When History Fell In India

While on the topic of why India didn’t liberalize sooner, an article posted to the SM’s News column points at one important factor. In his “Letter from India” column in the NYT, Akash Kapur reflects on the 20th anniversary of the fall of the Berlin Wall the impact it had on India -

Most of the media coverage has, quite understandably, focused on Europe. But the tremors from Communism’s collapse were felt far beyond the immediate battlegrounds of the Cold War. The breakup of the Soviet Union had a profound impact on India. In many ways, it paved the way for a reinvention of the country

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Akash Kapur

While an important socio-political milestone, Kapur notes the equally important intellectual milestone – an event Francis Fukuyama memorably christened The End of History. History in this sense didn’t mean an “end to events” but rather, the (potential) end of a type of dialectical debate about political systems.

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p>It’s tough to remember now, BUT, prior to the fall of the wall, there were many serious scholars who seriously argued that not only would communist / socialist systems deliver greater equality than capitalism but also greater wealth . Their economic promise went a l’il sumthin like this – under capitalism the steel industry, for ex., might currently consist of 10 small, competing companies which are constantly hunting for cheaper labor to exploit, can’t all run their plants at max efficiency b/c of inter-firm supply/demand flux, and ignore other, more important social goals.

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p>“I remember, from my childhood, the Soviet engineers and scientists who filled the bars in Pondicherry, seeking respite from the rigors of the power plant they were building up the road. I remember the dusty bookstores that stocked cheap Russian classics and the bottles of sparkling Russian wine my father used to buy from visiting sailors.”Instead, why not gather some scholars & start with a top-down, national plan for how much steel “we” need? Then, build 1 big steel factory, have some PhDs calc how to run it at maximum efficient scale, eliminate “wasteful” expenditures like marketing budgets, commissions for sales forces and particularly those evil profits & exec-bonuses. And “we” can achieve important Social Ends like hitting female/minority employment targets, insulating employees from the vagaries of the employment market, sourcing coal from underserved regions of the country and making sure no one makes more than 2x the lowest paid employee’s salary. Lather, rinse, repeat for all other parts of the economy and poof! we’d all theoretically be better off.*

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p>Of course, the fact that we (well, most of us) now get a hardy laugh out of the idea that the Soviet system could somehow lead to greater wealth is indicative of the degree to which History, in Fukuyama’s dialectical sense, has ended. We instead generally accept that the troika of Liberalism, Democracy, and Capitalism (LD & C) are the right big picture features of a socio-politico-economic system and most debate is instead about comparatively fine grained variations of the theme. Simply put, workers in the first and developing worlds aren’t quite circling the capitol in tractors with raised pitchforks like they did back in the day.

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p>Meanwhile, in India, Nehru/Gandhi did OK on L+D but were pretty actively opposed to C…Kapur’s piece provides some great examples – big & small – of how, despite official pronouncements of non-alignment, India truly was on the wrong side of this History -

India was never a Communist country. But it was far closer to the Soviet Union than to the United States throughout the Cold War, buying weapons on concessional terms, doing barter trade with the Eastern Bloc and receiving financial and technical aid for industrial and infrastructure projects.

I remember, from my childhood, the Soviet engineers and scientists who filled the bars in Pondicherry, seeking respite from the rigors of the power plant they were building up the road. I remember the dusty bookstores that stocked cheap Russian classics and the bottles of sparkling Russian wine my father used to buy from visiting sailors.

It Brought Down Mental Walls Too…

There were many reasons for the closeness between India and the Soviet Union, not least of which was a U.S. foreign policy that tilted decisively toward Pakistan. But the closeness was born, too, of genuine ideological affinity.

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p>At about the same time the balance of payments crisis was prompting India’s 1991 economic reforms, the Soviet Union was collapsing. While many of the reforms were arguably inevitable (the Indian state was truly running out of other people’s money), the fall of the Wall provided the important intellectual “cover” for enthusiastically pursuing reforms -

It’s possible that all of this would have happened anyway, with or without the dissolution of the Soviet Union…Most important, the death of Communism had a psychological and intellectual impact that paved the way for India’s transformation. As the economist T.N. Srinivasan (among others) has argued, it provided an opening for would-be reformers, who had already recognized the need for some form of liberalization but who had run up against ideological resistance.

The collapse of the Soviet Union wasn’t just the collapse of a political and military behemoth. It was the collapse of an idea, too, and with the discrediting of Communist ideology, Indian socialism, long the guiding philosophy of statecraft and economic policy making, confronted a crisis of confidence. Ideas that had until then been anathema to the nation’s governing class — ideas about markets, about profits, about entrepreneurship — suddenly seemed, amidst the detritus of Communism, to be incontestable.

It’s hard to remember now, after the spectacular market failures of the last few years, but policy makers in 1991 were operating at “the end of history.” Capitalism wasn’t just a superior model; it was the only viable one.

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p>And so, perhaps the biggest reason India couldn’t have liberalized sooner was plain old ideological inertia. Unfortunately, the cost of waiting to abandon those socialist ideas now appears to be 14M infant deaths, 260M literate individuals, and 100M folks who missed the opportunity to rise above poverty…..

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*alas, the same sort of “the top-down plan = efficiency, lower costs + cut out middleman profits = we’re all better off” thinking underlies many of the proposals in the US healthcare reform debate… so I suppose there’s still a lot of room to debate just how closed the verdict is on History….

115 thoughts on “When History Fell In India

  1. It took massive govt interventions aka socialism by America, China and the EU to prevent the world economy from going over the cliff.

    this is ironically teabagger nonsense coming from an apologist of the worlds most failed and despotic regimes. the bailout and stimulus are govt intervention, neo-keynesianism, but it is not socialism. keynesianism is meant to preserve capitalism by creating a safety barrier of government intervention.

  2. Very true. It is obscene how these brainwashed drones keep blaming nehruvian “socialism” for India’s failures. The Nehruvian License Raj was a corrupt, incompetent, unaccountable, blood-sucking nexus of babus and banias. It was not socialism.

    the fatal flaw with socialism is that it has no correcting mechanism to stop corruption, whereas capitalism does. in this sense. so the “corrupt, incompetent, unaccountable, blood-sucking nexus of babus and banias” were indeed real socialsits. The worlds leading left-wing economist explains why: “…nowadays we take the triumph of capitalism as something preordained by the superiority of our economic system. After all, it now seems obvious to everyone except North Korea and Cuba that a market economy is vastly more productive than one controlled from the center - and the Cuban economy is imploding, while the North Koreans are quite literally starving to death. Moreover, every time a Communist regime collapses, it turns out that the actual state of the economy it governed was far worse than anyone had imagined. For example, typical estimates of the GDP of East Germany before the old regime collapsed put its real GDP per capita at 70 or 80 percent of the West German level – meaning that East Germany was actually richer than some regions in the West. Yet after the fall of the Berlin Wall, visiting Westerners found something that looked like a Third World economy, with antiquated factories (and disastrous environmental problems) producing consumer goods of ludicrously low quality (like the notorious East German Trabant, an automobile that makes a Honda or Ford seem like a Mercedes). We used to think that the Soviet Union had an economy about half as large as America’s, that is, bigger than Japan’s; nowadays Russia seems to have less economic power than, say, Italy. We used to think that there was a real technological race between socialism and capitalism; nowadays the symbol of Russian technology is the hapless Mir space station. It seems obvious to many people in retrospect that the productive and technological triumphs that Communists used to claim – all those heroic photgraphs of dams and posters of muscular steelworkers – were mere propaganda; in reality, we think we have learned, socialism is a system that just can’t deliver the goods, while capitalism is a system that can.”

    (he goes on to add some nuance to this, that for a short period of time socialism can actually work, but in the long run even the world’s most prominent leftists economist gets the fundamental truth).

  3. china, and a handful of undemocratic capitalist regimes are bucking the fukiyama thesis. but this has happenned before. there were some fascist regimes that proved economically powerful. franco’s spain comes to mind and his economic liberalisation imposed by the IMF and Opus Dei was not accompanied by political reforms and repression continued unabated. but eventually these very reforms lead to socio-economic changes in Spanish society which would make the regime’s continuation untenable. it still took more than a decade for this to happen.

    i think the rising bourgeoisie in china will eventually demand political freedom to go with their economic. indeed, one could argue it’s already happening because if one considers the repression, ethnic cleansing, and absolute orwellian bloodbath only comparable to the uisssr and nazi germany the chinese expericed under maoism, the current regime in comparison is practically Jeffersonian.

    Fujikyama will likely be proved correct.

  4. Manju: How about this complementary thesis to Fukiyama that those states that get political freedom (democracy) before they have any economic freedom basically became failed states with neither democracy nor economic wealth. Every state from Burma to Africa seem to corroborate this. India and Russia seem to have bucked this thesis; they have clearly suffered a lot and continue to do so, they are not failed states though.

  5. i think the rising bourgeoisie in china will eventually demand political freedom to go with their economic.

    I remember reading long time back that there was some push to allow people to own property in China. I was not able to search any article related to that though

  6. One thing that communism does is it preserves poverty. That is it. True communism is impossible. And what you guys have in the U.S today is a big government – big business nexus, where taxpayer’s money is transferred to big business via the government. It is as if both socialism and the free market have failed in America. Communism will never be successful in India as Indians are too traditional to stomach something like true communism. I mean communism is anti-religion, anti-family, anti-traditional etc…. Indians will never stomach something like that with the exception of the poor tribals. But the tribals are not the majority in India.

  7. Al beruni wrote

    “I encourage others to actually read about the hostility and open racism that accompanied the creation of independent india, how the western powers assumed it would collapse and be destroyed within a few years”

    I think that had less to do with our racial abilities and more to do with the fact that India is so diverse with so many castes, ethnic groups and religions who hate each other. The British felt that they were impartial outsiders and that once Indians take control themselves, they will support their own and eventually all hell will break loose. They were proven wrong of course but not completely. All those Hindu muslim riots, Hindu-Christian riots, MNS Raj Thakarey attacking North Indians, Shiv Sena attacking South Indians in the 60s and 70s in Bombay with the slogan ‘pungi bajao, lungi hatao’, Bodos wanting their own state, Khalistan movement, South Indians overcharging North Indians for speaking Hindi, Kashmir and the North Eastern states fighting for independence from India etc… does prove that they were partially right. However it was not enough to break up India. Let us not forget the Tamil issue in Ceylon (Sri Lanka), the brutal Pakistani rule over Bangladesh and the eventual independence of Bangladesh, independence movements in the Chittagong Hill tracks against Bangladesh, independence movements in Baluchistan against Pakistan etc… does partially vindicate them and remember Muslim India or Pakistan did break into two. But ironically what kept India so united was that the British built a brilliant system to run the Raj, which all the Indians had to do was fine-tune further to local requirements.

  8. “How about this complementary thesis to Fukiyama that those states that get political freedom (democracy) before they have any economic freedom basically became failed states with neither democracy nor economic wealth. Every state from Burma to Africa seem to corroborate this.” I know this question was directed an Manju but I would like to answer. There are exceptions to this, namely South Korea, Taiwan and Singapore. South Korea and Taiwan became prosperous before they became democratic.There are even Saudi Arabia and the other states of the Gulf but I guess nobody considers them because they have oil. But nigeria has a lot of oil and is a democracy right now but is extremely poor.

  9. Kabir wrote:

    The joke is on intellectually dishonest, ideologically brainwashed people like you

    Kabir wrote:

    Clearly you do not have the ability to think for yourself…..like all fundamentalists and ideologues.

    Kabir wrote:

    It is obscene how these brainwashed drones keep blaming nehruvian “socialism” for India’s failures.

    Kabir, Surely you can find a way to disagree with Vinod without resorting to personal attacks. I expected better from you.

    Disappointed, TTCUSM

  10. Suresh, my question was what if democracy before there was economic freedom. South Korea Taiwan and others as you say became prosperous before, so they would not be exceptions.

    Why would democratic states want to prevent a shoemaker from selling his shoes to companies down the street? Indeed, I don’t think we can lay the fault of communism and socialism at the feet of blinkered economic philosophers, there is something very ingrained, something not just in those that are simultaneously educated and poor, we can atleast understand their attraction to socialism, or in those that are greedy and feel entitled since others have ostensibly exploited them. No, there is something more ingrained, something feudal, something religious. A God, a King. Something elemental.

  11. On second thought, it’s entirely possible that it wasn’t the real Kabir who wrote those posts. These snippets sound very similar to something that Prema would write:

    the abysmal failure that is Indian Democracy compared to non-democratic China.
    The Nehruvian License Raj was a corrupt, incompetent, unaccountable, blood-sucking nexus of babus and banias. It was not socialism.

    Plus, the real Kabir typically leaves a link to his blog in his handle. BTW, where is Conrad Barwa?? Of all the SM commentators, he is probably the most qualified to speak on this topic…

  12. Suresh

    But ironically what kept India so united was that the British built a brilliant system to run the Raj, which all the Indians had to do was fine-tune further to local requirements.

    I hope you are not a DBD, as this comment is so off-base, it would be laughable if it were not so shockingly ignorant. Administrative and political structures have evolved enormously in the last 60 years. New states – linguistic, cultural and so on created with peoples participation. Gigantic groups which were disempowered and invisible (even in my childhood!) have emerged to demand their rightful place. Over the last 20 years, a new balance has emerged between state and federal powers.

    These are huge achievements – and, yes, india does owe a debt to Britain for a legacy of constitutional rule and a reasonable administrative system. But to blow off the indian achievements (versus Iraq, pakistan and so many other ex-brit colonies) is either deep ignorance or a massive colonial inferiority complex.

  13. Al beruni, I am not blowing off the Indian achievement at all. The skeleton of the present system Indian system is based on the British Raj administration. Never before had India been ruled in such an organised fashion. Just because I praise someone for what he deserves does not mean I am suffering for inferiority complex, indeed not being able to praise someone where it is due reeks of inferiority complex feelings. I did mention fine tuning to local conditions and I think the British would have had trouble doing that as Indians had a better idea of what local conditions were.

    Anyways one of the wisest steps taken by the new administration is dividing Indian states on the basis of ethnic groups and in effect we are like the E.U., a collection of peoples. The process still continues and I hope the people of Bodoland, Telangana etc… get their own state.

  14. ” But to blow off the indian achievements (versus Iraq, pakistan and so many other ex-brit colonies) is either deep ignorance or a massive colonial inferiority complex.”

    I would go with V.S. Naipaul on this one. The fact is Hinduism being a more flexible ideology than Islam was better able to absorb the products of the Enlightenment in Europe which the British brought to India. After the European renaissance, India had its own renaissance led by Bengali intellectuals like Ram Mohan Roy. The fact is Islam is an excellent system to run a pre-industrial byzantine agricultural society but not very efficient to run a modern post Industrial revolution society. Hindus (including Sikhs, Buddhists, Christians, Jains and some Islamic elites) being flexible, absorbed the learning’s of Europe very fast. Just released from Islamic tyranny, the Hindus took over the administration of British India with gusto. I mean except a thin sub layer of British civil servants at the top, the entire administration was run by Indians but Muslims were under-represented. That is why after the end of the British Raj, Indians did not have much of a problem running the system. But things were different in Pakistan and Bangladesh. Except a small elite, the Muslim masses remained un-modernised as Islam is quite rigid in nature compared to Hinduism (and Sikhism, Christianity, Jainism, Buddhism and the Parsi faith). Indeed with time the Pakistanis tried making the country more and more Islamic with Sharia laws and all. In India, the legal system was more or less same as that in the British Raj. As I had said before running a modern state on Islamic values is not an easy task. That explains the difference between Pakistan and Bangladesh on one hand and India and Sri Lanka on the other.

  15. 7*6, Are you saying socialism is ingrained in man and the destruction of old socialistic institutions (which existed in feudal times) by post Industrial revolution capitalism, leads to the masses wanting to go back to similar systems?

  16. The case of India is not a failure of democracy persay but rather a failure of the democratic process within India.

    If the “democratic process” has failed in India, which is by far the largest Democracy, for well over half a century, isn’t that another way of saying that Democracy (blindly aped from the British) has failed in India? Ditto for numerous other failed third world democracies? How can one claim with a straight face that Democracy is a Universal Panacea when the great majority of the world’s most abjectly poor, hungry and backward folks live under democratically elected governemnts?

  17. How can one claim with a straight face that Democracy is a Universal Panacea when the great majority of the world’s most abjectly poor, hungry and backward folks live under democratically elected governemnts?

    that’s not fukiyama’s thesis. he claims societies will inevitable evolve toward liberal democracy and capitalism, as opposed to advocating the aforementioned. other systems play an intermediary role in his outlook. in this sense, ironically, he has a neo-marxist anaysis, or he calls it hegelian.

    so, to answer 7*6 at 54, i don’t think Fujiyama would necessarily disagree with that though i haven’t heard him address it.

  18. The fact is Hinduism being a more flexible ideology than Islam was better able to absorb the products of the Enlightenment in Europe which the British brought to India.

    This is the usual hindutva deceit. Hinduism with its hereditary caste system is fundamentally opposed to the egalitarianism of the European Enlightenment.

    Just released from Islamic tyranny, the Hindus took over the administration of British India with gusto. I mean except a thin sub layer of British civil servants at the top, the entire administration was run by Indians but Muslims were under-represented.
    1. And the sorry results of this imitative neo-colonial bureaucratic administration aka babudom by native hindu black/brown sahibs are there for all to see and be disgusted by. Yet you and your ilk remain inordinately proud of it!

    2. Your ilk was singing the praises of the mughals, boasting of your facility with their urdu and persian language, rebelling against british rule in favor of reinstating the Mughal Emperor and so on. A few decades from now your ilk willl be boasting of your fluency in Mandarin….

    That is why after the end of the British Raj, Indians did not have much of a problem running the system. But things were different in Pakistan and Bangladesh.

    India beats Pakistan in hunger, homelessness, inhumane conditions etc. First time visitors to India are shocked and horrified by the hellish living conditions of the great majority of Indians. Far more so than when they first visit Pakistan, Nepal or Sri Lanka. Yet people like you thump your chests with pride and mock these neighbours of India!

  19. The skeleton of the present system Indian system is based on the British Raj administration. Never before had India been ruled in such an organised fashion. Just because I praise someone for what he deserves does not mean I am suffering for inferiority complex,

    That, Suresh, proves both your ignorance of history and your servile identification with your erstwhile colonial masters. The pathetic legacy of Macaulay shamelessly lives on. Even the current Prime Minister of India praised the brits for ruling India efficiently! When the reality is that they were in India to exploit it ruthlessly and they demeaned the natives of India as racial inferiors. It is unfortunate that desis are the most spineless and sycophantic breed of humans.

  20. the fatal flaw with socialism is that it has no correcting mechanism to stop corruption, whereas capitalism does. in this sense. so the “corrupt, incompetent, unaccountable, blood-sucking nexus of babus and banias” were indeed real socialsits.

    What a pile of nonsense. Government intervention is the “correcting mechanism” whenever capitalism spins out of control as it inevitably does. Just look at what happened in the 1930s and what happened in 2008-9. No one trusted the market’s ability to correct itself. Not even the Reaganite Republicans in the White House…..

    And it is the height of deceit to pass off the selfish, corrupt nexus between babus and banias during the Nehruvian License Raj as “real socialism”!

  21. India beats Pakistan in hunger, homelessness, inhumane conditions etc. First time visitors to India are shocked and horrified by the hellish living conditions of the great majority of Indians. Far more so than when they first visit Pakistan, Nepal or Sri Lanka

    Exactly. We should judge the success of our istitutions not by the economic measures that the rest of the world uses, but the impression that a visit to the country conveys.

    Even the current Prime Minister of India praised the brits for ruling India efficiently! When the reality is that they were in India to exploit it ruthlessly and they demeaned the natives of India as racial inferiors.

    If you read that carefully, I do not see a contradiction in exploiting ruthlessly, being demeaning, and ruling efficiently. In fact efficiently ruling a country is necessary to exploit it properly. So what MMS said was technically true. It may not be the complete truth, but you know, he is a politician.

    . And the sorry results of this imitative neo-colonial bureaucratic administration aka babudom by native hindu black/brown sahibs are there for all to see and be disgusted by. Yet you and your ilk remain inordinately proud of it!

    While I am not necessarily proud of the bureaucratic administration, I think it is vastly superior to the mughal-rajput-maratha-other-kings non-existent administration that it replaced. Vastly. It is also vastly superior to other democratic-or-otherwise governments in large parts of the world including most of Africa and the middle east. Yes, there is room for improvement. But the Indian democracy actually works fairly well. We haven’t yet discovered a perfect socio-political system, and democracies everywhere have problems. Even in this country. But I think the Indian system deserves some credit for enabling, or at least not getting in the way of, enormous economic progress. Yes, we could do better. But we have done, by any reasonable objective measure, better than other states with similar talent pools in the neighbourhood, in Africa, arguably even in eastern Europe. On measures of social justice and education, social mobility, and freedom of press, while there is certianly room for improvement, we do beat the competition quite solidly. I think it is to the credit of the system set up by constituent assembly (our founding fathers, if you may), that they set up a system (by imitating or otherwise) that produced remarkable results inspite of the corrupt/incompetent/both politicians and bureaucrats.

  22. this is ironically teabagger nonsense coming from an apologist of the worlds most failed and despotic regimes. the bailout and stimulus are govt intervention, neo-keynesianism, but it is not socialism. keynesianism is meant to preserve capitalism by creating a safety barrier of government intervention.

    The real irony here, that escapes your comprehension, is that Keynesianism proposes a socialist medicine to rescue capitalism. What else would you call a government jobs program if not socialism?

    BTW, long before the teabagging idiots of today, the rabid capitalist ideologues during the Great Depression were calling Keynes and FDR “socialists”.

  23. The real irony here, that escapes your comprehension, is that Keynesianism proposes a socialist medicine to rescue capitalism. What else would you call a government jobs program if not socialism?

    i would call it a mixed economy, the most leftist tranche of the free-market ideology. its still within the free market camp, since it recognizes the fundamental flaw of a central economy–as the quotes i provided you from Keynes most famous modern day disciple demonstrates, but just one that recognizes occaisional inefficiencies and limits of laissez faire (which itself, at least in most incarnations, recognizes a role of government). they are no more socialist than bush is a fascist, to give you some “teabagger” nonsense that we often saw during the last admin.

    BTW, long before the teabagging idiots of today, the rabid capitalist ideologues during the Great Depression were calling Keynes and FDR “socialists”.

    at least back thn there were real socialists looking to get into power. so one can forgive them for being vigilent. whats your excuse?

  24. I think the Indian system deserves some credit for enabling, or at least not getting in the way of, enormous economic progress. Yes, we could do better. But we have done, by any reasonable objective measure, better than other states with similar talent pools in the neighbourhood, in Africa, arguably even in eastern Europe. On measures of social justice and education, social mobility, and freedom of press, while there is certianly room for improvement, we do beat the competition quite solidly.

    This is shameless deceit and dishonesty. Or pathological self-delusion. India is poor even by third world standards. It leads the world in hunger, in unsanitary conditions, in child slavery etc and yet you claim with a straight face that it has achieved “enormous economic progress” and is “solidly” beating the competition (including eastern europe!)!

    Take a look at the Human Development Index. India ranks #134. Well below every east european country. Every region of the world, including Africa, has countries ranked much higher than India.

    By any rational and humane definition India should be ranked among the Failed States.

  25. Prema wrote:

    By any rational and humane definition India should be ranked among the Failed States.

    If you’re interested, Foreign Policy has published the Failed States Index for 2009. India is ranked #87, well below Pakistan (#10) and Burma (#13). It’s even below China (#57).

  26. i would call it a mixed economy…..its still within the free market camp

    What a load of illogical BS. How can a “mixed” economy that recognizes the intrinsic limitations and dangers of unregulated markets and corrects for it/supplants it through government actions be considered “within the free market camp”??

    The very word “mixed” identifies such an economy as a mixture of both capitalism and socialism. Every developed nation in the world has a mixed economy. Most of the successful nations of the world are more socialist than America and many of them rank higher than America in the Human Development Index.

  27. What a load of illogical BS. How can a “mixed” economy that recognizes the intrinsic limitations and dangers of unregulated markets and corrects for it/supplants it through government actions be considered “within the free market camp”??

    easy, the same way one can put limits on democracy but still be considered democratic. keynes recognized the fundamental superiority of capitalism, as does krugman above, so his govt interference is placed within those limits. most wealthy nations are similarly economically free…ie fundamentally market economies with various degrees of interference allowed.

    india and china are two nations who have recognized the fundamental flaw of socialism. had they stayed on that route they most likely would’ve become failed states.

  28. Foreign Policy has published the Failed States Index for 2009. India is ranked #87, well below Pakistan (#10) and Burma (#13). It’s even below China (#57).

    There is nothing rational or humane about this Index. It is obscene to rank India which is home to the world’s largest concentration of starving women and children, millions of whom die every year from malnutrition, better than China which has done a FAR better job feeding, housing and educating its citizens. Even subsaharan Africa does a better job than India in feeding its children despite the occasional famine.

    It is the selfihness, cruelty and callousness so deeply ingrained in the casteist culture of India that makes folks like you ignore the misery around you and claim that India is a “shining”, “incredible” success story. Grow a spine and a heart.

  29. We instead generally accept that the troika of Liberalism, Democracy, and Capitalism (LD & C) are the right big picture features of a socio-politico-economic system and most debate is instead about comparatively fine grained variations of the theme.

    For everyone who doesn’t like kool aid, please read the discussion on the other thread for historical, political, economic, methodological, and other context on the topic of how-neoliberal-capitalism-saves-babies. Or google “Ha Joon Chang.”

    That said, it is enteraining to witness the irony of seeing the argument that an Indian elite clung to an out-dated ideology for too long from someone making an argument for free-market fundamentalism. Remember the old joke: when someone points to a $100 bill lying on the street, the economist doesn’t pick it up because “it’s not there- if it were market forces would have removed it.”

  30. That said, it is enteraining to witness the irony of seeing the argument that an Indian elite clung to an out-dated ideology for too long from someone making an argument for free-market fundamentalism.

    for the record, fukiyama is a not a free market fundamentalist and i don’t see vinod making that case here, where he is, as you point out, really making the case against fundamentalism of the communist and nehruvian socialism type. some even think he’s(fukiyamam not vinod) is a Marxist, of sort…as he’s associated with the nebulous philosophy of leo straus ,Allen bloom, and Kojeve…who have been accused of many things, but certainly not fundamentalism. bloom, who i’m most familiar with, had nothing but disdain for ayn rand.

    fukiyama also voted for barack obama, a well known fascsit.

  31. http://www.thecommonwealth.org/news/215304/281009washingtonconsensus.htm

    Neo-liberal Washington Consensus ‘is now dead’

    The global financial crisis has finally put paid to the ‘Washington Consensus’, the neo-liberal economic doctrine long adopted by international institutions, donors and developing countries, two acclaimed United Nations experts claimed at the Commonwealth Secretariat last week…………“There is no doubt in my mind that the Washington Consensus – as it was conceived with privatisation, liberalisation, de-regulation, free-trade all over the place – is now dead,” said Professor Emmerij, addressing an audience of academics, policy-makers………….He added: “There is always a danger that things will come back, but [the Washington Consensus] will never come back in its strong and pure form. The role of the state has been firmly re-established through the crisis in all countries.”………….Neo-liberal economic policies pursued under the Washington Consensus have proven damaging for developing countries, noted Sir Richard: “I think the consensus ought to be discredited after the catastrophic events of the last two years, not merely financially but in terms of economics, in terms of the impact on developing countries.”

  32. Neo-liberal Washington Consensus ‘is now dead’

    what does that have to do with the fukiyama thesis?

  33. Interesting that the same debate is currently playing out again within the capitalist believers – between the rational-actor camp and the people-are-crazy-mfers camp. That is a finer grained distinction though, as you pointed out.

    More importantly, yeah capitalism has pretty much proved to be the most efficient form of maximizing output, but the distribution of this output is still a pretty thorny issue. You’re kidding yourself if you think workers have put the pitchforks away. Both India and China have pretty serious concerns about unrest among the poorest classes.

    Btw, not really fair to involve healthcare in the US in this particular debate. For one, it is already run on a very top down approach – it’s more a change within the system than a new system (unless the public option goes through). Second, even in a hypothetical world where we started with true free market insurance, it’s not clear that it would lead to good social outcomes. The incentives don’t really line up very well. Healthcare is always going to require heavy scrutiny and regulation – some element of top-down-ness is required imo.

  34. Kabir wrote, ‘This is the usual hindutva deceit. Hinduism with its hereditary caste system is fundamentally opposed to the egalitarianism of the European Enlightenment.’ You have got me wrong, yes the caste system is elitist and anti-enlightenment but Hindu society has change a lot since the time of Ram Mohan Roy. Sati has disappeared, the caste system has weakened though has not disappeared, child marriage has disappeared, Kulin marriages among Brahmins has disappeared etc… Unlike Muslims Hindus do not wish to go back to a medieval system like Sharia.

    Kabir wrote, ‘And the sorry results of this imitative neo-colonial bureaucratic administration aka babudom by native hindu black/brown sahibs are there for all to see and be disgusted by. Yet you and your ilk remain inordinately proud of it!’ After the years of brutality and rape face by the Hindus for centuries of Islamic rule, British rule was a sanctuary of sanity and peace. And there was a lot of racism against brown Indians under Islamic rule. Many of the Islamic rulers were fair skinned foreigners like Persians or Turks. The language of official business and the elites was Persian which is a foreign language. When Ibn Buttata came to India he found that the new Islamic masters did not trust Indian Muslims and reserved some of the most important jobs for any non-Indian muslim.

    Kabir wrote, ‘India beats Pakistan in hunger, homelessness, inhumane conditions etc. First time visitors to India are shocked and horrified by the hellish living conditions of the great majority of Indians.’ I am not denying that India has more poverty but over all India is considered a more well run nation. India never faced military coups like Pakistan or Bangladesh. The government institutions have worked reasonably well. Overall India is considered a stable and successful nation by the rest of the world. Pakistan is considered a failed state by many today.

  35. Kabir wrote,

    “That, Suresh, proves both your ignorance of history and your servile identification with your erstwhile colonial masters.”

    The British obviously did much less damage to India than what the Islamic invaders did. Islam is Arab imperialism, where the conquered is utterly brainwashed to consider a foreign religion his holy language and a foreign place his holy land. Indians do not shamelessly bow down to the Big Ben five times a day. Bowing down five times a day to a foreign monument does strange things to the enslaved person’s mind.

  36. “Even subsaharan Africa does a better job than India in feeding its children despite the occasional famine.”

    India has a population bigger than all of Africa placed inside a country slightly bigger than Sudan. One look at a world map will show you how tiny the Indian subcontinent is compared to Africa, indeed Africa is ten times bigger than India with a much smaller population and much more productive land. We have to deal with a much much higher population density than Africans have to. India’s agricultural achievements are way ahead of sub-Saharan Africa in general. India is the largest producer in the world of milk, cashew nuts, coconuts, tea, ginger, turmeric and black pepper. It also has the world’s largest cattle population (281 million).It is the second largest producer of wheat, rice, sugar, groundnut and inland fish (info from Wikipedia).

  37. for the record, fukiyama is a not a free market fundamentalist and i don’t see vinod making that case here, where he is, as you point out, really making the case against fundamentalism of the communist and nehruvian socialism type. some even think he’s(fukiyamam not vinod) is a Marxist, of sort…as he’s associated with the nebulous philosophy of leo straus ,Allen bloom, and Kojeve…who have been accused of many things, but certainly not fundamentalism. bloom, who i’m most familiar with, had nothing but disdain for ayn rand. fukiyama also voted for barack obama, a well known fascsit.

    I wasn’t talking about Fukuyama – I was talking about Vinod. And he draws a link between India’s plannign policies and the completely dissimilar health care bill, which, in a general sense, places him well within the group that opposes all government action. I would hate to see what he made of single-payer health care, which is practically self-evident by any economic or commonsense measure. It’s one thing to say – the market does some things well (e.g. eliminating unsuccessful companies) – it’s quite another to say that every single thing that every single person ever does should be done under the guise of a market context.

  38. what does that have to do with the fukiyama thesis?

    It’s more the popular use of the phrase.

    Washington Consensus There Is No Alternative New World Order Dustbin of history (a particularly assholish one)

    These are all part and parcel of a similar range of thinking about capitalism and american geopolitical position. They come together in the themes of supreme arrogance, blindness to both the nature of american capitalism past and present, the past and present of previous core states that moved into the finance capital export phase and then eventually declined while some other state rose to become a manufacturing hub, and the utter, utter, shortsightedness with which the politics of the 1990s and 2000s were conducted by the American elite.

    The only question is how knowingly it was done – whether it was a CLASS based move to secure a new consumer base – or whether it was simple stupidity and shortsightedness. Meaning, did not investing in infrastructure so that resources are not devoted to levee and bridge maintenance and isntead relying on BPOs signal that the American capitalist class was ready to just cut ties, so to speak, with the rest of the U.S., or did it signal some complete and total failure of humility and comprehending reality that continues to this day in the Obama Democratic Party.

    That’s just from the standpoint of trying to understand the American elite. For the rest of us – as Gorbachev said, America needs its own perestroika. More than that would be nice.

  39. This webpost from OpenLeft which I saw on the same day as Vinod’s lays bare the inadequacies behind the kind of thinking that celebrates the kinds of ideas I described in the last comment. It details the secular trend of the rise of China and the decline of the United States over the past decade. I don’t like the potential China bashing implications, but it is worth looking at the easy to read charts.

  40. 57,Suresh wrote:

    However it was not enough to break up India. Let us not forget the Tamil issue in Ceylon (Sri Lanka), the brutal Pakistani rule over Bangladesh and the eventual independence of Bangladesh, independence movements in the Chittagong Hill tracks against Bangladesh, independence movements in Baluchistan against Pakistan etc… does partially vindicate them and remember Muslim India or Pakistan did break into two. But ironically what kept India so united was that the British built a brilliant system to run the Raj, which all the Indians had to do was fine-tune further to local requirements.

    This is a serious misconception that most Indian elites have (including perhaps the PM). The British did not come to civilize us or to build up our system. That was a result of their need to exploit India economically. Agreed, that they were less of religious fundamentalists than the previous Muslim rulers, but is that enough for India to be indebted to the British?

    This is extremely silly view of looking at things. India was just lucky that the institutions that the brits created gave the next generation of Indian rulers the tools to make it into a surviving sub-continent sized nation. If Indians should be indebted, then they should be indebted to the countless patriotic freedom fighters.

    Ofcourse there were a few Indo-phile Brits (A.O. Hume) etc who might have had a long-term interest of India in mind, but then I am sure there were Muslim rulers as well (Akbar).

  41. Suresh,

    You must be new to SM. For the record, “Kabir” is actually Prema, a longtime SM commentator who has an unshakable hatred of anything related to India. You won’t get anywhere arguing with her (ie, please don’t feed the troll).

  42. My last comment on this thread:

    Kabir wrote:

    Even subsaharan Africa does a better job than India in feeding its children despite the occasional famine.

    Here are some findings from the International Food Policy Research Institute: “Of the ten countries with the highest levels of hunger on the GHI, nine are in Sub-Saharan Africa. None of the Sub-Saharan African countries is amongst the ten most improved since 1990. ” “In Sierra Leone and Angola, more than one-fourth of all children die before the age of five, with child mortality rates of 27 and 26 percent, respectively, the highest of all GHI ranked countries. “

  43. I wonder if we can re-center the discussion, away from the crazies but also from the US framework – specifically -

    1) what policies should Nehru have followed immediately after independence?

    • keep in mind that when brits left, even match boxes were imported from britain. For the last 100 years of “enlightened” brit rule, india had an economic growth rate of 0.75%. And, yes, the brits werent nazis, the constitutional and other administrative models they evolved have been useful to the indian state.

    2) What were some of the other transition points to move away from babudom/license raj before the 80s?

    • given the cold war, and US hostility towards india’s independent foreign policy, which peaked in the early 70s (bangladesh war, wherein the US supported mass murder of bangladeshis by Paki army) how could this have happened?
  44. “The British did not come to civilize us or to build up our system. That was a result of their need to exploit India economically. Agreed, that they were less of religious fundamentalists than the previous Muslim rulers, but is that enough for India to be indebted to the British? ” I never denied that there were economic incentives to rule India but the Brits did have a civilizing mission. They found India an ancient civilization in a state of decay and stuck in the medieval age while Europe was moving forward with new ideas. I guess the British just wanted to play ‘Romans’. If I were a British gentleman Governer who only wanted to fleece India why would I bother with stopping Sati or increasing the marriagable age for girls after incidents of injury of teenage girls during sex. Why would I care for those brown native girls? Why would I bother setting up experimrntal dairy farms like the Imperial Dairy Farm at Bangalore where research was conducted to increase milk production by Indian farmers? Why would I bother (at times against bitter religious opposition), setting up partial sewage system and water pipe-lines into Indian cities? Why would I bother setting up Hospitals and send English doctors to villages? Nor would I care about the exploitation of the lower castes. Why should I? I say just loot and leave. Why set up schools and universities? There are many such cases which escape me now. But if they never had a civilising mission, all this would not have taken place.

  45. I wonder if we can re-center the discussion, away from the crazies

    So sad that this discussion has been derailed by the self-hating, ignoramus Prema, DISGUISED as Kabir...I mean isn’t that against the comment codes? SM Intern, can those comments from Kabir/Prema be deleted?

    I was enjoying the comments, some of you guys have some excellent arguments, and have a great background on economics and history of South Asia as well as other countries; But now it is derailed b/c of a crazie. Suresh best to ignore the Kimchi-chomping Prema/Kabir, who has to come disguised as yet another commentator.

  46. I’d interested to read how India’s caste system has affected it’s move towards liberalization in a way that China’s hasn’t?

    Does the caste system hamper the creation of a real meritocracy?