996. Indeed if I am not mistaken the per capita income of the people in Hongkong was greater than that of the U.K. during the 80s when it was part of the British Empire! Taiwan was colonised since 1544 by the Portuguese followed by the Dutch, Spanish and the Japanese. Today’s Taiwanese are mostly the descendants of Chinese immigrants. The original Taiwanese have become a minority just like the Native Americans and Aboriginal Australians. S.Korea faced Japanese colonial rule for about 40 years and then occupation and division of the country by the Americans and the Soviets. That was followed by a brutal devastating civil war. http://www.youtube.com/watch?v=Nnx2CjhHADM To realise how horrifying the war was check out this movie Singapore was a British colony since 1819 which is quite long and was conquered by the Japanese (the surrender of Singapore to the Imperial Japanese forces was the greatest defeat faced by the British ever).
PS said ‘Britian didn’t spend billions rebuilding India, after it left the region depleted’
Britain did not have to as India was not directly devastated by the Second World War. The British stopped the Japanese in Burma but I think the Japanese did reach the present North East of India. But the British did spend a lot in rebuilding Hongkong, Singapore and Malaysia after the war. But the second World war made India very rich as London began paying the British Indian government for part of its war contribution of goods and manpower, payments which left India with an astonishing 1.3 billion pounds in sterling balances at the end of 1945. This money was available to both the Indian and Pakistani governments at the end of the Empire in South Asia. http://www.swaminomics.org/et_articles/et20030820_bengalfamine.htm
Sathya is Prema.
Mangesh wrote:
Iran’s HDI is 0.782, which is higher than India’s HDI of 0.612.
Mangesh wrote:
India was ruled by the British East India Company since 1757, which is even longer. And let’s not forget, Singapore’s success is partly due to its geographic location in the Straits of Malacca.
Mangesh wrote:
But the very site that you linked to states that 2.1 million people died during the Bengal Famine, when crops were diverted by the British to support the war effort.
Where do you think the MORE STEEP progressive tax money will go, to the poor? Income Tax officials and not NRIs own most of the studio apartments coming up on the Greater Noida expressway (2-3 crore each) Since money in India equals social capital and license to circumvent law, it confers uber privilege and elite status. Why should an unscrupulous Byhri who passed a petty UPSC exam be afforded a status higher to say an entrepreneur who toiled, worked his intelligence and made his money the hard way. What kind of society do you think that will produce?
@ Mangesh
Not exactly shrinking, but rather close
The rate of GDP and per capita growth were one per cent and 0.2 per cent respectively during the period 1900-01 to 1946-47 (Nayyar, 2006)
http://www.docstoc.com/docs/10459706/India%E2%80%99s-Economic-Growth-and-the-Role-of-Foreign-Direct-Investment
TTCUSM wrote “Iran’s HDI is 0.782, which is higher than India’s HDI of 0.612.” Yes but Iran can hardly be called a completely developed nation. And what about HongKong and Ireland. Both were under British rule and have a HDI far higher than Iran. And what about Ethiopia? It was never colonised like India but is in dire conditions. Unlike the rest of sub Saharan Africa, Ethiopia had a sophisticated civilization during the European age of discovery. So if it was never colonised, why is it so poor and underdeveloped today? By your logic Hongkong after so many years of British rule should have been piss-poor while Ethiopia should have been very rich.
TTCUSM wrote “And let’s not forget, Singapore’s success is partly due to its geographic location in the Straits of Malacca.” India has a very strategic location too. Indeed India has a very central location in the world and in the Indian Ocean. Any ship travelling from Australia/New Zealand/ S.E. Asia to Europe and the Middle East will find India a very convenient stopping/trading point.
TTCUSM wrote
“India was ruled by the British East India Company since 1757, which is even longer.” Agreed but is that gap (less than a century) of membership of the British Empire enough to explain the enormous mind-boggling gap between Singapore and India as far as standard of living is concerned. And what about Taiwan which faced European colonisation since 1544?
TTCUSM wrote “But the very site that you linked to states that 2.1 million people died during the Bengal Famine, when crops were diverted by the British to support the war effort.”
Agreed, I never said India was never affected at all. About 80,000 Indian soldiers in the British Indian army lost their lives (British military deaths from the British Isles was about 300,000). But it was not directly affected i.e. it did not face large scale bombing of its cities and warfare between large armies within India. Indians did not have to wake up and run to bomb-shelters, see Japanese and British soldiers fight it out in their cities and villages. It was safe under Pax-Britania during WW2. Japan, Korea, China, Singapore, all of South East Asia, Europe, Soviet Union, North Africa etc… were not that lucky. The Soviet Union lost a mind-boggling 24 million people, the Germans 8.5 and Japan about 3 million. All these places had their cities bombed out completely. India was affected only indirectly. I think overall the U.S.A too was not affected directly as well.
Najil, thanks for the info.
TTCUSM wrote “But the very site that you linked to states that 2.1 million people died during the Bengal Famine, when crops were diverted by the British to support the war effort.”
You did not read that article properly. The poor suffered during the war but the middle classes who led the independence struggle prospered. Many Indian merchants became extremely rich by supplying goods to the British Army.