Saturday, 14 November 2015

Nehruvian (NOT Hindu) Rate of Growth

Nehruvian Rate of Growth

the "Hindu" Rate of Growth

India’s poverty is self-inflicted, thanks to the self-destructive policies followed after independence, even though prescriptions for prosperity were available off-the-shelf for many years, and there were any number of real, practical examples to go by. Had Nehru’s government focused on its primary responsibilities—internal security, external security, law and order, justice, education, health, ‘minimum government, maximum governance’, efficient business-friendly regulation—and desisted getting into business, had it allowed the freedom to public to do business, India would have shot into double-digit growth rate in the late 1950s itself—such were its advantages over other countries—and would long since have been a part of the developed first world, rather than still being a poor, pathetic, third-rate third-world country.

What makes a country poor or prosperous?

Climate, geography, area, location, natural resources, race, religion, history, “type of people”, “character of people”?

No. None of these.

Poor countries are poor because those who have power
make choices that create poverty.

—Daron Acemoglu and James A. Robinson
in ‘Why Nations Fail : The Origins of Power, Prosperity and Poverty’

The determining factors are what kind of laws and rules, that is, the institutions, the people are embedded in.

Daron-Robinson demonstrate in their book mentioned above that the determining factors are the institutions: ‘Extractive Institutions’ cause poverty and misery, while ‘Inclusive Institutions’ lead to prosperity and freedom.

Extractive Institutions are normally the feature of monarchy, feudal system, political or military dictatorships, fascism, socialism and communism. Capitalist societies that are not fairly capitalist, or where crony capitalism prevails, may also lead to extractive institutions.

Characteristics of Inclusive Institutions include: encouragement of investments; harnessing the power of markets by better allocation of resources; allowing entry of more efficient firms; ease of starting businesses and provision of finance for them; and generating broader participation in the economy through education and ease of entry for new entrants. Growth under inclusive institutions involves both creative destruction (replacement of the old methods, technology, industries by new) and investment in technology.

Inclusive Institutions are not compatible with socialism, communism and feudal societies, or with dictatorships and monarchies. Only a society with competitive capitalism is capable of having inclusive institutions.

“It would be devastating to the egos of the intelligentsia to realize, much less admit, that businesses have done more to reduce poverty than all the intellectuals put together. Ultimately it is only wealth that can reduce poverty and most of the intelligentsia have no interest whatever in finding out what actions and policies increase the national wealth. They certainly don't feel any ‘obligation’ to learn economics ...”

—Dr. Thomas Sowell

Unfortunately for India, after independence, Nehru laid the foundations of Extractive Institutions, and his Dynasty reinforced them! Socialistic institutions happen to be extractive.

While the developing countries of SE-Asia, which had been far behind India in 1947, raced ahead at over 9% growth and became highly prosperous, with infra-structure rivalling western countries, India plodded along at what was derisively referred to as the Hindu rate of growth of just 3%, and became a basket-case, begging aid and food from all.

However, the term "Hindu rate of growth" is highly inappropriate and unfair, besides being derogatory.

Let us examine why?

One : The "Nehruvian Socialistic Rate of Growth"

The low rate of growth was thanks to Nehru-Indira-Rajiv’s policies. If rather than the “Hindu rate of growth” it was called the “Nehruvian rate of growth” or “Nehruvian socialistic rate of growth” or “NIDP [Nehru-Indira-Dynasty policies] rate of growth” or simply “Socialistic rate of growth”, one would have no quarrel.

“Nehru’s inability to rise above his deep-rooted Marxist equation of Western capitalism with imperialism, and his almost paranoid, partly aristocratic, distrust of free enterprise in its most successful form as ‘vulgar’, cost India dearly in retarding its overall development for the remaining years of his rule, as well as for the even longer reign of his more narrowly doctrinaire daughter.”

—Stanley Wolpert

Two : The “Colonial Rate of Growth”

The rate of growth during the pre-independence period, the colonial period, was even less! In fact, it had even turned negative during several long periods!!

Why was the rate of growth then not called the “Colonial rate of growth” or the “Christian rate of growth” in a pejorative sense?

As per an estimate by Angus Maddison, a Cambridge University historian,  “India's share of the world income fell from 22.6% in 1700, comparable to Europe's share of 23.3%, to a low of 3.8% in 1952.”

Hindu-India had been highly prosperous in the past, thanks to its massive “Hindu rate of growth”, which is why first the countries to the northwest of India, and then the Western countries invaded it.

Until the rise of the West, India was possibly the richest country in the world, which is why it presented an irresistible target for the ravaging Mongols and their descendents, and then the West. Why then was the term "Hindu rate of growth" not used in an adulatory sense?

Three : Higher Growth After 1993

 How do you explain the growth rate of 9% or over for certain periods after 1993? The same India, after only part junking of the Nehru-Indira-Rajiv socialistic policies, reached a growth rate of over 9%! Junk more of the Nehru-Indira socialistic policies, and the growth rate will rise to double-digits.

Four : The Absurdity of Religio-Cultural Connotation

Many Islamic countries prior to the world demand and discovery of oil were very poor. Was their growth rate called the “Islamic rate of growth”?

The growth rate during the dark ages of Europe was static or negative, when during the same period India was immensely rich and progressive. Was it ever called the “Christian rate of growth”?

Sri Lanka and Myanmar have had long periods of no growth or measly growth. Were they castigated for being under the spell of the “Buddhist rate of growth”?

China’s growth rate after going communist and till the end of the Mao-period was pathetic. Was it termed the “Atheistic rate of growth”?

Why associate “Hindu” with a rate of economic growth unless there is an ulterior motive of deliberately showing Hinduism in bad light? Of course, many use the term unfeelingly, without being conscious of its implications.

Five : Nehru vs. Hinduism

Nehru was an agnostic, and was more English than Indian, more western than eastern, more “something else” than a Hindu, and therefore it is grossly inappropriate to name a rate of growth, which was thanks to him and his dynasty, as “Hindu”.

Six : Why not “Secular” Rate of Growth?

Nehru, Nehru-dynasty and Nehruvian intellectuals have raved ad nauseam on “secularism”, without ensuring it in practice. Why not credit the growth rate thanks to them as the “‘Secular’ rate of growth”?

Seven : Socialism vs. Hinduism

Hindu-India has had long tradition of free international trade and commerce, and of liberal religious and world view. Such an ethos can never accept the Big Brother denouement or the run-up to it. There is an age old Indian proverb: Raja Vyapari taya Praja Bhikhari. That is, people become beggars when government enters into business.

If you put the federal government in charge of the Sahara Desert,
in 5 years there'd be a shortage of sand.
—Milton Friedman

A belief in self-reliance and an overweening socialistic state on the part of Jawaharlal Nehru and Indira Gandhi actually did India in, rather than something that had anything to do with Hinduism.

Eight : Socialism vs. Gandhi, Rajaji, Patel...

A young man who isn't a socialist hasn't got a heart;
an old man who is a socialist hasn't got a head.

—David Lloyd George, the British Prime Minister in 1920

Mahatma Gandhi was no socialist. Nor were the other stalwarts like Sardar Patel, Rajaji and Rajendra Prasad.

Mr Jawaharlal Nehru returned from Cambridge with notions of how an all-governing interventionist state can force people into happiness and prosperity through socialism...He sticks to this bias in spite of the demonstration of world experience against it...I hate the present folly and arrogance as much as I hated the foreign arrogance of those [British] days.

—Rajaji, as reproduced in Rajaji: A Life by Rajmohan Gandhi

All the four—Mahatma Gandhi, Sardar Patel, Rajaji and Rajendra Prasad—quite unlike Nehru, could be considered as also representing the Hindu ethos, and perhaps precisely for that reason they were against socialistic claptrap of Nehru.

Nine : A Camouflage

In any case, using “Hindu” as in “Hindu rate of growth” in a pejorative sense is not only insulting, it camouflages the real reasons—socialistic claptrap was never going to give you a respectable growth rate to enable you to ameliorate the lot of the poor.

But, the question arises as to why did the term “Hindu rate of growth” gain currency? Well, here are the reasons.

One : Raj Krishna

The term was reportedly coined by the economist Raj Krishna to draw attention to the embarrassing rate of growth during the Nehru-Indira period. India being predominantly populated by the Hindus, he called it the “Hindu rate of growth”.

But, of course, he didn’t mean it to be insulting to Hinduism. He just used another term to represent India. It would have been more appropriate had he used the terms like “Nehruvian socialistic rate of growth”, which would have been really representative and meaningful.

However, what is interesting is the way it was lapped up, used, and made popular by the Nehruvians themselves, the socialists, and the leftist intellectuals; and also by the India-baiters and the colonialists.

Two : Blame Hinduism rather than Socialism

While many studies have documented the predominance of the political left in the academic world, the exceptional areas where they do not have such predominance are precisely those areas where you cannot escape from facts and results— the sciences, engineering, mathematics and athletics. By contrast, no area of academia is more dominated by the left than the humanities, where there are no facts to challenge the fantasies that abound. Leftists head for similar fact-free zones outside of academia.

—Thomas Sowell

Indian politicians and bureaucrats never wanted to admit that the fault lay with the socialistic apparatus. Why blame self? Especially, why blame something on which you have fattened yourselves?

The leftists, socialists and communists got prized slots in the government or government-aided organisations, societies and universities, and dominated the intellectual discourse in India. Socialism and Marxism could not be wrong—what was required was more of it!  The whole band, be it politicians or bureaucrats or intellectuals, didn’t mind the blame shifting to the religious-cultural heritage. Someone coined the term, the next one picked it up, and it spread.

“He [Nehru] had no idea of economics. He talked of Socialism, but he did not know how to define it. He talked of social justice, but I told him he could have this only when there was an increase in production. He did not grasp that. So you need a leader who understands economic issues and will invigorate your economy.”

—Chester Bowles, US Ambassador to India during Nehru's time

Three : The "Secularists", or rather, the Sickularists

For certain class of intellectuals the touchstone of secularism is whether you can be abusive to Hinduism. The term “Hindu” in “Hindu rate of growth” serves that purpose. It serves for them the double purpose: camouflage the ills resulting from socialism, and be also hailed “secular” the cheap way—by casting a slur on Hinduism.

Four : The Colonialists and the India-baiters

Other groups, which received the term with glee, lapped it up, and enthusiastically promoted it to disparage India, were the colonialists or those with the colonial mind-set or the brown sahibs, or the India-baiters. Give power to the Hindus, and what you will get is the “Hindu rate of growth”! Had the British Raj continued, things would have been better!!

* * * * *

Rajnikant Puranik
November 14, 2015

1 comment:

  1. It should be called "Nehruvian Rate of Socialist Growth" instead of "Hindu rate of growth."