Political, historical and technological factors. International scenario. These only help or hinder the economic progress of a nation. We need a more openly-debated economic policy too!
There is a superficial belief that Dr.Manmohan Singh is an economic expert. He is! Also there is this belief that economic experts can promote economic growth. This belief is not proved! More so now, under Manmohan Singh! Economists can explain some economic factors. But to bring about the economic progress we need bold leaders, visionaries, leaders with peoples’ mandate. Even here we can see China is different from Russia. China is fast growing. Russia is struggling. India is progressing, no doubt. But it is not doing things as it should be! In a sense, a light-weight Prime Minister is a handicap. Any leader must believe in some visionary set of beliefs.
Socialism for too long? Yes, it looks like that. Bureaucracy-driven economic management? Yes, we have been doing it, more slowly now! Entrepreneurs, those who made it, did so because of various negative causes. We don’t openly ask people to become entrepreneurs. Our Delhi-officialdom is IT-illiterate! So, whatever had happened in IT revolution took place without anyone in Delhi knowing it is happening! Communism is out. Socialism is not. Capitalism is an economic growth model that is now universally accepted. But a vision is what is missing in today’s India.
Even such mature countries like France, Germany and Spain stand by openly a Socialist, democratic government. Those who don’t want to be seen as too doctrinaire or too pro-American can’t but admire how France stands out as a uniquely independent country with independent foreign policy perspectives.
Here in India we have a Prime Minister who is seen as quite weak and ineffective to lead the country and accelerate growth by some bold initiatives. Even Vajpayee, his immediate predecessor, is seen more as a visionary and bold initiator of development projects like National Highways Authority. It will remain as NDA’s showpiece development initiative. Under Manmohan Singh, all that the UPA, after one year had achieved is to fight back the NDA ministers like George Fernandes and Arun Shourie, perhaps two of the most successful Ministers. In contrast, the UPA is seen as clueless to development initiatives.
One of the disabilities of the economics discipline is that while it has given us some of the brilliant minds, economists as a set of people have never gone about promoting economic growth. Economic growth in the sense of helping to create wealth. Wealth of the Nations is the first and still the best description of economics, its theory and since then how the practitioners of economics had gone about interpreting the field of economic activities.
The major reason why economists didn’t help to produce wealth can be explained in terms of how the art and science of economics developed in the major countries where this particular discipline took some shape and maturity. What Indians, I think, don’t know much or as much as they should and the time has come to know this side of the development of economics is the fact that wherever the economies grew to some maturity there also grew the science and art of interpreting this economic growth.
Thus, outside the UK and USA, the great growth of the economies took place under the Austro-Hungarian monarchy, in the Nordic countries of Sweden and Norway and of course Germany, there have also grown the science and art of economics. We have had great Swedish economists, the one popularly known is Gunner Myrdal, the author of Asian Drama and who also won a Nobel Prize for economics. The first winner is of course the legendary Afred Von Hayek, the finest flower of the Austro-Hungarian school of economics. The author of the Road to Serfdom, The Constitution of Liberty etc. Hayek had this unique claim for a prominent place in the history of economics : he held to his firm basic beliefs that no economic growth can take place under any control or state planning as it came to be known under Communism. Market is the very heart and soul of economics. It is market, the free market that only can decide and promote the economic “values”, the (unhindered) price mechanism only can create the “economic value” of any activity etc.
I am putting things rather crudely, I know. My purpose here is to convey to the general readers what economics is all about. So, Hayek was attacked (rather mercilessly) and almost “boycotted” by the rather, as we can say now, the” fashions” of economics of the day. Though he lived for long in England, recognition to his theories didnt come in his prime. But the fact remains, he lived to see his theories succeed before his own eyes! Communism collapsed, after 70 long years! He got the first Nobel Prize for economics when it was instituted, rather morally it was his own claim, when we look at the long sweep of the history of economics.
Technological innovations is one key element in economic growth and wealth creation. The world for the last 600 years was dominated by Western economies starting from the Portuguese discovering the trade route to India. Since then it was, in the inimitable phrase of a book title by the late K.M.Panikkar “Asia and the Western Dominance” all the modern history! International trade today is dominated by the US economic interests. WTO could do little, if at all. Six hundred years ago, China and India (Asia) accounted for 75 per cent of the global GDP. Europe was insignificant. America still lay undiscovered! It was technology, a new technology discovered by the Portuguese Prince Henry the Navigator, superior ships and nautical technology that opened the sea routes and thereby the trade routes as well. The sea roues overcame the then obstacles of the overland caravan tracks controlled by Arab/Venetian “international” commerce. At the dawn of the 20th century, Europe and the USA controlled the bulk of the world GDP! That is history of economics for you!
Now we talk of globalisation and much else. IT had changed India’s face in the new century. It is again the Americanisation of globalisation! Vasco da Gama in 1497. Mao Zedong died in 1976. Communism collapsed in 1989. China was already under Deng Xiaoping overtaking Russia in economic growth. 1989 brought out 500 million former Communist countries to the Capitalist economic development path.
A writer in the London Financial Times writes of the atmosphere in Delhi thus: “Despite the fact that India’s president and prime minister are among the most well-intentioned of the political class anywhere, there is a fin de siecle, “let them eat cake” quality that hangs over Lutyen’s/License Raj Delhi still”. Bureaucrats, diplomats openly refuse to talk of problems but only talk of the best of India, says the same writer. In plain language, there is this unbridgeable growing gulf between the rulers and the ruled. That is a grim reality of politics in India today.