The Indian Economy Blog

January 6, 2007

India’s New Year Resolution: Move Beyond Left And Right

Filed under: Politics — Nandan Desai @ 12:25 pm

India is a land full of ideologues – which according to my definition, describes someone who is so committed to their principles that they treat facts which challenge their ideology with utter contempt. Ideologues, of course, come in all shapes and sizes: we have our commies and our market fundamentalists; liberals and conservatives; Hindu nationalists and Naxalites; the right wing hawks and the left wing doves; the libertarians and the bureaucratic babus; the localists, the nationalists, and the globalists; and a bunch of others who defy definition and convention. In fact, there are probably few Indians (including myself and the others at IEB) who could credibly argue that they are not ideologues. As Amartya Sen so astutely observed, arguing about our beliefs (sometimes blindly) is basically part of our blood.

The only problem is that our discordant national discourse is not genetic – it is a direct function of our collective desire for a better India. It is also a reflection of the freedoms we enjoy and jealously guard. It has been argued by some that there is nothing which unites India aside from territory and cricket. And as political scientists like to remind us, democracy only works when there are some set of fundamentally shared beliefs and aspirations.

In India, ideologues dominate the political landscape (notwithstanding our current PM), and the endless bickering between the extremes has the perverse effect of creating a seeming absence of any sense of shared values. Indeed, for democracy to be able to move a society forward, there has to be a basic direction that all sides agree on – and the argument ought to be about the best way to get there.

Shared values and aspirations are of course closely tied to the relative size of the middle class. A growing middle class shifts the balance of politics – because leaders are then compelled to work in the interests of a larger share of constituents – mostly in order to keep their jobs. The direction of economic policy becomes easier to sustain as more and more people’s fortunes get intertwined with it.

Therein lies the challenge for both India’s economic ‘left’ and ‘right’. For those who believe in the virtue of the free market and the necessity of further structural reform, the challenge lies in ensuring that the gains go to the middle and the bottom, and not just the top – it is both a moral and a practical imperative. Similarly for the left, the challenge is to articulate an economic direction for the Republic. Is the goal simply to remain reactionaries – trying endlessly to dampen the excesses of the market? Or is it more practical – to use the market as a means to end poverty and want?

Unless these two seemingly irreconcilable views can coalesce, we may be destined for perpetual political gridlock. We will be resigned to the unfortunate position of being a nation of ideologues, without any ideology.

18 Comments »

  1. [...] Nanubhai writes on Unless these two seemingly irreconcilable views can coalesce, we may be destined for perpetual political gridlock. We will be resigned to the unfortunate position of being a nation of ideologues, without any ideology. [...]

    Pingback by Krishworld Politics » Sensible but not convincing — January 7, 2007 @ 6:15 am

  2. Ideologies are weapons used by people to further particular interests. The balance of power, not a colescing of views, drives policy

    Comment by akondofswat — January 7, 2007 @ 8:10 pm

  3. “Shared values and aspirations are of course closely tied to the relative size of the middle class. A growing middle class shifts the balance of politics – because leaders are then compelled to work in the interests of a larger share of constituents – mostly in order to keep their jobs. The direction of economic policy becomes easier to sustain as more and more people’s fortunes get intertwined with it.”

    This is very inspiring and may be readily apparent to a member of the middle class that is indeed growing rapidly (and getting richer even faster). But, it does not change the fact that the poor and the poverty stricken are still the majority in India and the intensity of their misery may in fact be worsening. Notice that agriculture –which is still the occupation of necessity (if not choice) of 60% of our population- is growing at 2% y/y; the rest of India’s economy is growing at 10-12% y/y. So, the shift in the balance of India’s politics is –I fear- far from a done deal.

    Much has been said about mass migration of rural folks into first and second tier cities, in search of industry and construction related jobs. Although, rural migration on a Chinese scale is simply not viable. Where will India’s millions go and live in the cities? Jhopad-pattis? Even the slums are targeted for demolition by various state/local governments to ‘beautify’ cities, clear congestion, and get rid of the unseemly sight of people huddling about, sleeping on and defecating on the pavements that they call their urban home. Meanwhile, have you seen the prices of urban home lately? Even NRIs are having trouble affording a decent place to live in when they return to India with their millions of dollars in savings.
    Moreover, has anyone noticed the traffic congestion in most Indian cities? The pollution? Of course car sales are zooming ahead but what about the growth in roads, mass transit? Sure, there will be a metro in Mumbai and also in Bangaleroo – but not until 2010 or later!

    Amidst all this, the rise of India’s middle class has indeed been phenomenal; but I list all these woes to highlight that the sustainability of this story faces several headwinds.

    Conceptually, it is laudable that you seek a “coalescing of views”. I also like your advice to free-marketeers to ensure the “moral and practical imperative” of enabling a better distribution of economic gains. And advice to the left, to stop being so reactionary and “articulate an economic direction for the republic”. While this is all good, it sounds more like platitudes rather than actionable recommendations for positive change. Though, the only hint of ‘policy action’ comes in your recommendation to “… to use the market as a means to end poverty and want…” This is easier said than done, though, I’d also be interested in knowing more about what exactly you mean by this?

    I believe reliance on market mechanisms goes hand in hand with reforms (or at least the ensuring of top notch governance, if the need for reforms is obviated by well developed institutional structures). You cannot have one without the other; or risk massive corruption or inequity in wealth gains or hugely skewed distribution of political power.

    It is thus rhetorically inadequate to say …’the market will take care of things’; markets work, sure, but the efficiency of its functioning depends on the collective perceptions of its participants. So, sure, the likelihood of reliance on market mechanisms will rise if only there is coalescing of ideological viewpoints. But, in terms of putting bread on the table for a lot of the ‘market participants’, it may not work –at least not in the short-term. Meanwhile, even though the middle class will remain fine with the reliance on market mechanisms (they have benefited from it and will, likely, continue to do so), so long as the desperation of this huge class of underprivileged remains high (or rises) there will remain several catalysts for the country’s political class to pickup the ideological gauntlet and make a ruckus out of it. In this regard, reforms and governance are more important. They will ensure the fairness, equity and transparency of market mechanisms. Otherwise, you will see continued political gridlock as you mentioned; or you may also see highly populist fiscal, and socio-political, responses, as I fear.

    AMitra

    Comment by ASMitra — January 7, 2007 @ 10:01 pm

  4. [...] I completly agree with Nanubhai that “unless these two seemingly irreconcilable views can coalesce, we may be destined for perpetual political gridlock. Just that I’d like him to give tangible examples of how the left and right could come together on such common ground. Posted by shivam [...]

    Pingback by The Ideology of India at Blogbharti — January 8, 2007 @ 2:12 pm

  5. I do not see anything particularly ideological about the following three suggestions which would halve India’s poverty if implemented fully:

    1. India must value the rule of law. No one, not even politicians or judges, should be above laws made in the right jurisdiction. Laws must strive to provide the appropriate structure for all commercial transactions. They need to be enabling and flexible, rather than restrictive. Laws should not provide an incentive to be corrupt.

    2. To achieve higher standards of living, free markets domestically and internationally are needed. Standard of living is sustained and increased by allowing the free movement of goods and services, in other words, allowing trade with minimal barriers. The theory of comparative advantage – which shows specialisation and trade make trading partners better off – makes sense on paper, and generally works in real life too.

    3. Excellent primary and secondary education. Great school level education, so crucial in improving literacy rates, can be achieved with government funding, especially if such funding does not discriminate between public and private schools. The only discriminator should be that students are attending an educational institution, not something else. Religious schools can be primarily deliverers of education.

    Comment by mookrit — January 8, 2007 @ 5:53 pm

  6. The three areas where I think the economic ‘left’ and ‘right’ can work together best are education, infrastructure (facilitating public/private partnerships), and institutional quality/governance. All three cut across ideological lines; and all three are cornerstones of a successful development process.

    From an economic perspective, the left has traditionally has held deep mistrust for the private sector, and the right has a similar mistrust of public officials. At their worst, capitalists are recklessly greedy and bureaucrats are venal and corrupt. At their best however, the capitalists grow the pie, and the bureaucrats *effectively* redistribute it through taxation, spending, and regulatory incentives. Getting from worst to best requires a reduction in the polarization between these groups.

    It is only by taming down the vehemence with which we challenge the other side that we will realize that progress, in a democracy, requires some cold, hard compromises.

    Comment by Nanubhai — January 9, 2007 @ 3:49 am

  7. “The three areas where I think the economic ‘left’ and ‘right’ can work together best are education, infrastructure (facilitating public/private partnerships), and institutional quality/governance. All three cut across ideological lines; and all three are cornerstones of a successful development process.”

    These three areas may indeed be good starting points. A ‘lowest common denominator’ if you will. Still, the devil is in the details. India’s tremendous potential lies in its democracy – which is something that, by and large, makes people (even the poor and poverty stricken) aspirational rather than revolutionary. But when social trends are such that you have a growing middle class and a poor class (that remains twice as big as the –estimated- middle class) it is too early to say that balance of political discourse is shifting in favor of middle class and a pragmatic ideological center. If I am wrong, and you are right, why would we have large swathes of the country dominated by violent Mao-ist/Naxalite ideologies? I have said this before, and I will say again, countries like China –with its more homogenous society and totalitarian system- can afford to ride rough-shod over socio-economic concepts like equality and egalitarianism (though risk a cultural revolution, great leap forward kind of mess every few decades). OTOH, India cannot take such breath-taking risks. This is not to say that India is destined to wallow in poverty and bickering. It is not. India can indeed rise to forge consensus. And nations typically do, when faced with a crisis. Several emerging markets have gone through such socio-political cycles (Chronologically: Mexico, Turkey, Brazil come to mind). In such episodic moments nations tend to either put aside partisan differences or opt to fall behind a strong leader. In fact, India itself faced such a moment in 1991-92, during its own BoP crisis that ultimately triggered a wave of economic liberalization, and government reform.

    Having said all that, what India does have going for itself is that the middle class is – as you said- indeed poised to shape the evolving discourse at margin, though it is far from certain that it is on the verge of controlling it. My nuanced emphasis on the middle class ‘being poised’ toward becoming dominant is based on the fact that it is the educated middle that increasingly dominates the media, sets socio-economic trends, and often is the last civil/constitutional bastion of oversight/protest. However, when the middle class under-estimates the angst of the power or gets too far ahead of itself, India is bound to repeat ‘India Shining’ kind of debacles.

    “From an economic perspective, the left has traditionally has held deep mistrust for the private sector, and the right has a similar mistrust of public officials. At their worst, capitalists are recklessly greedy and bureaucrats are venal and corrupt. At their best however, the capitalists grow the pie, and the bureaucrats *effectively* redistribute it through taxation, spending, and regulatory incentives. Getting from worst to best requires a reduction in the polarization between these groups.”

    This is all theoretically right; and might I add: obvious. However, how do you increase ‘trust’ and reduce ‘greed’ within two broad groupings of society? I think the answer lies in a few different sources of arbitration. First is the impeccable/trustworthy/efficient/persuasive/articulate credentials of a strong political leadership (say, the executive arm of the government). Clearly, the Prime Minister and his dream team of reformers have the ability to do more in terms of public sector reform and improving governance at various levels of the government through sheer political dexterity in parliament, usage of media, even mobilization and education of grass-root sources of political support. But such reforms, and the consequent reduction of waste, improvement of efficiency/transparency –all of which ultimately improve institutional capacity, economic management— have yet to be seen from this administration. A second way to build trust between opposing political parties and ideologies is to allow a neutral arm of the republic, say the judiciary (to include constitutional experts, law enforcement or even a bi-partisan legislative grouping), from stepping into the fray to provide a coalescent basis of arbitration. This is already been happening in terms of electoral commissions, and other commissions – ranging from Godhra commission (to look into the train burnings) to the Kelkar commission (to look at fiscal responsibility), and there have been several others. But such mechanisms are better for resolving existing or brewing disputes, rather than implementing new initiatives. A third –though, IMO- less desirable way to build trust indeed involves, as you pointed out, making cold hard compromises. But currently, the nexus between politicians and bureaucrats remains still strong enough to make this an unviable proposition. On this (the third) point, basically what I am saying is that the politicians who you are advocating should make pragmatic compromises for the betterment of the nation still stand to gain the most –either electorally or financially- from the existing ideological status quo.
    As things stand right now, the first two options – executive vigor and judicial interventionism- have simply not been used to full effect for enabling the kind of reduction of ideological deadlocks that are so necessary for moving forward with ‘growing the economic pie’ and ‘effectively re-distributing it’. If that were not the case, you wouldn’t have apts selling in Mumbai today for Rs. 3 crores (manhattan prices!) that are built by malnourished banjara tribals (who are more destitute than sub-saharan Africans!). For India’s politicians to still make cold hard, pragmatic compromises sans strong leadership and amidst an overstretched judiciary, India needs a lot of luck (which, though, I am by no means ruling out).

    Comment by ASMitra — January 9, 2007 @ 9:20 am

  8. Thanks for your extensive comment ASMitra.

    I mostly agree with what you said. I also fully understand that what I said is a tall order – it was more of a holiday *wish* than an attempt at sober analysis (I will get to that in future posts).

    Comment by Nanubhai — January 9, 2007 @ 11:21 am

  9. ASMitra,

    The Indian middle class does not influence the political atmosphere. I would go so far as to say that the Indian middle class is also divided along the same caste or religious vote banks.

    The economic issues in India take a back seat to social engineering. Unless we find groups that are willing to speak openly about the unspeakable, we will continue to discuss peripheral issues.

    Comment by realitycheck — January 9, 2007 @ 12:57 pm

  10. “The Indian middle class does not influence the political atmosphere.”

    I agree. Though, I was referring to the Indian middle class (IMC) being poised, increasingly, toward becoming ‘dominant’ in influencing the *political discourse*; I din’t even raise the topic of their actual/perceived influence on the overall *political atmosphere*. The 2 concepts – political discourse and political atmosphere- are, definitionally and contextually, distinctly different.

    “I would go so far as to say that the Indian middle class is also divided along the same caste or religious vote banks. ”

    Although I have mixed feelings on this, I still think that -within developing countries (incl India)- educated, english speaking, professional middle classes will have an increasing proclivity to vote on secular and economic issues rather than be driven by narrower race/region/caste/ethnic considerations.

    “The economic issues in India take a back seat to social engineering. Unless we find groups that are willing to speak openly about the unspeakable, we will continue to discuss peripheral issues.”

    I sense a very cynical sentiment here. Though, I will reserve any comment on this unless you are able/willing to articulate your thoughts on this in more detail.

    Comment by ASMitra — January 10, 2007 @ 2:37 am

  11. indeed, what is surprising in india is the death of what is called middle ground. you are either this, or that. often that polarisation appears to divide and stratify us, and perhaps may be a sourse of conflict. what is important, as sen points out in the argumentative indian, discussion, but with respect to the arguments of the other side, and as philosophers from plato’s time have told us, the search for truth. indeed, we can learn somethinh propounded by buddha, when he talked about ‘the middle path’.

    Comment by Aashish Gupta — January 10, 2007 @ 10:15 am

  12. To reform politicians basic requirement is the Government should undertake election expenditure of the politicians. The government should lay down method of propaganda needed for candidates, eligibility to contest election, and floor crossing.

    If election expenditure is borne by the state, rules made to make list of candidates on ballot paper short and continuous faith for a party (or independent) in immediate past on date of filing nomination there shall be great improvement in good people contesting elections.

    If the politicians are reformed it shall be easy to achieve goals.

    Comment by Jana — January 12, 2007 @ 9:12 pm

  13. What bugs me is when I see that some people use their so-called idealogies just to lure their vote banks. They do not really believe…they are hypocrites. When it comes to actual work they shirk it. I think these ‘idealogists’ would do well to talk less and work more and only then they will know whether their idealogies are workable and practical…or just rhetoric.

    Comment by Nita Jatar Kulkarni — January 13, 2007 @ 8:21 am

  14. Nita, I couldn’t agree more.

    Comment by Nanubhai — January 14, 2007 @ 12:24 am

  15. Idealogies expressed by politicians are for vote bank. The present system needs tons of money for elections. If politicians wish to survive in politics they need to develop vote banks. They are ruined if not elected. No one can take objections on idealogies. If one feels this should change the only solution is to reduce election expenditure to ZERO and make politicians loyal. This can be done if people wish to be governed properly and have strong desire to work for it.

    Comment by Jana — January 14, 2007 @ 10:31 pm

  16. Nanubhai,
    Good posts. I’ve always wondered what cognitive bug causes people to defend their ‘ideology’ against all evidence. Often, I come to this forum because the blogs talk policy not the usual mutually assured derision and name calling. I want to see an electoral candidate anywhere in the world who goes up on that dias and says, ‘I don’t have an ideology’…but, I guess that’s my wish and it’s not even a holiday:)

    Comment by PH — January 16, 2007 @ 11:10 pm

  17. China –with its more homogenous society and totalitarian system- can afford to ride rough-shod over socio-economic concepts like equality and egalitarianism (though risk a cultural revolution, great leap forward kind of mess every few decades).

    A second Cultural Revolution is impossible in today’s China. Both Cultural Revolution and Great Leap Forward occurred under Mao Zedong. It was not China’s roughshodding of equality and egalitarianism that caused the Cultural Revolution. What cause the Cultural Revolution was firstly Mao’s cult of personality and secondly a misapplication of equality and egalitarianism. Uncontrolled and unchecked leftism caused the Cultural Revolution.

    The central government today is rarely present in the everyday lives of the Chinese. There is no cult of personality. Leftism today is less tolerated in China than laissez-faire rightism.

    Comment by J. Yin — February 9, 2007 @ 5:08 am

  18. One thing that people do not acknowledge (by people i refer to the Chattering and Blogging Folks like us over here) is that India is very much a Relationship based society (and so is much of Asia) where Relations between individuals gets precedence over Rules (or laws). It is high time that we atleast accept this reality, however bitter may it be. It is better to work within the limitations of the system by acknowledging the same. Talking about Middle Class in India being confined to caste and religious ties is good in theory but the reality is that India is heterogeneous. Someone here says that what Unites India is only cricket… i wont agree – India as a nation is united by the spirit of survival, we are afterall the only civilisation that has existed continuously for 5 millenia despite countless foreign invasions. So let us first acceept some of our divisions and try to work within the system and get maximum material benefits for our population at large. India as a nation needs to quickly generate jobs for its teeming millions and we should all find ways to unite despite our differences.

    Comment by Ramki — February 10, 2007 @ 10:56 pm

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