The Indian Economy Blog

November 15, 2006

Sense And Swami

Filed under: Business — Naveen @ 12:34 pm

Of late there have been a couple of scathing posts on Swaminomics articles, one related to demographic dividend in India and the other on advantages of poverty. To indicate my disagreement with the stand taken I would like to provide four points.

  1. Atanu’s points on numeracy are well taken. However they miss the context of the article. Especially one assumption seems to have gone wrong. Swami is not comparing people in India vis-a-vis people in China. But within India and within China. The relative status of an Indian vis-a-vis other Indians will be benefited by the demographic dividends. That is what Swami wants to convey.
  2. Another point made is about the mismatch between people and resources. The answer is not a clear yes. Given good economic policies (and this is stated by Swami in his article) there may be no chance of a mismatch. Even given curent policies the measure of mismatch may be uncalculable. There is a nice book by Joel Cohen titled “How many people can the earth support?” which captures this limitation. As a reviewer notes, “the number and nature of the assumptions necessary for any calculation of maximum sustainable human populations size make any final estimate debatable.” Of course one can come up with estimates of limited scope but they are only based on present conditions and not possible better conditions. But no modeler worth his salt can confidently provide estimates of that!
  3. Finally there is a lot of criticism about the use of Lalu in Swami’s article. Swami is a journalist and then an economist. Once doesnt always need a PhD to be an economist. Good communicators use communication props (Lalu in this case) to get their point noticed and drive it home. Lalu in the article is mentioned only in the first and last paras. Reading too much into it is missing the wood for the trees.
  4. As for the recent post, I didnt find any point in it to critique.

1 Comment »

  1. ” Swami is not comparing people in India vis-a-vis people in China. But within India and within China. The relative status of an Indian vis-a-vis other Indians will be benefited by the demographic dividends. That is what Swami wants to convey.

    I doubt it is so, to me the impression is that he was talking about advantage with respect to global competition. This by the way is one of favourite cliche of Friedman (Tom that is )school of economist.

    “Of course one can come up with estimates of limited scope but they are only based on present conditions and not possible better conditions. But no modeler worth his salt can confidently provide estimates of that!”

    Again it is true (hence notriety of malthus), but the fact remains that we have to take decisions based on data we have
    I think there should be no doubt that Indian performance on human resource development is underwhelming. What is more considering the current political atmosphere and incentive in general towards one upmanship, I dont know whether any “miracle” is happening soon.

    Regards

    Comment by Gaurav — November 15, 2006 @ 1:14 pm

  2. I think the title of the post says it all – they don’t go together.

    Relative status has nothing to do with demographic dividends. If we have all old people with average age of 50, say, having mostly poor and some rich (relative status) won’t provide demographic dividend! The dividend is about the age of the population itself and nothing about the income distribution of the population. Rich countries can have demographic dividend too if the birth rates are high and the opposite can be true in poor countries.

    So why don’t we have perpetual poverty to give us a perpetual economic advantage? Apparently, our economic policy makers since the 60s (including Nehru) were geniuses! The whole rational and tone of Swami’s article is stupid.

    Comment by Chandra — November 15, 2006 @ 9:12 pm

  3. Using swami’s contorted logic is simply an obtuse way to ask the question which actually matters here: should India have population control policies? If so, what should they look like?

    Wouldn’t it be a lot more productive to argue about what India’s demographic policies should be rather than trying to:
    a) figure out what the hell Swami is saying
    b) debating whether he is right

    Just a suggestion.

    Comment by ND — November 16, 2006 @ 5:40 am

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